> Too many startups are focusing on areas that are over like 'Social'.
See, I like to think of a startup as any other brick and mortar business. If it manages to leap into a world-wide success, nothing wrong with that - but don't expect it. Have a game plan that focuses on the reality around you. A startup isn't always a Facebook or Instagram (although they were too, at a point). It's okay to build an online business and just make $60-120 k/year - you know, like any other B&M business owner. To me a "startup" is simply described as a scaleable model that employs technology intelligently with modern-day principals of delegation, pivoting & management.
I always get confused about exit strategy. To some it means here's what happens when/if I bail.... To others it seems to mean this is where I'll be a billionaire and.... Both are bunk to someone who is passionately building a product or service that they love.
>See, I like to think of a startup as any other brick and mortar business. If it manages to leap into a world-wide success, nothing wrong with that - but don't expect it. Have a game plan that focuses on the reality around you. A startup isn't always a Facebook or Instagram (although they were too, at a point). It's okay to build an online business and just make $60-120 k/year - you know, like any other B&M business owner. To me a "startup" is simply described as a scaleable model that employs technology intelligently with modern-day principals of delegation, pivoting & management.
The problem is that a lot of startups don't seem to have any plan in place to actually get to the point where they're actually making money on their own. The B&M store comparison is pretty apt here. You don't start a corner convenience store in the hopes that 7-Eleven will come up and buy you. You start the store because there isn't a store there, in the hope that enough people will come and buy stuff that you can make a profit.
That's where a lot of the worry is, I think. Especially because we're seeing a huge amount of VC funding going towards startups that are almost purely pinned on getting snapped up by a bigger company. Instagram is a great example of this. They have a product that has the majority of the current midshare in it's space, has millions of users, is a very cool application on both a technical usability level... and approximately $0 in incoming revenue. And no plan to make money besides "Maybe get advertisers on the platform at some point in the future"(http://behindcompanies.com/2012/04/instagrams-business-model... )[1]. From an investment perspective, it was a very bad investment... until they sold out to Facebook, at which point it was a GREAT one.
I think that's the concern that TFA has. A lot of startups, by and large, have turned into R&D for large corporations rather than traditional entrepreneurial businesses. The concern isn't that people are creating a product that's sold. They're creating a product without any concern about how to make money with it, and are hoping that someone with deep pockets will snap them up. There's a time and place for both, but the second shouldn't be getting nearly as much money as the first.
[1]To be fair, I think that with 30 million users, Instagram would have a viable business model based on advertising, and certainly could have made a profit. The problem, though, is that I don't think that model would return anywhere near the amount that the $500MM valuation indicated. Certainly, it would be in the low tens of millions of dollars, but not in the hundreds.
I like the view point. Another way of looking at this is what Startups were always good at. They were always good at "Disruptive Innovation". The regular "Continuos Innovations" is better done by big companies. Most startups today dont start with the idea of creating a business but to disruptively solve a problem. If the goal of the business is to cause Disruptive Innovation then it can be done better without looking at the money on day to day basis. Big Companies being able to acquire these Innovative companies works well for all parties involved.
See, I like to think of a startup as any other brick and mortar business. If it manages to leap into a world-wide success, nothing wrong with that - but don't expect it. Have a game plan that focuses on the reality around you. A startup isn't always a Facebook or Instagram (although they were too, at a point). It's okay to build an online business and just make $60-120 k/year - you know, like any other B&M business owner. To me a "startup" is simply described as a scaleable model that employs technology intelligently with modern-day principals of delegation, pivoting & management.
I always get confused about exit strategy. To some it means here's what happens when/if I bail.... To others it seems to mean this is where I'll be a billionaire and.... Both are bunk to someone who is passionately building a product or service that they love.