Say ‘technology start up’ – and what image springs to mind? Be honest. You’re thinking of bright college graduates in an open plan warehouse office with the wacky logo in reception. Complete with squashy bean bags, table football, sweatshirts and stock options. This is now as much business cliche as the investment banker with braces, the ad-executive with funky glasses or the architect in black roll neck pullover.
But is the cliche true? And is that kind of tech start up culture a good thing or a bad thing?The positive meme of technology millionaires is filled with images of hoodie wearing Mark Zuckerberg and funky office Google, staffed by the best and brightest ‘talent – the soon to be wealthy graduates building great useful tech. The negative is something that resembles the US hit Silicon Valley or Channel 4’s Nathan Barley. Funny but is there a worrying truth in these comedies?
At a recent RSA Lecture, Dan Lyons, author of ‘Disrupted: My Adventure In The Start Up Bubble’ – and the ex-Chief Marketing Officer of major start up HubSPot, painted a sometimes funny, sometimes worrying view of the Tech Start up picture he saw in Silicon Valley. You can see the full lecture from the RSA below
For a senior business journalist Lyons, the opportunity to work in a hot and fast growing start up was a chance to see the excitement, brains and energy of a tech start up close up but the closer he got the more weird, ridiculous and in some cases worryingly insular it seemed. Of course the silly furniture, uber enthusiasm and garish colour schemes can make us giggle and smile. No harm surely? All that positive mix of smart people building cool new funded by benevolent angels and investors? I spent a lot of my career in the industries of happiness; music, tv, advertising. And so I cannot fairly mock funky offices, silly haircuts and pizza fueled brainstorms that were more entertainment than business rigour. But the Tech Start Up scene has a darker and more disturbing under current, at least according to Lyons. And if we want to encourage positive, progressive, inclusive business, that is based on sound principles of sustainable profit, it is interesting to listen to what he says.
Firstly, he noted that there is often the lack of business discipline and business model in the Tech Start Up, which when questioned can be dismissed with the ‘ah, you don’t get it’. Yet could the hairdresser, the chef or the e-tailer get away with it? Sure, technology can be disruptive. But as Lyons points out Twitter and Spotify are running at a loss, yet continually grow their balance sheets with valuations based on investment, not customers and profits.
Secondly, in an age where diversity of culture, opinions and skills is often viewed as the real key to creativity and innovation Lyons notes that far too many of the start ups are mono cultural. Over 30? You cannot understand business and technology. Ethnic minority or person of colour? Female? Worryingly the composition of most of the businesses seen by Lyons, across the sector was white, male, educated middle class. Ironic, when so many business leaders today advise that teams need diversity of opinions, skills, and x-business collaboration with people who are different from you. (See Morten Hansen’s Collaboration or the work of IDEO for example)
Finally, there is self serving merry go round of start, investment, options, cash out and fail. Like the notorious hypes and bubbles of tulips, Louisiana banks and south seas, there exists within some that ‘there will be another sucker down the road’ – who will buy the stock, even if it is not a proven business. Is this just business? Is it OK to make money from money, rather building something of value? And this to me is perhaps the heart of the issue. How much of what is developed in the kind of Start Up Scene described by Lyons is providing real value? How much of it is more about the shares and the Series A funding – and commissions, rather than doing something worthwhile?
As Richard Branson advised when I saw him speak a few years ago, ‘if you’re not doing anything to make someones life better, but just to make money, what’s the point?’. Technology can make life great. But maybe some technology start ups don’t, despite the great furniture and hair cuts.