Is it just me, or are big-ticket gambles no longer viable in today's Valley culture? The article mentions that "Ultra local services like Uber, Lyft, Instacart, ZeroCater, Chewse, etc. are raising more cash than world domination disruptive ideas." Add this to an underwhelming W13 Demo Day in terms of said WORLD DOMINATION and I'm starting to wonder if investors are losing their edge.
There's plenty of opportunity for truly revolutionary disruption in all sorts of sectors. I just don't hear about it. As someone with disruptive ideals (but outside the valley) am I just being paranoid or is there really a problem?
Cleantech kinda collapsed on many large VCs, so to boost the returns to somewhere within the range expected by LPs, the capital is deployed into clearer monetization paths.
This does not mean companies like “ Uber, Lyft, Instacart, ZeroCater, Chewse” are any way inferior. Maybe these markets are much more bigger than perceived. Maybe they have the capability to expand to other cities. Maybe the founders are very strong in their conviction.
How are Uber and Lyft not "world domination disruptive ideas"? The others I can see maybe, but completely revamping the automobile part of urban travel is a pretty big deal as far as I can tell.
IMHO anything that cost-effectively shifts the responsibility for the actual driving from "me" to "somebody else" is almost automatically more disruptive than anything that doesn't. (Note the cost-effective requirement, which is important.)
Uber, Lyft are in the "self-driving car" category, not in the "more resource-efficient car" category. Put another way, they conserve a resource (attention) that is far more scarce than fuel, cash, etc.
I use Uber when I'm in SF. It seems like a very San Francisco specific service. I would never use it in NYC because I've never had problems getting a cab and the cabs already take credit cards. I would also not use it in any other city I've been in the USA because they are so spread out I always have to have my own car, anyway.
Uber mostly seems like a better way to hail a cab in SF because hailing a cab there was previously next to impossible.
I am not sure how relevant it is in other cities but it will be interesting to see how they do.
If you think the only city that is difficult to hail a cab in is SF, you are sadly mistaken. I can personally say Austin, Atlanta, Baton Rouge, New Orleans, Athens, etc. desperately need a better way to hail a cab.
As Jared touched on I believe all 4 companies mentioned (Uber, Lyft, Tesla, Zipcar) are all "world-dominate-y" ideas, they are just in different categories.
In addition to the "can't find a cab" problem, Uber & Lyft sell experiences. This user experiences will be their biggest asset as they expand into other cities.
I think the problem is that most of these VC-funded startups are seen as loaded to the hilt on one kind of risk (red-ocean grow-fast-or-die gambits) so they avoid all other kinds of innovation, which is why they are such uninspiring places if one looks at the actual work and culture. I know someone who's trying to run open allocation and his investors said "no", because they didn't want the added risk.
VCs are swinging for the fences more than ever, but that means they're loading up on one kind of risk (rapid execution risk) and have no space for any others.
At any rate, I think "world domination" is a pretty pathetic goal. Where are the companies that want to focus on excelling rather than simply "dominating" some market?
So the issue is less risk-adversity and more focus on a certain "ideal" risk. Interesting.
As to "world domination," it's more a joking term for startups that are creating a new product that intends to replace what the market currently has [0]. Imagine a product designed to replace college as we know it. Incredibly risky? Absolutely. Crazy payoff (in cash and actual change)? Just as absolutely.
I just don't see these kinds of ideas anymore. Maybe we all forgot to remove our schlep blinders, maybe the community has been focusing elsewhere, maybe they exist and have been avoiding premature hype. Probably a mix of all three.
[0] Think Google/Heroku, not more mobile apps/anything social media
I think that acq-hires ruined the ecosystem. The whole concept is parasitic. Acq-hires exist because failed companies (that the market should be clearing out) have had severe trust breakdowns and are incapable of discovering talent within, which renders them unable to do important projects (because they don't know how to find the people to staff them) so they have to buy validated talent at a panic price.
If a company is trust-sparse (that is, most people have the "bozo bit" on) then I'd rather let the market kill it than keep moving around deck chairs, leaving investors to think there's still something there. That applies both to startups and acquiring companies. Let these trust-sparse, uninspiring husks die already.
With acq-hires in the mix, the game is no longer about profits (so 20th-century) or building a business. It's about getting attention-- TechCrunch coverage, user count (which is meaningless), notoriety, and headcount (because valuations are multipliers on number of people)-- rather than building technology. So it's no surprise that the big winners are class-A marketers making quixotic, red-ocean plays.
No part of the scene is different in the era of acquihires than it was before acquihires, except that startups with strong teams and losing product concepts (ie, most startups with strong teams) have a safety net. I am mystified at the idea that anyone could see group hire/retention packages as a bad thing; to my eyes, anyone arguing that must also be arguing that it would be better for startup teams to be incurring more personal risks.
The parties most harmed by acquihires would appear to be financiers. There seems to be a meme that financiers enable acquihires so they can jazz-hands portfolio company failures by pointing to acquisitions, but funds either make money or they don't, and a fund whose portfolio companies hit the eject button instead of doubling down and taking a shot at returning high multiples is a fund that isn't going to succeed.
I wonder (only wonder; not certain!) if demonizing acquihires is literally doing venture capitalists a memetic favor.
If you want to build something cool, push MIT licensed code to Github, or write a kernel module for FreeBSD. The complaint that businesses are in it for the cash doesn't make sense.
You're under the impression that "something cool" is strongly typed to code. In reality, there's much more that can be done. Building an organization to make something happen is much more difficult than pushing to GitHub and usually requires outside investment.
At the end of the day, we all could have chosen med school and a life working for Partners in Health in Haiti, so this seems like a slippery slope argument.
I want to build something cool/useful and also enjoy the process of building. Your argument makes it sound like do something useful just for the sake of it. You ruined the whole argument buddy
Businesses exist to make money, and cease to exist if they don't. We all get that.
On the other hand, I'd rather not work next to a guy who'd stab his grandmother in the heart to get a small promotion because he feels that he has to make VP/Eng by 30.
Because that's the comparison here. Between the "few good startups that exist", as you said elsewhere in this thread, and the rest of them that are run by people waiting for the opportunity to stab their grandparents for a title bump.
There's plenty of opportunity for truly revolutionary disruption in all sorts of sectors. I just don't hear about it. As someone with disruptive ideals (but outside the valley) am I just being paranoid or is there really a problem?