Like I've said before, it's the '90s Tech Bubble Part Deux, and reality is catching up again. There are still media arguments over whether or not we're in a near-bubble-burst situation, and I can't understand why. Just the last two weeks have seen several Web/cloud/tech companies do the startup flop, each with a little more craziness than the last. Exactly what we went through at the turn of the century.
One example is a home delivery laundry service, Prim, backed by exclusive startup "investment incubator" Y Combinator. Yeah, you read that right: a laundry service. This thing had financial backing and a tenuous definition as a technology startup, apparently because you could schedule your pickups online.
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I'm old fashioned. I ask Pammy to do my laundry, then do it myself when she hits me with a shoe. But I checked with two local cleaners, and both had websites with the same scheduling capability on a canned GoDaddy site created by someone they knew personally and defined loosely as "he's a computer guy we know."
A few years ago, I used to take my laundry to a cleaners after I saw a rat the size of Pammy's credit card debt in my old building's laundry room. Each bag cost me $6; delivery cost an extra $5. If only these poor bastards had known that all they had to do to drive customized Porsches was act obnoxiously arrogant, sprinkle cloudy buzzwords into their 10-minute business plan, and raise their delivery prices to $25 a bag. They could have gotten millions in funding and cluelessly blown it on Solomon-esque excess before slapping an "oops" sign on their trendy Greenwich Village offices and returning completely unscathed (financially speaking) to a storefront model.
How about App.net? This was some typically vague app that wanted to compete with minor player Twitter as a platform using crowd funding. Last week, its CEO, Dalton Caldwell, tried to admit failure without admitting failure. He posted a blog entry that on the one hand said his company was still self-sustaining revenue-wise, but then went on to say that his subscription rate was so low he had to fire all in-house development staff, including the founders, and rely on a volunteer open source development model instead. So, yes and no. Yes, it did happen; no, it didn't not happen. In English, that means he went from paying for developers to begging for them. Maybe he doesn't call this a startup bomb, but I do.
Then there's HashFast Technologies. This is/was a bitcoin mining operation that decided to try its hand at chipmaking, but decided to conveniently forget to first pay off some customers. Again, HashFast isn't admitting that it pulled an epic fail, but the United States Bankruptcy Court might make that call anyway since those jilted customers filed a petition to force the company into either Chapter 7, or more likely, Chapter 11, so they could recoup their money. HashFast still has about three weeks to respond, though its executives are probably sitting in their offices with their hands over their ears screaming "La la la la la la!!"
Fortunately, only some poor, beset CEOs are troubled by failure. Poor, beset Marc Bell, the once-CEO of FriendFinder, had his company enter bankruptcy and now has to sell his ridiculous I-don't-wanna-grow-up Boca Raton mansion equipped with loads of arcade games, a room specifically built for playing Call of Duty, and a detailed replica of the bridge on Star Trek's starship Enterprise. He didn't even have the decency to model it after the classic series -- he went Next Gen.
Frankly, this guy deserves everything he gets because FriendFinder should really have been called SexFinder. It was a porn site conglomerate that contained an adult hook-up site and published the Penthouse magazine pages. That means this guy couldn't profit on porn. Porn! That's like not being able to make money with a casino that doesn't run credit checks. That's putting real effort into being stupid.
On the other hand, there's Henrique de Castro. This slickster actually profited from his screw-ups. He was so bad at his COO job for Yahoo!, the company dumped him like a 10-pound abdominal cyst. And yet he walked away with a total of $96 million, including about $58 million in severance. That's a truckload of cash for being incompetent. Why can't that happen to me? I'm incompetent. Just ask Pammy.
I reiterate: It's the bubble all over again. Startup CEOs are actually congratulating themselves on failing. Fail now! Fail fast! After all, it's not your money, so who cares? There's a whole convention, FailCon, devoted to nothing but startup face plants where snake-eye-rolling CEOs can pat each other on the back, suck down free drinks at the Heartbroken Investor Bar & Grill, and network for that Startup 101 teaching gig at the local community college.
At the same time, business pubs are still trumpeting that investors don't need to worry. Startup funding will continue even if the current market-cum-fantasy role playing game "corrects itself." That's totally realistic and we should all be gleeful about the coming golden wave spawned by Internet of Things innovation, which will be upon us really soon. Really, really soon.
This article, "It was the best of times, it was the burst of times," was originally published at InfoWorld.com. Follow the crazy twists and turns of the tech industry with Robert X. Cringely's Notes from the Field blog, follow Cringely on Twitter, and subscribe to Cringely's Notes from the Underground newsletter.