What They Can’t Tell You: Starting Up Outside a Hub
“How can we be the next … ?”
Many of the questions and suggestions I’m hearing on this topic of “creating a startup hub” contain what appears to be a flawed premise. Rather than trying to create a hacker culture, most cities (that aren’t startup hubs) sound like they’re trying to culture hackers. Rather than inviting the kind of hackery that breeds startups, the temptation (status quo trap) to which cities succumb is trying to lure young, potential founders into believing that this city is great for them, facts aside. And if it isn’t great in any detail, this, too, can (and will!) be fixed.
“Please, just tell us what you need!”
I heard this several times at SuperConf 2012 (in Miami). Responses varied from “office space” to “legal help” to “just a laptop and good internet connection”. These answers aren’t wrong, but there’s never an “a-ha!” feeling about them either, which is strange, because on the surface all of it sounds great. Who wouldn’t want the freebies and support of their community?
Then I had an encounter with a person that is firmly embedded in the community as a galvanizer of the budding entrepreneurial class. She is undoubtedly a hard worker, passionate about business, motivated, eager to help. But she asked me to do something really strange. ”You have to be positive … you can’t say those things you said the last time … we need [that new guy over there] to stay.”
I was stunned, so I nodded. But inside I felt like I had just been called in to the Principal’s office. Then I tried to remember what it is that I could have said that had scared her so much.
Nerds and PR
The challenges of building a startup community in South Florida aren’t secrets. The “Community Building” panel at SuperConf highlighted and rehashed them thoroughly. The hackers and nerds that I know are fact-finders, scientists, eager to face the truth so they can figure out how to hack that reality into shape.
But not everyone solves problems this way. Another tact is to “always look at the positive.” It isn’t simply optimism, because plenty of hackers are optimistic that they can find a solution. Rather, it’s a belief that the solution is to overcome the problem using the existing order, and when speaking about the solution, we should focus on the progress being made (however miniscule) rather than the perceived futility of this approach. It’s PR. And for a perceptive problem-solver, it’s patronizing at best.
By contrast, hackers flank things. They look at the problem and decide that the easiest solution isn’t to fight head-on, but around the side, up from the bottom, from above. Life to them is a Rubik’s cube, not a maze. Solve it in any way but the traditional way. This is how we solve problems efficiently.
But there’s a cost to solving problems this way. It makes the old paradigm of problem-solving (and problem solvers) obsolete. And consequently it can be very threatening to the old guard—even the people that are trying to help.
“Please just tell us what you need!”
So what does an unproven hacker really need to thrive in his community?
- Hackers with experience, willing to teach downstream.
- Hackers with money, who can confidently invest in people, not ideas.
- Hackers with power, who think and make decisions the way he does.
Startup hubs don’t just have a thriving strata of first-time founders. They also have a class of already-made founders, and their ratio in the population and the degree to which they are entrenched will determine the active growth and potential of the community.
In South Florida, this ratio isn’t in our favor—yet. The people with money, power, and experience may be friendly to entrepreneurs (good friendships make good deals), but they can’t offer the kind of teaching, investment, and decision-making it’s going to take to break through. It simply isn’t in their interest.
If PR is on one end of the spectrum, tough love is on the other. For tough love to work, you have to have a lot of confidence in your own ability to think through an idea and judge it. Paul Graham’s office hours (video here and here) are an excellent example of this. He sits down with the fresh-faced entrepreneur and proceeds to perform a series of Ginsu-knife operations on their brain. In the end, at best he extracts a gold nugget, at worst, he send them back with a maddening question that begs for an answer.
Delivering this kind of advice requires two things: experience, and real investment in the founder, not their idea. If you’ve invested in their idea or in the world’s perception of their idea, you only win when the initial idea succeeds or when people say nice things about the idea. But ideas usually need refactoring, and sometimes the entire startup needs to be scrapped in order to set the founder on a better course. This requires a willingness to risk humiliating the founder. Great founders and hackers will swallow hard and figure it out. Mediocre ones may give up completely and go away. That’s not something any city wants.
Aspiring startup hubs are trying to promote their wares in order to convince VC’s and engineers outside their limits to come and invest their money or time in locally grown startups. There’s nothing wrong with this. But the temptation is to take a shortcut and promote anything that appears to have any potential (no one wants to be empty-handed), rather than go through the risky, time-consuming exercise of mowing down the bad ideas and sparing only those with real potential. ”What if it discourages the founder too much?”
I see this short-sighted bait being taken too often. Unfortunately, this hurts (a lot). Savvy investors can tell the difference between a fully-baked idea and a joke with icing. The real humiliation then falls on the founder who hasn’t been told how terrible his idea really is. This whole interaction is ironic and painful and makes the city look even worse in the eyes of the sophisticated outsiders. Just don’t expect them to say it out loud. They know if they did, they’d be on the hook for helping. And, in fairness, they don’t have time for that.
One big success is all it takes?
Unless the existing order sees the short-sightedness of this approach, an alternative needs to rise up if we’re going to make real progress. Rather than dropping sugar and water into the petri dish of our community (freebies and polite gestures), we need to find a way to catapult entrepreneurs into positions of power, closer to the money supply.
During his talk at SuperConf, Jason Baptiste encouraged the Miami community to invest heavily in its strengths by attempting to create five 1-billion dollar companies in the travel/tourism, fashion, and Latin American sectors. All it would take is one success, and the rest would follow.
What’s happening in this scenario? Why does having a company succeed in a huge way beget more successful companies? Is it just that success breeds success? No. It’s just a way to transfer money and power into the hands of hackers, who can then invest in the next generation of people (not ideas), think the ways hackers do, and share it downstream (“pay it forward”). It’s a shortcut to a revolution.
A more difficult, but more likely revolution
But I’m going to argue that this shortcut isn’t going to happen. It isn’t that it wouldn’t work out that way if it did happen. But I don’t see any way that savvy investors are going to plow a $5-10 million Series A into any startup founded by green, South Florida entrepreneurs. The founders would have to be imported. Ignoring the fact that the company would have no heart-felt conviction to call South Florida its home, the odds of proven founders migrating to South Florida to start a startup that plays to South Florida’s strengths seems extremely unlikely.
A scarier but more tractable solution is educating and arming first-time founders with the lessons and toughness they need to succeed against the tremendous odds facing them in this territory. It demands a brutal honesty that risks discouraging young recruits, but this is how the best of the best operate.
As a founder born and raised in South Florida that’s had some measure of success (insofar as survival is a major component), this is my plan. To tell people of the dangers in no uncertain terms, to take a chainsaw to their ideas, and to inspire them to find ways to collect money from customers first, so they can collect it from opportunistic investors second, and on their terms. I won’t claim to be the first—there are bright and eager minds sprouting up left and right, and many more to be discovered. But I will refuse to settle for spin.
The revolution will not be televised—but it may be bootstrapped.