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Danny Crichton writes at TechCrunch that startups in Silicon Valley run on an alchemy of ignorance and amnesia and that lying is a requisite and daily part of being a founder, the grease that keeps the startup flywheel running. Most startups fail. The vast, vast majority of startup employees will never exercise their options, let alone become millionaires while doing it. But founders have little choice as they sell their company to everyone, whether investors, employees, potential employees, or clients. "Founders have to tell the lie – that everything is fine, that a feature is going to launch even though the engineer for that feature hasn't been hired yet, that payroll will run even though the VC dollars are still nowhere on the horizon," writes Crichton. "For one of the most hyper-rational populations in the world, Silicon Valley runs off a myth about startup success, of the lowly founder conquering the world."
Crichton says that Silicon Valley needs a new transparent approach toward information, but also need to understand that startups are inherently risky – and accept the lies that come with them. Founders can't expect to hide the term sheets and their liquidation preferences from employees who ask and informed employees have a right to know what they are getting into. "We still need that Big Lie to function. We still need to dream about the possibility of success in order to realize it," concludes Crichton. "With greater transparency comes a responsibility on the part of everyone in the startup ecosystem to understand and empathize with the plight of founders trying to build their companies."
(Score: 4, Touché) by Beige on Sunday August 02 2015, @07:29AM
I doubt anyone in the tech industry is surprised to learn that startups are more volatile than established businesses. Or that startups have to hype their business case in order to convince people to take them seriously.
Likewise, I doubt anyone in finance would be surprised to learn that startups with unproven business models and management teams are riskier investments than companies with proven track records. Ability to price risk is a fundamental requirement of VC.
Perhaps this Crichton can next write an expose on how some restaurants are claiming their product is tasty without any verifiable scientific evidence thereof. Oh, and by the way, most restaurant startups fail within the first year or two as well.
(Score: 2) by darkfeline on Sunday August 02 2015, @09:50PM
"Hype" is kind of different from "lie", as least as far as I'm familiar with those words.
Hype: our product is so-so -> "Our product is great!"
Lie: we have no product -> "Our product is great!"
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