The internet is a bubble

Posted: January 16, 2012 | Author: | Filed under: Social Web | Tags: , , , , , , , , , , , | 1 Comment


Links. Photo by me.

No, I’m not talking about a valuation bubble as in the .com-days. I am talking about how we are using the internet, today in January 2012, roughly 17 years after its breakthrough.

The evolution of the internet can be split up in to three phases, each building on the previous. Each phase is defined by a verb, which is the default behavior of a user of the internet in that phase.

The first phase is the SURFING phase, when we went from place to place looking for text and images. Yahoo! even started out as a company that manually tried to enter all the web sites of the world in to a categorized index. How crazy doesn’t that sound today?

This was the era of the bookmark and the URL. Your homepage (if you had one) back then was often just a dump of your bookmarks from your Netscape web browser.

The second phase is the SEARCH phase and started around the beginning of the century when Google became the dominant search engine. For many people, Google became the internet. I personally use the search engine more times than I can count during a single day. It has become almost an extension to my mind, an extra mind that we all share. It’s almost as if we’re becoming the same individual on some level. Quite fascinating.

Keywords and links became the hard currency in this era since links signal trust and is used by the Google algorithm to give each page a weight, the Pagerank. Search Engine Optimization tricks were (are) used to optimise your place in the search result but it really just boils down to creating stuff that people like to link to.

The third phase is SOCIAL and the verb is RECOMMEND, as in retweet, like, +1, share etc. This is where the bubble comes in because in this phase the internet is no longer interconnected web pages but streams of data from our friends. In the phase we live in sort of a Matrix reality shaped by the recommendations and retweets or the people (or companies) we trust.

An endless stream of status updates, this is the bubble we live in.

This is the era of hashtags instead of links or keywords, because the hashtag is how you pick out the signal from the noise in that endless stream. This is a significant shift from the first phase, which was essentially a broadcast phase where content owners had full control over the web sites they wanted you to visit. A hashtag, on the other hand, is just part of the stream and you have as little control over it as you have over the water in a river.

We’re only at the beginning of the social phase of the web so it’s not a bubble in that sense of the word.

Surfing, searching and recommending. The first three phases of the web. What do you think the next one will be?

Passive founder deadlock

Posted: January 11, 2012 | Author: | Filed under: Startup, Uncategorized | Tags: , , , | 1 Comment

Startup Founders are like toes
Startup Founders are connected like toes on a foot. Photo by me.

A “deadlock” is a state in a computer program where parts of the program is waiting for other parts to finish who in turn are waiting for the other parts. The result is a freeze where nothing happens. This has probably happened to your computer some time.

A similar situation can occur in early stage startups. Before a startup gets funding or revenue the only thing that drives it is the passion of the founders. But, the passion in every individual founder is deeply connected to the passion of the other founders. You need to have a passion balance equilibrium otherwise the startup will freeze just like the computer program!

As an example, you’re three founders, you get started, energy is high and you’re all excited to do this thing. Then after a while one of the founders starts drifting. Maybe her daytime job takes too much time. Maybe her spouse doesn’t like that she spends all her free time working on your startup. Maybe she just lost interest, the reason doesn’t matter but the fact is that you are now extremely close to a passive founder deadlock situation.

Her drain in energy will drain the other two founders as well. It’s Sunday evening and you have the choice between playing with your kids or working on your startup. Why should you sacrifice your spare time when the other founder don’t? You go play with your kids (a wise choice anyway). The startup dies.

The same situation can occur in later stages, when funds are limited. As long as your startup doesn’t have its wings in the air passive founder deadlock is probably your number one risk.

So, how do you prevent it? At the end of the day, you can’t. This is simply one of the facts of life for a startup. But you can limit the risk somewhat.

  • Of course you should make sure you have written agreements between the founders. This sets the baseline of what you expect from each other. It should also describe how a breakup should be done.
  • Too much administration can kill the passion too but some simple way of tracking who does what will help you see early on if someone is dragging behind. A Kanban board is an excellent tool.
  • One rather extreme way is to define an equity value for each task that needs to be performed and then split the equity after the task has been done based on who contributed the most to finishing the task. With this approach all the founders together make a list of what needs to be done and decide on an equity value for each task. When the task has been done the founders meet to “split the boot” with the founder who contributed the most getting the most equity. The downside with this approach is that you will spend a lot of time arguing over who did what and how much they contributed but if it works out it’s probably the fairest way to do it.
  • Do the startup alone is one way but the chance of success is even smaller with this option so this is not recommended.
  • If you’re OK with not an equal split of equity you can appoint one of the founders as “CEO”, give her more equity and the authority to be the driver of the startup. It’s then her task to “hire” co-founders and pay them with equity for the work they do. This approach also has downsides.
  • Of course the best way to solve this is to just simply get your wings in the air as soon as possible. You really should hate being in the startup phase.

What do you think is the best approach to prevent passive founder deadlock?

Hacker News discussion.

You should hate being a startup

Posted: January 11, 2012 | Author: | Filed under: Startup | Tags: , , | 2 Comments

We tend to glorify the startups too much. As Steve Blank says “a startup is a temporary organization designed to find a scalable business model”. What this actually means is that each day you spend in “startup mode” is a failed day. You still haven’t found the scalable business model!

You should celebrate the day when you’re no longer a startup. That means you’ve succeeded.

(Thanks to Gullfot for inspiration.)

Update: got some feedback on this elsewhere and I would like to point out that I personally love the startup phase. The problem is that the startup itself must leave this phase as soon as possible. This creates an interesting tension between the entrepreneur and the startup which is one of the reasons you as a startup entrepreneur should build a system, not a product.