In November, I attended the Entrepreneurial Best Practices Series event with Patrick Lee, fellow Berkeley alumni and founder of one of the most valuable web properties of our time, Rotten Tomatoes. As a successful global entrepreneur, Lee emphasized the importance and value of college years in founding a start-up and imparted the wisdom to create a start-up because of genuine passion, not because of the valuations.
Like most successful entrepreneurs today, Lee began in college with a start-up called Human Ingenuity, which sold computer systems and components. He was so passionate about his idea that he dropped out of school to begin his entrepreneurial ventures.
Lee believes that best time to go into start-ups is during college or right after graduation. During college, students have less responsibility to outside obligations, ample resources, and built in support networks. The most important skills Lee took away from college are learning how to learn and network. Lee believes that college is the best time to gain independence and also “the single best place to find a co-founder.” In fact, many of the big companies’ founders, like Facebook and Google, met during school.
Right after graduation is also an ideal time to found a company because the college mentality still reigns true. After adjusting to a full-time career and a normal salary, it becomes easier to settle down and the opportunity cost of transitioning to a start-up rises—the income and job instability become more detrimental.
Lee says there are always reasons why not to launch a company at a certain moment, whether needing to focus on school or not having enough experience. Yet, Lee claims that if an individual is too risk adverse to go into start-ups during or right after school, chances are that person never will. There will always be reason in life to say, “It’s not the right time,” however, he argues that your college years and the years after graduation are as close to “the right time” as possible.
While Lee encourages individuals to take risks and pursue ideas they’re passionate about, he recognizes that start-ups are not for everyone. At UC Berkeley, with close proximity to Silicon Valley, start-ups have become a buzz word and hot emerging trend. Lee believes that the Bay Area has become a lot like Hollywood: “You know in Hollywood how they say every waiter is trying to be an actor or director or they have a script in their back pocket? That’s the Bay Area now, except with startups.” People now are much more focused on the numbers and valuations, and ultimately, very concerned with the money.
Yet in reality, most founders have very low salaries, if any, when they are just starting their business. At Rotten Tomatoes, Lee and his other co-founders tried to pay themselves in a way where the company could break-even—even if Rotten Tomatoes was raising big money one year, they still didn’t pay themselves high salaries. Lee argues that individuals should not pursue start-ups for the exorbitant salary, but rather because they want to do something with friends that they’re passionate about.