The First Startup: What Columbus Can Teach Modern Founders
The Perfect Pitch Deck (1492 Edition)
Columbus wasn't just an explorer – he was the archetypal founder. His pitch to the Spanish Crown reads like a modern Y Combinator application: a bold vision of disrupting the established trade routes to India, backed by questionable market size calculations and an innovative technical approach.
His genius wasn't in the accuracy of his pitch (he was famously wrong about the Earth's circumference), but in how he wove together multiple narratives:
- Short-term revenue: New trade routes to Asia
- Medium-term expansion: New territories for the Spanish Crown
- Long-term vision: Spreading Christianity across the world
- Competitive advantage: His "unique" western route approach
Sound familiar? It's the same playbook modern founders use:
- Short-term: Initial revenue streams
- Medium-term: Market expansion
- Long-term: "Making the world a better place"
- Moat: Proprietary technology or approach
The Spanish Crown: History's First Venture Fund
Ferdinand and Isabella of Castile were the Sequoia Capital of the 15th century. Their investment in Columbus's venture would be between $2-4 million in today's dollars (based on the ships' costs and expedition supplies). This relatively modest "seed round" funded three ships and 90 men - a lean startup by any standard.
The potential returns? Let's do the math:
- Initial investment: ~$1.2M (2024 dollars)
- Returns by 1600: Control of most of South and Central America
- Gold and silver extracted: Estimated $530B in today's dollars
- Additional value: Trade routes, land, resources
- ROI: Arguably the highest venture return in history
Like modern VCs, they:
- Made multiple bets (funded other explorers)
- Expected most to fail
- Looked for asymmetric returns
- Provided non-monetary support (royal decrees, introductions)
The First Stock Options Package
The equity structure of Columbus's venture was surprisingly modern. His agreement with the Crown, the "Capitulations of Santa Fe," was essentially a term sheet that included:
- Title of "Admiral of the Ocean Sea" (Think: CEO)
- Governorship of discovered lands (Board seat)
- 10% of all revenue from discovered territories (Equity stake)
- Right to invest in future expeditions (Pro-rata rights)
This package kept Columbus aligned with the Crown's interests while giving him massive upside exposure – exactly like modern startup equity structures.
Early Employee Experience & Recruitment
Columbus faced the same challenge modern founders face: convincing talented people to leave security for uncertainty. His recruitment pitch to his crew combined:
- Financial upside (shares of discovered wealth)
- Adventure and discovery
- Personal growth opportunity
- Mission (spreading Christianity)
Sound familiar? Replace "spreading Christianity" with "changing the world" and you have a modern startup recruitment pitch.
The Cortés Pivot
When Hernán Cortés landed in Mexico in 1519, he faced a classic startup crisis: his team wanted to abort the mission and return home. His response? He burned his ships, leaving no option but forward progress.
This gave us the startup phrase "burn the ships" – meaning to eliminate backup plans and commit fully to your vision. Perhaps the most dramatic modern example is Netflix's 2007 decision to shift away from their profitable DVD-by-mail business to focus on streaming. At the time, this seemed almost suicidal:
- DVD-by-mail was their profitable core business
- Most customers still preferred physical rentals
- Streaming required massive infrastructure investment
- Content licensing for streaming was both expensive and uncertain
Like Blockbuster's eventual fate would prove, the safe path often leads to extinction. Netflix's "burn the ships" moment set them up to dominate the streaming era. It's a master class in strategic commitment - sacrificing your current success for future survival.
Lessons for Modern Founders
- Vision Stacking: Layer short-term practicality under long-term vision
- Asymmetric Bets: Like the Spanish Crown, look for low-cost, high-potential opportunities
- Equity Alignment: Create incentive structures that align all stakeholders
- Team Building: Combine financial upside with mission and adventure
- Full Commitment: Sometimes you need to burn the ships
The Ultimate Lesson
Perhaps the biggest parallel? Like Columbus, successful founders often achieve something entirely different from their original plan. Columbus never found his route to India, but he changed the world anyway.
In startup terms: Having an inspiring narrative that can evolve and the resilience to see it through matters more than any initial plan. Columbus's story wasn't about finding India - it was about daring to venture beyond known limits. Similarly, great founders aren't defined by their first pitch deck, but by their ability to inspire others and persist through the unknown.