As we celebrate the 521st anniversary of Christopher Columbus' discovery of America, let's remember him for who he really was--America's first entrepreneur.
Columbus' crazy idea, that he could find a shorter route to the Indies, began the same way most modern, new ventures do; some people laughed outright, some may have tried to steal the idea outright, and some stroked their beards and said, "Hmmm...maybe, but it's not cost-efficient." Sound familiar?
Columbus lived long before the words "startup" or "bootstrap" became part of the business vernacular, but he possessed all the distinct qualities of an entrepreneur that still resonate today:
- He had a big dream that he was determined to follow through
- He never stopped learning from others
- He was a risk-taker
- He was willing to invest his own resources
- He had investors already lined up to partner with his bigger venture capitalists
- He negotiated for a percentage of revenue and a buy-in option for any future commercial ventures that resulted from the initial venture.
When Columbus presented his untested, "pie-in-the-sky" idea of finding a shorter route to the Indies, he pitched to two of the world's most daunting VCs of that time, the Spanish monarchs King Ferdinand and Queen Isabella. No strangers to new investments and the inevitable wait for long-term gains, Ferdinand and Isabella were, nevertheless, wary of this particularly brash sailor who had been previously rejected by both the Portuguese and English kings. Isabella referred Columbus' proposal to a "committee of experts" who promptly advised her to back away.
It is at this point in the story that Ferdinand and Isabella mark their place in the history of venture capitalism. Although they followed the advice of their experts in delaying their investment, they decided to pay Columbus an annual retainer for the next two years, to discourage him from taking his "big idea" elsewhere. Like some modern financiers, perhaps they recognized the immense value of such an idea and wanted to protect it for themselves, while they gathered more information and financing.
Columbus, for his part, already had private investors lined up to bear some of the burden and was ready to invest his own resources, as well. After two long years, his patience and ambition finally bore fruit, and Ferdinand and Isabella granted him unusually generous terms in return for their investment--a 10% equity stake in any ensuing profits, a buy-in option for one eighth of any resulting commercial enterprises, and the title of CEO (okay, technically Viceroy and Governor, but effectively the same as CEO).
Entrepreneurship really hasn't changed all that much since Columbus' time. The desire and ambition to conquer new worlds is just as vibrant today, whether as an explorer like Columbus or as a modern-day conquistador of the Internet. Entrepreneurship is the universal drive to meet a personal best and not only succeed at a goal, but surpass even our own expectations of ourselves.
We are all entrepreneurs in our way. Tomorrow's reality starts as today's dream, so dream big, and find your own New World.
Happy Columbus Day.