According to our VP of Engineering, Cliff Hall, you have to be kind of stupid to start a company.  Not stupid in the head.  You have to have limited knowledge of what you’re going to do.  What Cliff means by this is, if you know too much you’ll find all the reasons not to do it.  It’s akin to diving off the high-dive at the pool and not looking down first.  If you look down, you’ll probably freeze at the end of the diving board.  I thought about this as I read an article this week in the New York Times called Silicon Valley Start-Ups Awash in Dollars, Again by Brad Stone and Matt Richtel. 

The article likens the recent rise in VC funding for Internet companies with little or no revenue to the dot-com boom several years ago.  I am not an expert in start-up macro economics; although I do play one as CEO of RipCode, but I think the bubble comparison is a bit crazy.  The market dynamics for the majority of Web 2.0 start-ups being funded today is very different than it was in the late nineties.  

What I do know for sure is that starting a company is hard work – bubble or no bubble – anyone that has ever done it will agree with me. So you have to be a little crazy or be a little naive to get into the start-up game.  I discussed with Chris Phipps in a recent interview with the DallasBlog, that most entrepreneurs only have a finite amount of start-ups in them because it takes so much energy and mental fortitude to make it successful.  And though it may seem that Internet start-ups are being showered with VC dollars, I know firsthand how hard it is to raise money.  Funding a company takes a lot of time and effort.  And it doesn’t stop once you secure the money.  The money is only a means to the end – you haven’t succeeded just because you were able to get funding.

Chris asked me in the interview to rank Product, People or Market as the most important for starting a new company.  Easy, market first.  You have to be on the right wave when there is an opportunity for your technology.  It’s easy to point to reports and market metrics that tell us the Internet and mobile video market is exploding.  Enabling technologies like transcoding will certainly benefit from this wave as UGV sites, studios and syndicators look for ways to grow their business and add new revenue through cross marketing of video content.

When you can hit the trifecta like I think we have with RipCode – the right market, smart people and a great product – that really makes this is a fun time to be an entrepreneur.