"It's a terrible time to start a company, especially here in the middle of it all, the Bay Area," according to Caternia Fake, co-founder of Flickr.com, which was acquired by Yahoo! last year. And, thus, she set off a small storm in the teapot that is the Silicon Valley.
I've been in on the founding of more than a few companies, having just gone throughIf there was a formula for starting a company, everyone would do it. the long pre-launch stage again, and, rather than take one side or the other in this argument, I just want to point out that the start-up experience is never the same twice. Arguing about the formula for success is like trying to relive your youth.
Caterina offers a list of reasons it's a bad time to, as she amended the posting, start a "consumer-facing Web 2.0 company," that includes:
- Everybody else is starting a company. No, they aren't. The mistake too many people make is to think that entrepreneurial work is something ordinary. It's awful and frightening at least as often as it is rewarding mentally, let alone economically, so most people don't start companies.
- Your competition just got funded too. So what? If having competitors in the market is bad, no one would start a company. Certainly, no one would invest.
- Talent is scarce again. What? Like it's plentiful at some times? Google is drowning in talent, in both senses of "drown." More below... .
- You can't operate in obscurity anymore. Why is obscurity necessary? The launch first-develop later approach, I think, is why there are so many one-feature wonders, companies that are really vehicles for getting hired with a signing bonus. Those aren't companies, they're avocations.
- Web 2.0 isn't all that (with which I wholly concur).
- There's too much going on, citing the river of events that Web 2.0 people can choose to attend instead of actually building their company. Having been a conference producer in my day, I freely admit that many such events are a pox upon the attendees, who confuse being seen with being relevant.
But, seriously, folks: If there was a formula for starting a company, everyone would do it. Talent—real, burn-the-house-down-and-start-over talent—is always scarce and, as Microsoft proves to this day, not particularly relevant to profitability. Instead, the challenge of execution against a plan is what determines whether a company gets funding and, more importantly, will ever reap a profit.
So, to all the folks who jumped on the Caterina-is-wrong bandwagon, here's my avuncular advice from this weird perspective I have as both a dedicated outsider and entrepreneur: If you have time to argue about the entrepreneurial virtues of the times, you're not working hard enough on the company you're starting.
Anyone who tells you that there is a good time to start a company, that at some point it is actually easy to put everyting you have on the line to make an idea fly, they are full of it. The legendary years of 1994-1997 and 2002-2004 are just that, rumors of glory. It was always hard to start, and—in retrospect—looks easy to sell, a company.