The Startup, Redefined

The Startup, Redefined

Cockroaches, Unicorns, Startups. Enough Already!, said Om Malik. “I get really annoyed by these dumb labels that are put on startups…These made up words represent a limited grasp on vocabulary of those who are seeking cheap attention. As an investor, what I don’t look for is startups that come with dumb labels, popularized by reporters who don’t know what the hell they are talking about and are looking for cheap slogans to put on their click bait bullshit headlines.”

Truth be told, that whole startup lexicon is rife with misleading terms – beginning with the term ‘startup’ itself.

There’s no simple math for startups, and if it were up to us, ‘startups’ would be used much less, and banned in the tech sector completely. Instead, a newly formed company would be designated as just that – a ‘newco.’

While we do understand that many companies pivot, the word ‘startup’ makes it sound like you’re still practicing, rather than doing the real thing, or building an actual company. There are certain expectations, when you’re starting a company, or ‘newco.’ Almost by definition, you’re implying that there’s a business model in there somewhere.  You may have to go investors at some point (it’s called the ‘growth’ or ‘expansion’ stage) when you need to start scaling and hiring people to keep up with the ‘growth’ or ‘expansion’ that the newco is experiencing. This is basic economics 101, for those of us playing the home version, not taught in the pop up schools for ‘startups,’ and not generally discussed at networking events, where one sits through pitches in hopes of grabbing the attention of the investors on the panel afterwards.

More good rules of thumb, if/when you’re embarking on a newco. Your new venture basically should be one of three things: disruptive, radical, or missing. One could argue that Airbnb, for example, is all three, and as for ‘missing,’ the hospitality industry never allowed for travelers to rent out their flats while they were out of town, in exchange for a hotel room. A whole new cottage industry was created – pun intended.

A lot of attention is being brought to the fact that ‘startups’ oftimes don’t value their employees. We covered it last week, and Dan Lyons, former HubSpot employee,  author of “Disrupted: My Misadventure in the Start-Up Bubble” and writer for HBO’s Silicon Valley, brought it up again this week in his New York Times editorial, Congratulations! You’ve Been Fired. “UNFORTUNATELY, working at a start-up all too often involves getting bossed around by undertrained (or untrained) managers and fired on a whim. Bias based on age, race and gender is rampant, as is sexual harassment. The free snacks are nice, but you also must tolerate having your head stuffed with silly jargon and ideology about being on a mission to change the world. Companies sell shares to the public while still losing money. Wealth is generated, but most of the loot goes to a handful of people at the top, the founders and venture capital investors.”

Many ‘startups’ behave as though it’s acceptable to disregard certain laws.

“Tech workers have no job security. You’re serving a “tour of duty” that might last a year or two… Companies burn you out and churn you out when someone better, or cheaper, becomes available.” Lyons notes.  “Treating workers as if they are widgets to be used up and discarded is a central part of the revised relationship between employers and employees that techies proclaim is an innovation as important as chips and software. The model originated in Silicon Valley, but it’s spreading.”

We do recall the Amazon employee who blew the whistle on that company’s culture a while back (What it’s like to work at Amazon – ‘Nearly everyone I worked with I saw cry at their desk’), and Amazon founder Jeff Bezos offered no apologies in his latest letter to his shareholders. But remember: a startup has acolytes: companies have employees. Who are entitled to benefits. Acolytes are true believers who fall into some sort of subset of the work force – until someone files a lawsuit, which somehow balloons into a class action suit fairly quickly.  Those seem to be spreading now, too. Twitter is having its employee and former employee problems as well, at the moment, as is Nest, for their toxic work environment.

Sidebar: Dan Lyons has done a series of pieces lately, besides the three referenced here and, besides the fact that he has a new book coming out, he also writes for Silicon Valley, as we mentioned, and new season coming soon. Looking for free ink, founders? Take a lessons from a master. 

In startupland – and no one has ever adequately defined when a company ceases to be a startup – seemingly all is permitted, as tech is reinventing/changing/saving the world. So, we propose that it’s time to strike the term ‘startup’ from the tech lexicon, if for no other reason than to clear up some of the confusion about how employees need to be treated, and how companies need to behave – and in some cases, that you are an employee, and not family or some nebulous designation whereby you forego those benefits to which all employees are entitled. And note to self: again, it is the law. And that it is a business that you’re building with this newco, and not a school project for the science fair.

Tech has even more or less dispensed with the term ‘human resources’ or HR. It’s ‘Talent Acquisition,’ thank you – talent to be acquired, when needed, and discarded, when necessary.

“In any place I’ve ever worked, if the boss started bringing a teddy bear to meetings, he would be a laughingstock, forever,” Lyons writes in  Disrupted. “Here at HubSpot there is none of that. Dharmesh [the cofounder] is our Dear Leader. A HubSpotter mocking his teddy bear would be akin to a Scientologist making fun of L. Ron Hubbard’s cravat,” Lyons says, according to a Mashable piece.

And therein lies the rub: the cult-like following and behaviors that this new class of startups and their founders attract and indeed, demand.

And lest we forget, cults tend to be manipulative and abusive.

How many times have we heard that tech attracts the best and the brightest – and then when it comes to living by the rules, whether it be the rules of basic economics or basic courtesy and decency – we seem all to willing to give startup founders a pass? If they are indeed the best and the brightest, high time for them to lead by example and truly live up to their potential, what to speak of their promise to make the world a better place. Since many in tech seem to practically deify them – especially those tech reporters who, as Malik pointed out, “don’t know what the hell they are talking about and are looking for cheap slogans to put on their click bait bullshit headlines,” – if that’s the case, it’s about time that we stopped giving them a pass and started holding them to a higher standard. Onward and  forward.

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