Looking to start a technology company in this era of small teams, lean cost structures, and fast times to market? You might want to check out Venture Mechanics in Seattle. It’s basically an outfit of four experienced startup executives who are trying to reinvent the process of launching tech companies. They held an open-house launch party last night in downtown Seattle, and they’ve just started to spill the beans about what they’ve been working on for almost a year now.
Venture Mechanics is not an investment fund. It’s also not an incubator, an accelerator, an angel investor network, or a mentorship program for entrepreneurs. That makes it different from Founder’s Co-op, TechStars, Founder Institute, Northwest Entrepreneur Network, or any number of angel groups around town that are also focused on early-stage companies.
It’s more like a “sandbox for serial entrepreneurs,” according to the website. But what does that mean? Forced to describe his new organization in one word, Venture Mechanics head Ron Wiener calls it a “Berkubator.” That means it takes some key elements of Warren Buffett’s Berkshire Hathaway investment model, and applies them to a portfolio of startups rather than acquisitions of established companies, he says. The main idea? Invest in cash flow-generating businesses, and use the profits to start new businesses.
Here are a few words of wisdom from Buffett that are applicable, says Wiener. “Buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” And, “I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.” And lastly, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”
Wiener, the co-founder and former CEO of Earth Class Mail (and five other tech companies), has assembled a team of “mechanics” that includes Peter Weiss, a 30-year veteran of finance and a prominent angel investor (he invested in Earth Class Mail); John Vogel, a longtime senior engineer with GoAhead Software, Tideworks Technology, and OneCommand; and Doug Choi, a lawyer and entrepreneur with leadership experience from Isilon Systems, F5 Networks, and Concur Technologies.
The word “mechanics” implies two things about the new venture. The first is that it will
