|Portrait of a serial entrepreneur. Max Levchin. People who talk about how hard it is to start a business or how govt regulation is keeping them from it are BSing themselves and/or others. They just don't have the right kind of drive or the intelligence to do it.|
After Succeeding, Young Tycoons Try, Try Again
By GARY RIVLIN
OCT. 28, 2007
SAN FRANCISCO — Max Levchin is not easily distracted from his work.
A few years ago, Mr. Levchin, one of the young princes of Silicon Valley, bought his first home, a 12-room Edwardian high atop a hill here, for $3.4 million. But Mr. Levchin, who made a fortune at age 27 selling PayPal, the online payment service he helped start in 1998, never moved in. He sold it two years later without having slept there for even one night.
At Sequoia, Mr. Levchin met James Hong, another successful entrepreneur who today is one of his closest friends.
“We’d go out drinking, and Max’d talk about how miserable he was, and I’d talk about how miserable I was,” said Mr. Hong, who was 27 when he and a friend started HotOrNot, a Web site popular with the under-30 crowd.
Mr. Levchin added, “We were both pretty pathetic.”
While not nearly as rich as Mr. Levchin, Mr. Hong describes himself as well off enough so that work is optional. He was collecting more than $1 million a year from HotOrNot, a project he and his partner had created in seven days and which demanded little of his time.
“All of a sudden, you have the luxury — or the curse — of being able to ponder the meaning of life,” Mr. Hong said. “You ask yourself, ‘Why am I not happier given how lucky I’ve been?’”
Only later did Mr. Hong diagnose the real source of his angst: he was not doing much of anything. So like most of his peers, Mr. Hong decided to throw himself back into work, in his case refocusing on HotOrNot in the hopes of transforming the Web site into a larger business.
In Silicon Valley, said Robert I. Sutton, a professor of management science and engineering at Stanford and co-founder of the Stanford Technology Ventures Program, remaining relevant, if not also admired and respected, requires that an entrepreneur continue to speed along in the fast lane.
“In other parts of the country, things like a great estate are the symbols people most respect,” Mr. Sutton said. “But here, the greatest status symbol is a person’s ability,” he added, to “still bring out hot new companies” and show that you are “working on the hot new technologies.”
Some, of course, choose to step off the start-up merry-go-round. Pierre Omidyar, 40, the founder of eBay, remains chairman of that company, but he gave up the day-to-day operations in the late 1990s. Since that time, Mr. Omidyar, who has a net worth of $9 billion, has devoted most of his work energies to philanthropic causes and investments in projects in the United States and in the developing world.
Mr. Levchin concluded that his competitive drive was too strong for that kind of life. During his time off, he competed with Mr. Hong over who was the more frugal of the two and challenged him to push-up contests at the gym. “No matter how many I’d do,” Mr. Hong said, “he’d have to do that many plus two.”
So Mr. Levchin did what any young titan in his position might have done. He dipped into his deep reserves of cash to pay for a large loft space and hired a half dozen of the smartest computer programmers he knew.
“I knew I wanted to be a C.E.O.,” Mr. Levchin said. “I just didn’t know the C.E.O. of what.”
Readying for the ‘Next Race’
Mr. Levchin proved vigorous in his pursuit of the right start-up. There are those in Silicon Valley who still create new companies out of a desire to crack a challenging technical problem. But not Mr. Levchin, who, like many of the area’s most highly regarded software engineers nowadays, views himself as the creator of potentially lucrative businesses more than simply the architect of a nifty new technology.
“It’s easier to start the next company than it was in the past,” said Marc Andreessen, who was a co-founder of Netscape Communications in 1994, when he was 22. It is also potentially more lucrative than it was even a dozen years ago, said Mr. Andreessen, who despite a net worth estimated to be in the hundreds of millions of dollars is now at work on his third start-up, a social networking company called Ning.
“For the first time in history, you have a global market of 1 billion-plus people, all connected over an interactive network,” Mr. Andreessen said. “The opportunities are bigger than ever before.”
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