Magazines, technology journals, blogs often do year-end summaries of the tech and startup world. They love putting together their lists, “The top tech companies of 2008”, or “the best startups of the year.”
Often these lists are a bunch of horse manure. For some reason, the journalists tasked with writing the story come up with inane or lazy criteria to pick their companies only to spend 10’s of hours of hard work putting together the collection of profiles for the magazine (company descriptions, interviews, photographs, etc.).
So then I run into Arrington’s undressing of BusinessWeek’s “Most successful startups of 2008.” John Tozzi, Stacy Perman and Nick Leiber, the writers on the story pull a list of companies with the Most Funding to actually determine their list of the “2008’s Most Successful”. To make their selection even more useless, they then exclude companies like Ning that BW thinks are further along in achieving that success (they call it “later stage”??).
Without getting too deep into the gory details, a review of the companies they chose shows that their list has little to do with success, and even their own flawed criteria seems to be disregarded for a number of the companies on the list. Several aren’t startups at all–in some cases, they were spun out of already successful public companies, others were started a decade ago and are on a downward spiral, and 80%+ of the companies have little to none revenue whatsoever. And the only IT company they picked — Cuil — had a disastrous launch earlier this year, with zero traffic to speak of today. Is that what startup success is made of?
This kind of stuff gets under my skin because a good percentage of any entrepreneur’s time is spent unwinding the useless confusion, hype, and vapor that media outlets produce. Even worse is that it is the startup/small business entrepreneur that BW is targeting in this new section of coverage.
My P2P experience is particularly poignant here. Do you know how many P2P companies have been hyped as the next big thing while simultaneously they were actually crashing and burning?? Kontiki raised $40MM+ into the hype while creating little of any value. How about those stories about Bittorrent, Inc as the next big IPO. . . but we knew what was really going on
Tozzi at BW will respond that his criteria was clear from the get-go, that he stated he was using funding in the last 12 months to determine most successful startups. Admitting he used a poor criteria does not suddenly redeem his list or validate a seemingly poor editorial decision.
It’s almost comical, and it’s the reason why the industry insiders who really get it know certain writers are easily manipulated or are simply lazy and aren’t worth reading. It’s the reason Arrington goes after Tozzi, because these types of articles continue to show the readers why BW isn’t worth their time, and why techcrunch is. I mean, honestly, how much credibility is lost when BW puts out stuff like this? Do you think Gates, Jobs, Sergei, or other tech elites spent the time to read up on this BW best startups of 2008 list?
They would if the folks at BW actually had been thoughtful on this one and not wasted their credibility/trust with such poor editorial.
Update: In a twitter exchange, Tozzi (@newentrepreneur) asks me (@konatbone) for advice on what he should have done to get a list of the most successful startups.
Maybe I’ll to a short post but here’s the quick and dirty:
– Go to the top 15-20 VC’s out there.
– Tell them you’re doing a most successful startup list and ask them what their top 3 most successful startups are in their active portfolio.
– Ask them why those companies are the most successful
– Have detailed conversations with the VCs to vet the “nominees”
Now you’ve got VC’s who are on the boards of these companies vouching for their success. In addition, you have some back and forth to cut through any hyping/promotion that VCs might be doing for their pet companies. Instead of a hard and fast rule-set/criteria, you rather have a stronger process for getting to some great answers in a practical amount of time.