Twingl’s CEO on why startups must beware of the whirlwind of romancing venture capitalists, IPOs and exit strategies
When you think “startup”, a certain image comes to mind. A scrappy young team going from the garage to billionaire-dom overnight. It’s an intoxicating myth. But we need to be wary of its trappings, lest we forget why these startups exist.
When we gossip about startups, we talk about certain things. Who’s raising from whom? How’s so and so’s traction? Did you hear these folks just exited?
We speak of these events as if they’re the point of running a startup. But they are the means, not the end.
The language we use shapes the way that we think—and there is a disconnect: between the language we use for talking about startups, and the reasons founders start them. I think this has the possibility to become harmful.
The ideals, chances
First—why do founders start startups?
Some do it to get rich. They usually fail: startups are so hard that “getting loaded” loses its appeal three years in. No—there are other drawcards.
Me? I had a few drivers. I have a pathological need for autonomy: to do meaningful work, when and how I felt like working on it. I have ideals: a belief that building better tools can fundamentally augment humanity’s potential. There was also a practical appeal: it’s a great way to learn many things, fast. And there was “chance.” I met the right people at the right time in the right place.
Above all, there was belief in a cause: at Twingl, we believe that the free sharing of ideas and knowledge between people is what drives the human race forward. We want to live in a future where I could say to you, “I’ll send you everything I know about this”, and be telling the truth.
One thing is obvious, though. You don’t start a startup to play the game of running a startup.
You found a startup because the world needs to be different, somehow, and only you seem able to see it.
You found a startup to build the future that you want to live in.
If that’s why startups happen, why do we talk so much about “disrupting markets”, IPOs, and pivots?
It all comes down to the way the ecosystem has fallen together to support what startups do.
So—what does a startup do? Simply, a startup takes something that people do, or want to do; and makes it easier or possible. Typically, they get it wrong heaps of times until they figure out what they should actually be building. When they succeed, they create a whole lot of new possibilities.
Take a look at a really old startup. Ford combined a new technology with a new process (the assembly line) to make a fast, cheap way to get from A to B. Ford cheaply increased the range and carrying capacity of humans.
As this new innovation spread, it made lots of new things possible. Now you can live out in the suburbs! Road networks get better. Supermarkets, drive-thrus and drive-ins all became possible. (And so, of course, do urban sprawl, climate change and alienation.) Startups create a whole new possibility space.
But tech startups capture a whole lot more of this space than Henry Ford could have ever dreamed of. In many cities, you need to drive. You drive to work, the supermarket, and out for dinner. But you don’t have to drive a Ford.
But Facebook? If you want to talk to a friend on a Facebook, you need Facebook.
Upside and its trappings
Tech startups can capture a ton more upside. It’s like starting a car company, then owning all the roads as well. And software startups can do this with a fraction of the resources historically needed. Kodak, at its peak, employed almost 150,000 people and was worth $28 billion. Instagram employed 13 and sold for $1 billion. Technology massively amplifies the power of a single person.
When you combine a massive possible upside with barriers to entry, you have a clear case for venture capital. And you have the ingredients for an ecosystem that prizes rapid growth: a race to get users (traction) so you can raise more money so you can get more users to…
Don’t get me wrong—the system seems to work wonderfully. But culturally, it makes us celebrate these infrequent, large events and not the long interludes in between. It gives us a language oriented towards pitching and a culture of “wins,” milestones, and exits. In the process, we risk losing more and more of the autonomy we prized—getting lost in the game. In short, we put our focus on the destination, not the journey.
The risk of this is burnout, cynicism and failure. The risk is forgetting what drove you to quit your comfortable job in the first place. The risk is letting the game play you.
In his fantastic Webstock talk, Sha Hwang quoted his co-founder Eric as they reflected on the sale of their startup:
“If at any point in this journey, you had told me what we’d accomplish 6 months from now, I wouldn’t believe it. I’d be so happy. But every time we achieved that goal, it was immediately discarded. We were immediately looking to the next thing. It was our ambition that got us here, but our ambition that stopped us from being satisfied.”
When talking about startups, remember this. Startups are not about the trappings of success. Startups are about change. Startups are about purpose.Startups are about people.
Startups don’t “happen” in fits of TechCrunch articles or capital raises. Startups happen in the long gaps in between.
The journey is the only thing we have: and to forget that is to pay the opportunity cost of your youth.
That’s the biggest danger of all.