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The walking dead of Silicon Valley
June 29, 2014 1:09 PM   Subscribe

But what about those tech entrepreneurs who lose – and keep on losing? What about those who start one company after another, refine pitches, tweak products, pivot strategies, reinvent themselves … and never succeed? What about the angst masked behind upbeat facades?
posted by lenny70 (36 comments total) 21 users marked this as a favorite

 


I imagine eventually, one of them will realize the collective value of their amassed failures and start a sort of anti-consulting business. Hire us! We'll tell you what to do. Your job is to then do the exact opposite.

Wait, shit.. I just gave away the farm, didn't I? Get me a team of tech losers and a couple coders, stat!
posted by mediocre at 1:24 PM on June 29 [5 favorites]


In line with michaelh's comment, there's a recent German study of entrepreneurs (pdf) that shows that past failure tends to predict future failure. The "fail fast, fail often" thing really doesn't have a lot to back it up.
posted by yoink at 1:26 PM on June 29 [5 favorites]


Still beats having a regular gig where even small mistakes can get you fired.
posted by Foci for Analysis at 1:26 PM on June 29 [2 favorites]


Didn't we go through this with the dot-com boom? I knew any number of young persons back then who were going to make it big. I guess every generation has to believe in the myth that there is easy money out there for EVERYONE. The value of failure is how the myth is sold.

OTOH, recovering from failure is really important.
posted by Peach at 1:29 PM on June 29 [1 favorite]


Still beats having a regular gig where even small mistakes can get you fired.

It's not like most of these people are drawing a salary to steer money to failed projects. For many of them it's a gig where the mistakes they make get them personally bankrupt.
posted by yoink at 1:46 PM on June 29 [5 favorites]


Bottom line, in the Silicon Valley environment one is making a gamble that all the pieces are going to fall in place for a win. The entrepreneur may have a better product/service idea, but one needs sufficient capital runway; early customers; a team that fires on all cylinders; a nurturing VC (if you can find one); timely marketing chops; and, luck. Having lived aside (and within) this culture for many years, it's been interesting to see the myths and hagiographic romanticism that has grown up around a culture that is a dog-eat-dog game where money is largely the end goal (with a few glaring exceptions).

One thing about Silicon Valley; it has become a "follower" culture. Lots of smart young people (a significant minority not so smart) coming to the "gambling table" to play the game. Another thing: VCs are WAY overrated. Having met and worked with many VCs, perhaps 1-in-20 is exceptional, and even the exceptional ones have made glaring bad bets. Last, Silicon Valley has become a prissy, catty, "insider" culture; it's aging and becoming very formulaic; it's ripe for disruption from other regions, worldwide.
posted by Vibrissae at 1:47 PM on June 29 [21 favorites]


I remember thinking that the spread of crowdfunding was going to destroy the traditional VC and change startup culture forever. Holy fuck, how naive. But I also was an early EFF supporter and WELL member, so I have a history of wildly overdreaming cyberutopian nonsense..
posted by mediocre at 1:51 PM on June 29 [9 favorites]


Silicon Valley... (is) ...ripe for disruption

Everything old is new again.
posted by oneswellfoop at 1:56 PM on June 29 [4 favorites]


from a VC perspective, encouraging entrepreneurs to "fail often" makes perfect sense, as they would want to keep the idea farm perpetually churning and therefore be able to select only the tastiest of bets.
posted by young_son at 2:14 PM on June 29 [6 favorites]


Software engineers employed by such zombies face a choice. Stay in hope the company will take off, turning stock options into gold. Or quit and take one of the plentiful jobs at other startups or giants like Apple and Google.

Having to choose between staying at one six figure job or going across the street for a different one is the not the kind of dilemma that one should be complaining about.
posted by octothorpe at 2:23 PM on June 29 [14 favorites]


I think the dilemma is not knowing the right time to cash out.
posted by bleep at 2:31 PM on June 29


Afterwards, they become president of the United States.
posted by Obscure Reference at 4:07 PM on June 29


Vc's pretty much all fail too. Its just that they get paid as they fail.
posted by JPD at 4:08 PM on June 29


I've always been confused about the "founder/ceo/company/VC/investments/valuation" model. If you want to start something, start something. There is literally no reason why you can't program it yourself or with a partner and get it out in the world for close to zero dollars. If it's a good idea, it will be successful.

Can you imagine what Metafilter would have been like if Matthowie had become the "CEO" of a "startup" that wanted to disrupt the "community blogging space" and went after venture capital? No, he made a thing because he wanted to make a thing and that thing turned out to be awesome.
posted by the jam at 6:14 PM on June 29 [5 favorites]


I've always been confused about the "founder/ceo/company/VC/investments/valuation" model. If you want to start something, start something. There is literally no reason why you can't program it yourself or with a partner and get it out in the world for close to zero dollars. If it's a good idea, it will be successful.

True enough in the current boom with software startups. Some of us have dreams of creating new companies based around hardware, which is a substantially more difficult thing to do without venture capital or other significant backing. I think that will be the next boom, and it's going to be a serious mental adjustment both for the entrepreneurs and for the investment community.

Also, let's focus in on this:

"There is literally no reason why you can't program it yourself or with a partner"

I'm speaking as an engineering graduate of a college whose campus was next door to a business school and if I had a dollar for every business school kid who came by our campus to tell us about their great idea and could we just do all the technical work for them (for loosely defined equity, of course; no pay) because that would be great... then I could have afforded to do all that unpaid work for them while they took all the credit. As entrepreneurship has become a "thing" in business schools -- even the HBSes of the world -- you get loads of "idea guys" who know all about valuation and investment and the CEO title, and crap all about programming or other technical skills, who want to get in on the latest tech boom, and the technical folks are starting to wise up to their bullshit and demanding pay instead of ethereal promises of equity. So I think the companies built by these sorts of people are building up the importance of having investment and valuations before any product is ever widely deployed, because they can't deploy the idea without paying someone to do it for them. Plus, doing it that way validates the necessity of their areas of expertise.
posted by olinerd at 6:50 PM on June 29 [16 favorites]


what Metafilter would have been like if Matthowie had become the "CEO" of a "startup" that wanted to disrupt the "community blogging space"

Didn't he post here a story about talking to VC guys and their big putdown was that Mefi was a "lifestyle business", meaning, I guess, a company that you run and that provides for you and your employees and that your customers like to use, that will never make a billion dollars, and he said to them, well, it's a good lifestyle, probably better than yours? Maybe it was in an interview or something else.
posted by thelonius at 7:08 PM on June 29 [6 favorites]


There is literally no reason why you can't program it yourself or with a partner and get it out in the world for close to zero dollars.

Limiting yourself to a couple of people working for "close to zero dollars" means no customer service, no curation of massive data sets, and minimal content creation beyond basic icon graphics. So a simple app or a puzzle game, basically. It also means working on it unpaid in your spare time as a hobby project.

If it's a good idea, it will be successful.

Because if it's not successful, that means it wasn't a good idea, right? If your idea of "success" is "had fun making it, got a few thousand downloads & a few nice reviews and some users even emailed you to say what a great app it is" then sure, that's a realistic expectation. If you want to earn beer money of it, you need to be in the top 10%, at least for free ad-supported apps. If you want to make a living off it (let alone get rich) then it needs to be awesome and there is a 99% chance it won't make the grade.
posted by L.P. Hatecraft at 7:24 PM on June 29 [3 favorites]


If it's a good idea, it will be successful.

This just isn't true. Whether it's good or bad makes no difference when no-one knows about it. If you have a great idea and put it out in the world without backing it with some kind of marketing power or networking, chances are it dies right there. But maybe not - maybe your great idea will trickle around slowly and be noticed by a company with power and you'll be steamrolled by companies enjoying the second-to-market advantages. The idea might succeed - but in someone else's hands.

I think the misconception that a good idea will be successful comes from the selection bias of noticing that many of the successful products were good ideas that started small, yet being unaware of the nature and quantity of the unsuccessful products, because they never made it onto the radar to begin with.
posted by anonymisc at 7:39 PM on June 29 [4 favorites]


If it's a good idea, it will be successful.

Two words: Singing Fish.
posted by Wild_Eep at 7:42 PM on June 29


"If it's a good idea, it will be successful. "

Cool bumper sticker but this is demonstrably false, as is its converse.
posted by deathpanels at 8:05 PM on June 29 [1 favorite]


"If it's a good idea, it will be successful. "

Cool bumper sticker but this is demonstrably false, as is its converse.


Yo
posted by voltairemodern at 8:24 PM on June 29 [10 favorites]


There is literally no reason why you can't program it yourself or with a partner and get it out in the world for close to zero dollars.

I wish it were that easy. Personally, I've recently written a desktop program that I think some people would pay for - but I have no idea how to market it or how to sell it. The market for this type of program has been "proven", but damned if I know how to write a Google Ad or do whatever sales and money people do. So it languishes on my server while I try to figure out how to find someone who does know how to do those things - at which point it starts becoming a "founder/CEO/etc" sort of situation.
posted by cmonkey at 8:51 PM on June 29 [2 favorites]


At this point, the ideas that can be coded by one or two Heroic Programmers, ... well, they are projects limited in scope by what two Heroic Programmers can do, and most Heroic Programmers have the option of excellent salary and lower risk. In addition there is a finite pool of Heroic Programmer talent. Partly because once one is 30 and has kids, living on ramen while rooming with your business partner is no longer a viable option for most.

Meanwhile, if you're working on your idea part time while a neighboring shop of OK programmers just closed a $5m round, they'll have an easier time working with other companies and they'll have more money to burn to solve problems.
posted by zippy at 9:10 PM on June 29 [1 favorite]


It's not like most of these people are drawing a salary to steer money to failed projects. For many of them it's a gig where the mistakes they make get them personally bankrupt.

Yoink, these people are not betting the mortgage to make a small business happen. Silicon Valley entrepreneurs get hundreds of thousands or millions from angel investors and VCs simply on the strength of an idea, without any guarantee of repayment, and yes, they can take a salary. This absurd fetishization Silicon Valley has of being able to fail repeatedly comes from the fact that these entrepreneurs have virtually no risk except for making a handful of old rich dudes angry.
posted by eschatfische at 9:52 PM on June 29 [3 favorites]


I am comfortable estimating that 95% of startups, even in Silicon Valley, don't get any significant funding besides personal savings, personal loans and maybe someone's severance or unemployment insurance.

We're talking about all the startups in "fail fast" culture, not just the ones that make the news, right?
posted by michaelh at 10:17 PM on June 29


Vc's pretty much all fail too. Its just that they get paid as they fail.

Most corporations have CEOs that not only fail but actually have to be paid off massively to go away and fail somewhere else.
posted by colie at 11:48 PM on June 29


Having to choose between staying at one six figure job or going across the street for a different one is the not the kind of dilemma that one should be complaining about.

It's a total lulzfest, so to speak, that this is taken at face value on here and even racked up favorites. It's got a lot of zing as a soundbyte, but if it was so true...

Then what's with the success of "hacker houses" where people live in bunk beds in a shitty old warehouse, or double up dorm style in crappy ass falling apart mid century houses in the outskirts of the area?

If you're making six figures, you can afford your own place even with the stupid rent. The fact of the matter is most of these people aren't raking in that cash. In fact, from what i've seen and heard, most take pay cuts to work at startups with the promise of equity and such.

Several people i know have turned down six figure BigRespectedCo jobs to work at a startup for as little as half, in the mid five figure range. This seems to be really damn common.

A lot of the "minions" in these smaller companies you don't really hear about get fucked. This isn't so much a "boo hoo go cry in your lexus" thing.
posted by emptythought at 12:11 AM on June 30 [3 favorites]


In my experience, founders take zero or minimal salary, aside from a few high-flyers. Angels want their investment to go to growth, not the salaries of founders. Sure, there are exceptions, and the CEO or COO a big VC installs on an A or B round is probably getting paid. But this isn't true for most founders I know (out of, oh, maybe 15 friends and friends of friends.)
posted by zippy at 12:30 AM on June 30


What's the appeal of hacker houses? It's kids (it's always kids) that flew out to land of riches, and are holed in in a hostel-like experience hoping to hit it big with VCs in a week or two. Seriously. Go to a Hackers-and-Founders event. These groups aren't hard to find.

Taking a bare-minimum salary for founders prior to an A round is one thing. Being employee #1 and taking a pay cut for 1% equity is stupid. 1% of zero, is still zero.
posted by robotmonkeys at 1:40 AM on June 30


Last, Silicon Valley has become a prissy, catty, "insider" culture; it's aging and becoming very formulaic; it's ripe for disruption from other regions, worldwide.

Just wait until those Silicon Valley fatcats see how well I'm doing their job, all the way from the east coast. That's right: my own failures are widespread and myriad, and they're not even confined to business ventures. By their own logic, I ought to be able to monetize this. If SnapChat is worth billions, my own sprawling incompetence keen-edged proclivity for incorporating failure into every paradigm I encounter has to be worth eight figures.
posted by Mayor West at 5:41 AM on June 30 [4 favorites]


If you want to start something, start something. There is literally no reason why you can't program it yourself or with a partner and get it out in the world for close to zero dollars.

If you and your partner are solid full-stack engineers, systems people, designers, and have business acumen then, yes. That's pretty dang rare though.
posted by wemayfreeze at 8:08 AM on June 30 [3 favorites]


This all just reminds me a bit too much of Joe Frank's An Enterprising Man.

I'm pretty sure that those continually failing entrepreneurs simply look over the smoking ruins of their company, have a cup of instant coffee and some celery sticks, say some personal affirmations, and get on with their next scheme.
posted by happyroach at 10:14 AM on June 30


>Several people i know have turned down six figure BigRespectedCo jobs to work at a startup for as little as half, in the mid five figure range. This seems to be really damn common.<

It is. Most of the ones I have brushed against have lovely packages involving stock and options on said stock as padding for the (most likely less than stellar) salary. So you run the risk of great success if they win or, well, not if they fail.
posted by twidget at 1:10 PM on June 30


I'm being pedantic, but SnapChat is based in sunny Los Angeles, not Silicon Valley.
posted by sideshow at 1:19 PM on June 30


I kinda really doubt that makes much of a difference. One of my aforementioned friends has been offered jobs(sometimes with, sometimes without moving expenses) in NYC, SV/SF, and Miami. There was also an LA area contract deal he actually did jump on at one point. He's one of the aforementioned kick ass heroic talented+warp speed programmers who can work for 18 hours straight, who also has the combo talent of being really personable/confident/sociable and good at selling himself and his work. Dude gets cold called every other month.

Every place, without fail, fed him the same canned bylines about stock options and company culture and how he was "getting in on the ground floor man, we're going to change the world and disrupt the market for XYZ and shift the paradigms and bla bla bla".

It's like they're all cold reading the same script for the same scene in a movie. No matter what city you go to, the SV culture has been completely canned and exported. It's like seattle coffee in a lot of ways with most places at least getting the basic version, and lots of "hip spots" getting offshoots of the advanced snooty versions.

I really doubt there's many places you could go in a coastal city, or some inland cities that are hip like Austin and not encounter the exact same crap.

I realize that may not have been your point, but to get more meta and less pedantic... it really doesn't matter if it's in LA or silicon valley, since these companies are like tract homes or something.
posted by emptythought at 2:33 PM on June 30 [2 favorites]


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