These Things Are Related
September 17, 2009
Here are some interesting recent blog posts and articles, mostly by friends or acquaintances of mine, all of which add up to an interesting narrative.
- Spencer Ante in BusinessWeek documents Mint's sale to Intuit:
Mint.com owes much of its success to one such investor, First Round Capital, which opted to back the fledgling company at a time when other VCs demurred. Indeed, the Mint.com acquisition is First Round Capital's largest exit, beating out the $100 million sale of portfolio company Powerset to Microsoft (MSFT). And although First Round Capital would not quantify the return on its investment, co-founder Josh Kopelman says the Mint.com deal generated the highest return of any deal the firm has done. Previously its best return came when eBay (EBAY) acquired StumbleUpon for $75 million, which generated more than 14 times First Round Capital's original investment. "I don't think this changes our strategy," Kopelman says. "It is continued validation for our approach."
- Sarah Lacy of TechCrunch reminds startups that they're supposed to be changing the world:
I did interviews with most of the TechCrunch50 experts backstage and there was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google. Nothing against Mint, but Silicon Valley wasn’t built on $170 million exits.
Web visionaries like Reid Hoffman and Sean Parker struggled to come up with positive feedback on stage. Robert “I-get-excited-by-nearly-any-start-up” Scoble was so bored he was playing Hangman via Twitter with Paul Carr. Marc Andreessen praised Udorse—a company that he joked would make the world a worse place if it succeeded—because at least it was a new idea. Tim O’Reilly said he didn’t care whether Cocodot, one of the companies he judged, succeeded or failed because it was so meaningless in the world. And Tony Hsieh just said it blatantly: “I didn’t see anything that was trying to change the world.”
In some ways, I feel like Sarah's post is a direct corollary to my own earlier post where I'd suggested that the U.S. Government is the most interesting tech startup of 2009.
The ever-diplomatic Jason Fried of 37Signals riffs on a topic that he and I were just talking about last night, a lamentation of modest ambitions:
Mint’s sale to Intuit really pissed me off.
Why should I care? Because I think it’s indicative of a VC-induced cancer that’s infecting our industry and killing off the next generation. I don’t know the full backstory, but I’d bet this sale was encouraged by a Mint investor.
Here’s a fresh new company that was gunning for an aging incumbent. And not only gunning, but gaining. They had a great product, great design, and great potential. They were growing rapidly and figured out the revenue game. They were on their way to redefining an industry — one that was left for dead by the current custodians.
They were everything their main competitor, Intuit, was not. While Mint was inventing, Intuit was out of it. People used Quickbooks/Quicken out of habit and legacy. People used Mint because they loved it. Intuit was disgruntled, Mint was disruptive.
But here’s what happened: Intuit, last decade’s leader in personal finance, just became the next decade’s leader in personal finance. Mint had their number, but they sold it for $170 million. A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential.
Mint was a key leader of the next generation of game changers. And now it’s property of Intuit — the poster-child for the last generation. What a loss. Is that the best the next generation can do? Become part of the old generation? How about kicking the shit out of the old guys? What ever happened to that?
- Chris Dixon, co-founder of Hunch, talks about the impending era of interesting new NYC tech startups:
There are a bunch of veteran entrepreneurs actively investing in and mentoring seed stage startups. Google has a big office here and many people seem to be leaving to go start companies.
New York City has many of the same strengths as Silicon Valley - merit-driven capitalism, the embrace of newcomers and particularly immigrants, and a consistent willingness to reinvent itself. Silicon Valley will always be the mecca of technology, but now that people here are getting back to, as Obama says, making things, New York City has a shot at becoming relevant again in the tech world.
- And Caterina Fake talks about how the connections in our city will fuel this tech renaissance:
Yes. As someone who goes back and forth between New York and Silicon Valley, I see more companies being started in the Valley. But I am seeing some great consumer internet companies being started out here too. Etsy is a great example. Hunch has to be on this list. And Kickstarter, which just recently launched, and is changing the way that creative projects themselves are funded. A promising beginning. There need to be more startups, naturally, and more seed capital, and a hometown newspaper, as Chris also notes. And the CS grads moving into startups rather than financial services companies. I'm optimistic.
Though Caterina is still optimistic about startups in Silicon Valley, I'll offer up that one of the biggest changes in her perspective since saying three years ago that it was a bad time for a startup is that she's spending a lot more time in New York City these days. Finally, my friend Jen Bekman exemplifies the diversity of NYC's nominal "tech" community, in that her startup and company are squarely focused on the world of fine art. As Jen says:
[T]here’s so much else going on aside from technology — the valley might hold the title of the best place for start-ups in technology, but NYC is the best place for many things.
The diversity of experience on the 20�200 team is incredible and inspiring. Everyone I work with has done a bunch of other things aside from technology, and not one of them set out for a tech career to begin with. Among us are photographers, musicians, artists, writers, lawyers, teachers and wine experts. We all love the internet (a lot! too much?) but what drives us most is our love of art and the people who make it.
Does this happen in Silicon Valley? Perhaps, but my time spent there — which I loved, for the record — was about an immersion in technology. Here in NYC it’s about the thing itself.
Then again, if you live too long inside the echo-chamber, it’s easy to forget who’s going to be using all this technology in the end. The reality check is important, almost as important as being able to hail a cab whenever I damn well please.
The thread that ties all of these things together for me is that technology adoption happens now because of culture and media, not simply for its own sake or because certain types of capital are available. It happens because a vision is ambitious enough to capture the attention of artist and writers and creators of all sorts, not just other technologists or people within the bubble of the existing tech community. And cities like Chicago, Boston, Washington D.C. and, particularly, New York City, have a decided advantage when it comes to connecting to those in the tech community to the rest of the world. We also have an unparalleled history of ambition (and, yes, ego) to match that potential.
I hope entrepreneurs learn a lesson from the few underwhelming startups that are out there, and realize that the model of making incremental improvements on companies that already exist is a recipe where, even if you achieve your goals, you may not have achieved much of a success. And if everyone around you has similarly unambitious goals, then maybe you need to be in a place where that's not true.
Note: I use, and like Mint.com, and I'm happy for their success and am hopeful that they have a positive impact on Intuit. I am not arguing that their definition of success should be the same as mine, but rather that they may have defined a different set of goals if they had been part of a different community.