When someone makes the bold claim that 90 per cent of the startups TechCrunch hypes are dead and buried within six months, you'd expect Silicon Valley to be in uproar. Surprisingly, though, the collective response seems to be, "Sounds about right." While I don't think the data support the claim, it is true that a large …
The same problem can actually occur at a later stage, too
Like when you need to make some sort of "generation change". Like when the first generation of engineers leaves, but has left a mess for the next generation. In such situations you are unlikely to be able to attract and/or hold a "next generation".
So if you look at a company, try to find out how sustainable it is. Try to look into the internal infrastructures and try to find out how easy it is to maintain it. Creative Chaos can be a very good thing, but when its interpreted as "look for the most current version of the business critical VBA code somewhere on 10 possible workstations and paste it into your spread sheet", it's not.
This is a real danger for not to large companies.
Are you suggesting engineer's salaries should reflect the fact that it's their ideas that push the business forward, which may (engineers are a temperamental bunch at the best of times) help and motivate them to produce the needed code? Not the paraphernalia of marketing and managing, which are typically massively overpaid and sometimes plain not needed.
I almost find myself agreeing with a Matt Asay opinion piece, that's gotta be a first.
It's not that simple
Although Engineers may not be very motivated when they get to little money. Paying them more money is not always going to fix motivation problems.
""Start ups that pivot once or twice times..."
Firstly; "pivot" is MBA speak for what exactly?
Secondly; "twice" is the correct English for "two times" oft used by Americans, "twice times" is just wrong.
Look, everyone is after money. If you're a PLC its your legal obligation. If you're a one man band its an obligation to feed your family. Everyone is going to take it.
I'd turn the whole opinion piece on its head:
"People who are are awash with money, such as VCs, are crap at choosing where to invest it."
There, didn't even need the rest of the article.
Agreed but then we wouldn't have found out about MA's "chairlift conversation"s with the movers and shakers. And then where would we be? Spared the usual self-promoting blather, that's where.
I agree with most of this
I work for a small privately owned company that's been growing itself organically for the past 10 years. We've never had VC or bank funding and have never made a loss. 90% of profits have been ploughed back in to growth and the other 10% kept in the bank to build a healthy safety net.
It's really tough because you are constantly having to do the same or more than your competitors with next to no money. It can be difficult when you see your competitors splashing out big bucks on expensive kit or premises, etc. but then we're still in business and most of them have folded.
We really focus on giving our customers the best support and professional services we can and pride ourselves on being responsive and flexible.
Having owned and worked with a number of start-ups over the last few decades I think there are two specific failure points for product based ventures.
Firstly - getting a workable, saleable product out of the door and in paying customer's hands. This seems to be the limit of ambition of many start-ups and I think this is a major error.
The second, and I believe more pervasive, failure point is getting that second version out. With all the implications of upgrades, testing, customer support, maintenance of multiple versions in the field, the reality of hotfixes for specific customers.
Now - for the amazon hosted web service this works differently - but I think it follows a similar pattern. First step is getting enough people to use/adopt your wonderful free service. The second issue surfaces when they look to monetize their customer base. Same sort of thing - all of a sudden you have support issues because people are paying for the service.
I've always regarded that second step as the maturing of the company. Of course - a lot of them look to get bought out by one of the big players at that point and so avoid having to grow their own infrastructure will all those boring grown up details that they've managed to ignore up until then.
Just my observations - your mileage will undoubtedly vary.