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Tech startup is burning from the inside

Today I accept the fact that the tech trade is dying. The news may still talk about growing Investments and acquisitions. But from the inside, we are seeing far less deals in the funnel and declining meetings with founders. The reason for this ismany of the funded projects recently are more relationship driven with focused discussions around capital gain and community growth rather than innovation.

The last running startup I invested in will be closing its figurative doors. This will be the 3rd failed startup closing in the past 15 months I hold equity in. I’m aware my personal failures are not the reflection of the industry as a whole but we have been noticing these trends long before the Pandemic. In fact, the Pandemic fast tracked the inevitable. I’ve had discussions with a so many people about what’s going on and here’s what I’ve heard:

Decline in Founders

There are far less visionary and inventory Founders than two years ago. Those unicorn founders are beginning to see the growth struggle outweighing the benefits of making their business succeed. Many Start ups don’t actually fail but more due to FAANG and other big players scooping up these business leaders for growth roles. ‘Everyone has a price’ rings true here. Senior product or community growth roles start with a $300,000+ total comp. At this point start up Founders begin a realistic comparison of their personal financial goals and feasibility of the very start up they created if they’ll ever see that kind of money during an economic troubling time.

Automation Killing Innovation

There are plenty of tools and frameworks out there in how to create a functional product that could pass off as “innovative” but in reality is not very original. College graduates today could look at an application and replicate it with little effort using far cleaner and leaner frameworks. Above that, algorithms can now be created to deliver code. Given the right parameters, basic features can be created. Github is the only version I have used and it is eerily good. This takes away creative innovation from the programming space. Highly sought after programmers today focus on extremely niche areas, such as drone programming using Python or Assembly. Companies like Anduril will jump all over those individuals.

Distribution of Product

Because innovation is no longer a rare quality in the trade, the industry is now focused on valuation and community growth. Cool factors and user experience improvement is no longer a the desire, creating noise and fundraising determines success. I think it has more to do with the fact those things are less controllable. Within our inner circles, we’ve already heard rumors of massive business leaders performing shady acts to get those metrics up while providing little to no value from a functionality standpoint.

These are just things I’ve heard and while they make sense right now, who knows if they’re right or wrong? Time will tell.

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