Yes, Silicon Valley Is Filled With Trivial Startups... And That's A Good Thing

from the missing-the-point dept

Fri, Jul 15th 2011 7:39pm — Mike Masnick

One of the more annoying logical fallacies of the post-gatekeeper era is that because so many people/companies/groups can do something, then the overall output is worthless. We hear this all the time. For example, people will claim that "blogging" sucks, because many blogs suck, and it doesn't have the same standards as journalism. That, of course, ignores the many excellent blogs out there. Similarly, we hear about how the world is now "flooded" with crappy music, because it's so easy to record and distribute songs online. The problem with this argument is that it makes a few really dumb assumptions, including the idea that relative quality is more important than absolute quality. It also is based on a lack of understanding of totally independent events.

That there may be a ton of crappy blogs out there has no impact whatsoever on quality blogs. That there's lots more music out there that you don't like, doesn't mean that there's less music that you do like. In fact, in both cases, the fact that it's easier to create and distribute such things actually increases the likelihood that the amount of actual quality increases. You just ignore the bad stuff and rely on better filters to find the good stuff.

Still, we usually hear this argument applied to content. So I was a bit surprised to see someone named Hermione Way basically making the exact same logical fallacy when it came to Silicon Valley as a whole. Her complaint? Too many startups here are working on trivial things, and somehow that's some sort of threat to Silicon Valley itself. This is the same thing as saying that there's no good music anymore, because there's so much bad music out there. The fact that there are some startups in Silicon Valley that are doing trivial things does not change the fact that there are many others doing amazing, world-changing things. The fact that there are some who go into startups and see them as get-rich-quick opportunities, does not impact the huge number of folks here who do not view startups this way (and, honestly, anyone who views startups as a way to get-rich-quick has probably never worked at a real startup).

Let me flip the argument on its head. Is there any place in the world that has a huge concentration of "world changing startups" that doesn't also have a bunch of frivolous and trivial startups hanging on as well? Of course not. I'd argue that if you stopped looking at the relative level of "world changingness" and instead looked at the "absolute" level, you'd be hard pressed to argue that more world-changing innovation comes from a single location than comes out of Silicon Valley.

That there are trivial companies mixed in as well doesn't take away from that. In fact, it often can help the world-changing innovations take place. That's because in this environment so many ideas are tossed up on the wall, that you get surprisingly powerful ideas coming out of them. Blogger and Twitter were both "side projects" that many people considered to be trivial. While I'm sure some people still consider them trivial, to argue that these weren't "world-changing" when you look at the communication they enabled, and how they've been used around the world, would be an impressive level of denial. People derided the original Apple computer as being trivial. But it changed the world in many ways. People mocked Google as being a trivial search engine in a crowded market. But it changed the world and the way we interact with information today. Many world-changing ideas don't start out that way. Most companies don't end up in the business they intend to start out in. Someone who's lived through startup life knows this. It's easy to mock from the outside, and not realize this is how innovation works. A trivial idea may be trivial forever... but it can also spark the next world-changing idea.

It's the cauldron of ideas and innovation, good and bad, that helps bring to life those world-changing concepts when they come about. Pretending that you can build an ecosystem that only produces world-changing companies is a fallacy.

That's not to say there aren't problems with Silicon Valley. And there certainly are overly eager folks who jump into the fray all the time without realizing how the world really works. But to brush off Silicon Valley because there are some trivial startups out there is to miss the point in a big, bad way.

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Filed Under: innovation, logical fallacies, startups, trivial, world changing

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Nicedoggy, 15 Jul 2011 @ 8:01pm

The only reason I can think of people keep saying a lot of crap is bad is because in an IP world that is absolutly true, those crappy startups will lock down every path for growth and innovation that there is.

The real problem is not that there are too many crappy companies, blogs, music, movies or whatever, the problem is there are too many few people holding control of it all at the moment.

Funny enough those same few entities and people are the ones who least help society to grow, they don't pay the percentage of taxes others do, they can't employ millions of people at a time, they can't create everything and they surely can't supply everybody.
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Anonymous Coward, 15 Jul 2011 @ 8:04pm

Innovation very often happens through trial and error. IP hinders the trial and error process by making it too expensive to try anything. If companies have to do an IP search before trying something, that increases the cost of trying anything which acts as a deterrent. and the risk of getting sued after trying something also increases the potential cost. This is largely why more innovation happens, and has historically happened, in places that don't have strict IP laws.
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Hephaestus (profile), 15 Jul 2011 @ 8:18pm

The top 5 percent ...
This all goes back to bell curves. On average the top 16 1/2 percent is usable, the top 5% is exceptional. Everything else is average to total and complete tear your eyes and ears out, shit yourself uncontrolably, crap. This goes for music, movies, and companies. What you see in silicon valley is, the top few percent of ideas that have gone through a VC or angel investor, and made it to the funding stage. A sizable chuck of the companies funded will fail. Not because their ideas are bad but their implementation sucked.
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Mr Big Content, 15 Jul 2011 @ 9:51pm

All These Pointless Businesses Give Capitalism A Bad Name
Who will take the concept of �business� seriously if so many useless and unsuccessful businesses are allowed to operate? The Free Market is about freedom to be successful, not freedom to fritter away precious opportunities and resources�freedom is too precious to be squandered just like that. Especially when this so-called �competition� takes away revenue and customers from legitimate, credible businesses. The Government should step in to ensure that only legitimate, credible businesses give it a go. This can only raise the quality of startups, and continue to make us the envy of the world, and continue stoking the jealousy of those who hate us for our freedoms. What�s not to like?
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Nicedoggy, 15 Jul 2011 @ 9:56pm

It would be nice to see an analysis of number of companies in any given year correlated to job numbers, taxes and other data points superimposed on laws restricting market entrants to see how that fares.
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Paul, 15 Jul 2011 @ 10:53pm

Valid Point
In the big end of town the business trend is called consolidation. The low barriers to entry for IP start-ups seem to have made low buck and by nature TRIVIAL start ups the norm, if you only follow the business press. Like the world needs another travel search site or RSS reader???

It does all look a bit like the early IP bubble where way too many brain dead MBAs wrote business plans and found backing.

The same sort of crap is still going on. I just read about a start up who coded an RSS reader and have raised $10M in funding???? That's the sort of trivial deals backed by cubic dollars you read about constantly in the Valley.

In the end the cream rises and the rest consolidate or die off, and in this case perhaps the sooner the better.
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illuminaut, 15 Jul 2011 @ 11:24pm

well, I can think of at least one disadvantage with having too many trivial startups: it sucks the talent pool dry. Good talent may end up wasting their time with a failed startup while the next big thing is in desperate need of good people. I know of quite a few startups right now who have what I consider great ideas but are having trouble hiring, despite funding.
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Richard (profile), 16 Jul 2011 @ 5:49am

Re:
Good talent may end up wasting their time with a failed startup

If they do that then, by definition, they aren't good talent are they?
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Eric Reasons (profile), 16 Jul 2011 @ 6:10am

We've heard this before...
We've heard this before; Harvey Swados, 1951, re: the paperback book:

"Whether this revolution in the reading habits of the American public means that we are being inundated by a flood of trash which will debase farther the popular taste, or that we shall now have available cheap editions of an ever-increasing list of classics, is a question of basic importance to our social and cultural development."

I feel so bad for the large group of people who see abundance as a threat.

I wrote a bit about how our social graph is created ever-better filters for discovery of new content, and how abundance actually solves it's own problem as our social tools get better. I refer to this as "crowdsourcing curation". You can read more over on my "crappy blog."

http://blog.ericreasons.com/2010/07/crowdsourcing-curation-social-graph-as.html
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marcyrw (profile), 16 Jul 2011 @ 7:21am

I would make a distinction in your analysis between tech start-ups and music. Music is art, tech start-ups make functional stuff. Much more importantly, the ratio of music offerings to the number of tech products out there is highly skewed to music offerings. It's a REAL glut. Here are a few problems w. music glut, and there are many: 1) because anyone at any age now can make "music" extremely easily (w. virtually zero cash needs), and throw it up on Youtube, and, because we have no reliable filters, the music merit bar has been deeply lowered; and 2) many have given up listening, because it takes too much time to sift through the bad crap and find the golden nuggets; and 3) music has been devalued to zero (see: Spotify; $4.99 for jillions of songs); no more competition driving need to be good - all music presented at same playing level. Alternatively, too much competition, overwhelming the market and driving value down, so serious entrants can either 1) not spend enough time on perfecting art b/c they have to market; or 2) not get into the market b/c rewards are much less. Whew. There's more, but I'm done for now.
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DannyB (profile), 16 Jul 2011 @ 7:30am

Why the gatekeepers are afraid
The dinosaur gatekeepers are afraid.

Journalism for example. Its not that the traditional journalist is worried about competing with the average blogger. S/he is worried about competing with the best bloggers, who may be the very few, but are the very best. There are some talented people out there. They don't all work for the dinosaur.

Music for example. Its not that the traditional signed band is worried about competing with the average garage band. They are worried about competing with the best bands, who may be the very few, but are the very best. There are some talented people out there. They don't all work for the dinosaur.

Software for example. Its not that . . . .
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Eric Reasons (profile), 16 Jul 2011 @ 7:42am

Re:
Music hasn't been "devalued".

1) It's cost has dropped significantly (as you point out)
2) Competition and efficiency in delivery have thus passed that drop in cost to the consumer in forms of lower price
3) Anytime price is lower than value, we buy. Value has remained constant, cost, and thus price, have fallen.

This is indeed the same mechanic going on in Silicon Valley. The filters we use for search and discovery are still catching up to the abundance that has occurred.

To expect the filters to be put in place before the abundance is to put the cart before the horse.
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ChrisB (profile), 16 Jul 2011 @ 7:55am

Re:
Okay, I'll try.

>1) because anyone at any age now can make "music" extremely
> easily ... and throw it up on Youtube

Okay, yes, I'm with you, this looks good ...

> and, because we have no reliable filters,

Ahh, I see where you're going. Google for music! Brilliant. I like your analysis ...

> the music merit bar has been deeply lowered;

WTF? You totally went off the rails here. What the hell is a "merit bar", and does it have nuts?

> many have given up listening,

Wait, what? "Everywhere I look on YouTube there are crappy songs, so I'm going to live in silence. No, asking a friend to recommend a song won't work because they all think I'm a freak, what with my no-listening policy."

> music has been devalued to zero

Wouldn't a sea of crap make good music more valuable? Let me ask you a question. You are going on a blind date and meeting at a bar. Do you want that bar full of good looking dudes with six-packs and fat wallets, or do you want a sea of Trekies with Mountain Dew guts?

> no more competition driving need to be good

No matter where I pause as I read that sentences doesn't make sense. Look, I can do it too!

> Alternatively, too much competition

I'm pretty sure it doesn't work like that. On one end there is a monopoly. In your world, on the other end is a multipoly. "Help, too many people want my business. I can find exactly what I want. I miss my limited choices and high prices!"

> not get into the market b/c rewards are much less

Exposure is its own reward. I'm pretty sure that is why we have this "problem" to begin with.

> There's more, but I'm done for now.

Code for, "I just puked in the comments section. Maybe something I said makes sense and doesn't contradict the other stuff." Nope and nope.

Yay, that was fun.
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Richard (profile), 16 Jul 2011 @ 8:23am

Re:
Here are a few problems w. music glut, and there are many: 1) because anyone at any age now can make "music" extremely easily (w. virtually zero cash needs), and throw it up on Youtube, and, because we have no reliable filters, the music merit bar has been deeply lowered;

So the opportunity for middle men is now in filtering - rather than organising physical distribution.
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Eric Reasons (profile), 16 Jul 2011 @ 8:51am

Re: Re:
Actually, the opportunity is for social systems that allow us to act as middle men for each other, which is already happening.

Most of our new music discovery now comes from friends, social networks, and intelligent machine filtering (like Pandora.com or iTunes Genius).
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marcyrw (profile), 16 Jul 2011 @ 9:08am

Re: Re:
You missed the point, sorry if I wasn't clear. There's alot going on in the music industry. (And, why be nasty? No percentage in that, and it makes you seem juvenile). First, people are indeed shutting down from listening to music and moving onto other forms of leisure activity. Sorry, but it's true, and in my business, I see it every day. Second, exposure is only it's own reward in a fantasy world, and it only holds for non-serious "musicians". Serious musicians actually need to make money. Third, if you can listen to/stream/rent/download a jillion or so songs for about $4.99 per month, the cost per song is statistically zero and artists cannot make a living. When you have real competition in the marketplace, and there are sufficient rewards available, innovation/excellence occurs. But because the playing field is leveled, i.e., there are very few ways to get heard above the fray and make a decent living no matter how amazingly great, innovative and skilled you are, why innovate? What's the reward? Why not just vomit out whatever you like and see what happens? And, if that song doesn't work, because it's so cheap and easy, why not just throw up more "demos", over and over again? Why bother practicing if you're going to get the same "reward" whether you do or you don't? Fourth: we do need filters, we need standards of excellence in art. Otherwise, as what's happening now in music, everyone could do it! There is a difference between a "prosumer" (nod to Alvin Toffler) and an "artist". But those lines are blurring because of the death of excellence standards. Oh, there is so much more on this topic, and so many POVs as well...but this is a small forum. And...You can disagree with me if you like, and that's all good, but again, it doesn't help your view if you just turn on the nasty.
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lfroen (profile), 16 Jul 2011 @ 11:07am

Comparing Google and Twitter?
Putting Google and Twitter into same category is like putting rubber duck and USS Enterprise into same category (both floating, isn't it?).
One based on some quite complicated technology, and another is IRC-written-again-now-in-html. You know what IRC is, right?
At no point at time Google was considered "trivial". But other "Web 2.0" crap, like Twitter, Blogger, and million others? The were trivial from day one, they are trivial today. They will (probably) disappear a year later and nobody will miss it. Remember MySpace? Geocites?

Google indeed changed the ways how people look for information, and Twitter - why should I use it, again?

Now, there's nothing wrong in doing trivial stuff, people still need trivial things like water, clothes, chairs, etc. But nobody call new chair factory "startup". This term usually reserved for business based on very unique idea. Not like Twitter, sorry.
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el_segfaulto (profile), 16 Jul 2011 @ 11:20am

Re:
I like to think of myself as at least moderately talented and for the last few months I've been doing consultation with a startup in Silicon Valley. If it does indeed take off, I'd like to think that it was in no small part due to my awesome coding skills. Learning skills has never been easier than it is today and the talent pool is NOT drying up.
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Richard (profile), 16 Jul 2011 @ 11:24am

Re: Re: Re:
The opportunity for middle men is to provide the infrastructure that enables all this to happen!
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el_segfaulto (profile), 16 Jul 2011 @ 11:28am

Re: Re: Re:
Musicians do need to make money, but having a gold-plated dump truck deliver metric tons of Beluga caviar for your caddy's chauffeur is no longer going to be a realistic reward.

Dear musicians, welcome to the real world. I spent two months writing a small book's worth of code, I got paid for those months and will not continue to get paid in perpetuity. I have friends in all walks of life, and every one of them expects to get up every morning and continue making a contribution to society.

Some of my favorite bands have been going to the dark side, and guess what...I don't buy their new stuff if it is released as part of an RIAA label. Your biggest fears are competition with legitimate bands (you can keep your corporate cookie-cutter music), and informed consumers who will no longer have terms dictated to us by middle-men and other useless members of society (IP lawyers I'm looking in your direction).
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Richard (profile), 16 Jul 2011 @ 11:30am

Re: Re: Re:
Third, if you can listen to/stream/rent/download a jillion or so songs for about $4.99 per month, the cost per song is statistically zero and artists cannot make a living.

You cannot make a living by selling recordings != you cannot make a living from music.

If you are good You can make your living from teaching music to all the other wannabees and have enough time to produce top quality music yourself. Most of the greatest music ever written was produced by people who lived that way.
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Anonymous Coward, 16 Jul 2011 @ 11:32am

Re:
Also, companies are afraid to try something before getting a patent because if they try something without a patent and someone else later gets a patent on it, the company can get sued. So companies have to go through the lengthy and costly process of obtaining patents before trying anything. This deters trial and error which deters innovation. Not all tried ideas will work, only some will, but the more expensive it is to try an idea, the fewer ideas will be tried, and so fewer successful ideas will be tried.
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Anonymous Coward, 16 Jul 2011 @ 1:21pm

Re: All These Pointless Businesses Give Capitalism A Bad Name
Government Control.....maybe?
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NullOp, 16 Jul 2011 @ 2:42pm

Journalism?
I couldn't get past the first paragraph or so as the writer mentioned journalism. Let me be clear, journalism in America is a thing of the past. There may be a shred left somewhere but, by-and-large, the real journalism once resident in this country is gone. Journalism has been replaced by opinion-ism and quipping. For the majority of people nothing is better than a mean spirited, opinionated little piece of proper length to read while in the wash room.
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Gene Cavanaugh (profile), 16 Jul 2011 @ 5:54pm

Too much too soon
Great article.
I was recently involved in a startup. We began with a crappy product, but slowly developed the basis for something really valuable.
Then "the man" (founder) decided he was only interested in selling the company, and had us abandon efforts to make a silk purse out of that sow's ear, and just make it look "jazzy" so the company could be sold.
I dropped out, of course - it might work, but I don't like working with smoke and mirrors.
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The IPKat, 17 Jul 2011 @ 2:21am

IP and lockdown
Nicedoggy is quick to comment that "The only reason I can think of people keep saying a lot of crap is bad is because in an IP world that is absolutly true, those crappy startups will lock down every path for growth and innovation that there is". How strange it is that, in the history of mankind, there has never been a period in which as much innovation has hit the marketplace as over the past three decades, when registered IP rights really began to proliferate and unregistered IP rights started receiving broader statutory and judicial protection.

Look at medicine, healthcare in general, the entertainment and communications sectors, fast-moving consumer goods, the luxury sector, banking and commerce -- all this has been facilitated by IP, not inhibited by it.
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abc gum, 17 Jul 2011 @ 6:51am

Re: All These Pointless Businesses Give Capitalism A Bad Name
That was sarcasm - right?
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Prashanth (profile), 17 Jul 2011 @ 7:59am

Her name is "Hermione", which tells me that just like Hermione Granger, she fears and feels threatened by any hint of failure in Silicon Valley, and logically extends that to include frivolous startups. Her Boggart is probably one of her being wrong (just as Hermione Granger's Boggart is of her being told she has failed something).
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Eric Reasons (profile), 17 Jul 2011 @ 8:32am

Freedom to fail...
One of the most critical components of innovation (god I hate that word's overuse, but I'm being very specific to the phenomenon here) is *the freedom to fail*. In particular, to fail informatively.

Cue Thomas Edison's schtick about learning "1000 ways NOT to invent a lighbulb"
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abc gum, 17 Jul 2011 @ 10:22am

Re: Re: Re:
"You missed the point, sorry if I wasn't clear."

No, you were clear and ChrisB did not miss the point.
You however, failed to respond to points raised.
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Anonymous Coward, 17 Jul 2011 @ 11:31am

Re: Re: Re: Re:
The reward comes directly from success. You can't guy a dump truck of caviar if there isn't a huge number of people buying your product. It's really that simple. You are confusing cause with effect.

The average "artist" was barely making a living before, and with a few whales, most of them were not. Increase the number of "artists" exponentially without increasing the income (and music related sales, live, recorded, whatever isn't shooting up), and things get exponentially worse for the people at the bottom of the hill.

Perhaps Bono (the U2 guy that Nicedoggy things writes laws) will have to cheap out a bit and take one less transcontinental private plane trip in his lifetime to balance the books. For the lower end guy barely making it on the bar scene, he just found out that he gets only half as many dates because there are twice as many bands in his area. He'll make ends meet by getting a McJob.

The farther you try to spread the wealth, the thinner it gets on the edges.
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Mike Masnick (profile), 17 Jul 2011 @ 9:44pm

Re: IP and lockdown
How strange it is that, in the history of mankind, there has never been a period in which as much innovation has hit the marketplace as over the past three decades, when registered IP rights really began to proliferate and unregistered IP rights started receiving broader statutory and judicial protection.

Correlation =/= causation.

While I disagree with Nicedoggy's original comment, I find it difficult to believe that there's a causal relationship as you describe either. There were so many other things that happened unrelated to IP that I think explain most things in your sentence here.
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ClarkeyBalboa (profile), 18 Jul 2011 @ 8:23am

Re: Comparing Google and Twitter?
The point with Google being trivial when it first launched was that it was just another player in the search engine world. At the time, i believe Yahoo! had the largest market share, and it would have been easy to see another search engine being trivial to the market. Years later and everyone now can see that this case was anything but trivial.

Second, i don't consider water to be at all trivial. There are dozens of stages and processes that water goes through from the river to your tap and back to the river. Billions of people have poor access to water. It is hardly trivial.
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