There’s an unspoken code among entrepreneurs and investors in the Valley to not speak publicly about one another’s investments or companies (we save all the shit-talk for F2Fs in bars and coffee shops, or over Signal). The premise? If someone takes a chance and is brave enough to put a product out there, then we shouldn’t criticize them.
It’s time to relook at this. Why? Because the code is based on weak principles. It’s like being told by a professional athlete that you shouldn’t criticize them because you’ve never been a top sports figure. Or hearing from your favorite chef that your opinion on their food is irrelevant because you don’t know the first thing about fine dining. This same sort of argument has prevented many from outlets from practicing accountable journalism in recent years.
But stunted discussions don’t move needles. Instead we need candid conversations about bad products and capital ventures that make no sense when held to the light of Silicon Valley’s modus operandi: building products to change the world. Thousands of companies receive seed funding every quarter that shouldn’t, because they’re designing products that make absolutely no sense. Here are just a few recent companies that lost investors billions of dollars with products that solve (at least on their surface) nothing:
- JUICERO — $118.5M RAISED
Does the world really need a Wi-Fi-enabled $700 Keurig-like juicer? What problem does squeezing bags of juice into cups solve? Perhaps the most shocking bit, aside from the amount of capital the company raised, is the caliber of talent that worked on this product. Malachy Moynihan, who ran product development for Amazon Echo, was the chief product officer of the ill-fated company. The money and brainpower poured into this thing should have been used valuably elsewhere.
2. YO — $1.5M RAISED
The Yo app, which gained notoriety a few years back for enabling users to send the word “yo” to each other, pitched itself as a potentially larger platform business. For a brief time, they introduced the ability to hail a cab with the app. The startup shot upward, drawing millions of users and becoming — albeit briefly — the No. 1 social networking app … before crashing and burning. Yo was a prime example of a company gaining user traction quickly, luring investors to overpay for a piece of the action.
3. OUTBOX — $5M RAISED
The post office has been in trouble for a long time — it loses billions of dollars each year. But is the answer a subscription service that intercepts your mail, scans it and makes consumption supposedly easier via … email? This is surely a problem already solved by auto-pay and having a recycle bin for throwing away last month’s Restoration Hardware catalog.
There are, of course, thousands of companies that fit a similar mold to the ones above. I have a heartfelt respect for every entrepreneur, especially as one who has been on the journey a few times myself. But if we are really going to market ourselves to the rest of the world as having a deep understanding of what consumers need, and serve as the supposed anointed ones fixing the world’s problems with tech, isn’t it time we start focusing our efforts where they’re most valuable?
The only way to do this is to hold each other accountable by having public conversations about our failures and our bad financings and by getting user feedback from outside of Silicon Valley. Accept the feedback and make startups better with even better solutions. To not talk about it and sweep it under the carpet is akin to being an ostrich while the world passes by.