Web 2.0 dreaming: get rich quick, or fail trying
In “Rocketboom: Web 2.0 'success' on $20 a day?” I reflect on society’s desire to count on a “get rich quick” American dream success story, rather than to work towards a “hard earned dollar.”
As every American is born with the unalienable right to the ‘pursuit of happiness,’ and we often equate money with happiness, there is a tendency to jump on ‘happiness’ bandwagons, rather than take ‘slow boats to happiness.’
This second wave of the commercial Internet is no exception. At TechCrunch, Michael Arrington cheerleads daily for the latest cool applications put forth by a seemingly unending flow of Web 2.0 ‘start-ups.’ While his colorful anecdotes are well received by fellow Web 2.0 champions, there appears to be less interest in the ‘deadpool’ tag he recently added to the TechCrunch Company & Product Index.
This week’s entry of the now defunct online calendar application, Kiko, into the TechCrunch Deapool is getting attention, (see Eight sure ways to get in TechCrunch Deadpool ), but the parties involved in the failed Web 2.0 start-up are gearing up, undeterred, for their next chance at the TechCrunch limelight with another “outrageous startup idea,” according to Paul Graham.
Graham, financial backer of Kiko via his Y Combinator, says at his blog of the Kiko team:
Ok, so try again. Y Combinator funded their new idea yesterday…
In fact, it's probably the most outrageous startup idea I've ever heard. It's good to see those two haven't lost their appetite for risk.
What is Graham’s rationale for backing the latest “idea” of the unsuccessful Kiko team?
And this one is not the sort of thing Google employees would be using at work.
From all indications, Graham and the ex-Kiko team will not be doing things much differently at this try for the Web 2.0 “brass ring.”
Graham says of Kiko’s folding:
There's another encouraging point here for the new generation of web startups. Failure is not a disaster when you're very light. The total amount raised by Kiko in its existence would be about six months' salary for a first-rate developer. There's a good chance they'll recover most of it by selling their code. They only had one employee besides themselves. So this is not an expensive, acrimonious flameout like used to happen during the Bubble.
Graham’s praise of “lightweight” Web 2.0 “business” efforts is disconcerting; It reflects the almost “slash-and-burn” type thinking suggested in his Y Combinator “investing” philosophy.
The Y Combinator Funding Application for Winter 2007 implies a rapid sell-out strategy for applying “start-ups”:
Which companies would be most likely to buy you?
If one wanted to buy you three months in (March 2007), what's the lowest offer you'd take?
The ex-Kiko team apparently agrees with the Y Combinator philosophy of starting a company with the goal of rapidly turning it over via a sale.
In “Eight sure ways to get in TechCrunch Deadpool ” I cite Kiko team member Richard White, on the group’s designs on a quick buy-out:
we thought that the release of Google Calendar might be good because it would push one of the other big players into acquiring a calendar application to compete. 30boxes had stated that they didn't want to be bought out so, as the #3 player, things were looking hopeful. Things didn't pan out, but that's okay. None of us were ever had a Lexus on hold.
Y Combinator was undoubtedly influential in encouraging the team to “operate” the start-up with a quick sell-out focus. Y Combinator says of its funding philosophy:
Y Combinator funding lets you sell early, if you want to. We think startups will increasingly opt to sell themselves when they're small for a few million, rather than take more funding and roll the dice again. Google and Yahoo both like to do this sort of acquisition, and we expect it to become increasingly common.
Kiko has indeed opted to sell itself. Unfortunately for the team, however, the Y Combinator funding has not yielded a quick, lucrative buy-out by Google or by Yahoo.
The Kiko team has had to put the Kiko assets up for auction at eBay with an asking price of $49,999.99.
While the Kiko eBay sales description characterizes the assets as “used,” the team is offering “Free Shipping.”