$100,000 is the New $10 Million
Venture capitalists are racing to miniaturize themselves toward the vanishing point. One of my favorite bloggers, Fred Wilson, recently asked why not “back 10 teams at $25,000 each instead of one team at $250,000”? Just last week a Seattle venture capitalist boasted that “we are seeing impressive companies being built for under $100,000.”
To which one can only say: Really? Which companies?
Just do the math. Two engineers can last 12 months on $100,000, which is great for building a prototype, but often nowhere near enough to build an ambitious product, much less a business. Yes, hardware and software have become nearly free, but people have always been a startup’s main cost.
Spending Less, Doing Less
What’s usually happening is we’re spending less by doing less. Behind the steady drumbeat of startups, any TechCrunch reader can’t help but notice how whimsical many have become.
Trading college-girl gossip or graphing rock-band popularity is cool but we also need entrepreneurs willing to spend the time and money to f*** with the order of things. Rather than building game-changing technologies that can make an entire segment of the economy better, most startups are using what’s already out there to create a new media site. Silicon Valley, meet Hollywood.
