The Startup Party Is Over
news.quelsolaar.com
news.quelsolaar.com
The party is not over. It’s never over. There are always always always more ideas, great businesses waiting to be built, and wonderful opportunities for clever people.
Of course the “obvious” apps/website have been built — do you know why? Because they only seem obvious in retrospect - most weren’t obvious at the time they were built. And even if they were, implementing was harder than you’d think and adoption was even harder.
Argh this frustrates me so much.
HNers: Don’t give up - don’t throw in the towel, and definitely don’t assume there are no more ideas to build with a good brain and a keyboard at your disposal.
My strong reaction came from "all the obvious ideas are taken" and I still think you can build a billion-dollar company from your bedroom.
I actually agree with the author that the YC model of accomplishing something huge and meaningful and hockey-stick-like in 12 weeks is unrealistic. (I actually think it's been unrealistic from the start but that's a different argument for a different time).
Thanks for pointing this out! The core of my response still stands but I see the nuance of the author's post now.
Many of these companies were absolutely obvious, just hard to get right. "Everyone" were creating social networks at one point when Myspace was big and Facebook hadn't yet won. And music streaming after Napster, or "mobile blogging" as an Instagram predecessor, or video streaming with Flash, or ... .
Of course it was hard to get it right, but that is why you had a shot to make something with "a good brain and a keyboard". Many companies who didn't make it all the way still sold on some merit of technology. Many VC firms aren't looking for that any more, but things like marketing and sales.
Robinhood - publicly launched 2014
Airtable - publicly launched 2015
Plaid - founded May 2013
Nextdoor - publicly launched 2012
Opendoor - founded 2013
Keeptruckin - founded 2013
Samsara - founded 2015
Calm - founded 2012
Niantic - founded 2010, first launch in 2012 (Ingress) then Pokemon Go in 2016.
Quip - founded 2015, acquired by Salesforce for ~800mm.
All examples of ~multi-billion dollar companies founded in Silicon Valley in the past few years solving real problems and scaling fast.
I can keep listing more but I think my point has been made.
Sure the market is more mature, but there's still tremendous potential out there and there always will be. It's too convenient to think all the easy problems have been solved (but yes, many have) and that the big guys will crush you (but when is that not a possibility?).
I think this article is just pessimistic with no substance. It's quite fashionable to be pessimistic about Silicon Valley.
But please, I would love to see your list from 2016/2017. That would be very interesting.
I listed multiple BILLION dollar opportunities created in the just the past few years during the tail end of that author's range. I think this shows that the author's argument is weak at best and completely unsubstantiated at worst.
The ones founded in 2016/2017 haven't had time to mature yet. I suspect we'll see more breakouts hit ~$1B valuations soon enough.
But sure I'll give you examples:
* Brex was founded in 2017 and is now worth $2B.
* Whatever you think of scooter companies, Lime and Bird were both founded in 2017, and are now $1B+ companies.
* Nuro was founded in 2016 and is a $2.7B+ company.
At the same time, I strongly caution interpreting any VC-funding-round-extrapolated-total-valuation as a true valuation.
https://sanfrancisco.cbslocal.com/2019/05/31/swedish-startup...
Setting aside for the moment whether this is true, if you're unwilling to invest 5 years of your time into a business, I would argue you're not committed enough to it for it to succeed. I suspect investors will think similarly.
There probably are plenty of opportunities for hockey stick growth and quick impact, BUT is that really what humanity needs?
In general I think the opportunities in non-direct-to-consumer business will be great in the short term (there are a lot of inefficiencies that are hard to solve in-house by the big corps).
The problem is that it's much harder to sell to big companies than it is to sell to consumers. While a consumer may be receptive to an unreliable app with MVP-level functionality, a big company isn't going to risk the stability of its business operations on that quality of product. They're going to want stability, scalability and support, and they won't want to deal with a startup that's at high risk of not existing a year from now. One exception would be if the startup offered a unique product that couldn't be replicated internally. But if all they offer is the promise of better efficiency, what's the point of risking your business on it?
If a startup has survived long enough to achieve this kind of stability (like the already-public companies you cited), then it has a better chance selling to big corporations. But it's going to take a significant amount funding and growth for them to get to that point.
The companies that are seem to be winning the most at selling services to big companies are huge, established businesses like AWS, Microsoft and Google.
It was never the case that this was trivial or easy. During the time period he lists (2002-2014), it was extremely difficult to reach mainstream success.
"The party" is as much in swing as it ever was. Which is to say if you're rich or lucky you get to be part of it. It was never easy to have a megahit.
> All the obvious apps/websites have already been built.
> I want to change the world, but real problems are hard. There are huge opportunities, in transportation, energy, computing, healthcare, manufacturing, but none of them can be solved on the kind of timelines and expectations that the startup community have. So many companies I see have great ideas, but aren't realistic and serious enough to realize them. I worry that we wont solve these solvable problems, because everyone just want to party like its 2009.
But there is just so much wrong with this article. One of the most egregious errors is the assertion that the conditions which enabled unicorns are no longer present.
Nothing could be further from the truth.
The only accurate assertion of the article - that it's genuinely hard to add value - was already obvious.
That said, there is a point in the article that, some longer term investments are probably just not happening because a big amount of the investments is going to "short term VC gambling". E.g. personally I'm also not very happy with the little progress that robotics made electro mechanically in the last 40 years...
I guess that investing into the next messenger app to topple the current #1 is a) more likely to succeed and b) has an average return rate below 5 years. Sad but I don't see how that is going to change anytime soon. They will keep innovating.