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Teenage startups---they don't even have Furlough Fridays !!!

Whenever I worry about innovation in America or when I hear silicon Valley is dead....


Teenage Entrepreneurs

by Geoffrey A. Flower
Tuesday, May 11, 2010

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Cupertino High School senior Diane Keng pitches MyWeboo.com, her third start-up, at the Web 2.0 Expo in San Francisco.

Here is one indicator of the allure of Silicon Valley's entrepreneurial culture: Diane Keng just launched her third start-up -- and she is still in high school.

In March, the 18-year-old launched Internet company MyWeboo.com to help teens manage their digital lives and social-network identities in one place. She is now pitching the company to venture capitalists, and earlier this week presented at the Web 2.0 Expo in San Francisco.

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Yet each morning, Ms. Keng also heads to Cupertino's Monta Vista High School for a schedule of classes that includes Advanced Placement economics and government. In the afternoons, the high-school senior squeezes in varsity badminton practice.

"My age, my gender and my lack of experience don't deter me from going after what I want for the company," says Ms. Keng, who runs marketing for MyWeboo.com from home and co-founded the venture with her 25-year-old brother, Steven.

Ms. Keng has several advantages in pursuing her entrepreneurial ambitions, including her father, a venture capitalist who splits his time between Beijing and Cupertino and gave her $100,000 in seed money.

Another big advantage is that Ms. Keng is here in Silicon Valley and can tap the region's unique ecosystem of tech resources and experience -- not to mention supportive parents and teachers. Her high school alone is home to about 10 entrepreneurs, including a student who buys and flips websites that he thinks have potential.

The Valley is filled with teen-entrepreneur legends: Gurbaksh Chahal started online ad company Click Agents in San Jose when he was 16, and sold it for $40 million two years later. He then founded ad network BlueLithium, which he sold for $300 million when he was 25.

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Kristopher Tate, who five years ago finished high school early and drove his parents' car from San Diego to Cupertino at the age of 16 to launch photo-sharing site Zooomr, says Silicon Valley is a great place for budding entrepreneurs. "Everybody is there, and when you want to step up or feel like your idea is worth a grain of salt, there are people who will take it seriously." Today, Mr. Tate is 22 and runs a portfolio of Internet companies from Tokyo, but isn't involved in Zooomr's day-to-day operation.

Despite the encouraging business environment, teen entrepreneurs have their own set of work-life balance issues.

"For the first two years that it took me from starting Click Agents to selling it, I basically sacrificed my youth," says Mr. Chahal, who dropped out of high school to focus on his start-ups. "I slept and worked in the office."

In addition, many start-ups don't succeed, which can bring some particularly harsh lessons for young entrepreneurs. They are, as a set, more inclined to overvalue their own ideas, according to YouNoodle Inc., which tracks start-ups. In a recent survey, YouNoodle found that founders under the age of 25 expected their companies would be worth about 27% more after three years than other founders (who are, on average, 35 years old).

Ms. Keng co-founded the venture with her 25-year-old brother, Steven.

Other young entrepreneurs end up putting school first. Virtual goods marketplace PlaySpan Inc. was founded in 2006 in the garage of San Jose sixth-grader Arjun Mehta, who wanted a better way to sell items he had won in online games. He created a mock-up of his ideal website, then passed the baton to his dad, who now runs the company while Arjun attends eighth grade.

"In my free time, I test out the commerce side of the site," says Arjun. He says he doesn't demand a salary, but has kept the title of co-founder.

Ms. Keng launched her first venture at age 15, when she started a T-shirt screen-printing business and later began a teen marketing-consulting firm. She says she ended up dropping the T-shirt company because it wasn't making enough money, and the second business because she felt she was spreading herself too thin amid activities, and needed to devote time to prepare for the ACT.

With MyWeboo.com, it helps that Ms. Keng's school encourages entrepreneurial activity and makes allowances for an enterprise's demands. Fiercely competitive Monta Vista offers business classes that include marketing and finance, and brings groups like the Silicon Valley Private Equity Roundtable to workshops on how to write a business plan. Teachers allow Ms. Keng to miss class and make up tests as needed.

"If they're going to fail, they might as well fail when they are young," says Carl Schmidt, Ms. Keng's business teacher at Monta Vista. He teaches students that 90% to 95% of all new products fail, so they must focus on doing their research and solving a real consumer need.

Still, balancing so much requires focus. Ms. Keng, who says she gets As and Bs and will attend Santa Clara University beginning in the fall with a full scholarship, turns off her cellphone and email while at school or doing homework. "If it's a business call, that's what voicemail is for. I will call you back," she says.

And her father, Brian Keng, says he insists academics remain his daughter's top priority. Ms. Keng's parents also ask that she communicate with them about all her business activities.

"She is just in high school," says Mr. Keng, "and sometimes it is very difficult for her to make a judgment."

Even with those boundaries, developing a business is a far cry from traditional high-school diversions like glee club or yearbook. Those activities are still around, but "there needs to be a place for those kids who are entrepreneurs and are a little bit eccentric and are willing to push the envelope," says Mr. Schmidt.

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My criticism is of:

- Funding companies based on nepotism
- Building companies where the founders are non-technical

The probability of failure for this is extremely high and amounts to a rich man's hobby.

I am not defending Hawaii's schools in any way. I am simply saying that if the goal is to emulate the lead example in this article, it will not help Hawaii.

I cannot change Hawaii's school system. However, my company is growing and I can hire young people. To that end, I plan to hire 2 local engineers out of school this summer and I can at least help give them an opportunity to learn more first hand in our profitable startup.
Derek, I think you were being facetious but that is a very good point.

We moved to Hawaii to flee the bizarre San Francisco School District lottery system. We contemplated the usual SF parental "exit strategies": Cupertino, Palo Alto, Mill Valley. Even for smart kids, though, we weren't sure about how well-rounded an experience possible in the Cupertino and Palo Alto districts.

While I am not thrilled to pay for private school in Hawaii, I do believe it is a good value.

From the WSJ
The New White Flight: In Silicon Valley, two high schools with outs...

And LA Times
Palo Alto campus searches for healing after suicides
Since May, fou...
.

Derek said:
I never felt so inadequate.
John said:
Given that you acknowledge the impact of the region's culture and school system, why do you stress that this person has an 'innate' drive and ambition?

Aloha John. Thank you for your reply and for the opportunity to clarify. When I emphasized Diane's innate drive and ambition, what Dan described above in response is exactly what I had in mind. Comparisons can be made to both trust-fund teens and non-trust fund teens. Most high-school aged teens do not demonstrate an interest in launching a start-up.

Daniel Leuck said:
Derek - Those are very interesting insights with regard to how students in Hawaii are steered. I agree that there is nothing wrong with being a worker. There is honor in doing any job that is beneficial to society well, but I don't think high schools should be steering kids to be anything other than strong on the fundamentals.

Aloha Dan. In regards to being strong on the fundamentals, I don't think we're in disagreement. To clarify my thoughts, I think being strong on the fundamentals should be a mere baseline for high school, but high school education need not be capped at the fundamentals. I don't think an enhanced program that encourages entrepreneurship would steer students away from that. I would imagine that an enhanced program would have pre-requisites where students would need to be strong in the fundamentals before doing anything advanced much like current high school advanced placement classes. Ideally, this would be balanced so as to not create a situation where a school is too narrowly invested in math and science (as cited) by Kevin.

John said:
Many Silicon Valley execs would be club promoters or real estate agents in Honolulu (and vice versa). Being born in Mountain View rather than Moiliili tends to be more important than one's innate abilities.

Maybe so. I tend to think that a good idea, is simply a good idea regardless of where a person comes from. Unfortunately, good marketers can make a bad idea look like a good idea.

Where I'm from is a lot closer to Mountain View than Moiliili. If indeed being born in Mountain View rather than Moiliili tends to be more important ... then, should I be glad I was neither born nor raised in Moiliili?
The same idea with the same talent and drive done in one place can go much farther than another - whether its Mountain View vs Moiliili in technology or Manhattan vs Mountain View for finance. The environment has a major impact.

However, things like advocating entrepreneurship in grammar or secondary schools is a lagging factor that would provide little benefit for Hawaii's current condition. Valley elementary schools are advocating entrepreneurship as a result of historical massive success - it did not cause the success nor would the absence of it be a significant constraint on their ongoing success. In Hawaii, even if you had every school advocate and introduce tech entrepreneurship, what would it do? Where would these kids go? To San Jose?

What makes the Valley thrive in technology is the critical mass of successful profitable technology companies. This is what motivates schools to teach tech startups. This is what gives people born in Mountain View an 'unfair' advantage.

I understand the local K-12 education system has flaws but it's way down the list of things that are likely to change or is likely to matter in terms of fostering a tech sector (especially in the next 10 - 20 years). We have to do things to build the sector on our own that we can do with our own resources and capabilities.

Derek said:
Maybe so. I tend to think that a good idea, is simply a good idea regardless of where a person comes from. Unfortunately, good marketers can make a bad idea look like a good idea.

Where I'm from is a lot closer to Mountain View than Moiliili. If indeed being born in Mountain View rather than Moiliili tends to be more important ... then, should I be glad I was neither born nor raised in Moiliili?
John said:
Valley elementary schools are advocating entrepreneurship as a result of historical massive success - it did not cause the success nor would the absence of it be a significant constraint on their ongoing success. In Hawaii, even if you had every school advocate and introduce tech entrepreneurship, what would it do? Where would these kids go? To San Jose?

What makes the Valley thrive in technology is the critical mass of successful profitable technology companies. This is what motivates schools to teach tech startups. This is what gives people born in Mountain View an 'unfair' advantage.

Aloha John, I'm glad to see we're not in disagreement. My very first point was indeed, "I think what can be praised and emulated is the entrepreneurial culture of Silicon Valley."

Is it not the entrepreneurial culture that has helped nurture and grow the "critical mass of successful profitable technology companies?"
Brian said:
Derek - "Most high-school aged teens do not demonstrate an interest in launching a start-up." Probably not most, but more than you'd think. Do you work with teens? I do and a lot are more industrious than you may think. However the ones that want to start their own businesses are almost invariably those with the fewest opportunities.

Aloha Brian. Thank you for your continued dialogue. In response to your question, I do work with teens. My most recent work was with the junior class at Ke Kula Kaiapuni o Anuenue in Palolo Valley over the course of 4-5 weeks in March - April. For next school year I'll actually be starting a much larger mentoring program where we mentor teens from their freshmen year through Senior year in high school with the goal of encouraging and inspiring them to apply to and enroll in college. After doing that for about a year, we're hoping to start the program earlier to 7th and 8th graders.

A careful review of my statement indicates that I never suggested teens weren't industrious. I'm sure you'll agree that there are many more industrious teens than there are teens who will actually pursue a start-up.

The nice thing here is, that we're actually in agreement Brian. John emphasized the favoritism that Diane Keng is getting in her role of her start-up and the funding she received from her father. I, on the other hand, emphasized the decision-making, ambition, and "industrious-ness" of the teenager described in the article. This is evidenced by John's question to me, "why do you stress that this person has an 'innate' drive and ambition?"

Much like the teens you work with, Diane Keng is ambitious, industrious, and fortunately for her, she is one of the few with access to capital. I don't think you and I are in disagreement about that.

My main point however was counter to John's assertion that there is nothing in the news story that "Hawaii should emulate or praise." I think there is a general theme in the news story that is being overlooked. "I think what can be praised and emulated is the entrepreneurial culture of Silicon Valley."

What I'm liking increasingly more about this particular thread is that, I think we're all generally in agreement.
John said:
What makes the Valley thrive in technology is the critical mass of successful profitable technology companies. This is what motivates schools to teach tech startups. This is what gives people born in Mountain View an 'unfair' advantage. ... We have to do things to build the sector on our own that we can do with our own resources and capabilities.

A thriving and supportive entrepreneurial culture helps to produce thriving entrepreneurs, much like healthy lifestyles produce healthy people.

My only regret in this discussion is not better articulating and contextualizing an earlier comment I made,
I said:
I think what can be praised and emulated is the entrepreneurial culture of Silicon Valley. I think we can emulate a high school curriculum that encourages entrepreneurial activity, offers business classes that include marketing and finance, and connects students with business leaders.

I was not trying to suggest that a newly-introduced high school curriculum would kick-start or lead to a thriving entrepreneurial culture that would eventually also save our public school system. To clarify, I support developing our current entrepreneurial culture of which a by-product of that culture could be a high school curriculum that encourages entrepreneurial activity. A large part of developing that thriving entrepreneurial culture was articulated by John,
John said:
We have to do things to build the sector on our own that we can do with our own resources and capabilities.

There are, in my opinion, other elements of building this culture that we haven't mentioned yet. Namely, a supportive state legislature. I'm not sure if there is an alternative or any other way of developing a thriving entrepreneurial culture with a legislature that reneges on promises to investors.

My main and original point is that we can and should emulate a culture that promotes entrepreneurial growth.

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