Dispatch from SXSW: Have Startups Become a Fetish?

Preparing for South by Southwest Interactive every year, I’m inundated with pitches for services (now they’re apps when they used to be social or merely web-based products) that are fun, sometimes useful and generally something I wouldn’t pay money for. Since the magical breakout of Twitter in 2007 and the Foursquare success of 2009, SXSW has become more and more cluttered with startups trying to break out. It has also become a celebration of startups in general. However, that celebration has turned into a fetish — placing the act of creating a startup on a pedestal without casting any sort of critical eye on the quality or likelihood of that startup or idea succeeding.

For example, Wired just ran a story about the 160 applicants riding on six charted buses from Silicon Valley to Austin prepping some business idea en route to the event. After 48 hours coding on the bus, these applicants will be disgorged in front of a panel of judges that will choose the StartupBus winners. Meanwhile, there are at least six other startup contests or app contests happening during the event (I’m a judge at one of them). But amid the hundreds of startups launching, pitching, forming or otherwise trying to break out at SXSW, how many of them are real businesses? How many of them are thought out beyond a scrawl on a napkin, or a quick debate ahead of a startup weekend?

The Wired story notes that last year’s StartupBus winners DormDorm and DateBrowser never became real businesses:

“Two teams won last year: DormDorm, a startup designed to rent colleges’ vacant dorm rooms to travelers during the summer, and DateBrowsr, a Hot or Not for dating profiles the service pulled from several sites. Neither actually became real businesses, but many people involved in the StartupBus’ virgin voyage claim the experience was integral to both their personal and professional development, whether from skills learned or from connections made. Mick Johnson from the DormDorm team was accepted into startup funding firm Y Combinator and launched Whereoscope, which tracks family members by their cellphones.”

Of course these didn’t become real businesses. Most dorms already have programs to rent their rooms out during the summer and have had them for years, and a few calls could have easily nixed this idea. As for DateBrowser, that’s not really a business; it’s maybe a toolbar. Wired and the founders gloss over the fact that the winners of this startup competition never even had a chance at becoming a real business by focusing on the learning experience and the connections that the ride helped founders make. But I can’t.

The thousands of startups today that are pitching themselves at app competitions or in industry conferences all seem to think being a startup is enough. That daring to come up with some idea, any idea, and build a beta site is enough. That the users will come and then the business model will come and then the money will come. Google, Facebook and Twitter are their icons. Somehow the act of creating a startup has become the goal instead of the building of a business. As this post in The Awl points out, there are now startups built to merely create launch pages for your startup. (The Awl highlights LaunchRock, but Prefinery is another. I can’t believe there is a me-too startup even trying to build a market for startup launch pages.)

My issue is less with those littering the web with launch pages — if people want to take some time to test out a web site idea in their spare time, that’s far better than watching Two and Half Men reruns — but with the media, the venture firms and the ecosystem that has been built up to worship this idea of a startup. Maybe a little less fawning in the coverage and a little more skepticism is needed. For example, why is Wired devoting space to a startup competition that produced no real startups? If we called it “160 people get on a bus to Austin with their laptops,” it somehow doesn’t have that same cachet. Nor would it be worth sending an actual Wired blogger along to provide “updates from the road, as Wired.com reports every glitch, bathroom stench and late-night code dump on this perilous journey into the dot-com cosmos.”

Eventually, many of these sites will fade away, and domain names purchased on a whim after a late night of coding will expire. Some startups may get bought by Google or Facebook for their engineers, and even fewer will eventually realize their startup has the germ of a business which means that the startup will suddenly “pivot,” face the outcry from users, and perhaps make some money. Perhaps this has always gone on, but without Twitter and the infinite news hole offered to blogs, most of the offerings that fade away never infringed quite so much on people’s consciousness. But again, I’m not sure it’s just the bubble mentality and fawning coverage. On the web, it’s easy and cheap to create a prototype of an app or an idea and call it a startup. But is it a business?

I wonder if it dilutes the value of having a startup or calling yourself an entrepreneur. I think the fetishization of startups has helped create somewhat of a bubble, if not in valuations, then at least in me-too apps that will likely be deleted as soon as SXSW is over and everyone moves on to the next hot app. Yes, it has become cheaper to start a business, but has it also cheapened what it means to build a startup?

This rant seems to be part of a general zeitgeist, so why not wander over to the stories below for other thoughts on the issue:

One Nuclear Bomb Will Ruin Your Whole Startup Bubble from The Awl

The limits of Twitter and Facebook, the Bubble from Scripting News

Foursquare, Facebook, Founders, and Passion from Software Rants & Other Miscellany