Concur. I think this is a very volatile and potentially dangerous time to "do a startup" if you don't have a very focused and somewhat proven plan. I think it's time to ignore what the Cool Kids are doing (in 2-4 years, they won't be cool) and go away from where they are so as to avoid following them into idiocy.
This sounds easier than it actually is. The advice of "focus on real work and ignore the idiotic social climbing" or "build something useful" seems obvious and easy to follow, but when complete jackasses are getting funded and acq-hired for millions, it's easy to be swayed, embittered, confused, or otherwise influenced by the distractions. It's really hard for a 2x-year-old first-time founder not to find himself doing stupid stuff amid all the insanity.
Winter is coming. That doesn't mean that "the crash" is here. It might be 4 years out, or 4 weeks away. It might be a sudden drop or a slow deflation. I have no idea when or how it will come, and I don't think anyone does. Still, there are some conclusions to take away from it. First, those of us who aren't ready to be Founders properly (that means, having enough VC connections that VCs consider you a social equal and will take the time to mentor you if they don't fund you) should probably sit this bubble out. Sure, being a founder provides a unique and immensely educational "startup experience", but taking a subordinate role as employee #37 at a VC darling is not much different and rarely any better than taking a regular job. Actually, I'd argue that it's often worse for subordinate employees, because VC-istan tends to have crappy health benefits, inexperienced and unstable management, and a lack of long-term focus on peoples' careers (because the company may not exist in 5 years). If your ambition is to be a Real Founder (again that's not some guy whittling at his trust fund, but someone who VCs are actively interested in, and who could get an EIR job with a phone call) and you're not there yet, there's probably not enough gas in this bubble left to get there before the end of it. People who are out of school now have a decent shot at being Real Founder material by the start of the next startup boom, if they really crack the books and work hard starting now and right through the bust... during which the wantrepreneurs and social climbers will get discouraged and leave, making the field less congested and giving the real players a chance to shine.
Which means... it's time to take the focus away from what TechCrunch and Sequoia are doing, and back to the difficult and often obscure (if intrinsically rewarding, and often lucrative in the long term) campaign to improve one's technical skills through practice and hard work. This doesn't have to occur at a startup, although it can. But now is also a good time to go back to school, to work in a more established organization, to try out Real Technology instead of these silly social apps, and to start networking.
I don't think this is good advice. If you have the burning desire to start a company, you should start the company and not worry about timing the market to ride the bubble. People start startups because they have a solution to a major problem inside their head that's dying to get out, and because the alternative(getting a stable job) is out of the question, not because they think economic conditions are more favorable.
You can also build the initial version while still going to your regular job. So you don't have to give up on your safe salary.
If you can't do that because of a lack of focus, then maybe you are not ready to start a company. If a lack of time is what gets in the way, then maybe you need to be smarter about it and build less. If you can't do that, then maybe you don't have the discipline required to start a company.
IMHO, it's a bad investment to start a company without having real proof that the product is wanted by people. And ideally you must also have a couple of paying clients.
Solving a technical problem and starting a company are two different processes. I would say that it's better for most people to focus on the first, and then if there seems to be demand for the solution, consider the second.
If there's established demand for a product, then it might be time to start a company. If you already have clients or people dying to fund you (they asked you, not vice versa) then go. That's more acyclical than trying to become a VC darling.
Also, getting a stable job isn't out of the question for most people. This isn't 2008.
Which means... it's time to take the focus away from what TechCrunch and Sequoia are doing, and back to the difficult and often obscure (if intrinsically rewarding, and often lucrative in the long term) campaign to improve one's technical skills through practice and hard work.
Ignore TechCrunch and Sequoia - yes please :-) However, I'm unsure about the rest of the advice.
This maybe just me - but most of the problems I've had when I started a company for the first time (and second, and ...) are with the business skills not the technical ones. Being better technically doesn't make me better at running a business, finding markets and channels, etc.
I see just as many businesses fail through lack of business chops as I do lack of technical chops.
The most effective learning I've got in that arena was from starting a business and failing miserably. There may be better ways to learn now - who knows. But I'm pretty certain just focusing on sharpening your technical saw isn't going to make you more likely to succeed.
Maybe starting a new business now, in the face of almost certain total and abject failure, is just what the doctor ordered :-)
This maybe just me - but most of the problems I've had when I started a company for the first time (and second, and ...) are with the business skills not the technical ones.
Fair point, but right now the business world (in VC-istan) is loopy and you might learn the wrong things-- things that are only true at the peak of a bubble.
I know someone who had a startup in the late '90s. He didn't know what he was doing and never should have been funded. He ended up raising about $50 million. Being CEO of a transiently important company went to his head, the tide went out, and he crashed and burned. It's 13 years later and he still hasn't emotionally recovered. All of his subsequent effort has failed because he wants his late-90s startup back. This sort of emotional pollution can be obvious or it can be subtle. I think most people get affected by some amount of it over their careers-- usually the more subtle kind. Loopy, style-over-substance business environments where clowns are made kings are ripe grounds to take in emotional pollution, and it's harder to resist that than people think.
Maybe starting a new business now, in the face of almost certain total and abject failure, is just what the doctor ordered
Right now, the issue isn't that there isn't money to be made in startups. There is. But the environment is congested and therefore noisy rather than meritocratic and that tends to teach people the wrong lessons.
In times of congestion, social connections win. What this means is that 90% of what is being funded is raising money because of who the founders know, not what their ideas are. If you try to imitiate their ideas, you're learning the wrong lessons. If you want to be a startup founder, you're better off figuring out what you need to do to have more VC connections in 5 years, and that may or may not be starting your own company.
As I said, learning the wrong thing is more dangerous than sitting a bubble out and doing something else, and emotional pollution is a cause of the former experience. The late-bubble danger isn't an "everyone loses" abject failure; it's that you might watch unqualified people win, while losing, and start (possibly subconsciously) picking up the attitudes and approaches of those winners, which might not suit you later when substance becomes king again.
Maybe looking at what's VC funded is a mistake - but that seems an fairly small chunk of the startup community. Even in this effervescent time. Where most of the noise is, of course, but there are a stack of people bootstrapping products, or starting small dev or design agencies, or consulting. Lots of other ways to start and build businesses, and many lessons to learn outside of the VC funding bun-fight.
(I also question anybody who has a generic career goal of "startup founder" - they're probably heading for trouble anyway :-)
This sounds easier than it actually is. The advice of "focus on real work and ignore the idiotic social climbing" or "build something useful" seems obvious and easy to follow, but when complete jackasses are getting funded and acq-hired for millions, it's easy to be swayed, embittered, confused, or otherwise influenced by the distractions. It's really hard for a 2x-year-old first-time founder not to find himself doing stupid stuff amid all the insanity.
Winter is coming. That doesn't mean that "the crash" is here. It might be 4 years out, or 4 weeks away. It might be a sudden drop or a slow deflation. I have no idea when or how it will come, and I don't think anyone does. Still, there are some conclusions to take away from it. First, those of us who aren't ready to be Founders properly (that means, having enough VC connections that VCs consider you a social equal and will take the time to mentor you if they don't fund you) should probably sit this bubble out. Sure, being a founder provides a unique and immensely educational "startup experience", but taking a subordinate role as employee #37 at a VC darling is not much different and rarely any better than taking a regular job. Actually, I'd argue that it's often worse for subordinate employees, because VC-istan tends to have crappy health benefits, inexperienced and unstable management, and a lack of long-term focus on peoples' careers (because the company may not exist in 5 years). If your ambition is to be a Real Founder (again that's not some guy whittling at his trust fund, but someone who VCs are actively interested in, and who could get an EIR job with a phone call) and you're not there yet, there's probably not enough gas in this bubble left to get there before the end of it. People who are out of school now have a decent shot at being Real Founder material by the start of the next startup boom, if they really crack the books and work hard starting now and right through the bust... during which the wantrepreneurs and social climbers will get discouraged and leave, making the field less congested and giving the real players a chance to shine.
Which means... it's time to take the focus away from what TechCrunch and Sequoia are doing, and back to the difficult and often obscure (if intrinsically rewarding, and often lucrative in the long term) campaign to improve one's technical skills through practice and hard work. This doesn't have to occur at a startup, although it can. But now is also a good time to go back to school, to work in a more established organization, to try out Real Technology instead of these silly social apps, and to start networking.