Calacanis on the Future of Start Ups
This is my rundown of the excellent presentation at Tokyo 2.0, “The Future of Startup Companies” by Jason Calacanis, whom I had the pleasure of meeting. Below is the video (starts at 9:10).
Live TV by Ustream
The citations in the following are not verbatim, the numbering is not entirely correct, and it’s all a little sloppily connected, but it’s all strong on substance:
What he said
Great brands are built when the market is down; that’s when you can take market share. The down market is the time when people build things they need. People who build companies to get rich generally don’t succeed. People who don’t have any money build better companies, because they build them on passion.
The market is going down, internet usage is going up, start-up costs are going down, and people’s amount of free time is going up. In short: the downmarket is a great time for start ups.
Trust and “curation” are the future. Lots of things in 1.0 and 2.0 are built on a very bad foundation of anonymity, marketers, and shady people. The way to go is taking existing ideas and adding trust and curation to them. Digg is a great system, but the anonymity provides opportunity for improvement. There is no wisdom in crowds. There may be trends or patterns in crowds, but not wisdom… “Wisdom in crowds” was made-up by someone in Silicon Valley to get suckers to work for free. Wisdom of the crowds does not exist.
Surviving is innovative. Great companies are those who are there for a couple of years. If you’re scared because of the recession: close your company, go home to your mom, and let the real entrepreneurs take over your market share.
My five cents
First of all, it’s great to hear someone speaking with so much optimism, especially someone who has been in the business for so long and experienced the associated shitload of negativity that comes with that experience.
Yes, brands are personalities, thus they are built on the passion of the people that incorporate them. Whether we speak about Steve Jobs, Bill Gates, Henry Ford, or Jeff Bezos, the head of the company symbolizes and drives the brand. But passion alone isn’t enough. You need a massive market, a massive network and—most importantly—solid means to survive. Yes, technology has become incredibly cheap, but without adequate resources in programming, interaction design, and marketing, it is almost impossible to compete with the big shots. In order to take on the big guys you need more than passion. You need strong muscles, T3-levels of determination, and enough cash to feed the people working for you.
I fully agree on the second point, and I’ve said so before. Even though it’s not going to be easy, I believe that the downmarket is a great chance for tech companies: Surf the Avalanche.
From our experiences with comments here, on FACTS (anonymous comments), and on Das Magazin (real names only), it is painfully clear that anonymity is the poison of Web 2.0. To create trust, you need transparency. That means real names only. It’s no accident the superstars of the current generation of online services build heavily on verifiable identities. I’ve said this many times, and have taken serious beating from anonymous users for it. Here is my final word to you anonymous and pseudonymous 2.0 super heroes: grow up.
Jason’s fourth point is spot on. I have only to add that if you still believe that with a little money and a couple of tricks you can become rich over night without moving a finger, you’re gambling in the toughest lottery ever. All great brands—online and offline—are built on hard work, good connections, and a strong dose of luck.