Tuesday, March 29, 2016

How Many Tech Startups Are Empty Shells?

How many startups are empty shells filled with glitzy PR designed to appeal to VC newbies?
It's widely accepted that most tech startups will fail. Perhaps the core business proposition didn't pan out, or the execution was flawed, or the initial success foundered on poor management, or another startup scaled up fast enough to suck up all the oxygen in the room--there are many reasons a startup with a fair chance at success can fail.
But what if many if not most of the current batch of startups have zero chance of succeeding because they're nothing but empty shells of gaseous public relations? Coder Daniel C. recently shared his experiences interviewing at numerous tech firms, both established firms and startups.
Here are Daniel's observations:
When I first got into the high-tech field, I thought it was the only place that was safe, in other words, I really thought everyone was innovative and cutting edge. But now I am seeing something you probably have already seen being in the S.F. Bay Area, which is that a lot of companies in the high-tech sector are clueless and full of it.
I have recently been on several job interviews with high tech startups and they are the wierdest interviews. They give me a bunch of blather about their company, but they don't ask me any substantial questions about my technical expertise. Then they tell me within 24 hours that I just don't have enough experience as they would like.
Many of these companies reach out to me like I am their buddy, no formal introduction, "hey, dude, can we talk?" Some of them like to use the F word in their outreach, which totally turns me off. I think they have innovative confused with lack of professionalism.
Of the ten-plus job interviews I have been to in the high-tech field, only two actually gave me a coding challenge to prove my skills. I actually have a lot of esteem for those two companies (one of them is in London) because at least they assessed my hard skills via practical application. The rest I have no clue how they are coming to their conclusions based on a unfocused ten-minute talk about nothing.
In fact, I am noticing most of these companies are not even reviewing my portfolio, which is leading me to develop questions for them such as "Which one of my apps did you enjoy most?"
Anyway, I shared this with you because if you have any knowledge of anything similar, I would love to see an article on it. I have a hunch a lot of these companies lack direction and are probably not really drumming up a lot of business. A lot of good public relations, but not necessarily a steady stream of clients.
Thank you, Daniel, for sharing your experiences and for raising a number of key points.
The key metric for startups now is not revenues or paying clients--it's their valuations--as in Unicorn valuations of $1 billion or more.
The number of 'unicorns' in tech is booming (Business Insider, Oct. 2015)
But valuations that aren't based on revenues, paying clients and profits are notoriously prone to collapse. It is far easier to convince a venture-capital wannabe with millions of investor dollars to fund a PR-heavy startup than it is to actually build a business with paying clients, rising revenues and profits.
No wonder we're seeing accounts like this:
Bubbles always seem permanent to those living within them. How many startups are empty shells filled with glitzy PR designed to appeal to VC newbies anxious to find the next Facebook? Perhaps far more than the financial media cares to admit.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Christopher T. ($125), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.
Thank you, Sigma Metalylics ($50), for your marvelously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:
Correspondents' email is strictly confidential. The third-party advertising placed by Adsense, Investing Channel and/or other ad networks may collect information for ad targeting. Links for commercial sites are paid advertisements. Blog links on the site are posted at my discretion.


Our Commission Policy:
Though I earn a small commission on Amazon.com books and gift certificates purchased via links on my site, I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP