Start-Up Prostitution

[Prologue: Dave sends me a link to a UK article below that lists ten factors that are ‘causing’ the modern start-up world to be be like ‘prostitution’. The article lists 10 (a nice round number that) reasons why start-up entrepreneurs should stop taking part in beauty parades (incubators, awards, useless fund-raising activities and the like) and spend more time building their businesses.]

Firstly I would note that prostitution is a legal profession in the UK so the authors ought to be rapped on the knuckles for implying the pejorative to this ancient and successful industry.

And secondly, they have missed the point entirely. Let me explain.

The root cause of all current start-up industry woes is that the bar for entry is very low.

In this IT era an idea can be turned into app within days, allowing anyone to be a start-up entrepreneur if they choose to be so.

In days past, one would had to have (1) special technical knowledge, (2) a track record in, and a deep knowledge of an industry, (3) done an apprenticeship in other people’s high growth businesses; all before even considering starting a tech business.

The bar was higher because much more early stage funding was required to turn ideas into products, and to turn market problems into revenue opportunities.

Since anyone can jump into the start-up world today, and because many do, the mean return on investment into start-ups is undoubtedly quite negative.

Any investment into an asset class that has negative mean returns is called ‘gambling’.

Any such environment naturally deters entry by the properly qualified, thereby even further reducing industry returns.

A classically trained start-up entrepreneur or investor will turn to other activities rather than participate in an unsavoury environment full of deluded Gen Y’s that have collectively degraded the industry to a Totalizator agency board where the only profits are made by white shoe operators pedalling services such as incubator real-estate, access to government grants and miscellaneous advisory services.

The only parallel to prostitution that I can perceive is the requirement these days to have a bloody long shower after engagement with the startup environment.

As to the advice by the authors that the entrepreneurs should stop taking part in beauty parades (incubators, awards, useless fund-raising activities and the like) and spend more time building their businesses; they are missing the point – this is exactly the reason why all these so-called entrepreneurs are in the business in the first place!

They have redefined success solely in terms of lifestyle and fame.

It’s a called a reality TV show, but in real life.

I’m not sure what I’d call this but ‘unreal reality-life show’ sounds like a start.