Congratulations, You Failed
Most Silicon Valley startups are doomed. That’s not a bad thing.
By Will Oremus (http://www.slate.com/articles/business/how_failure_breeds_success/2014/05/no_exit_by_gideon_lewis_kraus_are_tech_
startups_for_suckers.html, retrieved 27 May 2014)
When you think of a Silicon Valley tech startup, what do you think of? Razor scooters and beanbag chairs? Billion-dollar IPOs? Twitter, Yelp, Uber, Dropbox?
The Silicon Valley of the popular imagination is defined by its success stories. But they’re the outliers. According to CB Insights, which tracks the venture-capital industry, three in four startups go nowhere. Another 21 percent get acquired by a larger company. That leaves just 4 percent with the chance to make it big on their own. Startups that turn into billion-dollar companies are so rare that they’ve acquired the nickname “unicorns.” Yet they’re the ones you hear about in the news every day—the ones that fuel the Silicon Valley dream.
So what about the other 96 percent? What’s it like to work for a startup that isn’t destined for fame and fortune? That’s the subject of Gideon Lewis-Kraus’ timely new book No Exit: Struggling to Survive in a Modern Gold Rush. He follows the frantic founders of a startup called Boomtrain as they scramble to piece together a round of seed funding from unsympathetic investors before they run out of money to pay their sole full-time employee. Lewis-Kraus’ conclusion: In most cases, founding a startup is a waste of time and talent that borders on tragic.
What looms over our heroes if Boomtrain goes bust is not exile or debtor’s prison. It’s a six-figure job as a product manager at Yahoo.
Like so many startups, Boomtrain starts out as a grand idea to disrupt and democratize a market—in this case, online video—and ends up as a scheme to help e-commerce firms get more people to click on their links. Even in that diminished form, it appears to stand little chance of long-term success, despite...