Was Christopher Columbus an Entrepreneur Like You Are?
By Cynthia Kocialski,
think the world has changed and that somehow the experiences of
today's entrepreneurs are different than yesterday's. Is it really
different? With Columbus Day upon us, let's step back and take a
look at Columbus through the eyes of today's entrepreneurs and start-ups.
Columbus was an explorer and an adventurer, but today he would simply
be called an entrepreneur.
Christopher Columbus was born around 1451 to a father, who worked
in the textile industry, and was of small means.
Today's Perspective: Christopher Columbus was not well-connected
and he had to build his professional network to achieve his goals.
Certainly funding was not to be found among family and friends of
his early childhood.
Columbus spent his youth sailing on small vessels. In one of his
writings, Columbus claims to have gone to the sea at the age of
10. Yet, a contradictory statement by the admiral has him becoming
a sailor at 14. In the early 1470s, he served on a ship associated
with the failed attempt to conquer Naples. However, during the same
years of 1470-1473 he can be found in the family weaving business.
In 1476, he sailed on a convoy attacked by a privateer - two of
the four ships escaped. His voyages continued into northern Europe.
In 1479, Columbus settled in Portugal, where he worked with his
brother as a mapmaker.
Today's Perspective: Columbus had some experience in his industry.
His resume was spotty. Nothing stands out or is remarkable at this
point. Being part of some failed voyages was not optimal for asking
investors for funding in later years.
In 1478, he married a lady of some rank, Felipa Moñiz de Perestrello,
daughter of Bartholomew Perestrello, a captain in the service of
Prince Henry the Navigator, and also cousin of the archbishop of
Today's Perspective: Now here's some potential to get family and
friends as investors, or at the very least, some introductions and
connections to those institutional investors (monarchs) and the
super angels (noblemen).
Identifying the Problem
In 1453, the Ottoman Turks took over the land-based trade routes
to Asia, which made travel through the region dangerous. Thus, the
urgent need to discover a new sea route to reach India and China
- vital sources of silk, spices and other products.
Today's Perspective: The political winds changed, causing profits
to be curtailed from a sole source supplier with no other geographic
location able to provide suitable replacements. There we have it:
customers desperately seeking a solution to an urgent problem. Surely
they tried other solutions, but apparently none were adequate. And
where there is profit, there is progress, and the greater the profit,
the greater the progress. Here the investors were trying to solve
a big problem.
The Product Concept
How Columbus arrived at his idea is not known, and the details are
disputed. It is said while working as a mapmaker, he came in contact
with many mariners. There were books written about previous explorations
to the east. He corresponded with some of the thought leaders of
the day concerning his proposal.
Today's Perspective: Columbus had a spark. He didn't take a half-baked
idea directly to the investors. He spent some time researching it,
discussing it with current day experts - the mariners that required
maps, and corresponding with the thinkers of the day. He refined
his proposal. Columbus' investment community was rather small. There
were only a few that could afford to fund him, likewise there simply
aren't a huge number of venture capitalists today and word gets
In 1485, Columbus presented his plans to the King of Portugal. He
proposed the king provide three ships and grant Columbus one year
to search for a route to Asia. The king submitted the proposal to
his experts, who rejected it. In their opinion, Columbus' proposed
route of 2,400 miles was far too short.
Although the king's council was negative, the king favored Columbus'
proposal. The king brought the proposal to the bishop of Ceuta,
who suggested the plan be carried out in secret and without its
author's knowledge. A ship was dispatched, but it returned shortly
after beginning its voyage as the sailors lost heart and refused
to venture far.
Today's Perspective: It would be a miracle today if an unknown and
unproven entrepreneur could secure major funding from the first
investor meeting. The king did exactly what the venture capitalists
and angel investors do today; they validate the technical aspects
of the proposal through their network of experts in many fields.
In Columbus' case, the experts weighed in with serious concerns
about the technical merits of his proposal - and rightly so. Columbus'
inexperience in sailing made him underestimate the circumference
of the earth.
As to the secret voyage, well ... that's when investors like the
idea, but don't like the entrepreneur. It's when investors feel
they want to appoint a more suitable management team. In Columbus'
case, the investors didn't feel he would be adding much to the execution
In 1488, Columbus approached the King of Portugal once again and
was rejected. Henry the Navigator had revived an old proposal for
Portugal to pursue a sea route around the southern tip of Africa.
In 1487, the Portuguese mariner Bartholomeu Dias set sail to round
the Horn of Africa. Shortly after Columbus' second meeting, Dias
successfully returned and Portugal was no longer interested in seeking
a westward sea route to Asia.
Today's Perspective: The investors liked Columbus' proposal, they
tried it, but it didn't work. So they sought a solution elsewhere
and chose to fund a solution that was proposed by a successful and
proven mariner - Prince Henry the Navigator. The entrepreneur is
never the only proposal being presented to the investor; there will
be many. Once Portugal had solved its problem, it was time to seek
funding elsewhere, perhaps with a competitor.
Persistence and Searching Harder for an Investor
Columbus had difficulty finding funding. His proposals were rejected
by the various European monarchs. While presenting his proposal
to the monarchs, he continued to meet with noblemen, seeking their
advice and securing connections. Columbus persisted as the royal
experts debated his proposal and subsequently denied its merits.
Columbus often fell into deep despair. When he presented his proposal
to Ferdinand and Isabella, it received the same rejection. One appraoch
was poorly timed, as the Spanish were in the middle of a struggle
that resulted in the conquest of the Granada Moors. However, the
Spanish monarchs offered him an annual allowance and provided him
food and lodging at no cost in all cities and towns under their
control, just to keep him from taking his proposal to someone else.
Queen Isabella rejected Columbus' plan three times before changing
her mind. Columbus' terms - the position of Admiral, governorship
for him and his descendants of discovered lands, and ten percent
of the profits for all trips made by Spain to the new lands, for
all time. Finally in 1492, the monarchs approved his proposal. In
August, his expedition departed and arrived in America on October
12. Columbus stumbled upon America. He returned the next year and
presented his findings to the monarchs, and Spain entered a Golden
Today's Perspective: Persistence matters a great deal in the start-up
game. Unless you've got a spectacular track record, funding won't
happen quickly - not in a week, not in a month. Entrepreneurs have
to persist for some time and there will be those times when the
entrepreneurs wonder why they are doing it. Cisco was rejected by
77 VC's before securing funding and it was near a 1,000 rejections
for Colonel Sanders of KFC. It takes a strong ego to survive that
much rejection. Timing is everything in capital markets. If the
entrepreneur is seeking any kind of outside funding, it is all somehow
connected to the capital markets. In Columbus' case, it was the
struggles between countries.
The Spanish monarchs essentially put a no-shopping gag on Columbus
- they paid him not to take his proposal elsewhere. This is green-mail.
Once Portugal had a sea route around the Horn of Africa, Ferdinand
and Isabella had to find a route to the East in order to keep their
competitor from grabbing the lion share of the market. Hence, their
sudden interest in Columbus and willingness to accept his terms.
In today's terms, Columbus demanded to be CEO and locked in a succession
plan for his children to be appointed CEO, he and his family were
to receive 10% of corporate profits forever - equity was out of
the question, but salary and profit sharing seemed acceptable to
the monarchs. To have demanded those terms for the monarchs, Columbus
must have been quite an ambitious man. Imagine the response a first-time
entrepreneur, with no track record of success, would get from a
VC today with those terms.
The world is not so different today than 500 years ago. Technology
advances as we further the improvements of previous generations,
but how people behave and react has not changed at all.
Cynthia Kocialski has founded three companies
and has been actively involved in more than 25 hi-tech start-up. Cynthia
has held various technical, marketing and management positions at
IBM and Matrox Electronics. She is a graduate of the University of
Rochester and the University of Virginia. She writes a blog at http://www.cynthiakocialski.com
Published - November 2010