Yes, but the reasons are somewhat different. If anything, startup costs have gone down with technology costs and as access to technology increases. The problem now is that with the great saturation of these consumer web startups, and the "startup-gold-rush" mentality of everyone trying to start a company, the "bar" has been set much higher for an acceptable product. It's no longer good enough to have an app that works, it must work, and be beautiful, and be cross-platform, and use the cloud, and have social integration, and ...
It's no longer good enough to have an app that works, it must work, and be beautiful, and be cross-platform, and use the cloud, and have social integration, and ...
Or maybe (he writes, donning his HN-proof flamesuit) having genuinely innovative ideas actually does matter.
There are plenty of people around here who keep saying it's the execution that counts, launch with a MVP because you need data so you can pivot, what matters is having a great team, and all that. I'm sure there is some element of truth in all of those things, but most of the "businesses" based on that philosophy seem to build something obvious that a thousand other people thought of and any 15 year old geek could do in a weekend, and then act all surprised when they don't become the next Facebook.
If these are the kinds of people who are approaching VCs with a view to serious funding, it's hardly surprising that most of the ones that don't have literally the best execution in a market with hundreds or thousands of plausible competitors will fail.
To me, it seems crazy today to even try going after mass-market, low-level consumer services. There's far more money in B2B unless you really make it to the top in B2C, which you are extremely unlikely to do even with a fantastic offering. And if you are happy to settle for a business that is merely very lucrative rather than the next Facebook/Google, you can do very well in B2C with a good idea in just about any specialised field, where the market is not every consumer in the world but the people in the market really want what you're offering because it genuinely benefits them in some way that nothing else did before.
[Edit: I see Fred is posting here, so I'll mention that it would be interesting to know how many of the companies VCs take on tend to be in that latter category these days. Is specialist B2C just too small for VC-style deals to make sense most of the time?]
There are plenty of people around here who keep saying it's the execution that counts, launch with a MVP because you need data so you can pivot, what matters is having a great team, and all that.
I've been calling bullshit on the "execution is everything" meme for a while now, but I hadn't thought of it as maybe a cause of increasing difficulty in the startup ecosystem. That is an interesting hypothesis.
The problem is you can stuff any meaning you want into the word "execution" - designers can stuff in beautiful design, programmers can stuff in cross platform deployment, etc. It should probably mean, "relentlessly finding market fit"
[Execution] should probably mean, "relentlessly finding market fit"
The trouble is, that doesn't really say much either. "Finding market fit" essentially means producing something good enough that people will pay for it, so arguing that execution is all that matters for success with that definition is a circular argument.
On the other hand, if we contrast "execution" with "idea", as is often the case in HN discussions where the "ideas have little value" argument is made, we're effectively comparing having a good idea that we can make money from with having an arbitrarily bad idea and assuming that it can be incrementally adapted (<ahem> pivoted) into a good idea that we can make money from. I simply don't accept the premise that you can start from anywhere you like and always wind up making money as effectively as someone who started from any other point.
> I simply don't accept the premise that you can start from anywhere you like
Is anyone saying that? I believe it's a strawman. What people say is "ideas are worthless" which is quotable hyperbole used to club stubborn NDA wielding entrepreneurs over the head. What people mean is: ideas are effectively worthless because until you start executing you don't have a good way to know if the idea is good or not.
So yes, starting point matters. Unfortunately, until you start to execute, you only have the an extremely hazy understanding if your starting point was good. Sure you can weed out absolute loser ideas, and you can get an idea of the risk profile of the venture, but not much more.
Is anyone saying that? I believe it's a strawman. What people say is "ideas are worthless" which is quotable hyperbole used to club stubborn NDA wielding entrepreneurs over the head.
That is surely how it started, but I'm not sure everyone on the start-up scene today got the memo.
Unfortunately, until you start to execute, you only have the an extremely hazy understanding if your starting point was good.
I still respectfully disagree. Some of the most successful small businesses I'm familiar with started out with a disruptive idea in a specialised market that was so far beyond what was available at the time that there was never really any doubt that it would be viable and a successful company would result, the only question was how successful.
The common factors in each case were founders with a shared interest in/understanding of some specific field, often an existing support network in that field, a solid combination of general technical and non-technical skills, and most importantly, going where no other team with those combined strengths had been before. If you stop trying to appeal to the entire planet and start looking into niche areas (which does not necessarily imply tiny markets, just smaller than "everyone"), it's amazing how many opportunities there are to apply modern technology to do things qualitatively or at least order-of-magnitude quantitatively better, and how many real problems you can solve for businesses and private individuals alike.
Many of those businesses are also counterexamples to the popular wisdom that if you have no competitors in a market then that's a bad sign because there isn't really a market there. Sometimes you really are just that much better than everyone else, because if your market isn't full of geeks who build their own hardware or write software just for fun, even applying quite basic (by geek standards) skills can put you far beyond old school, manual ways of doing things.
So I concede your point, but I think those are also smaller and smaller markets. In an efficient world those obvious-at-the-start ideas are only unsolved AND obvious because they perceived value of solving them is low. Not so low they are not worth doing, but low enough they won't support a rapid growth and investment seeking startup.
I think those are also smaller and smaller markets. [...] Not so low they are not worth doing, but low enough they won't support a rapid growth and investment seeking startup.
I think we agree on the basic situation, just perhaps have a different idea of the scale.
To me, having a business that has merely millions of potential paying customers, but where those customers have a particular interest in what you're offering and there is relatively little competition because you really are doing something new, is worth more by any metric I care about than having a business with billions of potential paying customers who have no particular interest in what you're offering and dozens of competitors offering something similar. About the only metric where this doesn't come out on top in B2C world is "probability of hitting it out of the park", which is of interest to VCs and serial entrepreneurs playing the long game, but possibly not so relevant if you're just trying to start a successful business for yourself.
Your comment about "in an efficient world" is interesting, because I think this is where the received wisdom breaks down: the real world is nowhere close to an idealised efficient economy. Many people have the skills to use modern technology effectively, but a lot of them are working for someone else in some large business, and the overheads of that large business make many of these smaller projects commercially unappealing. The "correct" economic response for the people with the skills to take advantage of the market that would pay for them is for those people to break away and set up their own small, efficient businesses that can then make a very tidy profit by genuinely helping a lot of people who are below the radar of big business.
Of course, that requires skills other than technical ones, and an awareness of the possibilities, and a willingness to take a risk with your income when perhaps you have a mortgage to pay and a family to support, and all of those things influence what actually happens. But that is why there really are still a lot of very lucrative (by individual/small business standards) opportunities out there for those who are willing and able to make that jump.
