{ Tuesday, March 21, 2006 }
I was having a conversation with Matt the other day about how people are saying it's a great time to start a company. We both did the skeptical cocked eyebrow thing: it's a terrible time to start a company, especially here in the middle of it all, in the Bay Area. Why?
- Everybody else is starting a company. It's crazy. Every single person who leaves a tech company isn't going to Microsoft or Google or Apple or whatever, they're going to a startup. Trying to operate in this environment is crazy. I'm getting late-onset ADD from trying to keep track of them all, and it's impossible to get attention for your product amidst all the buzz (er, noise).
- Your competition just got funded too. You've got $5 million in the bank, and they do too. Their VCs want them to succeed every bit as much as your VCs want you to succeed. This gets you into a horse race, which no one wants: it's exhausting and expensive.
- Talent is scarce again. Hell, I want to find someone to write a little bit of PHP for Wench.com and I can't find anyone (Hey if you are a PHP webapp builder and have some spare cycles, email me at caterina-at-gmail). Everyone's gainfully employed, and fielding several offers.
- You can't operate in obscurity anymore. We started our company in 2002 when nothing was getting funded anywhere and everyone was still licking their wounds from the big bubble bang. Nobody cared about us except us. We were in Vancouver fer crissakes. But we were able to focus on finding and connecting with the people who mattered most: the customers, the users, the community. You get more done when no one's looking over your shoulder.
- Web 2.0 isn't all that. Hello?. I don't think there's a rising tide lifting all boats here. I don't think Web 2.0 is the magic bullet some people seem to think it is either. It ain't the features, it's that AND the business. Tagging was a great feature, no doubt. But Flickr was at break even -- about to tip into the black -- when we were acquired.
- There's too much going on. Every night there's a Mashup get together, or a TechCrunch party, or it's Tag Tuesday, or SuperHappyDevHouse or SXSW or this conference or that conference. And this stuff is fun. It's a real community. But all of these things are great by themselves, but terrible in combination. I see some entrepreneurs in photos from *every single event*. Who's talking to the users, writing the code, tweaking and retweaking the UI? It ain't the Chief Party Officer.
There are some great products & businesses out there, and I am advising few of them (Bunchball, Now Public-- in Vancouver!) which is great. And here's some great advice from Mike Tatum of CNet. But I had this same stay-out-of-the-water-there's-sharks feeling circa 1998. Maybe my hype antibodies are just kicking in.
UPDATE: I've turned comments off. I was talking here about consumer-facing Web 2.0 companies based in San Francisco and the Valley, which bears repeating. Given that 9 out of 10 companies fail, I just think the odds are getting worse.
LINK | 5:27 PM | TB
Caterina, I'm not quite sure I agree. I still think it's a wonderful time to make something happen if you have a good crew (much less so if you have an idea, but no do-ers involved). Usage and bandwidth are exploding and may as well get your thing out there now instead of waiting. If you can stay out of the funding loop, differentiate yourself from your competition by doing what the people want not what the business case studies suggest, I think it's a great time.
I agree about the hiring problem and salary inflation will only make that worse. I expect a new wave of good people to reappear from those still holed up in their post-bubble corporate jobs that would love to be creative again and geeky college grads who can probably get a job sans experience. Then there are the good people already leaving start-ups funded in '03 and '04 coming back on the market.
I recently wrote about how I expect to see a wicked amount of divergence is both product and usage. I really expect to see a ton of companies mushrooming up in place that were already considered locked up and many more in areas that have never been thought of. If they can keep their expenses down and not try and go for the obivous home run, I think they will be able to make a go of it.
http://www.spideysenses.com/2006/03/09/technical-divergence-is-the-new-techincal-convergence/
But I will admit I'm am optimist through and through my preferred lense of unfunded development strategies rosies my views too.
Ted Rheingold | March 24, 2006 4:25 PMIt's a bad time to start a Web 2.0 fluff company. Those that are truly innovative and actually create value will do fine.
John Koontz | March 24, 2006 4:54 PMIt's always a bad time to start a fluff company, Web 2.0 or not.
Jerry Kindall | March 24, 2006 5:39 PMBunchball? Now Public?... These inane, 2-cent ideas are lowbrow and, ultimately, insignificant... There may be a plethora of startups, but like the 90s, 99% of them will fold like paper.
And by the way, talent IS scarce, just not because everyone's gainfully employed.
People with Real Ideas and people with an understanding of the Internet as an informational tool that can affect change are sadly lacking in this, and all other arenas of our culture.
David Wilson | March 24, 2006 6:07 PMOn the other hand, if you are starting a non Web 2.0 company that doesn't have a thousand competitors and is not an obvious idea, is technically non-trivial to build and you do not plan to make yourself public till you have an actual product, isn't this a better time to start a company - considering that funding is easier to get? Of course this assumes that in a boom a non-fad company gets funding almost as easily as a fad company. I have no personal experience to qualify this yet.
Aarjav Trivedi | March 24, 2006 6:20 PMNobody is available for PHP/MySQL work in NYC either. I can't believe the offers that are getting turned down. I wasn't around for the first bubble; was it like this then? I heard a lot of unqualified people were getting hired in those days; they just hired anyone they could grab.
Jakob | March 24, 2006 6:30 PMI disagree. It's ALWAYS a good time to start a company if you have a product that will feed a starving crowd. If you have a me-too product, that doesn't have a targeted audience and will never have paying customers, then it's NEVER a good time.
karl s | March 24, 2006 7:07 PMActually, it's a better time to start on off-line company than a web 2.0 startup. I'd much sooner make a bet to be the next Whole Foods or the next Chipotle Grill or the next 7 Jeans and get taken out for $500 million, than the next little web app that Yahoo buys for $15 million. But that's just me...
Kim Bee | March 24, 2006 7:41 PMYeah, this is happening all around the world. Startups are poping up everywhere, and they'll all drop dead (or most of them) during the next IT crash..
Nature has its own way of controling elements of its environment, wether it is overpopulation of living organism or virtual ones
[Geeks Are Sexy] Tech. News | March 24, 2006 8:11 PMPhp/SQL Developer Shortage?? Ever thought of going RoR??
Khang Toh | March 24, 2006 9:15 PMYou could have a 1000 reason's to prove its a bad time to start a company, but the one reason saying it is a good time to start a company wins every time, Greed.
Why would anyone seriously starting a company care about web 2.0? it means nothing, I'm sure you have switched on the TV and flicked thru the channels to the News Channel and thought that the Headlines were just filler because nothing is happening. We are in that state right now,
All the "Fluff" as John Koontz stated above, is just cut and paste ideas, nothing is new, nothing is worth really caring about right now, and when something actually does come round thats worthy it will be a killer, so maybe its a real good time to start a company :P
jme giffo | March 24, 2006 9:23 PMIt may be a 'bad time to start a company'; but you have to love the almost daily influx of new ideas that are coming up on the web.
Navdeep | March 24, 2006 10:28 PM"Hell, I want to find someone to write a little bit of PHP for Wench.com and I can't find anyone"
Bunches of PHP programmers have moved on to RoR , aka Ruby on Rails. As it's the 'next big thing' in web development you'll find lots of eager RoR developers ;-)
Phil | March 24, 2006 10:56 PMIt's pretty much ALWAYS a bad time to start a company if what my Business studies Professor told me is right.
Something like 80% of all small businesses are doomed. DOOOOMED.
Still, failure isn't a bad thing.
As for obvious ideas: How do you tell when an idea is obvious? Is the litmus test as simple as "Why isn't anyone else doing this?" Or is it maybe that an obvious idea is okay as long as you have a business model that'll make it profitable and there's no one else running that model right now?
Danno | March 25, 2006 12:43 AMI don't agree. If you stick to basic principles of what a business is then you *should* start that business. Most investments today are still reasonable.. but there are too many hobby companies (products/features trying to find a business).
"Php/SQL Developer Shortage?? Ever thought of going RoR??"
Do you realise that there are thousands more PHP developers than RoR? It is installed on 60% of web servers.. Caterina just look in other places outside of this circle of bloggers or use rentacoder.com
I agree with the "Chief Party Officer" comment though, I don't know how these people do it.
Oh and you can operate in obscurity (we did for 2 years), and talent can be found if you have something interesting to work on (real engineers prefer interesting projects to stock options). Competition getting funded can be a sign of the space being hot.
Nik Cubrilovic | March 25, 2006 1:22 AMI agree wholeheartedly. In the hype cycle, this thing is overblown beyond proportion. All one seems to need is a big font, characteristic text box on their homepage and they are hailed as web 2.0! I'd love to see an integration platform for all these startups to start sharing their content silos with each other, and perhaps a directory of web 2.0 startups. It can't be good to have a fragmented set of social apps - especially since their business models are to grow through user generated content. There may come a day when I need to be signed up to 8 professional networking sites to keep up with people's preferences. I hope the remnants of this revolution still pass through into some apps that stand the test of time.
Amit | March 25, 2006 1:48 AMTalent shortage? I've been unemployed for months and fielding no offers. Worked in the computer industry for 13 years, in multiple areas ... sysad, dev, qa, etc.
Seems to me if you don't have a PHD or 10 years experience in a technology that's been around for 5 you won't even get a call back much less an interview. Unfortunately for me, I don't wanna do anything for 10 years straight.
Been denied several offers because I didn't have experience with one technology but I have with it's competitors ... for example, I might have mysql experience and not oracle, or python and not perl. How long would it take me to learn the other? Oh, about 2 or 3 hours. That's how short sighted companies have become. Boo hoo hoo.
anonymous | March 25, 2006 3:36 AMThose who can't find PHP developers probably aren't looking in the right places. Yeah, some folks have moved on to Ruby. But others are in parts of the country that aren't on either coast (and don't want to move).
What amazes me lately is the huge resistance to tele-commuting that theoretically "internet" companies have. Or perhaps not. But not all the talented programmers are pressing flesh at SxSW or living on a coast.
DaveP | March 25, 2006 4:08 AMThe Chief Party Officer thing is particularly apt. Will we look back at this time and conclude that too much time was being spent in the "community" and not enough time comuning with users?
Paul Montgomery | March 25, 2006 5:28 AMmaybe you are just so cool that the earth will reverse its motion and go back in time and you will be able to relive your rave mashup parties that are so beyond cool it's not even funny
pbdotc | March 25, 2006 8:18 AMIf anyone wants a PHP Developer, I am available. There is not much on my personal site right now as I am just finishing up 2 Bachelor's Degrees (Computer Science and Computer Networking), and I am getting ready for grad school. So if anyone knows of where I can find a job for a few months in the summer, please contact me at:
jamier.net -|AT|- gmail.com
Jamie | March 25, 2006 8:26 AMits a bad time to do a WEB startup. your breakthrough of a 98% efficient solar cell can still make you a multibillionaire. the days of two-guys-in-a-garage is over, thats all. it costs nothing to do a website today (and from now on), which is why you can't expect high profits either. you don't want to be entering a market that is oversaturated and has no barriers to new participants.
grumpY! | March 25, 2006 8:34 AMHere is another 'no talent available' sceptic, late to respond because I was busy working yet another 3-level-career-drop-barely-covers-food-and-shelter-grim-meathook-future contract (doing LAMPHP).
If you are having trouble finding talent maybe the real problem is your inability to recognize talent. In that you are not alone.
I am convinced that it is a great time to start a company. When has the competition been as beatable?
| March 25, 2006 8:35 AMspeakin of which theres an article in latest
BusinessWeek about 3 Ruby guys and there business,
they say it's a great time right now.
PS caterina is a hot mama
TOM | March 25, 2006 8:38 AMIt's always bad time to start a "me too" company. That seems to be most of what is being built these days. But sometimes you have an idea that you have to chase after, something that can change the way something is done in a fundamental way. If you have that passion then timing is moot because you have to do it.
Now the "me too's" do have some impact on the others. Your point about hiring is particularly well taken. Your point about others getting funded is moot if you're not a "me too". You certainly can operate in obscurity (if you choose to). I also agree that the social scene in the valley causes more damage than good. But if you're focused on impressing the customer (instead of Arrington, Malik and the Web 2.0 community) you'll be ok.
Now if you're building a product FOR the Web 2.0 community you're in trouble. The market is way too small and way too crowded. You'll have too much early success (which will screw with your perspective) and never break out of the 2.0 crowd niche. There's way more smoke than heat in this conflagration.
Erik Schwartz | March 25, 2006 8:51 AMI disagree, but let's go through this.
You state:
1. Everybody else is starting a company.
The truth is that it isn't simple to start a company, so the landscape is already filtered to some degree with those who do something interesting and not just "add to the noise." If you want to stand out now, versus when there are fewer new startups, you still must make the same decisions. If you innovate, have something truly great, the buzz around you will hardly make a difference to your success.
2. Your competition just got funded too.
Yes, this has always been true. If you have a good idea, someone will copy it and get it funded. To think this was any less true two years ago is false. What is true is that VCs are more open to spending money again, though they don't do it stupidly. The bottom line is there is no economic environment that has ever existed where a good idea would be without funded competition.
3. Talent is scarce again.
I see this as a great thing. If you hve a truly fantastic idea, they will come to you when you ask. I see this as the glass is half full... If you competition can't get them, great, work harder then they do and get them yourself. Pay them more. Offer better packages. This is a cut throat environment, and if you're afraid to be one of those offers in front of the scarce talent, you weren't meant to play on this field.
4. Web 2.0 isn't all that.
Well I agree with this... Just because you use AJAX or are pretty and point and clicky doesn't mean you're sporting some kind of unfair competitive advantage that will blow people's minds. It's merely a tool that seems to make the web more consumable to the masses, and if that is in fact going to get your more complicated app more popular, great...It's not a magic bullet, as you say.
5. There's too much going on.
This is about dicipline and good management. If you team is partying 24x7, that's your fault. On the other hand, if they are collaborating and solving problems through interacting with other experts, then fantastic, power to them. I hardly think this is a reason not to start a company if you have a great idea.
The bottom line is that I believe it is a great time to start a business. Like always, only if it's a real business, and really makes a difference, otherwise some of Caterina's points will hold you down. If you think this new wave of investment means a bad idea will make it big, you're being foolish... However if you take advantage of this time to get a great idea going, the timing is great, and the benefits clear.
Thanks,
Jay Adelson
A little OT but would you consider freeing up screen names associated to deleted/dead accounts on Flickr sometime in the near future? Thank you.
Rohit | March 25, 2006 9:04 AMFWIW, real talent, true 100X talent, the kind it takes to make a company take off, is always scarce.
But you're right, worker bees are getting expensive as well.
Erik Schwartz | March 25, 2006 9:05 AM"Flickr has some catching up to do" - based on this article on Zooomr looks like it's a great time to start a company:
http://techcrunch.com/2006/03/11/flickr-has-some-catching-up-to-do/
Pigballs | March 25, 2006 9:21 AM I disagree. There is no such thing as a "bad time to start a company" (nor a good time for that matter). Starting a company is independent of time or the conditions of that time.
The primary thing that matters is producing something of value to others and effectively marketing your value - both require hard work and the willingness to perservere (talent is actually a very minor factor, there is plenty of talent out there).
The notion that everyone else is starting their own company is foolish. Do you stop looking for a job because everyone is looking for a job? Do you stop looking for a romantic lover because everyone else is? Welcome to life - this is called competition - either drive your efforts towards your goals or run home and tell mommy because someone else did before you.
It doesn't matter what 'time' you launch your start up. The only thing that matters is that you have a solid product. Regardless of time, if your product/service is 'the shit', then you have nothing to worry about.
- Cozby
timeless | March 25, 2006 9:31 AMIs it a bad time to start a web startup or a bad time to do {Web 1.0 Idea} + AJAX?
I imagine that every Web 1.0 application that got snatched up by big $$$ corp is evaluating an upgrade to Web 2.0 functionality. So, if your idea is Word + Web + AJAX, for example, are you dooooom?
Johnny | March 25, 2006 9:45 AMVancouver isn't exactly some no name city by the way, its the biggest tech powerhouse in Canada, and its not exactly tier2.
So, does Flickr officially supportthe Canucks, I'm just curious.
| March 25, 2006 10:18 AM"So, does Flickr officially supportthe Canucks, I'm just curious."
Boy do the Canucks need it right now...
hockeyFan | March 25, 2006 10:20 AMCaterina is right. It's a great time to come to work at Microsoft, where the salaries are about 30% higher than whatever that doomed startup will pay you and you'll have one of the best benefits packages in software development.
Join the Empire! You know you want to. You'll get a brand new shiny TIE fighter, your own office, all the free pop, milk, and fruit juice you can drink, and great discounts at the company store (what's your operating number?).
I start on Monday.
FelixTheCat | March 25, 2006 10:30 AMI agree with you in some respects. There is a reason why the term Web 2.0 bubble is going around. I'd like to think that the bubble will not burst, but you know as fast as the industry moves it is bound to happen. I think what really sets the web industry apart from other is everything happens in very large and obvious waves. If one innovation happens, such as "tagging", then every other website adds it. But, the problem with the web is things don't creep out of the wood works like other fads (please do not punish for using that word). Fads in fashion, pop-culture, etc... can take months to happen. One the web it can happen instantly.
JT Archie | March 25, 2006 10:58 AMAt the end of the day its a matter of how much risk-averse you are.
Regarding you PHP needs... why dont you try rentacoder.com ?
Cheers
Ollanta | March 25, 2006 10:58 AMThe beauty of Caterina's comment is that it's validity rests in the fact that few people agree. If everyone agreed there was a 2.0 venture bubble, then the bubble would cease to exist very quickly. Caterina, you are 100% correct, but definitionally, you can't get the mass consensus until history repeats itself and 90+% of all the newly funded 2.0 companies fail to take off.
S | March 25, 2006 11:00 AMit's always a good time to start a company if that company proves to be a success.
it's always a bad time to start a company if that company fails.
therefore, it doesn't really matter about timing, it's all about a good product/idea.
nemo | March 25, 2006 11:01 AMWho says you have to start a company in the bay area? There's plenty of local talent and VC capital with less of a saturation of tech start-ups in other North American citiies.
dxh | March 25, 2006 11:03 AMMan, I'm very intrigued at what I'm hearing. In the last few years I've been learning PHP and MySQL like mad only to get told be several people that PHP is a dying language... I just tell them to screw off because it has been my favorite web language of all I've worked in. (Java, ASP, ASP.NET[C#+VB],PHP) I'd show off all my work, but most of the advanced stuff is inside portals that you have to login to. I hand coded a forum a couple months ago:
http://www.Lannage.com/forum.php
What are we missing here? The internet is what America is to the World: The land of opportunity. You just need motivation and the right idea and you're off the ground. Obviously if you're just copying everyone else you've got a slim chance of making it. If you're just swimming out to catch the wave, it's already too late. You've got to cause it.
Currently, I'm working for Lockheed Martin and they really don't use PHP. I'm not really sure why (maybe because they don't like open source/free stuff). And because many large companies are the same way (don't like PHP) we aren't going to see many people specializing in PHP and MySQL like they do Java and Oracle... Well, I've had my time on my soap box. I'll step down now.
Robbie | March 25, 2006 11:06 AMI don't think there's ever a perfect time to start a business so it's tough to say "now is not the right time." If you have an idea you just have to go for it and see what happens.
On the other hand, I completely agree w/your 6th statement about too much going on. There seems to be nothing but meet ups and conferences. As someone looking from the outside in I've always wondered when these people have time to work and communicate w/customers considering they're constantly flying around the world going to get togethers.
--
Derek Hampton
SouthBeachCasa
http://www.southbeachcasa.com
I agree completely. As a creative developer whose dotcom was just swallowed by a corporate entity, I have no desire to get out there.
1. The hubris
Because of the lack of talent pool, startups are hiring whoever they can get in whatever way possible, and this means a lot of inflated egos, all of which want to be heros and stars, real primadonna types. They might get a smart guy/gal here and there, but it's almost guaranteed the rest are jerks.
2. The lack of ideas
I think we can all stop pretending that most web 2.0 companies aren't just clones. Just go around the web adding up everything that includes tagging, mashup, and social with a missing or extra vowel. The originals made something unique and creative. The rest are just annoying my search engine results. I'm looking at you Zooomr.
3. The missing focus
The first thing a new company seems to want to do is use Ajax everywhere on their app. What? The technology doesn't make the company unless you're Google.com.
4. The ownership, and the team
Who calls the shots at the end of the day? VC's dont do it out of the goodness of their heart. That's a lot of pressure to work with, and creates under-the-gun type decision making which usually has some painful results; whether it's hiring, firing, or completely changing your original idea. No thank you!
All of this for me says to me I've had enough of tech bubbles. I'll start a company when my ideas are right, not when the checks flying...
TheBrains | March 25, 2006 11:30 AMTo Nik Cubrilovic: you say "real engineers prefer interesting projects to stock options". Do you mean "20-something single engineers with no kids"?
We will all agree that stock options do not offer the proverbial 100%-sure jackpot, far from it, but it should be obvious that:
1. while it is pretty much guaranteed that the amount of stock options will not decrease throughout an engineer's stay at a company, said engineer is never guaranteed interesting projects throughout said stay,
2. (most) everyone works for money, present or future, it's the bottom line; thus compensation packages and stock options are usually considered at least as important as the content of the job.
I assure you that someone who must feed the family will easily take a less-gratifying higher-paying job. That doesn't make them worse engineers.
Pierre Samanni | March 25, 2006 11:41 AMto pierre -- according to "information week" surveys, stock options generally rank near the bottom on a list of over 30 compensation-related items. for more, see r. florida "the rise of the creative class." while i don't agree with all of his conclusions, he makes available a lot of data for your perusal.
dave | March 25, 2006 11:57 AMCreate value - build something remarkable - get customers to pay for that value, rinse repeat. Everyday is a good day to do that - if you're focused on a flip then chances are you will not survive in this environment. Sooner or later the smart money moves to "VALUE" - if you have it great, if not, well that just sucks.
Peter Cranstone | March 25, 2006 12:23 PMI have to agree with Caterina's sentiments here. Everyone's in demand these days. The tech bubble is happening all over, thought it wouldn't. Actually, I didn't know what to think.
The .0 in Web 2.0 means certain developers can add another zero to their typical rate. It's all bollocks and annoying.
shotoshi | March 25, 2006 12:30 PM37signals disagrees. I side with optimism.
Craig | March 25, 2006 12:33 PMIt's a good time to make a difference.
If a few more people focused on that, rather than on their exit strategy, we might all benefit, and leave something enduring for our children.
Besides: focus on making a difference--on delivering something substantial that people actually need--while everyone else is focusing on bamboozling investors, and your odds of success are greatly increased. Much less competition in the value-driven-sphere.
Also, your advertising budget goes way down, because you don't need to fool people into buying something they don't really need.
Make a difference.
galiel | March 25, 2006 12:53 PMIt's a bad time to start a company if you don't like to work.......
Mark | March 25, 2006 1:12 PMYou'd think after Yahoo was kind enought to buy your company, you might use Yahoo email ? :)
Jim | March 25, 2006 1:33 PMGreat link bait! While everyone else is trying to help people make money, you take the contrarian view and tell people they just can't do it.
Awesome idea considering 95% of businesses fail - you can always say you were right. Congrats on all the link love.
To Dave: I won't dispute indeed that back in Spring 2002, for me and for many other Silicon Valley engineers, stock options had turned meaningless.
Things might have turned around since then, obviously. Some of my friends have left their "ex-startup turned corporate" companies for startups. Clearly for them, stock options are seen as an important item of their compensation package.
As for the others now working for the eBay, Yahoo, Paypal and other big names, they don't really seem to have a choice, as in that context, shares and stock options are generally coming scarce.
Pierre Samanni | March 25, 2006 2:52 PMIt's funny that you say it's a bad time to start a company. Is it because you have more competition now than ever before? Competition is healthy. It's as good a time to start a company as it ever has been. As a matter of fact I did a post in November 2005 titled “why you should start a internet company today”. I still believe it's a great time to start a company. Assuming you have done your research and have something interesting to offer. However, I have seen a few companies get funding lately that I just had to shake my head at.
chris mullins | March 25, 2006 5:35 PMThis post is not for discussion.
I could say something smart (like author or the article and a few of fellas above), but what's the point?
Anyway, I'm posting just to have my site linked: ratingo.com, the site for ratings on everything which can be rated.
No developers? There are allot of people where I live who have a hard time finding quality projects. Maybe it's just SF where everyone is gainfully employed.
Clark | March 25, 2006 5:49 PMThe talent is scarce? Well, if you go looking in the right places, you can find talent. It's like underground music; you have to search to find the good stuff. I'd say you subcontract talent to get the work done that you need. That seems the way to do it. I'm a freelance video producer and work has picked up a lot because its more cost effective to hire freelancers, rather then create a whole media department or hire on a full time staff. Also, if it seems to be this way in the bay area, why not seek business ventures on the east coast? We've got plenty of nerds in our neck of the woods! =)
Nice article though, very informative, great read! From the wise words of Journey..."don't stop, believing!"
Well, if you can't otherwise get funding, all this exuberance has its advantages. But if you can get yourself started, its costs are pretty high -- harder to find talent to hire, and to stand out to both investors and customers.
Generally, if you're sending good signal, you want the airwaves to have less noise, not more. And there's a hell of a lot of noise out there right now.
mattpfeff | March 25, 2006 6:40 PMI'm sorry to say but this post strikes me as not much more than a "in my day we had to walk uphill both ways to school... in the snow... without shoes" type post.
So there's competition, an ability to get funding, and so many projects going on that talent is hard to come by.
You and I disagree at a base level on what is good and bad...
Jake | March 25, 2006 6:50 PMYou contradict yourself. In bullet point 1 you say "everyone is starting a company" then in bullet point #3 you say "Talent is scarce again... Everyone's gainfully employed, and fielding several offers"
...
If talent is lacking then there is room for talented individuals to spring up and start their own company. And from personal experiance, I have to disagree with you, now is better than ever.
e.p. | March 25, 2006 7:33 PMI disagree....looking at your points above:
#1. How does this matter? Why would you assume that folks leaving big companies are all going to make it big? How does that prevent you from starting your company?
#2. Funding really should not be a reason for confidence or fear at all. Funding is never a sign of success anyway and a bootstrapped company might do much than its funded competitors. Flickr? And why is the horse race not good any way?
#3.You don't require 10 strong business/technical people to start a company. You need 2. And that cant be as tough, as long as you are building something solid.
#4 #5 and #6. All valid points but none that pose hurdles to starting a real business that solves a real pain point.
I agree with you on Web 2.0 and the parties though. While the hype is alarming, I am sure there are a lot of companies being built that are solving real problems and not just touting their new AJAX or tagging features.
Vaibhav Domkundwar - iNods.com | March 25, 2006 7:34 PMhmmm seems to me that you've touched a nerve here, lady. :) I don't know if there ever is a great time to start a company. But I see your point about right now... I wouldn't really want to launch a Flickr in this environment. But ultimitately it's about the concept and the plan. I think anything can succeed in any environment, if that environment is considered at the outset. As long as you keep your expectations realistic, you might be okay.
I will say this, if anyone out there is starting a business with the goal of being acquired by a Yahoo! or Google or Rupert. Give up now. Your goal should be about changing the world and improving quality of life.
beach | March 25, 2006 10:38 PMCaterina, you are right but what you are saying is that it is a bad time to start another web 2.0 company. One must be quite sucked in to reduce "starting a company" to web tech company only. But you would be in good company - so are most VCs, too. Your advice should go right out to them. "It's a bad time to invest in a company" as everyone tries to throw a bunch of buzzwords on ruby railed, ajaxed, tagged beta sites and then some dumb VCs show up who seem to have forgotten that they had to sell their last S-classes just 5 years ago. And then the old game gets going again. And guess what, 98% fail expectations once again (Yahoo just buys one DAM solution).
But starting a company is always a good thing to do. It is a great experience. It is a lot of work but it is rewarding. It does in most cases mean more work for less money (compared to your market value in the corporate world). But it also means you get a sense of what your customers want, how you are able to spread your word on a budget, how to find great people that believe in what you have created and love it as much as you without getting paid for their passion as much as they deserved to. It's the nights in your office with your team working on something stupid, not great at all but you know it makes your customer happy and that�s why you do it and you all have a great time somehow anyways, open another bottle of beer and copy another 4000 lines in that database you promised your client to be up and running by Monday morning. And really, it is rewarding when you call those friends you once hired, when your client refers you and is proud of you even after the project has been over for quite a while now.
I have started a great small company 8 years ago and just started my second one. We were caught up in the first VC war for a while (money was almost in the bank), survived, stayed small, never made the millions we wanted. But I don't want to miss a single second nor would I ever look back in anger of missed opportunities in the corporate world.
I would do it again anytime. If you have a great groundbreaking idea or just a small thing - if you can just make one customer happy or one employee - do it. You will love it.
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Girlfriend, it's a great time to start a company. I must totally disagree with you. Think of the hundreds of great ideas you had while the economy sucked. Now that money is flowing again, working for yourself is the only way to really cash out.
I totally respect the safety of working for the man. But many of us would rather be the man (or woman!), than work for the man. Great thinking though, I really enjoyed your argument, very good structure and POV.
Cheers,
David Martinez | March 24, 2006 2:41 PMDavid Martinez
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