I feel like we have hit a wonderful spot in the world of entrepreneurship in the software world. It is so trivial to build incredibly powerful apps with a but few lines of code. You can prototype an idea, get it in front of users in a matter of weeks, and deploy it into the scalable cloud with almost no effort of thought or planning. And, because you have written so few lines of code, worried so little about deployment and scalabiity, and generated almost zero attachment to your ideas (that used to come after years of building something), it is so much easier to fail and pivot. Failing and pivoting are the prime ingredients for the new startup empires.
And, with that freedom comes new problems. In the Hacker News community, people are now thinking about how to answer the question about the “Gowalla situation.” This refers to what happened to all the people who built businesses on top of the Gowalla platform only to have the carpet yanked out from under them when Gowalla was acquired by Facebook. New startups now have a pressing new question to answer which is “how do I know you won’t leave me in the lurch?” This was always a remote possibility with any business due to acquisition, but it has become even more important because businesses have gone beyond being adaptable (quickly able to react to new business conditions) and are now transformable (quickly able to shift to entirely new business).
Whenever we see displacement through new technologies, we see new challenges created. This makes “soft skills” like communication, vision, commitment and integrity even more valuable.
GroupOn is the fastest growing business the world has ever seen. This is not as exciting as the possibility that GroupOn could be the fastest imploding business the world has ever seen. GroupOn did not raise the funds necessary to build the datacenter required to sustain their rapid growth, and their cash burn rate could kill them. They could eat themselves; their growth may destroy them (which is distinctly different than what happened to WebVan).
If businesses can adapt and transform with this rapidity, what is to prevent customers from adapting and migrating as well? I’m not sure people are locked into Facebook as much as Facebook and their investors would like to think. This is why I am bullish on Google over a company like Facebook: I still think Google’s engineering culture and products (which have taken focus and long term vision to build) will trump short term gains that can be achieved by a platform like Facebook which looks more reactionary.