A Scott Budman Perspective on It’s Big To Be Small
The San Francisco office of Goldbely screams startup.
For one thing, it’s a company that only takes up part of an office. It shares space on a nice floor (with a view) with two other startups. It’s got boxes everywhere, and a small handful of young scruffy people coding away on their MacBooks.
Goldbely, which delivers food from your favorite bakery or restaurant to your doorstep, is just starting out, but like a lot of tiny companies, it already has some tailwind. Namely, a $3 million dollar round of funding. That will pay for a lot of pies and cookies to be delivered.
2013 turned out to be very tasty for small startups. Tiny companies, with no revenue in sight, snagging big money from Venture Capitalists, who are terrified of missing out on the next big thing. The big star of the small movement has been Snapchat, an instant photo-sharing service that reportedly turned down $4 Billion dollars worth of Mark Zuckerberg’s Facebook money, choosing instead to remain independent. This, despite any hope of revenue, and a tiny staff that would likely thrive with Facebook’s backing.
Like the dot com “boom” of 1999, startups are all the rage again. 2013 saw the number of IPOs nearly double on the Nasdaq – and, you’ll remember, Twitter actually IPOed on the rival New York Stock Exchange. All those stock options becoming real are catnip to young techies, who are leaving the security of big companies, choosing instead the siren song of small, risky startups.
Risk, big money, and sexy stock offerings. A potent combination that has done two things: Made sure that Silicon Valley again tops the list of places where young smart people have to work, and erased the bad memories of all those investors burned by the dot com “bust” of 2000.
The small company trend has brought new ideas, new companies, and jobs to the Bay Area, and that’s a good thing. It’s also brought risk back in vogue, which means that we’re in a strong economy, but remember, as we have seen throughout history, everything that goes up, more often than not comes down. We shall see and also hope otherwise.
However, in this definitive meantime … it’s big to be small. Very BIG. Indeed, just one big winner – hitting that jackpot – the payoff, makes it all very well worth that risk.