Silliness of Technology Business Incubators

Technology business incubators have exploded in recent years, but Agile Technology developer Jorge Rodriguez of Continuum tweets an article by Stacey Higginbotham suggesting that startups have become a fetish that attracts too much capital. She points to DormDorm, a proposed service to rent college dorm rooms in the summer, that won a startup contest of 160 applicants.

When I was in college, the first thing that occurred to me was the waste of space, so I reduced my expenses by taking courses in the summer when college fees and apartment rentals were cheaper. The same idea had already occurred to thousands of others, so DormDorm quickly disbanded after winning the contest, but a member of the team was accepted into one of the most successful technology business incubators, Y Combinator, to pursue a different idea.

Meanwhile, the contest, a set of buses full of aspiring entrepreneurs called StartupBus that travels from San Francisco to Austin each year in March, has expanded into six other cities. Never mind that it started as a fully beer-infused joke and obviously generates bad ideas!

The worship of startups reminds me of when I was in high school and many fretted that black teenagers were spending too much time mastering basketball and not learning to read. In both cases, a small minority hits the jackpot while the majority fail, but the difference is that 70% of the technology business incubators are funded by governments, while only 25% of the parents of basketball players receive handouts such as food stamps.

The United States has become a culture engulfed in a celebration of gambling and produces websites that aren’t very useful, tolerating widespread failure and ignoring businesses that solve difficult problems. Rather than mimicing a declining culture, Chile should concentrate on solving real problems such as the lack of tasty affordable nutritious food. I have been in five countries in the last three months and saw unhealthy people everywhere, a problem that will persist as long as most restaurants and grocery stores sell food that mostly expensive or without the nutrients necessary to enjoy a healthy life.

Tim O’Reilly expands on the idea of working on stuff that matters such as bionic men, copper mining using seawater, and a practical artificial leaf that generates energy ten times more efficiently than a natural leaf. O’Reilly has published quality technology books for many years and promotes capitalism:

I want to make clear that “work on stuff that matters” does not mean focusing on non-profit work, “causes, or any other form of “do-goodism.” Non-profit projects often do matter a great deal, and people with tech skills can make important contributions, but it’s essential to get beyond that narrow box. I’m a strong believer in the social value of business done right. We need to build an economy in which the important things are paid for in self-sustaining ways rather than as charities to be funded out of the goodness of our hearts.

Technology business incubators might generate fewer impractical ideas if governments ceased creating and subsidizing the majority of the industry.

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2 Responses to Silliness of Technology Business Incubators

  1. I’m not sure how many people have read this post, but I agree, and think your points are important. Business is important, and capitalism done right seems to be the best way to solve humanity’s problems, but there is a lil’ web 2.0 startup bubble that’s a brewin.’

    I’m starting my own company at the moment, and for a long time I was pondering what area to go in. The only thing anybody seemed to be doing was tech and so for a long time I thought of ways I could enter that space because that’s what everyone else was doing. But upon further inspection it seemed too much like a “me too” thing to do. I’m starting a food company now and I’m glad I’m doing what I’m doing. The world doesn’t need anymore web 2.0 social widgets, and we spend too much damn time sitting in front of computers anyway.

    • Mark says:

      It’s easy to start a tech company that focuses on the web and it is fiercely competitive. What’s worse, if you have a good idea, there are probably 4 others trying to do the same thing, and they might be located 3000 miles away, and you’ll never hear about them until they release a product two weeks before you release your product. Investing in tech today is similar to investing in the oil industry; you could hit a gusher and get rich, but you’ll probably come up dry.