Creating a startup is very different in 2024

If you have the feeling that today it is much more difficult to face the growth of a startup, you are not alone.

Over the past 25 years, I have built more than a dozen companies, from start to finish. A few I have financed alone, the rest I have done as a team with others and we have financed them with venture capital.

I've had both multimillion-dollar exits and embarrassing failures, some resulting in fires and zombies.

I have also advised dozens of startups, many in a formal capacity as board members or advisors. A good number of them have also moved forward.

Those are my credentials. But along the way, I've also been writing about what I've learned – not what I've read, not what someone told me, not what I've seen – but what I've learned – while founding, building and growing a company. startup after another.

The question is this. I haven't written anything “new” about entrepreneurship in 2024, and it's not typical “writer's block.” It's because the way a startup funds, builds and grows has changed dramatically in the last 12 to 18 months. There are a lot of new dynamics to figure out.

And now I think I've discovered some of them.

I'm not talking about “hindsight is 20/20.” I'm talking about the year 2020.

See, in early 2023, I wrote an article about how to start and grow a startup in 2023, and in that article I was referring to this same seismic shift in startup dynamics – a shift that, not surprisingly, started all way back with the pandemic in 2020.

That's the tricky thing about the lasting effects of big changes in business dynamics. They don't happen like earthquakes, where you can feel the ground shaking beneath your feet and then everything falls off the shelves. They happen like waking up one day in another version of a multiverse, where almost everything remains the same, but there are glitches in the matrix.

It takes a minute to realize what's changed, so I'm late to the year, but here's what I can say has definitely changed from 2020 to now.

For decades, the general public was infatuated with technological advances. Desktop computers became laptops, the cable became wireless, the network became mobile, and the connection became visual.

So those of us in the technology sector became greedy and assumed that the consumer was satisfied.

You can point to the break wherever you want, but I'll start with what I call the peak of the Internet technological cycle: the emergence of the mobile device as an assistant in your pocket, let's call it the late 2000s. Then things changed, and technology gave us, in a general sense, mobile tracking (ew), then digital currency (really?), then web3 (come on), then Matt Damon and Tom Brady urging the consumer to buy meme coins.

Yes of course. Clear. Overreach. “Oops.”

But the damage was done and especially under the surface: a huge loss of consumer confidence in technology. Today your mobile phone is not a vehicle of freedom, but rather an unhealthy combination of big brother and depression machine in your pocket.

Too strong? Probably not enough. Ask Generation Z. If you can, get their Tik Tok faces.

And now, the final nail in that coffin – I mean, the last wave in that evolutionary cycle – is a form of artificial intelligence that the technological elite doesn't even bother to sugarcoat. Don't get me wrong, AI is still an amazing technology, but hucksters and profiteers came out of the woodwork before the technology even stopped amazing.

I never thought I would write that sentence. But it is a good starting point.

This type of AI has been around since the early 2010s and perhaps earlier. I already know it. I was there and helped introduce it. That's not the problem.

The question is what happened in the workforce starting in 2020, when entrepreneurial talent gave corporate America the collective finger. Overnight, seemingly menial jobs for low pay in an unproductive environment, located in an expensive and depressing place to live, simply seemed… stupid.

Suddenly there were big resignations, quiet resignations and real revolutions in the workplace.

But American companies don't take this kind of thing calmly. Enter the AI.

Now look, I'm not a fan of Corporate America by any means, but I'm familiar with the playbook. And he played as follows.

Corporate America said: «If people don't want to work here, we're going to use remote work technology to fold in the top talent we want to keep, and we're going to use AI (or the excuse of AI), to cut the talent they don't want. pay “.

I know. I have taken some licenses. Corporate America is not a single, self-aware entity. But neither is AI. So all that shit fell apart.

Anyone with one foot in the field of AI already knew that collapse was coming, or at least that the technology that was not being delivered could not live up to the promise of the technology that was being oversold. But American companies aren't a bunch of geniuses either (no offense? Any offense?), so they dove in headfirst and without a life jacket.

So there is a ton, A TON, of venture capital and public company money invested in some of the more… “not cool” applications of the current flavor of AI, which, as I keep screaming, is still only in its infancy. “chatbot and deepfake porn” stage. It's promising, sure, but we're a long way from practical application and not running over people with self-driving cars.

You don't know how many examples I have seen of a very promising startup and products that have foundered because investors went from logical mandates for profitability in 2021 to panic measures in 2023 to cut spending without taking into account the consequences.

Babies definitely went out with the bathwater. Teams were reduced, entire departments were gutted, and R&D slowed.

This should be a blessing for a newly created startup. As incumbents made mistake after mistake, young, innovative companies should have taken advantage of the weakness and cornered market share.

But there is no fuel for that fire. The combination of these three phenomena – disinterest in technology, over-reliance on AI as a sales pitch and spending at all costs – means that there is no longer money to innovate. In the world of a startup, when you don't innovate, you can't grow. When you can't grow, you don't survive.

So here we are.

I'm not saying that the old way of funding, building and growing a startup is dead. I'm not saying that it doesn't make sense to prepare a pitch deck and knock on the virtual doors of venture capital. I'm not saying that some stupid clone of an AI knockoff isn't going to get eight figures in funding five minutes after you read this. I'm just saying that if really innovative founders want to do really innovative things, they're going to do better:

Self-founded, self-financed and self-sufficient.

Profitable from the start

Solving problems instead of selling trendy technology

Build Slowly Instead of Pursuing Explosive Growth

Strategically innovating alongside existing technical innovation