2015-2020 was a boring time to build startups

I hope we never go back

I started a new company and raised money for it in 2021. It turns out I am on some weird schedule where this is just what I do every six years. The first one was Klout in 2009, then Joymode in 2015. I can't wait to tell you more about this new 2021 company. It's not a secret, it will just be more fun to talk about when it's ready for people to start using. 

It's crazy how different the startup world has been for each of these companies. I feel like I've had a front row seat for building consumer startups in three totally different eras. I am trying not to turn this into a "back in my day" boomer post. I will say, however, that from 2015-2020 building startups felt lame and boring and I’m glad we've broken out of it. I am worried we'll end up back there though. 

By 2015 the prevailing wisdom was that Facebook/Instagram, Snap and Twitter had won the social space. At least in the US, this led to the mainstream consumer startup ecosystem mostly settling around D2C and marketplaces. It's not that the companies that got built were necessarily boring or lame, some certainly were, but many are weekly if not daily parts of my life now. From a product and technology perspective, though, these types of companies are relatively straightforward. It's still incredibly hard work but the challenges are either obvious or become known very quickly. 

All companies become math equations at some point. I mean, that is the goal. Build a business that scales into something really big where the fundamentals are easy to measure. What was fun about the early days of social and building Klout in 2009, companies were given time and space to grow and figure out how to best capture the value they created in the world. The most important early metrics were product related things like monthly and daily active users. To impact this metric you had to build cool shit that would make people want to engage more with your product. 

When marketplaces and D2C took center stage around 2015, they were more naturally monetized and measured against financial benchmarks from day one. The most important metrics were marketing and revenue orientated like customer acquisition cost and lifetime value. Product innovation took a backseat as founders (myself included) optimized against what quickly became a very standardized playbook. From surface level things like instagram ads and marketing emails, down to core strategies like network subsidies and city rollouts, everything started to look the same. 

I am guessing there are a lot of people who really love building in a more mature market where success can be more clearly evaluated and modeled. I found this really stifling though. The whole reason I even got into startups was that I didn't want to follow some paved path. In retrospect, I wasn't brave or smart enough to realize I was playing the same game as everyone else. It's hard in the face of industrialized thought leadership where there are endless tweet storms, podcasts and even substacks (and I am guilty of this too) telling you the right way to do startup stuff. Even when you're an experienced founder you want to follow best practices and save yourself from fucking up. 

Don't get me wrong, I have benefited greatly from the shared wisdom of other founders and investors. The fact that entrepreneurs around the world can easily learn from each other has got to be one of the most underrated economic developments of our lifetime. The downside is that it creates a ton of dogma around what is and isn't possible. This isn’t just boring, it’s costly. We convinced ourselves that social was dead and then the biggest consumer app in the world came out of China instead of the US. 

There is no shortage of things that have sucked about the world since 2020, but I do appreciate how it shook us out of the paint by numbers era of consumer startups. In a lot of ways it reminds me of the early days of social and building Klout in 2009. Everyone was creating interesting new ways for people to connect and express themselves. There was a sense back then that every company had a chance to build something huge. We were all gonna make it! 

While there are things that remind me of 2009, I think this current era is better in almost every way. First, there is way more money available from tons of different sources. In 2009, the vc landscape was tiny. “Seed investors” weren’t even really a thing. The first $1.5m we raised (at a $3m pre-money valuation!) was called a Series A. Funding is way more accessible now. You can pitch over zoom to investors around the world or build a community for a token and never interact with traditional VCs. We still have a lot of work to do to make sure it's distributed in a more equitable way, but from a funding perspective there has never been a better time to be an entrepreneur. 

Second, you don't have to be in Silicon Valley to be taken seriously and to build a great company. I had to move to San Francisco in 2009 to raise money for Klout. The original Klout engineering team was based in Singapore. It was seen as a massive weakness if you didn't have Silicon Valley based engineers so I did everything I could to hide this. Once we raised a bit of money, I had to quickly hire Bay Area based engineers and transition away from our offshore team. If you were committed to having your whole team in an office in San Francisco today it would be seen as a massive competitive disadvantage and likely negatively impact your ability to raise funding.  

I feel really lucky to be building a company right now. All the playbooks have been thrown into the fire. Every piece of what we build and how we build it is being experimented with. It's not just basic things like whether you should have an office and how distributed your team should be, but the fact that people are debating the fundamental structure of a corporation and considering things like DAOs is wild. Everything happening in crypto and Web3 is fascinating. It’s awesome to see companies explore new ways to grow, engage and reward users. And after years of having the tech stack commoditized, the innovation around dApps and the stacking of protocols is bound to lead to some breakthroughs we can’t yet imagine. I don’t know what will stick, but pushing the boundaries like this is going to make all future consumer startups much more interesting. 

In 2022 it feels like we are creating the future - not just optimizing the present. There is also an amazing new generation of entrepreneurs leading the charge on this. I am just trying to learn and keep up. I also want to help us not fall back into the local maximum it felt like we got stuck in from 2015-2020. Some big new companies will emerge (I hope we are one of them) and it will be hard not to look at the path they took and proclaim it the new standard. We've seen how boring and lame that can get. Our industry and, I believe, the world is best served when startups can learn from each other while also not being afraid to blaze new paths.