Bessemer Venture Partners

Editor’s note: This guest post was written by Prerna Gupta, who is CEO of Khush (now part of Smule), whose music apps,like Songify and LaDiDa, have been used to create over 200 million songs worldwide. You can follow her @prernagupta.

When I became an entrepreneur at the age of twenty-three, I began in earnest, as do all entrepreneurs, chasing a dream. My dream was clear. I would build a consumer technology company that reached ten million people and sell the company for millions of dollars, before the age of thirty. Then, as the dream went, I would retire to an oceanfront house on a warm Pacific beach and learn how to surf.

I recently had the fortune of celebrating a year in which I saw that lofty goal fulfilled. My company’s iPhone apps had over ten million downloads, and a competitor paid a large sum of money to acquire what we had built, just a week before my thirtieth birthday. Dream had become reality.

I took a trip soon after to a secluded surf beach on the Pacific coast of Nicaragua. Sandy-bottom beach break. White sand. House so close to water that the sound of crashing waves made it hard to sleep. This was it. I had made it.

Yet, as I sat dangling my feet off a seven-foot surfboard, missing wave after perfect wave, I saw an unmistakable truth. I was terrible at surfing, and all I really cared about anymore was launching another hit app. Far from retiring, I found myself more in the thrall of ambition than ever before.

Having risked my career in order to escape, at all costs, the Great American Rat Race, this was disconcerting to me. My entrepreneurial intentions had, after all, been pure at the outset. I was drawn to entrepreneurship by the lure of freedom: control of my time, the ability to work on my own creations, no boss, and, of course, the potential for independent wealth. But the purpose of the money was never to buy fancy cars and houses, or to be richer than my peers. I viewed the money simply as a lifelong guarantee of these freedoms. When I had enough wealth to live modestly for the rest of my life without working another day, I would quit. I would stop chasing the dream. And yet here I am, still slaving away. How could this be? I am not one of those miserable over-achieving types who are satisfied with nothing less than better-than-everyone-else. Really. I’m not.

Am I?

You see, a funny thing seems to have happened just before I reached the ten million users mark. That goal of mine nefariously shifted by just a bit, a decimal point to be precise. I have a new goal now. It’s 100 million.

This is the disillusionment of the entrepreneur. There is no such thing as success. It is a moving target. A mirage. By the time you attain what you thought was your wildest dream, reality has moved on and left your dreams in the dust. And the desire for success grows stronger still.

I do not like being enslaved, by anything. There are times when I can feel ambition, that greatest of American virtues, imposing its power over me. There are times when I succumb, for a short while. But to allow myself to be driven by ambition alone would be the ultimate failure. I strive for happiness. Not happiness when I am sixty, but happiness now, and tomorrow, and the day after. And although ambition and happiness can coexist, I have found that the first much more readily thrives without the other.  I understand this now, as I understood it at twenty-three, and my values are unchanged. What can then explain the control ambition has over me today?

Many who run in entrepreneurial circles would say that my dream was insufficient in the first place. Indeed, Silicon Valley frowns upon such middling goals as selling one’s company for mere millions. We should aim for billions, we are told, or not aim at all. I am loath to admit that I have let that over-achiever’s ethos influence my own thinking, but I suppose it is at least partially true.

That’s not the only reason though. While my values have not changed, what has changed is this: work is more fun than it used to be when I was twenty-three. Work actually makes me happy. I always enjoyed entrepreneurship, even though I had many setbacks and failures along the way, but it is infinitely more fun now that I have had some tangible success. This is the real reason I continue. Success builds upon itself, and in so doing, makes the journey more fun. That is not to say I won’t still have failures, in abundance; I am certain I will. Yet underlying the day-to-day failures is the knowledge that I can never truly fail again, because if success does not exist, neither does failure. I am finally free. I am free of the fear of failure. Perhaps that was my dream all along.

I’ll still learn how to surf one day, as soon as I reach that 100 million.

In the spring of 2001, with the telecom market melting down, wireless-broadband startup Flarion was out raising cash. And having a pretty tough time of it.

“We were on thin ice,” recalls former Flarion CEO Ray Dolan. “We were down to two payrolls or three.” To make matters worse, one of the company’s major strategic investors was balking at ponying up more money for the untested venture.

But two of Flarion’s other investors, Bessemer Venture Partners and Charles River Ventures, stood by the company, providing it with credibility as Flarion battled much larger, deep-pocketed players, according to Dolan. Despite the tough environment, Flarion was able to close its funding round—and convince the strategic investor, a big Silicon Valley tech company, to participate, too.

Bessemer and Charles River “could easily have blinked, and I would have been playing a weak hand,” Dolan says. “Cisco wouldn’t have closed.” Instead, Flarion raised the money, and it proved a turning point for the company. Flarion was able to invest in its business and immediately hired a new vice-president of engineering and a head of sales—key positions that helped Flarion move forward with its business and product plans. In early 2006, Flarion was acquired by Qualcomm for $805 million.

Bessemer Partner Bob Goodman, who originally invested in Flarion as a spinout of Bell Labs and recruited Dolan to the company, says he stuck with Flarion because it was making a real “breakthrough technology.” The company was risky, he says, but worth taking a chance on.

“I had looked at a gazillion proprietary wireless standards and turned them all down,” Goodman says. Flarion was different: “I knew I was ready to make this particular bet.” Goodman had the confidence to back Dolan and his team because he had studied the wireless-broadband market exhaustively as part of a Bessemer investing “roadmap”, the firm’s rigorous process for identifying promising industry sectors and companies.

Once he invested, Goodman helped Dolan negotiate complex deals with carries like Nextel and T-Mobile. Goodman had that expertise because he previously had been CEO of two wireless companies himself.

Rajiv Laroia, Flarion’s founder, says he had heard negative stories before starting Flarion about how some venture capitalists operate, but was pleasantly surprised by his dealings with Goodman and Charles River’s Bruce Sachs. They asked tough questions but didn’t interfere too heavily in the company’s day-to-day affairs.

Both those investors also were “the only two guys who actually came out to Bell Labs to see me” as part of their due-diligence process, Laroia notes. There, Goodman and Sachs got a first-hand look at Laroia’s initial work building a brand-new wireless standard specifically designed for Internet protocols, which Laroia felt was a better alternative than the 3G standard being developed by wireless-phone companies for cellphones.

“Lucent apparently didn’t want it. They didn’t think it was very valuable,” Laroia recalls of his technology. But Goodman and Sachs did. Working with the two VCs “was just an eye-opening experience,” and a very positive one, Laroia says.