I came across a post on HN today complaining of the lack of important things happening in Internet startups. The author, Swizec, makes a case for the existence of an echo chamber effect in Internet startup-land that leads to incrementalism.
I couldn’t agree more.
Here in NYC, there’s an echo chamber in the media world. Everyone knows the common wisdom; reaching your audience requires things like “starting conversations” and “engaging media” and “gamification”. All the speakers on the talking-head circuit say the same thing, and we all spend time hanging out together reinforcing these ideas.
No one in media seems to care about quiet successes, those great ideas that make things better, but don’t win any awards.
The same thing is happening in Silicon Valley.
The craze over the past few years has been “social”. I don’t just mean social networks like Facebook. Every darling Internet startup seems to be based on re-imagining something everyone already does, but making it social. Certainly, that’s the basic nature of the Internet, but there’s also this unspoken rule: you should want your startup to be famous, and to be famous, it better be social (with matching hockey-shaped adoption curve).
That’s why you want a famous angel investor, instead of one that’s tapped into your target industry. That’s why you shmooze at tech startup events instead of the events your target audience hangs out at. That’s why you want a nice writeup on TechCrunch.
You’re chasing the wrong dream. Fuck fame.
Fame is about the shiny new play thing, “the next XYZ but with twice the social”! The problem is that most of these fame-seeking new ideas aren’t novel.
Take airbnb, a company that democratizes the hospitality industry (i.e. locals can post their residence up there and have tourists rent the space). I pick on them because they’re actually doing something quite disruptive to the hospitality industry. Unfortunately, there’s nothing particularly interesting about disrupting the hospitality industry.
Airbnb provides a solution that used to be provided by hotels, craigslist, word-of-mouth, and so on. Certainly, they’re doing it better. They’re adding something new. But there’s not much they let you do that you couldn’t do before. Airbnb lets you… rent places.
I know I’m going to get a lot of flack for ragging on Airbnb. But really – better vacations? Talk about first world problems.
Or take a more obvious example: groupon. Their bright idea is… *drum roll*… to send out coupons. Woopee!
Everyone seemed to be thoroughly impressed by their business model until word spread that they were losing money hand over fist acquiring merchants and consumers – not in itself a problem – but also that merchants weren’t particularly interested in using the service again after their first promotion. It’s hard to make a business selling things people don’t want.
So, I have a thought for entrepreneurs over in silicon valley:
You can make a fine business applying your technical know-how to make things a little bit better, a little bit faster, a little bit more democratic for consumers. If you do, you’ll be able to raise some money (for now, at least) and churn out Yet Another Consumer Web App. Get enough buzz, and you might even succeed.
The alternative is to build things that fix problems that couldn’t be solved before.
There was no reasonable way for me to give directly to an entrepreneur in Sub-Saharan African before Kiva. There was no reasonable way for me to buy science textbooks for a student in Kansas before Donorschoose. I didn’t have access to the smartest people in the world before TED. Or if those are all too philanthropic for you; I couldn’t (automatically) keep track of my finances before Mint.
But I think you’ll have trouble finding many consumer problems that Western Society hasn’t already found some fix for, online or offline. That means you should either think harder about mass market problems in the developing world, or ignore the consumer segment and focus on domain-specific problems in industry.
These kinds of companies aren’t behoven to the Silicon Valley echo chamber. They don’t require fame.