Check the Expiration Date on Your Favorite Startup

Rob Diana has a provocative post today titled “What Do We Expect From A Startup Exit?” where he puts forward the thought that users should not expect startups to become multibillion corporations, but that exits are something that should be part of their lifecycle.

In effect, users should adopt products like they buy milk: checking their expiration date.

The problem with this approach is that users don’t want invest time and energy into something they would know will expire in 2 or 3 years.

If someone had told me that FriendFeed would disappear for sure in August 2009 back in July 2008, I’m not sure I would have devoted so much time putting my daily life in it. As more and more startups go this route, it’ll become harder and harder for new startups to gather an audience, as people will become paranoid and ask “how long will this one be running for?”

Of course, there are no guarantees in life. But by purchasing startups and closing them, the big boys (VCs and Googles of the world) are doing exactly what they need to do: get people to be afraid of using anything else that’s not them. That is the VC cancer that Jason Fried is talking about.

And this is where innovation suffers. Because if we don’t have the next garage startup that changes the world and leave this to big corporations, we are indeed going to be faced with boring technology until kingdom come.

Users want startups to have something more than an exit strategy. They want startups that will make an impact on their lives and stick around for a long time. It’s very hard to understand how a site works, get enough traction and community around it, implement its APIs, convince our friends to join and so on.

This is work we’re doing for free for them.

So if the exit strategy works for them, shouldn’t we be entitled to a piece of the action as well? Of course I’m being ironic here.

Maybe we need more people like Craig Newark, who is doing it for something else that’s not necessarily money.

Photo by blandm

Tagged as: exit, Startups, strategy