Who is the father of modern venture capital? Surely someone from Silicon Valley in the late 60s and early 70s, right? Wrong.
The father of modern venture capital is General Georges Doriot who helped to form and run American Research and Development, the first modern venture capital firm in Boston right after World War II. Doriot also taught at Harvard Business School and was a mentor and teacher to the first generation of Boston VCs who operated in the 60s and 70s.
With all the focus on the bay area and its history as the center of innovation in information technology, Doriot’s contributions are often overlooked. But now we have a new book and a blog, courtesy of Spencer Ante of Business Week.
Ante’s Creative Capital is about Doriot and the start of the venture capital business here in america post world war II. I haven’t read it yet, but I just ordered it on Amazon. Here’s a short excerpt from the Harvard Business School blog. I suspect the readers of this blog are the perfect audience for this book so you should all go check it out.
Fred,Is this lecture somewhat open to the public? I am actually flying up to Boston today as well and would love to get to listen.Trey
fred- this is awesome… I hadn’t heard about this…. here’s the interview I did with Spencer Ante about his book on Doriot just a few months ago in two parts on my podcast:https://soundcloud.com/vent…https://soundcloud.com/vent…
Creative Capital is a wonderful book about a fascinating character, General Doriot. Georges Doriot was not just a highly influential Harvard professor and the father of “venture capital” through his company American Research and Development Corporation, which funded one of the first high-tech behemoth, Digital Equipement Corporation. He also played a major role during WWII as the Director of the US Army’s Military Planning Division and was instrumental in founding INSEAD, one of the world’s leading business schools. What a life!I enjoyed this book several years ago and reread it with much pleasure recently.
I loved that book. I also had a painting commissioned of him https://uploads.disquscdn.c…
Fred- couldn’t think of a better person to give this talk. Really hope there will be a recording you can share with us (or a livestream?)
Congratulations, Fred. What a great honor. (Take a swing by 119 Bay State if you get a chance. You’d be impressed.)
I hope that you’re not “overbooked”.
All MIT students are overbooked : )
I didn’t want to hijack this thread so I did not comment until now. What could the United CEO been thinking? How about his advisers?It’s one thing to dispute taking somebody off a plane for a crew (which is just horrific, but I have seen people get bumped all of the time but before they got on the plane)But he gets knocked out cold, teeth broken, and concussed?And then say they were following the rules? You must have know the above. It’s not like he is claiming whiplash or a sprain.That is where you just have to say you are sorry, give a large lump sum ahead of the settlement for an agreement that we deescalate the situation.Yes, maybe he should have gotten off, but what are you thinking?This is one of the all time bonehead PR and Legal moves. Just add a zero to the claim, and subtract about 8 from your value.
By the way separate from any other issue with this event if you have an important event (like ‘I am a Doctor and need to see patients!!!’) it’s pretty much common knowledge to not book a flight the day before which could be cancelled for weather or any number of reasons. First thing I learned when taking cruises was you arrive at the departure port the day before and book a hotel just in case your flight is delayed or cancelled or some other issue (car on way to airport etc.). Otherwise you miss the boat. Ditto for luggage, pack in different bags in case they get lost.Munoz by the way is just a regular guy with a special skill that got him to where he is. Remember CEO’s are big picture guys. They don’t operate at the detail level where they would seat of the pants know the right thing to do here. As far as his advisors (marketing, pr) that is pretty wild the advice they gave him.The passenger was 100% wrong with how they handled this. We are not a society where you get to act like a 3 year old and hold up an airplane of hundreds of people even if you think it’s fucked up that you need to do so or if they airline is wrong or whatever. Take it up later.
Yes if it’s critical you don’t cut it close on the last flight.But you also don’t put the person on.Yes he was wrong, but those are some injuries, ones you can’t fake.Every CEO of United States Flagged Airlines is banging their head and wants him gone. There will be new rules.
To me, this is an extension of how we’ve been treated/treating people in the airport for the last 10+ years.Last year, I started to fly again fairly frequently, though not weekly like I did in the 90s. Not having status is an eye opener. The only surprise is that we haven’t seen something like this happen sooner.Even before this, I had started to consider driving to some destinations that are a bit of a stretch, and not practically do-able by train, even if it “costs” me in time — just to avoid what domestic air travel has become.
Yes he was wrong, but those are some injuries, ones you can’t fake.The injuries were as a result of him ‘resisting arrest’ (note the quotes) and not being cooperative. The blame for that falls squarely on the airport fake police not on United. Now if you want to argue that what I will call ‘service grade’ people working for United should have made better decisions fine. But they are the same grade people that work for all airlines. No amount of training can give people common sense. Plus if the people working in the cabin were ‘high capacity circuits’ they wouldn’t be working for United in the Cabin. Right? Are you raising your kids to work in an airplane cabin as an attendant? Or in the support system? Now if you want to say they should have a hot line to someone with a bigger brain back at headquarters (like with medical emergencies) then that makes sense to do in theory.This was like any airline accident as you are probably thinking as well. Had to have a bunch of things come together to create the issue. A certain nutty passenger, mistake at the gate let’s say, plus a bad procedure for dealing with a passenger that doesn’t want to cooperate.The fact is thought that in millions of miles of travel a year this is an edge case. Even if people didn’t have smartphones before it’s still so rare as to not even matter that much. Sucks for the guy and airlines suck and are arbitrary but that’s a different crime.
No airlines like United are to blame. I watch them. I used to be a million miler with them too. I quit, when I had a person in the club refuse to upgrade me for miles or money when I had the flu because “those seats are for the crew”They’ll play dirty tricks like bump one person in a party. That person is eligible for compensation, but of course the others can’t just leave a child or spouse behind. They get screwed.I watched a woman absolutely incensed about this. She might have been 4′ 6” and maybe 100lbs. The gate agent called the police and said she was a physical threat to him. To the cop’s credit he said this isn’t my problem it’s yours solve it.No, you play the game and sometimes it comes up bad for you. Then you don’t say well too bad.There must be thousands of stories of people physically removed from planes I’ve seen it dozens of times. But that one was bad.
They’ll play dirty tricks like bump one person in a party. That person is eligible for compensation, but of course the others can’t just leave a child or spouse behind. They get screwed.All good points and honestly you are the expert on this not me.But with regards to the above I am guessing that the ‘bump’ algorithm doesn’t take into account who is in your traveling party. And people frequently travel together.Let me ask you this. As a businessperson who travels on a schedule and has to make appointments and meeting and typically travels alone, would you want the algorithm to change to accommodate families? It’s easy for you to answer ‘yes’ but are you sure that you really would want that if you got impacted enough?And regardless of how you would answer most likely 100 guys like you would not give the same response. I wouldn’t for example.I watched a woman absolutely incensed about this.I think this is a matter of boundaries and customers are not different than children in many cases. You simply can’t let a person who is (by your words) ‘absolutely incensed’ set an example which says ‘get angry and get what you want’. That sends the wrong message and only invites more behavior like that. Plus as a slipperly slope if you allow people to get lathered up like that someone will end up physically lashing out among 100 people because they are more nuts than average.
I have said I screw people all of the time.And no the gate agent has a lot of control over the “computer”
Congrats! It is fun going back to your alma mater to speak.
I loved this part from the HBR review on this book, because it reminded me that the blockchain is pushing the envelope again on something new.”The idea of venture capital was so new that the founders of ARD were forced to reengineer aspects of various financial regulatory structures in order to make it viable. Before ARD could offer its stock, for instance, it had to obtain a number of exemptions under the Investment Company Act of 1940 from the Securities and Exchange Commission.”This is almost where we are with cryptocurrency tokens and funds. The industry is begging for a re-write and a reengineering of the financial regulatory structures of the 1940’s.
There right now. Thank you for the touching tribute to Doriot. Too few people know about his formative contributions.Also loved the West Point story. You may be the only person who was scared to tell his parent that he got accepted to MIT!
CONTRIBUTORS:excellent read.Still brings us back to Dan Primack article on the entire NYC Tech hype machine.If the information in the excerpts of the book are reviewed one key ingredient is continuously overlooked is the numbers which has been replaced with hype.A company can fail and a founder who actually was let go in disgrace can found another company in a matter of the following calendar year and the same VC’s are at his door begging to get in. It highlights the King makers motivation.http://fortune.com/2014/10/…
My good friend Dan’s article was written before Walmart bought Hoboken Based Jet for $3b, NY isnt the valley (thank GOD) but it has great companies at a fraction of the SF valuations.
Michael B. Aronson:we agree with your assessment on valuations between NY verses SF. But our point was that VC’s do the two step in discussing corporate governance, ethics, etc. but will continue to fund companies found and ran by people who were disgraced and let go from a previous company and then elevated like a Phoenix with the new venture. (Same people all the way around)
If I knew you were in the neighborhood I would have dropped by. Would also love a recording if they make one.
Me too, and I’m within walking distance of MIT today and the sun is out. Frustrating!
Who is the father of modern venture capital? Surely someone from Silicon Valley in the late 60s and early 70s, right? Wrong.On the west coast depending on the account you read it was Tim Draper (DFJ)’s grandfather that started the first west coast firm. SV certainly popularized the VC business.https://en.wikipedia.org/wi….That said I think there is a difference between ‘invented’ or ‘the father of’ and ‘popularized’. The people who ‘popularize’ things often get the credit and attention. Ditto for products. Invented is not the same as when something becomes popular and reaches a tipping point of recognition.A few examples:Fax machine (1843 by one account), popularized in the 80’s (widespread in business as opposed to niche years earlier by only larger businesses)Computers (1946?) but not fully popularized until much much later. Probably 70’s or 80’s but if you consider mainframes the 50’s.Smartphone – 2007 Apple with the iphoneElectric cars (1828 by one account) now Tesla is trying to popularize it.Day trading – Not until the dot com era was it popularized I think.Throw people off airplanes (since the start of air travel most likely) popularized recently by United Airlines  Sorry I had to say that.
He also founded the top business school in Europe, INSEAD. My favorite of his quotes: “without action, the world would still be an idea”