Tagged: startups

The marketplace for startup funding is something that has always fascinated me. Venture capitalists seem to behave like trendsetting hipsters trying to go to the next “it” club. Once the new “it” business plan is identified, VC’s will gladly fund mediocre startups that resemble or piggyback to “it” regardless of their potential for long term viability.

In the mid to late 90’s “it” was any business plan that involved e-commerce. You could write a business plan to sell dogshit online, and “it” would probably get funded. The Napster phenomenon caused a funding frenzy towards P2P startups, even though their potential for revenue was mediocre at best. The success of Myspace caused a funding boom for anything to do with social networking, even though that business model is extremely questionable. Today, the “it” trend is probably cloud computing.

Venture capitalists are like hipsters looking for the next “it” nightclub, but most of the time they end up with a bunch of “me too” companies that go nowhere, but get funded with buzzword laden business plans. Some of the most successful startups in the history of technology are boring companies in established markets.

Was there really anything exciting about Google? Search was already being done by 20 different players in the late 90’s. Search was boring. I’m surprised they didn’t get passed over in order for a VC to fund the next Pointcast screensaver.

The point is that some of the best startups are boring companies, that do boring things, in already proven boring marketplaces.