Recently, there have been a lot of press on the troubles of VC firm Kleiner Perkins. They were once legendary in their pick of tech companies, as early investors in Amazon, AOL, EA, Google, Intuit, Netscape, Sun Microsystems, Tandem, etc. More recently, they went all-in with cleantech, and did not come out smelling so great.

Linked to the article from Gigaom is another good article this, and on the problem with righteous investing. VCs play a large role in innovation by picking and choosing the right startups to fund. However, this choice is critical. VCs can’t just pick a lofty mission, and dump money into it. As I’ve been learning (and wrote about in a prior post), the market always wins. Lofty visions are great, but there must be a market, and the market must want your product.

However, VCs are only one side of the story. The other side is the entrepreneurs. And the same law applies: lofty visions are awesome, but at some point the vision meets reality, and the reality of the market wins.

This is critical for entrepreneurs to think about. Passion matters in entrepreneurship. Most people don’t leave perfectly good jobs (with perfectly good paychecks) unless they have a passion for something. The most passionate are often driven by the largest missions, and there are many great missions out there: world peace, feeding the poor, educating the world, etc. Clean tech may be one of these (although I’d bet that timing was the real issue). These missions sound great, but can be huge traps. Maybe they would be great as a non-profit, but as a startup? Tread lightly.

This has been one of my biggest lessons so far in my time as an entrepreneur. Look at yourself and make sure you aren’t being a righteous entrepreneur. Passion is great, but the market always wins.

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P.S. This is post number #79 in a 100 day blogging challenge. See you tomorrow!

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