Dangers and thoughts on the startup hype
Someone spoke his opinion about startups as a label: startup term seems to be self-defeating.. a stupid concept that assumes that one own’s business is a piece of crap that hasn’t started. Back in Chile, I was a lot involved in the startup ecosystem, and it happens there, that startup term happens to be not self-defeating, but all the opposite; a hype that grants good status. Between the bachelor and several courses and events, I heard again and again the came Osterwalder canvas, Design thinking, KISS, fail fast, etc. We even laughed many times about how there is a dictionary of the startup world. Chile has made so far a great job encouraging the startup culture, into a level that suddenly seemed that everyone around me, had a startup. Beyond the classic question “what do you do”, often, you will hear the answer -well, I have a startup- or -I have this project-. A foreigner friend once described this as a characteristic of Chile.
These have been quite good news for Chile. As far as I know, this incentivation has activated the economy, building a highly active sort of economic cluster. The Start-up Chile program became well known between all the many accelerators that operate around the world, and gathers entrepreneurs from all around the world; just as it aimed. But once then, it suddenly started to sound me like a gold rush to me. The classic dream of the startup, is to make a great business that starts making revenues, and then is sold to a big corporation at a very high price. There is also a less common dream of keeping with a healthy big business, like Facebook. When I started wanting to start and drive my own business, I wanted to make it so that I was independent from the predetermined and guaranteed kind of life that a regular job grants. Maybe when the idea of the startup becomes a standard ideal as well, feels like it deprecates it’s own purpose. Maybe in that sense, namely, becoming a startup becomes self defeating. This is where suddenly the word Startupidization came to my mind, while working for a certain startup project once.
The second idea that I find worrying, comes from a statement that I heard from someone with vast experience at earning. Where commodity trading businesses usually make return on investment, innovation business as a whole, only generate enough revenues to level all the other failures. According to this idea, the revenues of Facebook are the same amount in losses in many failed startups. I don’t believe this statement, because I couldn’t ever manage to get proof of this. It could have been originated from faulty research. But still, it gave me a good, further vision of the other danger that startups ecosystems as such may have: innovation in the corporate world is a tough topic, because innovations only succeed in a small percentage, while they have costs. I will explain the problem that this carries by describing a dystopian situation in which the startup ecosystem becomes a harvesting field for corporations. They see lots of entrepreneurs working for an idea that may or not work, and risking their own assets, while being able to pick the ideas that worked, buy them (and therefore, accomplishing their entrepreneur’s dreams), and take the product of it. How much better if the startups are funded with state funds. I said that this is a dystopia, because to be fair, this is not completely true. Buying an already-working idea is expensive for the corporations, and sometimes even then, the ideas don’t work. But it is completely something to be aware of, because the natural trend is towards it, needless of a deliberate intention.