UNHAPPY MILLIONAIRES... HOW MUCH IS ENOUGH?
Buzz in the blogosphere yesterday was around this NYTimes article, "In Silicon Valley, Millionaires Who Don’t Feel Rich." This was a good read, but I thought it would have been a better and more amusing story if it was focused on Wall Street and NYC.
While the article described some disappointing people, there were those with a good perspective such as Celeste Baranski, former head of engineering at Handspring, and Bruce Karsh who stated in the article, "A lot of the money here is accidental money."
Randi Jayne, sister of Mark Zuckerberg, and other young startup employees or entrepreneurs should think deeply about Karsh's words. His statement reminded me of an old Red Herring article I read during the first boom times by a very successful entrepreneur. I forgot his name, but he co-founded 4 or 5 successful companies and had a couple failures. I believe his exits totaled a few hundred million and he created billions of dollars of value on the markets. After recently exiting his last successful company, in the article he still attributed his success to luck. From his perspective, there were a dozen reasons why his company should have failed and hundreds of reasons why his competitors should have succeeded, so his belief was that he was lucky or blessed or whatever you wanted to call it. I agree with his view on entrepreneurship and success because it's not just about how intelligent and hard-working you are. Most startups have at least 10 competitors working on a similar product, tackling the same problem to solve, and who have the same intensity. It's a race with numerous factors in the environment and landscape that can trip your team up or lead you astray, so humility is a good trait to acquire on the startup road.
I remember during my first startup back in 1999, my co-founder, Jimmy, and I met a wealthy entrepreneur who we weren't terribly impressed by. Jimmy turned to me and said, "Better to be lucky than smart." And this statement is something Jimmy applies to himself and others to this day.
Regarding Randi Jayne and other twenty-somethings like her, I write off their antics and views as immaturity. For others like Gary Kremen, mentioned in the article and founder of Match.com, I would just say, "Get over it, dude. Who cares?... Your not in high school any longer."
Why was he measuring his self-worth by money and material possessions? Why keep score? This is strikes me as insecure. Oddly insecure. For many of these types of personalities, there will never be enough. Much of their happiness or self-worth is centered around money and materialism, so it would be safe to say that I wouldn't want to work closely with such people. Money would be their primary driver for success or building a company, so these values would overlap into a negative, downward spiral at some point during a company's critical growth periods.
A few years ago I worked at a boutique investment bank and my colleague was complaining that because he was with our "startup" bank that he had to fly economy class. He was particularly irked that day because he just ran into some of his former associates that worked under him at his former employer, a bulge-bracket investment bank. The fact he was flying "a class lower" than his former associates bothered him greatly. I really couldn't grasp why such a silly thing would bother a person so much, but this was also a person that liked to keep score.
As I mentioned at the beginning of this post, this story would have been more amusing if it was in the hometown of the NYTimes but that angle has probably been overdone in their pages. In Silicon Valley, for every "unhappy millionaire" you get someone grounded and humble like Bruce Karsh or Celeste Baranski. In New York City (London and Hong Kong are interchangeable here), in the world of investment bankers, traders, and fund managers, it's a different animal. If you make it into the top tier of finance, the road to millions is more certain so there is less humility and a viewpoint of "accidental money." If you're on the banking side of a firm such as Goldman Sachs or Merrill Lynch, by the time you hit associate (4th - 6th year) level you can make $500,000 on a good year. This of course increases as you reach VP, Director and then Managing Director (titles vary for each firm). Anyway, my point is that there probably is a lot more wealth on average in the finance world than hi-tech with a lot more egos and a lot more oddities to write about.
What's also interesting is that in this world of more certain wealth, a question I receive more often from bankers and fund mangers is, "How much is enough for you to walk away?"
First, it seems to me that this question is a reflection of their industry and that many of them are doing it for the money. I'm sure there are many that are doing it for the love of the deal or investing (all of MY friends in finance:), but money is the sole driver for a good percentage. For me, money has been a motive to do a startup but a secondary driver. Even for my third startup, GoingOn Networks, whether it wildly succeeds or fails, I will do another because it's fun. I enjoy the process of company building from scratch to product launch and beyond. So I really couldn't answer this question because I wouldn't walk away. $30 million? $50 million $100 million? I'm not going to stop working at my age just because I can.
Second, the answer I often hear ranges from $5 million to $10 million. This was recently reiterated by a Silicon Valley billionaire I met a few months ago during breakfast. He said that he looked at this question a while ago and calculated that $5 million was enough to make him and his family be comfortable for life. $10 million was a point where he could make effective charitable donations to help others whether through his own foundation or other nonprofits. Or for other people anything above their life goal of hitting $5 million is keeping score. How much is enough for you? What drives you to work? What makes you happy?
Some other posts on this article:
Jason Kaneshiro, "Silicon Valley Is Messed Up: Single Digit Millionaires Feel Insecure"
Jeremy Toeman, "Those Poor, Poor Millionaires"
Anne Truitt Zelenka, "How to Feel Rich Even if You Think You’re Not"
Jeremiah Owyang, "Silicon Valley’s Middle Class"
Dave Winer, "The angst of Silicon Valley"
Winer's post is amusing because he actually separates himself from "Silicon Valley" since he's in Berkeley.