Bad economy? Good.
I, for one, am excited about the upcoming market challenges facing start-ups. Yes, less money will be invested. Yes, valuations will be lower. And yes, start-ups will have to run leaner even if at the expense of growth. Good.
As a fan of technology and innovation, I’m bored. I’ve been bored. The past few years have been littered with over-hyped, over-funded “companies” (please note the quotations) that are much better suited as plug-ins or features than real businesses. Everyone knows this, but the tech community prides itself on building “the next big thing”. So it’s compelled to throw catchy language around in an attempt to convince itself that we are continually entering new stages of development. Web 2.0. No, Web 3.0. No, cloud computing!
But no matter how or how often you say it, the fact is innovation has stalled. Rather than building disruptive technologies that can transform an industry, entrepreneurs have focused on the race to be the latest [insert hyped trend here] company featured on Techcrunch. Why? Because Techcrunch = hype, hype = VC money, VC money = more hype, and more hype = a quick flip. It’s a beautiful equation, but one that only works with excess VC money, growing budgets, and dying incumbents that are scared shitless.
Even if you exclude the “me-too” noise, what we’ve been experiencing for the last several years is, at best, simply the natural evolution of previous innovation: adding a new feature, designing a better UI, expanding into new markets…making current technologies incrementally better or more useful. Necessary? Of course. Exciting? Not the slightest. I’m bored of incremental.
[Enter the current economic crisis]
The climate has changed. There is a cautious attitude among investors (if not an actual strain on VC money), budgets are declining and exits of any kind are years away (at least for money losing start-ups).
Now this? This has the potential to be exciting. With funding hard to come by and quick exits but a memory, the noise will fade. Only real business models with true long-term value creation potential will get funded. And only smart, passionate (yet prudent) entrepreneurs—those willing to risk it all for something they truly believe in—will survive. Long-term perspective and passionate minds is a beautiful combination, one that leads to the creation of disruptive technologies and ideas.
I, for one, am excited.
