Might be nice to start the new year with a rant on one of my pet peeves. You may or may not think so but here goes. I'm really done with people using the word "startup" to describe small businesses that are involved in the tech space. Social media is chock full of startups. I think the idea of calling something a startup instead of calling it what it really is, which is a small business or maybe a fledgling venture, is based in some kind of elitist mentality. I also think that it helps to breed a culture that inherently leads many of these ventures to fail.

Setting A Low Bar

The concept of the startup has set a really low bar for businesses. Anyone who throws up a web page feels like they have the right to call themselves a startup and thereby receive adoration as the founder (or even worse, CEO) of a startup. Okay, so you started a website. That's not a business, that's a website. Try again please. Take it further. Offer a service that people just might be willing to pay for. The low bar that has been set in the world of the web for what constitutes a real business serves only to marginalize those web based services that are actually transacting business or in the words of a person with common sense, making money.

Spending Too Much Money

Startups are notorious for their free spending ways. Big launch parties and big booths (and sometimes big parties) at trade conferences are standard fare in the world of the startup. It's time that these small business owners learned about fiscal responsibility. In the mind of the person with common sense you start with a small amount of money and see if you can build and find an customer base for something of value. You then strategically expend capital as you earn revenue. In the startup world you spend money to make an impression so that you can look bigger and more successful than you are. People also spend money to feed their egos. Definitely plenty of those in startup land. Some people want to say, "Hey look, we're hosting the Frog-haus at such and such show." Well that worked out well in the end.

Spinning Rather Than Serving

It seems to me that many startups spend a disproportionate amount of their time spinning tales about how great they are (via overpaid PR people, blogs and social networks) and what great things they're launching. They don't realize that they exist to provide a service that offers something of value to people. Or maybe they do realize it and just can't deliver on the solutions that they claim to be offering people. Either way, there's a lot of talk and very little action. Common sense dictates that you will be much better off if you spend ninety percent of the time building something exceptional and ten percent of the time talking about what you've built. Unfortunately in startup land the percentages are typically reversed.

Refusing To Sell A Product

Typical startups hold up a lack of revenue as a badge of honor. The excuse is that they want to focus on traffic growth. That's just an excuse though. The real reason they're not selling anything is that they know they're not offering anything that people are willing to pay for. Hence their startup constitutes a hobby and not a business. I think that there's also a fear of failure that indicates a lack of confidence in what they're doing. They're paralyzed by the prospect of a product that doesn't sell well enough. After all, they're so cool right now they don't want to take the chance of being considered less cool. The ultimate hope is that they will be purchased. This strategy rarely works. Common sense dictates that businesses are started based on something that you sell to a customer. So if no one is paying then you're not really a business.

B.S. Titles

Every swinging John or Jane who hires a coder and launches a website feels like they have the right to call themselves a CEO. Their best friends become the CMO and some guy who gave them $5k to hire an offshore developer becomes CFO or COO. Allowing people to occupy these titles creates an inflated sense of worth and most definitely quite a bit of ego in web ventures. I don't know exactly what draws the line between being able to be called a C-level officer or not. I do know that there's no such thing as a CEO in a business with no revenue. I also know that real C-level officers have built (or inherited) a substantial organization. So the marketing flack of a five person web service can choose to call themselves a CMO but they're just deluding themselves and insulting everyone they meet by doing so. C-level corporate titles should be properly earned. The idea that you can take a shortcut to knowledge, wisdom and business prowess by granting yourself one of those titles is silly. Real entrepreneurs know that skill and confidence is developed via real experiences (including failures) and accomplishment,not b.s. titles.

Time For A Shift

In 2008 many small companies saw difficult economic times and I'd like to see people doing better in 2009. I would also like to see the quality of services on the web improve. I think that the thing that will help people in the world of startups the most in 2009 is to leave that world behind. In leaving the fantasy world of venti lattes and VCs behind these individuals can join the world of people who are genuine entrepreneurs seeking to build long-term businesses instead of creating something that they can flip in six months to one of the big internet or media companies. It wouldn't hurt to add a bit of humility to the equation either.

Final Thought

The boom is over folks. It's time to change for the better and come back to reality.