The subtitle for this post is: “And other stupid ideas for the startup community”. Boy, I hope people kept reading to this subtitle or you’re really going to get the wrong idea about my blog…
If you’ve been reading this site for a while, you’ll well know that I’m a pretty severe skeptic of the current start-up landscape. The supply well outweighs the demand in a way only the dot-commy boomers can relate to. But, as much as I like to throw my opinions around, I’m also an early adopter who loves new tech and new ideas, so I’m naturally fascinated with new startups.
Last night I attended PopSignal, along with 400 other of Boston’s techy/new media types for an open bar, free food and pretty solid networking. All in all, the event was well done and not remotely as shady as you’d expect considering it was held at Tequila Rain, one of the sleaziest bars near Fenway.
The event was targeted for Boston’s tech people to share ideas and make connections to help get startups going (or at least that’s the interpretation I’ve come up with). So naturally, throughout the night I constantly found myself having the same conversation over and over again: here’s an idea for a startup, what do you think?
Well, as a natural skeptic of the area, here’s what I think: what value does your company add. You’ve got a funny name? Good work. Cool logo? Great. What does your company do that brings value to the end user. This should be the number one question for all startups. Value.
During the night I got into a discussion with the guys from a WPI startup caleed MessageSling. They’re making a free (ad-supported) voicemail-to-text (either text, email, or whatnot) service that, as you might imagine, sends your voicemail to you in a readable format. Seeing as that while talking to them I had two voicemails on my phone that I couldn’t listen to because it was too loud and busy, I remember telling them that their company “adds value”.
To me, there are a ridiculous amount of startups out there, or as Compete’s Max Freiert said: “too much noise”. The VCs are throwing money at anything that moves and has a funny name, which is making anyone with an idea think they can game the market. But what we’re going to see, and I think this will be relatively soon, is the cream rising to the top (or is it bottom… I don’t do much dairy so this analogy is lost on me).
As explained in this venn diagram I just created on MS Paint, there are a lot of VC funded startups, few of which add value (and you can also note that there are a few valuable startups that never receive funding… I can’t name any, but obviously they’re out there).
The purple area represents all of the startups that are getting funding that don’t really do anything valuable. Yeah, that’s a lot. No, this isn’t remotely based on anything by my healthy skepticism, but it’s likely pretty accurate.
This post isn’t meant to discourage the startup community by any means, if anything it should jazz you up that your startup does something valuable. Because if you have a startup, the first person you need to convince of your idea is you. So ask yourself now: what value does my company bring.
Lastly, during the conversation with the MessageSling guys I said that if your company has value then the money will come, to which one of them responded “yeah, but you’ve got to keep the doors long enough for that to happen”. The way I see it, if you are making something worthwhile then someone will be knocking at your door soon enough. If you build value, the money will come.
Although I guess good ideas that don’t work is where the little light blue sliver fits in to my arbitrary diagram…
Oh, and Ken George at The Conversation - please note the horridly poor job of brevity for this post…
Ok, I’ve ranted long enough. What do you think?
May 16th, 2008 at 12:44 pm
I couldn’t agree more with this blog. When a company adds value, that is true innovation. The whole space is too crowded with “waste.” Give the general consumer something they want/need and the landscape will shift from apprehensive to accepting
May 18th, 2008 at 11:17 am
Healthy skepticism never hurts but as someone once said: nothing good gets created without irrational exuberance.
May 19th, 2008 at 10:11 am
Zach:
Hah! I Have bested you in the brevity department.
Props though for the detailed analysis!
May 19th, 2008 at 10:48 am
I agree with this post, but it’s nothing new. People have and always will try to come up with strange and bizarre ways to make money. Whether it’s Zach Morris selling Buddy Bands or someone creating a stupid new startup - it’s all the same thing. Startups are just the new craze because it worked out for a few people.
May 19th, 2008 at 12:17 pm
@Drew
First, huge kudos for the SBTB reference. This is why we’re friends.
But secondly- I think you have a really, really good point. Startups are similar to the lottery. All you need is a few, well publicized, winners a year and you’ll get hoards of people trying to hit it big.
Why this bugs me, is that there are some really good ideas out there that deserve to hit it big, but with all the junk making noise the market will eventually die for both good and bad ideas.
A while back when I was working in more of a tech-salesy environment we used to have this saying to help push the high-volume model: throw enough crap at the wall and something is bound to stick. I don’t like seeing this model apply to startups.
Anyway, for continued humor, please watch this video on Buddy Bands.
May 19th, 2008 at 2:59 pm
oh that video is amazing - I forgot that they had to do that video…