The Culling Of The Herd

I don’t care about valuations. But I do care about the tech industry as the most powerful means for the promulgation of new / cool / interesting / important technology; and the tremors running through the industry of late, as the so-called “unicorns” begin to tremble and quake, are hard to ignore.

Evernote. Dropbox. Square. Theranos. Snapchat. IPO down rounds. Some kind of foot-and-mouth disease seems to be infesting unicorns everywhere you look.

To be clear, this is not some kind of apocalyptic catastrophe. Sickness is relative; Snapchat is still valued at $12 billion. Tech remains a growth industry. But it’s hard to shake the feeling that on the one hand, some former industry darlings grew too fast and became bloated and sclerotic. (Dropbox and Evernote leap to mind. As a frequent Dropbox user, and occasional Dropbox API developer, they sure seem to me to have stagnated over the last few years.)

Meanwhile, some unicorns have unjustly ridden others’ collective, er, coattails, and/or coasted on hype rather than substance. Consider this Wall Street Journal infographic depicting the so-called unicorn club — and the 41 companies valued at exactly $1 billion. What a coincidence! …What a sad, darkly hilarious comment on the state of the industry. “Arbitrary as fuck,” to quote Slack CEO Stewart Butterfield.

But, remember, I don’t really care about valuations, except (barely) enough to occasionally point and laugh. Even if I did, face it, startups burning too much money are asking for their fate; they were were warned. So why do I care if some unicorns might be dying?

…Well, actually, I’m kind of rejoicing.

Not because I want companies to fail, don’t get me wrong. Again, even if you don’t care about valuations, the technology industry is crucially important to a collectively better world and future.

But as Mark Suster put it:

Something is rotten in tech startup land … Somebody posted too many party fliers. The uninvited crowds have all turned up … And I blame unicorns. Not the successful companies themselves but the entire bullshit culture of swash-buckling startups … My concern is that culture of unicorns has created a generation of entrepreneurs & investors looking for short cuts.

I called them the pretty people earlier this year:

Tech is becoming the finishing school and springboard for the upper-middle-class, the way law and finance were a decade ago … And often, paradoxically, despite their privileged backgrounds, they have much less appetite for risk … The establishment scions pouring into tech take on the trappings of subversion, while remaining fundamentally conformist.

The great Umair Haque writes:

Once, technology meant stuff that went to the moon…cured fatal diseases…extended the human lifespan […] miraculous breakthroughs that altered lives […] Now, “tech” means something very different: apps that…hails taxis…summon butlers…automatically call dog walkers…gadgets that remind you have a meeting…turn on your thermostat for you […] It’s not that the latter is bad. But it is a fact that the latter is trivial.

Now, it’s true that yesterday’s technology is tomorrow’s tech. The creation and worldwide spread of the Internet, and then smartphones, are the very definition of “miraculous breakthroughs that altered lives.” Dropbox was lifechanging once; now it seems increasingly like the commodity feature that Steve Jobs once prophesied. So it goes, such is the circle of Silicon Valley life. But it’s also true that the industry is full of trivial sugar water apps, and people seeking only to make money, not breakthroughs.

I submit that too many of the party crashers, the pretty people, have flooded into the tech industry, and sought sugar-water shortcuts to enormous wealth. Granted, even the most saccharine of these honeyed purveyors often hope to follow the Elon Musk model — make some money, then use it as a basis to change the world — but his success in doing so is not necessarily a template others should follow. The whole point of the Valley VC culture is to empower founders to change the world in their first at-bat.

My hope is that this culling of the unicorns will mark a phase shift; trigger a dwindling of the pretty-people party crashers, in favor of hackers and scientists; indicate more thinking outside of the proverbial box, and less drawing within its lines; signify more companies swinging for the fences with new technology, innovations that increase our collective power and skill, rather than trying to make a few quick million from tech. A few dead unicorns seems to me like a small price to pay for such a shift.