View on startups

A critical view on startups

A critical view on startups 700 350 Comidor Low-code Automation Platform

I am not going to start with a short preface in this article. I am going to be straight forward. Enough with the startups! I am tired of reading newspapers, blogs and website articles about successful startups in 2013, 2014, 2015. I am tired of hearing the same old ideas, covered with new fancy words and being presented as innovation! Is it innovation to offer a new social media network specialized in books? Is it innovation to offer a new mobile social media network which has better design and some more CRM Project Management and Business Intelligence Productivity features? No people! It is not! Social media networks was an innovation is 2005. Now, it is reusability of other people’s ideas.

And it is not only the social media “innovative” startups. There are startups about flight booking (which offer the “innovation” of random price sales), restaurant reservations (with the innovative feature of searching the nearby restaurants), cloud storage (best innovation offered is the cheaper price and guess what the safety!) and hotel reservations (in the new … I really cannot find anything!). But the startup “idea” that really irritates me the most is the job searching platforms. When taking advantage of people’s unemployment became a cool idea that deserves thousands of dollars?

Be careful and do not misunderstand what I am trying to say. All of these applications are good ideas. All of them are helpful and even necessary for everyone. What is wrong is the unbelievable number of applications which try to break the market in small pieces, with an ostensible specialization. Has anyone understood that if half of these startups were working on research or in real new innovative ideas our world would be a much better place? Why we all have to reward them? Why all the media present our era as the birth of innovation? Guess what! IT IS NOT!

The success rate of startups is estimated somewhere between 1-2%. Because the real success story is not a small business who manages to get in a seeding round. The success comes after 2-3 years when it has stopped requesting money, it has a full product that is finally accepted by the consumers and which is self-sustainable and produces growth.  And here comes the even scarier part. Half of these businesses are based on a freemium model with advertising based revenues. I am not going to talk about the “Advertising Bubble” as many predict. I am just scared to think that there is a whole growth system based on advertising, which in case of a financial crisis will let a huge number of businesses unable to fund themselves.

I come from a country which has paid a big price for using such methods of false growth, based on money borrowing and media guidance. I would not like to see that happen in the IT and services domain in a global scale.  I hope the time proves me wrong.