Helpless human babies and pre-revenue startups make for clever parents

It takes clever parents to raise a helpless human baby to adulthood;
It takes clever entrepreneurs to make a pre-revenue startup a success.

By George ILIEV

All babies are vulnerable when they are born. Yet, many animals give birth to young who get on their feet in minutes. Why are human babies so helpless?

Research by Rochester University suggests an interesting hypothesis: humans have become so clever exactly because their babies are so helpless. Helpless babies need smart parents to be able to survive: the more helpless the baby, the smarter the parents need to be to raise them to adulthood. This creates an evolutionary loop which allows babies to be increasingly helpless, as long as their parents are getting increasingly smarter.

Now look at this analogy through the prism of the startup world. The Googles and the Facebooks of the last two decades were born as companies that didn't generate revenue. Many of them were moonshots that took many years to become self-sufficient. Yet, they had smart founders who managed to raise seed and VC capital to tide them over their first years.

At least this is the case in Silicon Valley, where venture capitalists will support a team of bright founders working on a promising idea. On the other hand, European investors are much more risk-averse. European VCs primarily tend to invest in startups that are already generating revenue or are close to that point.

This makes me wonder why the US startup ecosystem and Europe have diverged in their evolution and who bears the responsibility. If US startups are the human babies, are European startups the orangutans?

Photo Credit: Barry Bland

Why venture capitalists do not invest in flying penguins

Functional focus helps animals excel and entrepreneurs succeed
George ILIEV

Seasoned venture capitalists are known to refuse to invest in entrepreneurs who are working on more than one project at a time. Focus is the key feature that a VC looks for in a startup, as focused ventures are less likely to fail.

In the world of birds, the same principle holds true, known as the "tradeoff hypothesis". Birds that are efficient in diving are mediocre at flying, as wings optimised for diving make flying possible only at a very high energy cost. Murres and cormorants are an example of excellent divers but terrible fliers: murres are able to fly but only by burning energy at 31 times their rate at rest, which is the highest known ratio in the ornitological world. Similarly, because of the inefficiency of being able to both fly and dive, penguins gave up and lost their flying skills 70 million years ago.

Flying has evolved independently at least four times in the history of life on Earth (insects, dinosaurs, birds and bats) but the loss of flying in birds has occurred independently at least five times.

Focus appears to be the key to success in both startups and animals.

(Photo: Walking penguin, Boulders penguin colony, Cape Town, Oct 2012. Source: George ILIEV)