Don't Be a Lonely Planet Entrepreneur- startup mythology and the death of capitalism

On starting this blog I decided to make a habit of writing for it- hell, that makes it sound like work. In reality, it’s a great excuse to take an hour out from the flow of the day, sit down in a nice sidewalk cafe and write down some thoughts over a espresso and a Heineken. It’s a nice habit and I’m really enjoying it- today, however, as I started walking to the cafe I was at a loss for what I would write about.

Walking along and trying to think of something to write about, I saw a group of backpackers walking out of their hostel. Surrounded by a beautiful boulevard in a great city, surrounded by activity and an atmosphere full of life, all three of them were nose-deep in their Lonely Planet guides. Eventually they started walking, glancing down at their guide every now and again, and at the end of the street, again buried themselves in their guide- Lonely Planet walking tour ahoy! In every city of the world you see it, people experiencing travel through the block by block directives of a four year old travel guide.

Three weeks ago I needed to renew my three month EU visa, so I took a week trip on over to Tunisia. I didn’t really know anything about the country, certainly not which cities would be cool to visit, spots that would be great to see. I just had some vague directions jotted down in my notepad on how to get to the Tunis hostel, deep within the medina of the city.

Arriving at 11pm, having procrastinated on packing until 3am and hopping a train to Vienna at 7, I hadn’t slept a wink- but, on getting in, I wound up going out into the city and hanging out with a couple of Algerian guys from the hostel, getting a recommendation to visit Hammamet, and, by chance, there attending a Michael Jackson trance tribute. This naturally got led me to meeting more new people, getting more recommendations, and so I wandered Tunisia, new friend to new friend, city to city, awesome experience to awesome experience.

I think there’s a lot of entrepreneurs who start their businesses like Lonely Planet travelers- Lonely Planet entrepreneurs, if you will. Move to San Francisco, apply to seed funds, get VC, scale operations, don’t worry about the business model, build something people want and roll with it, get profitable eventually, and go from there.

Somewhere along the way the tech world has left behind that whole ‘capitalism’ thing. The part where you make money, the part where you build businesses that generate revenue and scale operations and your product line as cashflow allows. This is mostly a matter of lag time- it takes about seven years for most major business success stories to develop, by IPO or by acquisition.

The major shifts in the economics of starting a business, cloud services, on demand, pay as you go computing, and lowered prices across the board, those shifts are recent. The businesses that have been built atop them have not yet had time to develop, so when people look to the past, when they look to mythology, when they look to the great companies of the past for guidance on how to move forward into a successful future, they look to companies built on a fundamentally different economic model.

Google, Ebay, Amazon, Facebook- venture capital, venture capital, venture capital, venture capital. The success stories of the past point in a direction certain, but that direction now serves to lead new companies astray. The facts of our industry, the costs of our industry, and the marketing methods of our industry have shifted and that shift serves to permanently reroute the pathways of success.

Let’s get back to capitalism, and, in so doing, leave behind Lonely Planet entrepreneurism at last.