I moved to San Francisco in 2010, in time to witness the extraordinary growth in the Bay Area tech scene. Since then, the startup boom has dominated business headlines: from the leadup to Twitter’s IPO, Facebook’s acquisition of WhatsApp for $16 billion, and the rise of Uber, now valued at more than $18 billion. The list goes on and the entrepreneurial fervor has inspired countless Ivy-League dropouts to pack-up their hoodies and head West with dreams of becoming the next Mark Zuckerberg.
But the underreported truth is that most startups fail.
Tuesday night’s “Startup Zombie” segment on the PBS NewsHour explores the companies that never quite found their footing. They didn’t “fail fast” or yield big returns but rather claw along like the living dead. The result: A cottage industry of Valley businesses that acquire zombie companies so the investors can write off the losses on their tax return. Watch the piece here to get the full picture:
For those like me with an affinity for the ridiculous, the recent tech boom has offered one silver lining: it’s very easy to poke fun at. It certainly gave me plenty to talk about in the PBS Digital Studios series “Everything But the News,” which I co-created with my partner Noah Pink. The show earnestly covers the absurdities of tech culture from the perspective of a Jim Lehrer-obsessed, tote-bag carrying outsider. Binge viewing of the digital series available here.
NOTE: Longtime NewsHour viewers can rest-assured that Tuesday night’s piece was a slight departure in tone from “Everything But the News.” Fortunately (for me, you and Jim Lehrer) it included first-rate reporting from journalist Nic Pollock.
We introduced the Startup Zombie segment with some of the hyperbolic language that plows down the streets of San Francisco faster than a Google Bus. The terminology can be off-putting, nonsensical and completely ridiculous. It often masks the grim realities of a hypercompetitive marketplace, especially for those unwilling to throw in the towel.
Below, we’ve provided a startup glossary to help interpret the jargon. Who knows, maybe it will come in handy the next time you’re seated beside a budding entrepreneur coding for gold at an elite Bay Area coffee shop.
PIVOT: Our idea tanked so we’re doing something else.
DISRUPT: Finding unconventional ways to overhaul established business models. Example: Uber disrupted the taxi industry.
SHARING ECONOMY: Socio-economic system built around the sharing of human and physical resources in such a way that a middleman platform can make obscene profit. (Uber example above applies here too.)
GROWTH HACKER: Another way of saying “marketing,” typically used by males.
FABLET: A really big phone, or a really small tablet, you choose.
CRUSHING IT: Such effusive language in the Valley often masks real trouble. In other words, “We’re crushing it,” can mean “We’re sinking. Please hire me!”
ROCKSTARS, NINJAS, and JEDIS: Add this as a prefix to your existing title. Your job hasn’t changed, but it makes you much more fun at parties.
BURN RATE: “We’re spending money as if we were lighting it on fire.” Hide this from the investors. Remember, you’re “crushing it!”
HOCKEY STICK: The growth trajectory of a company, which if successful, should be up and to the right. Really depends on how you’re holding the stick.
CONVERTIBLE NOTES: A short term debt that converts into equity. Read: a good way for investors to put in a little bit of money in return for a disproportionate share of a company and possibly your cat.
CULTURE FIT: Young CEOs consider if new hires will be a good “culture fit” for their startup. Read: Will the person be fun to play beer pong with at 2 a.m.? This kind of thinking can lead to a kind of workplace discrimination.
BETA: A temporary state in which companies leave their app in for the purposes of testing and research. It gives entrepreneurs some protection from market failures because they can say “Hey, we were just in Beta!”
EMOTIONAL QUOTIENT: What people without emotion use to measure emotion.
THE NAME: The deluge of new startups has reached the point of exhausting known language. Time to get creative. Try adding “.ly” to the name of an insect: e.g. Moth.ly. Chances are it’s already registered. Maybe now is a good time to pivot.