Victus Spiritus


Signal Purpose and the Phoenix

10 May 2010

I can guess what you're thinking, and no, the title's not a typo or normal Mark word mangling. Today's riff is a brief look at startups as a system, related marketing, messages and the motivation behind them.

Founder & Investor Signaling

There is a massive amount of compression in the signals of investment. Startups can signal immediate viability by showing a large user base with miniscule costs, or healthy early revenue that is trending up faster than costs. When expert investors make moves others adapt to their decisions, and cause waves of activity. Take for example the angel investment of Ron Conway, followed by a first VC round by Union Square Ventures. This form of startup investing is like voting with your wallet (perhaps the only meaningful election left). Whatever venture they back will get some media and competitive attention. Their investment signals a form of resource gravity around a type of business model or technology pattern. In fact there may be value in feints or public light investments in troublesome value propositions just to shake off all the copy cat investors and startups.

It's the end of the world as we know it, & I feel fine

I'm in the enviable position of learning about the formation of businesses based on viral patterns. Odds are if you asked a handful of successful founders what their peak joy as entrepreneurs was, most would refer back to the chaotic time before they locked on to their first mega breakthrough. In the struggle to understand value, I have found purpose. In a zen way, I have discovered satisfaction in understanding more about the people that are attracted to startups*. While their individual success is highly variable, the model of startups as a system is unstoppable. Like the phoenix, older businesses are replaced by the rebirth of new models that better match the pattern of current social need with technology. Of course I strive at all times to be the phoenix that takes flight and best serves a market segment. The zero sum game of yesterday has been disrupted by the network economy. Align your business pattern with the Net and grow with adjacent startups and larger businesses that accept this philosophy and culture.

Society as an OS to Civilization

Exploring, molding and reworking the human machine interface to match a social need or spark a new market is akin to hacking society on a large scale. In order to get there, founders have to stretch themselves both incredibly thin and wide, or concentrate all their faculties and resources to dig far below the surface. If society is our civilization's operating system, founders are optimizing device drivers, adding new programming languages, and even hacking it's kernel. Society is in a constant state of flux. Individual values and needs shift with respect to the changing availability and utility of previous generation tools, frameworks, and infrastructure.

My chosen field of utility is efficient and Fun information exchange with Victus Media and there's no better place to be for learning about this rich garden of opportunity than the social web.

*= I believe satisfaction in nurturing the social pattern of startups and founders is a big part of what drives outspoken leaders like Paul Graham, Steve Blank, Eric Ries, Chris Dixon, Mark Suster, Robert Scoble, Seth Godin, and my personal favorite blogger Fred Wilson. These gents recognize that there's no how to guide for building a successful startup, but their shared experiences are potent tools in the hands of those willing to use them.