

Ask YC: Is Startup Ubiquity a Bad Thing? - iamdave

In the past two weeks I have seen quite a few of these "X Startups in X Days" threads, or some other form of cranking out code, putting it on the web and calling it a 'startup'.<p>While I'm not immediately aware of how investors handle the rhetoric of 'startup', but personally just putting together a webapp and hosting it does not really make anyone or anything a startup.  This lead me to an even more crucial thought pattern:<p>The web is indeed becoming the platform Web 2.0 demands it to be.  YCombinator is showing consistency in funding successful startups, but I feel that there is too much ubiquity in redundant startup concepts (ex. remember when a new to-do list application was coming out every 3 days?  notice how the exact same thing is kind of happening with GTD apps?)<p>Well, while I have no problem with people wanting to do great things, the thought wont leave my mind that while this burst of web activity is great, but what's to become of the other technology sectors?  For that matter, what's to come of other <i>industries</i>?<p>Is this ubiquity of web activity endangering to itself, and possibly other industries?
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nostrademons
Basic economics states that when many firms enter a market, the market becomes
more competitive and the expected returns to those firms go down, which acts a
disincentive to others entering the market in the future. The effect isn't
immediate (entrepreneurs have imperfect information about the real returns in
a market), so that's why you get boom/bust cycles.

Slightly less basic economics states that when a market becomes commoditized,
its complements should raise in expected returns. So we ought to be seeing
higher returns for web frameworks, scripting languages, open-source databases,
scalability services, web hosting, startup boot-camps, and services that help
people make sense of the Web 2.0 clutter.

I think we're seeing this, but the problem is that other folks realize this
too, and so we're seeing people pile into lifestreaming apps (eg. FriendFeed)
and YC clones. I'm not really sure what industry has the best returns now - if
I was, I'd be rich. I suspect it's not Web2.0, but there's something within
tech that will be very, very high returns over the next 10 years, but it's not
an obvious industry at this point.

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joeter
"Slightly less basic economics states that when a market becomes commoditized,
its complements should raise in expected returns."

Good post - I see a big opportunity emerging for those who can figure out
better ways to enable sophisticated use for and make sense of multiple
databases.

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tstegart
I think it depends on what your real definition of start-up is. Is it only
businesses that can scale and create huge amounts of wealth? Or does it refer
to anything someone starts with the intention of becoming profitable and
supporting themselves? I can imagine that with enough time and hard work some
of these apps thrown together can indeed produce returns, and might even give
someone some financial success. Sure, they're not likely to be the next Google
or YouTube or Amazon, but I don't see a problem with people cranking out code
if they so choose.

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SwellJoe
So pick a harder problem.

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qhoxie
It may be endangering in the short term due to dilution or pollution,
depending on how you want to classify it all. Overall, though, the best
products will rise to the top. It's impossible to say when this will happen,
but my thought is that it will.

As for other industries, there will probably be cross-pollution based on the
quick successes that we have seen. Since the appeal of churning out
'companies' is obvious, I have no doubt it will be emulated in other markets.

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vaksel
Thats what happens when the barrier to entry gets lowered. We probably have
the same amount of Googles coming out each year, but now they are just diluted
more since a lot more people are cranking out code now.

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hsuresh
Am not sure if this is bad. The life of a startup probably begins after that
initial launch(that bloggers, media covers). What happens after that is what
probably decides if they become successful businesses.

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sutro
No.

