Reading about startups is clearly the thing this guy thinks people know they want. To me this reads like the promo to some $29.95 eBook I won’t be able to live without.
I find the HN style obsessions around start-ups as vehicles to make money by exploiting a niche deeply unhealthy. There is no focus on the social good of your work, on the technical merit of it or of the health of you, your coworkers or your users. Forget your 174th shitty startup idea, go do something you know is Good (with a capital G) and build it well.
There seems to be a belief that the act of making something which exploits a niche and makes money (not on its own, necessarily, but through an IPO, an acquisition, etc.) is necessarily a good act. Many in Silicon Valley have talked at length about the ways in which technology improves the world. And they’ll act as if improving the world is truly the point of the startup world. Of course, this is all done to assuage fears, and to encourage people to give the techies the legal freedom to do things they currently can’t (in other words, it is an argument against regulation).
Yet of course, helping the world is not the goal of the startup world. The goal of the startup world is to make money. And that’s fine! That’s dandy. Except that it is obscured by this self-congratulatory narrative that spins startups as the world’s saviors. It creates an environment where people are not only told to mindlessly seek growth (not profit, which is apparently antithetical to growth) but to imagine themselves heroes while doing it. It breeds an arrogant smugness that looks down on other people, and it inflates the importance of the startup world to absurd proportions; as if the only good, worthwhile work is being done there.
Many interactions I’ve had with people from the world of startups have been unpleasant. Because the ego and self-congratulation is wildly out of proportion with the work being done. And this ego kills companies. It is isn’t designed for the long term. It ignores a need for stability, it forgets the good of its users, it collapses into acquisition. The startup world is the startup world because that is the state its organizations stay in. It is not designed for stability. It is not designed to make companies. It is designed to grow, and it is very good at what it does.
I’ll end this rant (and I apologize, for it is indeed a rant) with this: the startup world has in fact done some good. It has created a vibrant economy that has weathered an intense recession. It has created wealth for many people. It has increased the rate of technological development. These are, by and large, good things. But it is also insular, and prone to group-think, and could use from time to time a dose of reality. And none of these are unique to it. They are the weaknesses of many large, elite organizations. But they are no less bad, and no less wrong. I hope to see more startups working on world ills. I believe that the knowledge and skill exists to make a difference, but I also think there are forces at play which hurt Silicon Valley’s ability to really change the world for the better, and I wanted to make those known.
Alas, we have an economic system that values social good and technical merit and health only as a secondary or tertiary side effect.
The cure for that is going to be fairly dramatic, if it ever comes.
But you are right, “exploiting a niche” as basis for a startup is fundamentally flawed, even within the unhealthy system we exist in.
In the realm we find ourselves, there is a measure of “What People Want”.
It is “What People are spending Money on”.
I prefer to think about it as “Intercepting Flows”.
$X amount of Money Flows from A to B for some reason C.
Can we satisfy reason C well by doing something new for $Y which is markedly less $X?
If $Y is sufficiently less than $X and the flow is sufficiently large, can we make enough in doing so to make more money than we are currently?
By “markedly” I mean, less than the cost price of the previous service, otherwise you’re in a price war with an incumbent… and you will lose.
If so then you have a viable startup.
This is one of those articles that seems plausible on first read but after a bit of thought doesn’t hold up to scrutiny. There are plenty of successful ideas based on things people didn’t know they needed. I didn’t know I needed Twitter but I’m very glad I have it now. I didn’t know I wanted a memory foam mattress, but I would never buy anything else. I could mention post-it notes, youtube, or even the mobile phone as solving problems I never knew I had.
I didn’t read the article, but I disagree with it.
I think the fatal flaw is that a tremendous amount of startups don’t have a sound business model and just bet on being acquired by a larger company before their money runs out.
How do you know that’s not what the article contains if you did not read it? :P
(You are correct, but one of my hopes for Lobsters is that people do at least read the article first before arguing against it.)
It’s just like those “Will X be the next Y” headlines where you can answer “no” automatically. :-)
Surely the point of a startup is to discover a viable business model for an idea? If you have a business model and are making money then you’re not a startup, simply a new business.