Anthropology of Mid-Sized Startups

This is a great look at startups through the lens of anthropology, and dissecting them as tribes, a human organization as old as humanity itself. All the attributes we think about when imagining a startup make a lot sense in the context of creating tribal rituals. It also supports the common startup truism that it is critical for a startup to have a cohesive, nearly homogenous culture, and to have a set of uncompromising values upon which decisions are based (so called Sacred Things).

Definitely worth the read, along with the footnotes.

The Minimal Homepage

I came across this short post about increasing signups through the use of a minimal homepage via Andrew Chen.

While a lot of the advice in the post is sound and all of it undoubtedly leads to more signups, I have a problem with Mattan’s first point: “No access without signup.”

He argues:

Most startups make the mistake of giving people who visit their site free access to content, whether it's apartment booking or daily deals. This is often a bad idea. Contrary to popular belief, the more things a visitor can interact with on your site before they're prompted to sign up, the lower your signup rate will be.

He is almost certainly correct that such a design will increase signups, but the question becomes - are signups the most important metric to be tracking? User numbers a frequently a vanity metric, especially for venture-backed or venture-seeking startups, which use them as a proxy for potential monetization (however dubious).

The focus should really be on creating enterprise value. In the case of a startup like Dropbox that has a revealed business plan and is generating revenue, the relevant metric would be whether giving “no access without signup” results in the greatest increase in revenue - that is, users who ultimately sign up for Dropbox’s non-free accounts.

It might be that signups correlates well to revenue and income, but getting too focused on the intermediate goal of increasing signups can cause you to lose sight of long term value.

A good example of this is Quora, which has taken the strategy of “no access without signups” almost to an extreme, only allowing non-registered users to view the first answer to a question on their site. The practice has received a lot of criticism, but I’m sure the Quora team justifies it with increased signup rates. For Quora, however, with their unknown business model, I’m skeptical that “increased signups” is the relevant metric for their long term value [1].

Hollywood, or Silicon Valley: Where'€™s the Money? - NYTimes.com

This comparison between Hollywood and Silicon Valley is fascinating - two industries that rely almost exclusively on big hits to finance all their other projects.

An interesting thing to note is that in the same way that Hollywood producers try to de-risk their films, leading to the same bland retreads of past successes, so do VC’s try to de-risk their startups, leading to so many startups doing the same tired routines. Hollywood relies on “bankable stars” as a way to boost their chances of success in the same way that VC’s are willing to give ridiculous amounts of funding to entrepreneurs with past successes prior to any traction in their current company (see: Color, Airtime, etc).

The romantic notion is that of the indie film with little to no insider funding that defied all odds and became a huge success - which has its parallels in bootstrapped startups and other companies overlooked by VC’s, who are only too happy to provide funding once it is a known quantity. While those stories are inspiring, it’s due to their improbability - most indie films receive little to no recognition, and while they might be a great form of artistic expression, they aren’t going to be the right type of venture for a Hollywood producer to back.

But that’s ok. For the filmmaker, it’s about a passion for telling a story. Startup founders should feel the same way.