The tech industry has a romantic infatuation with startups. Many of today's biggest billion dollar tech giants began as fledgling startups in basements and garages. In 2008, who will have the larger impact on tech — the latest startups or the former startups who are now big businesses?
For the past four decades, the tech industry has had a romantic infatuation with startups. Much of that is due to the fact that many of today's biggest billion dollar tech giants began as fledgling startups in basements and garages. In the 1970s and 1980s, it was mostly startups involved in the rise of the PC. In the 1990s, startups were hitched to the birth and growth of the Internet. During the past few years, the infatuation has transferred to the startups powering the Web 2.0 revolution, which is basically the transformation of the Internet into an application, services, and social collaboration platform.
While startups have an enchanting aura of energy, passion, and innovation, big companies — even the ones that used to be cool startups — are often saddled with the stereotype of being boring, bogged-down, and conservative. Nevertheless, the best, coolest, and most important work in tech is not reserved for startups. The truth is that startups and big businesses typically operate with two distinctly different sets of priorities and challenges.
All of this begs the question of whether startups or big companies will have a larger impact on business technology in 2008. The answer is complicated, since startups are about new ideas and innovations and big companies are about people and processes. To take it one step further, startups are usually about launching new ideas to successfully gain a following and show the potential to become a big idea, while big companies are about about building the right teams and processes to systemically deliver successes again and again.
With that in mind, here are some predictions for tech startups and big tech companies in 2008.In 2008, tech startups will ...
- Use their nimbleness and focus to take advantage of specific opportunities that big companies have not figured out how to crack (e.g. , Web video and online collaboration).
- Struggle with resources as a result of the credit crunch and the slowing world economy.
- Witness a major consolidation of Web 2.0 vendors, with some going under as they run out of money and/or don't have a product that has differentiated itself in the market and others being acquired by competitors or big companies.
- Create new markets and new opportunities with ideas that fly in the face of conventional wisdom.
- Use their experience and deep pockets to patiently wait for markets like WiMAX, UMPC, and VoIP to mature, become profitable, and eventually revolutionize certain aspects of work and play.
- Take ideas that had big potential as a startup and do the hard work of building an infrastructure to systematize and channel that potential into a sustainable success.
- Repeatedly fail to execute on ideas that they should be able to get right because of a lack of focus and/or having too many cooks in the kitchen — for example, simplifying security configuration for users and IT.
- Use their resources and scale to successfully bring great ideas to the masses and thereby make a major impact on culture and daily life (e.g., the Tablet PC and touch-based interface).
So which will have the larger impact on tech in 2008? Because the Web 2.0 movement has reached the point where it's time for consolidation, commoditization, and monetization, the pendulum is going to be swinging toward big companies in 2008. In fact, many of the Internet's long-promised revolutionary advances (for example, in telephony, video, conferencing, and collaboration) are at the point where they need capital, organization, and systemization — all of which play to the strengths of big business.
In the spirit of full disclosure, I should mention that over the past decade I have worked at two startups and I have worked in corporate America. That includes my work at TechRepublic, which was a startup when I was first hired in 2000, but is now part of a corporate publishing empire of CNET Networks.