A great blog talking about start ups and what it really means to NOT be a start up anymore. The whole piece is here.
Something that we look at Justaxi - Manchester's best taxi comparison and booking app - is how long as an idea we have been running for and when we should pivot. When we should call time on our idea and change it - or when we have enough traction for NOT being a start up anymore.
It is funny that perhaps this is something "Americans" need to look at as well as "After
$336 million in VC funding, reaching a valuation of $1 billion and a
staff of 700 employees, how did Jason Goldberg describe his troubled
company Fab last month?
It’s a f*cking startup.
In a public memo, now deleted from his blog but preserved in angry amber by the snarkers at Valleywag,
he sprinkled the f-word around more liberally than a Tarantino
character and hammered out the message that despite it all, the company
was still a startup.
Today, Fab is making more layoffs and will be down to 200 employees.
The black hole
There’s a point at which the word “startup” becomes a crutch.
That’s
arguably what has happened with Fab. Starting out as a gay social
network before metamorphosing into a flash deals site then into a more
traditional style-orientated online retailer, the amount of money, time
and people poured into what now looks like a black hole would be
shocking to any sector besides the startup world.
At
his previous startup, Jobster, Goldberg managed to burn through $48m in
VC funding. So far it seems Fab’s greatest success is to chew up even
larger piles of other people’s money.
Fab culture
The
reason I’m picking on Fab in particular is that it illustrates a
problem with the world “startup” and the culture that comes along with
it in forty foot high neon letters.
Even
after all that investment and ramping up Fab to hundreds of employees,
Goldberg was still clutching on to the notion that it was somehow early
days, as if defining your business as a startup and not a grown up
company is a kind of cheat code for avoiding the inevitable.
No
amount of kooky soft furnishings and free food can make employees feel
better about the dawning reality that jobs are going and money isn’t
coming.
Just a phase
The
idea that it’s fine to take your time working out how to make money as
long as you can hustle up enough venture funding was further
strengthened by the announcement earlier this month that Quora is
joining the latest batch of Y-Combinator companies.
The
five-year-old Q+A site has raised over $141 million – $80 million of
that this year – but is joining the accelerator, normally a berth for
early stage firms, as “an experiment”.
To
at least some of those investors who’ve put tens of millions into Adam
D’Angelo’s baby the move must have been more than a little worrying.
Quora has said it wants to “remain independent forever” but what about a
return on investment?
At some point, a company has to grow up. Its time as a startup should be a productive phase not a way of life.
Of
course keeping the best parts of the startup mindset is important –
flexibility in roles, optimism, quick decision making – and corporations
spend millions trying to suddenly inject those qualities into their
hidebound, siloed organisations.
But you have to grow beyond that.
There
would be fewer job losses and less wasted investment capital if more
founders were focused on building businesses that left the startup label
behind than clutching on to it as a safety blanket. Fab is not a
startup, it’s a business that’s failing.
Mic Wright is the founder and CEO of The XX Corporation,
a new kind of media company. He was previously Chief Tech Blogger at
The Daily Telegraph, held staff roles at Stuff and Q Magazine and has
written for almost every British national newspaper. He currently lives
in Dublin and tweets at @brokenbottleboy.
Read Mic's column every week at Tech City News.
This post originally appeared on Tech City News, VentureBeat's editorial partner in London.
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