A few years ago, I didn’t understand the hype around tech startups. People have always built new products, ideas, companies. What made it special now?
I was once told: “It’s the mindset. These people really want to change something.”
Looking at the tech startup industry now, I mostly see business models focused on making a huge amount of money. They are not trying to change structures, businesses, or issues that we disagree with anymore. They don’t have a crazy idea. It’s about building the Airbnb/Dropbox/Facebook/Ebay/Uber/… for any other different case.
While some might argue that this is just an easier way to explain their model, it also easily gives the impression of “We heard that idea works! And this is how we want to get a piece of that cake!” Also, “We are the Airbnb/Dropbox/Uber for ____” makes ideas sound less interesting, because the model is known and there is not much excitement to add.
Fixing no problem is ok as long as your idea is killer
Despite the fact that a big player (e. g. Facebook, Airbnb,…) has fixed a problem, it is common to think that the idea is going to solve a problem in a different area as well. In this case, many startups end up creating a problem to solve instead of solving one that actually exists.
Addressing your sense of humor, here is the Airbnb for Ponies:
While this video is clearly a fun piece, many startup pitches I listen to are not.
As a startup, I thought you would either fix an existing problem or have an innovative idea that can make it, because it is genius.
Take, for example, Twitter. Twitter didn’t fix a problem. It is hard to believe that millions of people wished for a 140 characters tool to talk about #tvshows, #cats, and #selfies (as the pitch deck couldn’t be found online, it is unclear if they had other intentions).
By inventing something new and not “The Facebook for short messages” or “The text messages for the world”, Twitter left enough room to become what they are: one of the few startups that really made a change in how many people communicate, share and exchange information worldwide.
Growing is important! Otherwise you won’t be able to sell.
I once asked who the target group for the startup presented to me was. The answer was short and simple: “In the end: Google. They will want it.”
It is ok to me to start an idea and lose interest on the road and sell it. However, I miss the people who build a company, because building a company is a long-term commitment and requires development.
Being acquired can slow startups down by either the new owner (e.g. Google) or the spirit. As Ted Livingston, CEO of messaging app Kik, points out (Wired 04/2014, p. 87): “We worry more about Line, KakaoTalk, and WeChat than WhatsApp. You take this small, hungry company and give them $19 billion, and they aren’t hungry anymore.”
Stay hungry, stay foolish?
Talking to many founders at conferences, I got the impression they are not hungry anymore. They only wait for the desert: the exit.
The ideas, the impact and building a company, do not seem to matter anymore as much as who will buy the startup in two years.
What happened? Where are the kids that want to try The New? The people who think bigger? The ones that think so differently that you shake your head but at the same time keep their idea in your mind for weeks wondering ‘What, if this really works?’
Is it because investors fancy to see a proof of concept (“This works in the United States, too!”)? Is being acquired “Giving up on making it on your own” or “You’ve reach your final destination” ?
Or is the startup industry just like any other? About making money and gaining power?
If the answer is “Yes”, we should think about a pivot.
Image Source: Felicitas Hackmann