Obama Didn't Slam Entrepreneurs, He Spoke the Silicon Valley Ethos
“If you’ve got a business, you didn’t build that. Somebody else made that happen.”
Two sentences and 14 words from a recent speech in Roanoke, Virginia were all it took for President Obama to incite the entrepreneurial community and inspire thousands of angry Tweets.
As a snappy sound bite, those two sentences paint a damning picture of Obama to the startup community, which is full of people who have sacrificed vacations and sleepless nights, survived an Internet of snarky bloggers and haters telling them they were nuts, and put their professional reputations on the line, all in the attempt to build something huge out of nothing. I didn’t make this happen? Screw you, Obama.
But, while poorly articulated, the President has a point about entrepreneurial interdependency. True, many entrepreneurs have worked 15-hour days, seven days a week to build their businesses. But the fact remains that at some point every founder has had to rely on someone else to get their business off the ground.
Consider the context of President Obama’s statement, which pundits have repeatedly ignored in an effort to sensationalize his message and stir controversy.
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.Notice that the President’s statement remains unchanged, but seems less divisive than what the media chose to present. Obama’s core argument – that business owners have used government resources and had lots of help from various individuals and institutions – is damned near irrefutable. Farhad Manjoo made this point clear in his article on Eduardo Saverin and his plan to renounce US citizenship.
Would Eduardo Saverin have been successful anywhere else? Maybe, but not as quickly, and not as spectacularly. It was only thanks to America—thanks to the American government’s direct and indirect investments in science and technology; thanks to the U.S. justice system; the relatively safe and fair investment climate made possible by that justice system; the education system that educated all of Facebook’s workers, and on and on—it was only thanks to all of this that you know anything at all about Eduardo Saverin today.It’s doubtful that any startup founder has never used a road or form of public transportation. The idea of a wandering businessman creating a company without government aid, be it an Internet-based startup or a small town grocery store, is what most would describe as “bullshit.” Whether it’s through regulatory laws or as a byproduct of the government’s effort in other sectors, startups and small business owners are able to build companies because of the government.
Even if you were to find some wandering, public transport-averse founder, chances are high that this mythical being has received support in his ventures, both directly and indirectly.
There’s a reason why events like PandoMonthly sell out within a few hours: Startups want to hang out with other startups and bounce ideas off of each other (and maybe enjoy some free pizza and beer). Face time with other founders and investors may not directly benefit a startup founder, but those chats can often mean the difference between an “unfunded, unloved, and unwanted photo-sharing app” and a viable business.
The greatest entrepreneurs and investors understand this concept. After entrepreneurs like Elon Musk, Peter Thiel, Reid Hoffman, Dave Morin, Marc Andreessen, and Ben Horowitz created companies that made the Web what it is today, they all became investors and spread their wealth amongst young companies and founders that wanted to build the next wave of PayPal and Netscape-caliber companies.
Consider RIM as a counterpoint. Former co-CEOs Mike Lazaridis and Jim Balsillie have never invested in startup companies in their home city of Waterloo, which has driven entrepreneurs to seek funding elsewhere. To be fair, RIM did support Ted Livingston and his effort to build an unlimited messaging platform, Kik – until it didn't. Livingston was shut from the BlackBerry App World and RIM sued Livingston for his efforts.
“An innovative firm in the Valley grows not just on the expertise of its own workers, but it grows on the entire ecosystem that surrounds it,” economist and author Enrico Moretti told PandoDaily’s own Hamish McKenzie. Compare that to Obama’s remark:
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive.Startup founders are happy to thank others for their successes, whether that person is an investor, teacher, mentor, or fellow founder. Nobody thinks to thank (or, at the very least, appreciate) what the government has done to build an economic system and infrastructure that allow startups and small businesses to exist in the first place.
Beneath Obama's poorly-worded statement was a fundamental understanding that the government has made it possible for Americans to build their own companies and make a living doing what they love. The Valley isn't angry with the President; the Valley is angry at the media's misinterpretation of his message.