Startups, who’s in to be Apple?

Like most of Nerd America I started Reading the Steve Jobs Biography last night. I got in some good reading at the gym this morning and started thinking. I haven’t made it to the Apple years yet, but as I was reading it, thinking about Apple, about Jobs, startups and about death, a notion started forming.

Who’s going to step up and be Apple? Heck, where are our Hewlett and Packard? Our Michael Dell? ¬†Bill Gates?

I work in a space with a fair amount of startups, and being so close to Boulder I hear about a lot more of them, and of course I’m in the Silicon Valley for events a fair bit too, and of course I follow my friend Eric Norlin. So I’m not uninformed when it comes to startups.

I know there’s awesome startups out there doing cool things (like Bloom). I work in the same building as one. But in looking at them and at most other startups, I wonder, who’s solving tomorrow’s problems? Who’s working on making the next big thing? NOT the next thing for AOL or Google to acquire. It seems that most startups are starting to be bought by someone, existing more than 5 years isn’t in the plans. That certainly is the exit that makes the most financial sense for their backers, and the founders even. I wonder sometimes if our VC and Angel worlds are so wrapped up in ‘quick bucks’ and early exits, that they’re encouraging young founders to not focus on building companies that can or will be around 20 or 30 years. Let alone build companies that are focused on tomorrow’s problems. Sure messy contacts, old school comic readers, and lack of robot balls are problems worth solving, that’s not my point. My point is there should be a balance, and I don’t see it.

Looking at Techstars and Ycombinator I see awesome companies making cool things like gMail plugins and robot balls with LEDs in them, and new takes on training sites, sites about treating musicians like stock, and such. But I wonder will any of them exist in 5-10 years? I suspect not. They’ll either have folded up and moved on, or been absorbed into some other larger thing. And that’s ok in it’s own right, but where does that leave us? The Country of Dell and HP and Apple and Microsoft? I feel like it leaves us with a sad lack of innovative long term tech companies. VCs are bitching about immigration policy not letting tech founders into the country in high enough numbers. I’d argue the gov’t should be looking at these VCs and asking where the companies that will lead innovation are and why they aren’t helping build them? I’d be thrilled to let the next Bill Gates in on a Startup Visa, but not if he plans to simply build something he can sell to Microsoft for a quick buck.

I know in startup circles and no doubt in VC circles getting acquired is a win. In my book it isn’t. I remember sitting around beers with some friends talking about a company in Boulder that was bought before it even left private beta. To me that was a fail. Sure they made out like bandits, everyone got paid. But they were barely a business, they had maybe a few customers, maybe a few hundred, but they were beta testers not paying customers. I suspect that’s why I’m drawn towards brick and mortar style businesses. Conferences, coworking, etc. Because those businesses are immune or less politely often excluded from the hub bub of tech investing. Therefore for the most part they require bootstrapping which it seems so many startups can’t or won’t do. I’ve seen ideas live and die based on acceptance to Techstars. While I have no doubt Brad Feld and co. know a winner or at least a good horse when they see it, I’m sure they’d agree they can’t see all the winners (or losers) all the time.

That kinda brings this all back around for me. I’ve never asked for money or (at least yet) taken out a bank loan for 360|Conferences or Uncubed. I live and die by what I can do on my own (or with partners as the case may be). In both cases i think to myself often, are these businesses that will be around in 10 years? Can they be a legacy, can I actually do something good with them? I think both can. I don’t know if either will, but I think both can, and I’m happy to try and find out. I think both started for the right reasons. Trying to change systems that exist, for the better of the communities they exist in, ¬†which to me is the right reason to start a business. Will I get rich? be acquired by someone? Probably not on both counts, but that’s ok because that wasn’t and isn’t my motivator. I like money don’t get me wrong :) I want to live a comfortable life, but that’s the extent of it. I don’t need to make something someone else wants to buy so I can pay back investors and retire at 35.

I wonder if startup founders go to bed at night thinking about the future. Not the future where they get bought, where tech crunch writes them up and they secure yet another round of funding. A future where they employ thousands. A future where they and their product/service are shaping lives. A future where they make a difference for more than a year. Sure payroll next month is important, press is important I’m not discounting that, but if they’re not thinking about 10 years from now, I’d say they’re doing it at least a little wrong.

 

4 thoughts on “Startups, who’s in to be Apple?

  1. David Pennington

    It’s really easy for a tech start up to dream that they are going to be the Apple circa 2008, not the Apple circa 1988.

    Everyone today was instant gratification. They consider their VC investment a “win” just because it’s got a dollar sign attached to it. How many of them think about the first profits? The real cash that comes with selling a product to a customer, not an idea to an investor.

    I also think this quandry has a lot to do with the fact that there are a lot of brands out there, but not a whole lot of icons. Apple, while I hate it, was innovative while being simple enough for the everyman. It seems a lot of new products aren’t designed for the everyman anymore.

  2. John Wilker Post author

    Completely agree. The focus has shifted from serving a customer/making a ‘thing’ to ‘selling to an investor’ for most founders.

    Yeah love or hate Apple, they were an icon, as is MS and HP, etc. But yeah most are into the quick gratification.

    Makes me wonder what the tech landscape will be like in 2025 for the US.

  3. Phil Chung

    Well said John. Heck, I think there are very few in this industry (including me) who haven’t at one time or another have thought about the quick exit.

    I think as we move into the future, and the pace of change continues to increase, there will be fewer and fewer companies that survive long term. Especially in our industry (“software”), where people are very quick to move onto the next big thing and tech you see today won’t even be relevant in 3 years.

    I think everyone agrees that the big thing Apple did well was build loyalty, almost to the point of fanaticism. I think the companies that survive, regardless of their product, have to have that. Unfortunately, most of them are thinking more about how to get rich quick than spending time thinking about how to keep their customers happy.

  4. Kevin

    There’s been a lot of talk around this subject lately (in certain circles…not in others), including the question of are we actually innovating enough. Are we actually creating new ideas, businesses, technologies, etc, that not only solve real problem, but can be the basis for, or foundation of, future economic, and technological expansion.

    Tech startups are notorious for employing very few people, while labor intensive businesses such as manufacturing employee an order of magnitude more for each dollar of revenue…that’s assuming the tech startup has any revenue. Although it’s much more capital intensive to create a new car company, for instance, the potential for helping power our economy is probably much greater.

    I for one do not need any more ways to share favorites, locations, music, or movies, or communicate with friends (and strangers). I also don’t need any other ways to download or listen to music, tell people where I am, broadcast my opinion, learn about new restaurants, music, movies, get deals, local or otherwise, book trips…and on and on.

    What I would like is new ways to travel, power my life, or make health care cheaper. This would make my life better. One more hyper-local-social-deal app, is one more too many for me.

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