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Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats.

If the bureaucratic trap is like a cage that restricts the opportunities for people to contribute all they can, the entrepreneurial trap is a void, a black hole into which people disappear when they lack direction or accountability. The issue is balance: enough breadth in jobs and decentralization in decisions to allow initiative and creativity, but enough discipline and direction and controls to focus local initiative on the highest priority tasks from the standpoint of the entire corporation.

The central problem of the late-'90s business model was that customers got a free ride. In the balance between customers and capital, capital underwrote everything. Today, the best business plans are the ones where customers pay for their share of the cost. That's a very simple test. The customers pay either by acquiring lots of product or by underwriting the development. If the customers don't want your product now, why are you doing it now? I don't care what customers are going to want in the future. Don't tell me about the new, new thing.

Entrepreneurship is the relentless pursuit of opportunity without regard to resources currently controlled.

Classic entrepreneurs are likely to score high on achievement and autonomy but low on affiliation. They might rank somewhere in the middle on the need for power. Consequently, many entrepreneurs get bored and frustrated and often leave the confines of corporate life-or are moved aside-when their tiny ventures grow into big, bureaucratic businesses.

Corporations typically run on annual budget cycles, but new ventures can't. They need money when they need money-typically, a commitment of funding should come every few months. Those commitments should come only after the venture has reached clearly defined milestones. Poker players will tell you that, in seven-card stud, most of the money is lost on the fourth and fifth cards, as players indulge the unreasonable hope that an uninspiring hand might turn into something good. The same is true of [new] ventures: Companies should place new bets on them only if, at each stage, they are able to show real prospects for success.

The catch-22 that early-stage companies always face is that they must weigh the advantage of time to market against the risk of not building a strong enough foundation. The situation gets played out in almost every decision made: product completeness versus product breadth, distribution strategy, capital structure, geography. Entrepreneurial companies have to fight that trade-off all the time.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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I never invest in someone who says they're going to do something; I invest in people who say they're already doing something and just want funding.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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Most investors prefer "learn-it-alls" to "know-it-alls."

I think there are too many people who try to change consumer behavior. That's really expensive. When an entrepreneur tells me he or she wants to educate the market, I run the other way.

Very early on, the founders of startups make an important choice. Do they want success or control? Neither is bad so long as the choice is explicit. I've picked success. And success implies giving up control -- hiring people who are much better than you, or being willing to be the janitor if that's what's required.

Markets do not work as well for social entrepreneurs. In particular, markets do not do a good job of valuing social improvements, public goods and harms, and benefits for people who cannot afford to pay. These elements are often essential to social entrepreneurship. That is what makes it social entrepreneurship. As a result, it is much harder to determine whether a social entrepreneur is creating sufficient social value to justify the resources used in creating that value. The survival or growth of a social enterprise is not proof of its efficiency or effectiveness in improving social conditions. It is only a weak indicator, at best.

Visionaries buy on the promise of a product; pragmatists buy when the product's benefits are proven. But pragmatists usually control the bulk of the money. Understanding how a specific set of pragmatists and visionaries relate to one another in the application that the venture chooses to pursue is the key to rapid revenue growth; because, if you do business with the "wrong" visionaries, they'll lead you away from the very pragmatists you will need to turn a high-potential venture into a high-performance venture.

Outsiders think of Silicon Valley as a success, but it is, in truth, a graveyard. Failure is Silicon Valley's greatest strength. Every failed product or enterprise is a lesson stored in the collective memory. We don't stigmatize failure; we admire it.

The important difference between an entrepreneur and an administrator is that the entrepreneur is opportunity-driven, whereas the administrator tends to be resource-driven.

When societies aren't organized so that the old vested interests can be brushed aside, entrepreneurs cannot emerge. Social systems have to be built in which entrepreneurs have the freedom to destroy the old. Yet destroying the old can too easily be seen as a step into chaos. Societies that aren't ready to break with the past aren't willing to let entrepreneurs come into existence.

Silicon Valley isn't based on resource allocation, it's based on resource attraction, where somebody throws out an idea into this kind of marketplace for ideas. Either that idea attracts capital and talent or it doesn't. But there's no giant CEO brain making allocational decisions in Silicon Valley. There are many, many people making those decisions - It's very distributed. If one venture capitalist doesn't like it, you send it to another and another and another, and maybe you get funding and maybe you don't. You have to create the expectation that the kind of ideas that could change the destiny of a company can emerge from anywhere, and you have to create a system whereby people can quickly share those ideas.

There's only a fine line between entrepreneurship and insubordination.

Anyone who tends toward arrogance should be sentenced to a term of VC fund-raising during a tight market.

Start-ups tend to be enormously resource constrained. Typically they are not able to devote money and time to the problems of strategic uncertainty. As a result, start-ups tend to be "bet the farm" propositions: high risk, with the potential of high reward. Such firms don't manage strategic risk, they accept it.

The degree to which you manage risk will be a function of your ability to bear risk and recover from setbacks. On the continuum from the archetypal "two people in a garage" to Johnson & Johnson, I take the counter-intuitive view that start-ups are much better able to bear risk: if the venture fails, the people and other resources involved are typically far more easily redeployed than is the case with large corporations.

There is no such thing as a "space".

There is such a thing as a market -- that's a group of people who will directly or indirectly pay money for something.

There is such a thing as a product -- that's an offering of a new kind of good or service that is brought to a market.

There is such a thing as a company -- that's an organized business entity that brings a product to a market.

But there is no such thing as a "space".

And, as far as startups are concerned, there is no such thing as Web 2.0.

What happens when startups start getting referred to as "Web 2.0 startups" -- or for that matter, "B2B startups" or "mobile startups" or "pen computing startups" -- or as being in the Web 2.0/B2B/mobile/pen computing "space" -- is that trends are getting mistaken for markets and products.

You can't build a company based on a trend.

Trends are obvious, and there's no startup opportunity in the obvious.

It frankly doesn't really matter which trends, or design patterns, you incorporate into your product.

If the product is compelling to the market, it will succeed.

If the product is not compelling to the market, it will fail.

It's not much more complicated than that.

Successful serial entrepreneurs are able to recognize patterns before an opportunity takes shape. They search for ideas at the intersection of markets, industries, and emerging technologies. They look for disruptors that will "unfreeze" a stable industry and the companies that compete within them. They look for business models that worked well in one market and can be adapted and applied in another. They recognize that they must listen to customers but must sometimes educate the marketplace to new approaches. Entrepreneurs learn to identify ideas by raising their head above day-to-day operations and expanding their vision. They then prioritize and narrow the many ideas they generate into a potential opportunity that addresses a compelling problem for customers who are able-and willing-to pay.

One of the things we are doing in the venture capital business by raising ever larger fund sizes and amassing larger pools of capital under management is creating problems and then making them the entrepreneur's problem.

And so we tell the entrepreneur that we need 20% of his or her company to solve our problem. I don't think that's right. I've said this before and I am going to say it again. The scarce resource in the venture capital business is great entrepreneurs with cutting edge ideas willing to work 100 hour weeks turning the ideas into businesses. The scarce resource is not capital and yet we are optimizing our businesses to be able to manage ever larger sums of capital.

Entrepreneurialism is a way of living life, not a way of managing life. The real entrepreneur has a certain spirit, an elan and an approach to issues that is just different. And that is the key. In a system that demands sameness, the entrepreneur is willing to be different. Only by being different can things be made better. That is the philosophy at the heart of being an entrepreneur.

How do you know a great entrepreneur when you meet one? Great entrepreneurs would do a better job running the competition than their competitors are doing. They can tell you not only the ways in which their strategy is better than their competitors', but also the ways in which their competitors have created the very opportunity that they are exploiting.

There is nothing investors like more than a startup that seems like it's going to succeed even without them. Investors like it when they can help a startup, but they don't like startups that would die without that help.

The reason they like it when you don't need them is not simply that they like what they can't have, but because that quality is what makes founders succeed.

The average investor is a pretty bad judge of startups. It's harder to judge startups than most other things, because great startup ideas tend to seem wrong. A good startup idea has to be not just good but novel. And to be both good and novel, an idea probably has to seem bad to most people, or someone would already be doing it and it wouldn't be novel.

Be stubborn in the face of failure. Instead: Be determined in the face of disbelief.

The doubters are inevitable and the odds are stacked against entrepreneurs and startups, thus it is crucial to believe in yourself, your company and your solution. Yet that determination can become our biggest weakness when it manifests itself as stubbornness or inflexibility; we can learn more through failures than successes.

The difference between determination and stubbornness is the difference between ignoring people and ignoring results.

What do self-respecting entrepreneurs do when subjected to new regulations? They learn the regulations backward and forward and then vow never to start another business that falls within the scope of those regulations. And so off the entrepreneur goes to find a new way.

The new entrepreneur often seeks ways to innovate outside the scope of the newly established regulations. In the beginning, all that works out fine. We have innovations, we love the people who created them, they’re great heroes, the returns are strong, everybody says, “I’m going to be one of those guys.” Eventually, all the truly good guys who are going to get into that business have done so. The opportunity starts drawing less savory figures—charlatans who overmarket, cut corners, establish usurious contracts, and do other clever things to generate profit for themselves. They end up bringing the system down. Then guess what happens? At the end of that period, after the equity premium has soared and collapsed again, the government steps in and regulates the systems, this time focusing on the last wave of abuse. And then we start over.

Entrepreneurial leaders need to be a little bit deaf and a little bit blind. By definition they're trying to do something that defies the common view. They have to be inured to skeptics. They have to believe that their vision is true and they can make it happen. But if they are too deaf and too blind they won't learn from the market or their advisers, and as a result they won't have a chance to course-correct. They won't be able to respond and adapt as more information becomes available to them. It's a tricky balance.