It is instructive to look at the trajectory of most startups in this latest so-called bubble. As I look upon the last three years, there have been enormous changes in the tech sector. The one area in particular that has contributed to these changes has been the ubiquity of technology services that make the development of websites and mobile apps easier, faster, and better. Now even a complete tech novice has the tools and resources available to develop a functional and well designed application given some time and a little gumption.
Notice that I did not say money. Amazon EC2 obviated the need for hardware infrastructure. Github accelerated the sharing and reuse of code. The programming languages and development environments are openly available. Frameworks abound that make starting a functional website and ecommerce sites in less than a day. Numerous SaaS applications exist to perform all sorts of support, monitoring and administrative functions. The kicker is that the total cost of all this software and hardware is nearly free.
As a result, many people are jumping into tech startups regardless of backgrounds or experience. Teachers, auto mechanics, florists, anyone essentially has the same opportunity. Even the cost and complexity to outsource has dropped dramatically if hiring local or learning the tools themselves is not viable. Part of what we see as the “bubble” is the dramatic shift of people flowing into the tech sector, reversing the downhill slide over the past decade. With this influx of talent are all sorts of ideas, many of which are going to be similar to existing services. Thus we have seen a significant rise in complaints about copycats and the lack of big ideas.
What this means is that what we envisioned as a tech startup is not so “tech” anymore. In the first dot com wave, starting a tech company required tech chops, lots of programming and hardware resources, and boatloads of cash. All the stereotypes about male-centric, socially limited, nerd factories were not too off base. There were no soirees with fashion icons, party invited from Hollywood celebrities, or rich and famous hobnobbing. Family and friends of techies generally had little idea about technology expect for Microsoft, PC vendors, and TurboTax.
I look at the array of current startups around NYC and realize that there are a lot fewer pure tech-centric startups. Many of the founders are not technical (though they are becoming more tech-savvy). These are startups aiming straight at the heart of every industry, endeavor, and interest. The DNA of these modern tech startups are food crawls, fashion mags, fantasy sports, factory automation and everything else under the sun. Technology is required, but it is certainly not the differentiator. Instead technology is the factory behind the scenes and the show is the product, the model, and the service.
There will still be the classic super tech startups. Things that deal in security, network optimization, scalability, API’s, analytics and the like will continue to be needed to support the growing waves of non-tech tech startups. The mobile front is rapidly changing and complex, so that will also require serious tech chops. Obviously there will also be developers making tools and platforms that make building technology even easier. Building transactional database web applications now as compared to when I was building sites in the late 90’s is easier by at least a factor of 10. That does not even take into account cross-site/cross-application integration.
As the technology becomes even more accessible and easier to plug-and-play into real applications, look for more startups get launched using the paint-by-numbers, app-in-a-box approach. And do not expect the winners to be based on the best tech. It will come down to execution, closing deals, smart user acquisition strategies, and superior service/community. That may sound like heresy to the tech community. Many are dismissive of the non-tech founder set. If we take an honest look towards the ultimate future though, it is not software eating the world. It is really software eating itself, something I will get into more in another post.