Wednesday, January 7, 2009
The State of the Valley
There are lots of stories detailing how Silicon Valley is dead. Dream on. What's dead is the risk that VC's used to take. Not the VC's themselves. They're around. And they'll remain here. So stop dreaming about the days when you won't be dealing with them.
People are still standing on their soap boxes, pronouncing how cheap it is to start a company. Well, just throw a Rails app together and voila. You have a company. Sure. If your company is a T-shirt company. Or if your app is like Twitter.
What about those other companies, that actually require a time investment in conducting research? That want to change the world? That want to change the way people do things? Let's look a little at Vyoo. We spent about 6-8 months conducting psychological research. Since I wasn't a psychologist, we had to engage those people. And they aren't free. Especially if you want psychologists who conduct rigorous research. Then how about developing and designing our algorithm, which, to be fair, I really didn't know where to start. Well, we had to engage a psychometrician. They aren't free either. Now the rest of the team is volunteer. But there are a few problems with that. The first is that hiring people who are friends or who believe in your idea is all well and good. But when they have other jobs or other things going on in their lives, it tends to take a back seat. This results in extended amounts of time to get work completed. What would shorten this? Money. But how can you get money when VC's want you to have a product already live with users?
Or how about a service that relies on building partnerships with other companies in order to develop content. That's something we're certainly going to have problems with. How do you prove to these companies that what your doing is really going to change their world? All while paying me (nothing), paying for our servers, and the others who we've contracted to help us. Sure, you can do it on the cheap. But it still costs money.
I'll tell you what. Screw people who say starting a company is cheap. I'm sick and tired of hearing that. Go try to start one yourself. And not a Facebook app.