Wednesday, December 16, 2009

Is the tech start-up market aiming too low?

Clive Thompson's latest piece in Wired attempts to tackle the criticism that today's tech start-ups just aren't as ambitious as those from years past. Where are all those start-ups that are dreaming big like Google, eBay and Microsoft did?

As he explains:

You could argue that huge companies like Google and Microsoft and Facebook are working so ardently on big problems like cloud computing and social networking that less room is left for the little guys. But I don’t think that explains today’s smallness of vision. It’s always possible for tiny Davids to best tech Goliaths; indeed, that’s precisely what Google and Microsoft did back in their youth.


A more persuasive argument — which Lacy herself proposed — is that startups are hobbled by today’s quick-and-cheap startup culture. These days, Valley entrepreneurs tend to pick a cool (but niche) idea; bootstrap it with minimal staff, open source code, and rented server space; and then build a user base until some lumbering technosaur buys them up. That’s how Mint, which makes the nifty tool for analyzing personal finance, did it: Born in an apartment three years ago; sold to Intuit this summer for $170 million. This system is more fiscally responsible than the con-job IPOs of the dotcom boom — but it favors entrepreneurs with modest ambitions.

In typical Clivonian style, he elegantly refutes this argument by explaining how true innovation is invisible - that is until it pops into your field of view (think: my Mom lived her whole life without text messaging, and then poof, it becomes essential technology).

I think this argument is flawed for simpler reasons:

First, my sense is that there's a fair amount of revisionist history at play when you describe established companies like Google and eBay as having a grand vision from day 1. Check out eBay's story for a great example:

Originally called AuctionWeb and hosted on the same server as Pierre's page about the ebola virus, the site began with the listing of a single broken laser pointer. Though Pierre had intended the listing to be a test more than a serious offer to sell at auction, he was shocked when the item sold for $14.83. Pierre knew that he'd created something big as soon as he contacted the winning bidder to ask if he understood that the pointer was broken.


"I'm a collector of broken laser pointers," came the reply.


AuctionWeb soon took over Pierre's entire domain, www.ebay.com, short for Echo Bay, which was the name of his consulting firm at the time.

Do you really think AuctionWeb was created to change how commerce was conducted on planet Earth? Yeah, don't think so.

Secondly, if you look at Google, eBay, Microsoft and others, I think what you'll find as a common thread isn't vision, so much as Execution. Any group of guys can sit around in a bar and talk about making the world's information searchable, it's infinitely harder to do anything even close to that.

To imply that to "bootstrap [a business] with minimal staff" and develop a product is somehow the easy way out of developing a business is crazy. If anything, it shows that you have the dedication and passion to turn your idea into the next Google or Microsoft.

Vision is good, execution is everything. I just don't see the tech start-up world as suffering as long as there are businesses who are making solid and interesting products. Have patience, they'll be able to re-write their history and add a clever mission statement when they get just a little bit bigger.

2 comments:

  1. I can speak first hand that there are start ups that aim large. In my experience the vision is a starting off point. The ability to adjust the vision is more important.

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  2. Well put Khyle!

    -Ben

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