In the past seven years, we’ve had the chance to interact with countless startups and disruptive technologies and watch the startup ecosystem evolve. In recent months, we’ve started noticing a worrying trend with many new startups looking for communication and editorial services: Despite months or even years of incubation, a lot of them still aren’t ready for a major public launch.
This isn’t due to lack of good ideas or solid technology, but in our view, reflects a larger problem: While 2014 might be the easiest time to fund or incubate a startup, it’s also one of the toughest times to bring it to mass market success.
Here's some of the major factors we think are causing this:
Startups Choking on Increased Resources
Every month, it seems like there are new incubators, VC firms, or funds for startups. While these resources are exciting, they can also create false expectations and hopes for entrepreneurs and founders. Many companies with weak business models or products not ready for prime time are nonetheless getting seed funding and graduating from incubators. This push from investors and startups looking for a quick profit or exit is leading to a swell of mediocrity. This, in turn makes it harder to recruit, as too many companies struggle to hire from too small a talent pool.
Oversaturation of Apps—and Inflated Expectations by App Makers
Apps! Don’t we just love them. The app environment has created an economy of its own within the startup ecosystem. And while some apps can grow to be legitimate businesses, the fact is that a vast majority simply cannot. Despite this reality, many app makers (especially of the “lean startup” variety) expect PR and news coverage to drive downloads and engagement. However, with the amount of noise around the app world, an app needs much more than good coverage to be successful and gain traction. (Vanessa discussed this problem in a recent post for Venturebeat.)
A Cultural Shift Away from Problem-Solving and Sustainability
The early ideology of startup culture was rooted in a desire to improve the world around us. And while many in the startup community are still keen to solve problems and fulfill needs, the culture is being consumed by a hunger for major IPOs or a billion dollar buyouts. In the early days, companies would work to solve problems, but often lacked a sustainable business model. Nowadays, however, it feels like the desire for a massive liquidity event is overshadowing both problem-solving and sustainability. It’s gotten to the point where many startups don't even seem to understand what being a startup even means -- and as they become too insular, forget who their product is actually for.
Again, these are just trends we’ve been noticing as an agency lately, and we welcome different perspectives. But as recent tech stock downturns suggest, early startups will need to become much more strategic in coming quarters. We’ll be continuing dialogue around this topic as it evolves!
Image via: brazencareerist.com