Smart-Ups

While chatting with a friend about the recent influx of smarter web start-ups: “smart-ups!”, I exclaimed, patting myself on the back, and thinking I was the bomb.com. Guess you had to be there.

I know, I know… the last thing we need are more buzzwords (and this one probably already exists elsewhere). But more importantly, starting a web company in 2005 is far different than starting a web company in 1999. People are smarter, hindsight is 20/20. Less money is needed. Less people are needed. I look back with laughter on my days at the failed MyWay.com in 1999: the hierarchy! The salaries! The sheer number of employees working on one, single web site! It’s never been easier to get an idea out the door.

What are you waiting for?

55 Comments

  1. Dave P says:

    Actually, that buzzword is more dangerous than you think… Make sure you have a look over on APC’s website: that’s their UPS brand-name.
    Quite popular too.
    But you’re right: I don’t know what it is I’m waiting for. :-)

  2. I stopped waiting about 3 months ago. Expect a launch first quarter 2006. You’re gonna love it.

  3. Ethan says:

    I’m just waiting for the web economy BS generator to come back into vogue.
    It’ll happen. Oh, it’ll happen.

  4. John S. says:

    I’m not waiting any longer. I quit my job effective Friday. Already signed a big client.

  5. Scott says:

    I’m just waiting on an idea!
    ;)

  6. Everyone say the same thing, but I have a few questions:
    What changed?
    Why starting a web company in 2005 is far different than starting a web company in 1999?
    What is the basis of the assumption that people are smarter?
    How come you need less money and employees?
    Is the change technological or social? And don’t tell me both.

  7. “What is the basis of the assumption that people are smarter?”
    More exposure to the internet from your average Joe Internet User i’d say!
    Smart Ups! Thats classic

  8. Raanan:
    You need less money because software and hardware are just so much cheaper than they were before. I can get the basics of a service running on less than $100/year. I can start generating revenue before I even have to worry about switching to dedicated or multi-server environments.
    You need less employees because there’s more of an existing base of products and API’s that speed the development process. Again, I can crank out a decent application in a couple weeks.
    The change is both technological and social. Technologically, the power of machines and software have gone up while the cost has come down. They’re almost commodities at this point.
    Socially, we simply understand the process better. We understand that it doesn’t take 30 people to build a web site. If anything, it’d be counter-productive. However, I don’t think we’ve necessarily learned from our mistakes. We’ll see investments go into a slew of businesses that just really don’t seem to have any sustainable business model. Mind you, the market is much larger now than it was in ’99 and is able to sustain smaller niche markets and greater competition.

  9. Jeff says:

    Saw the title in my feed reader and was wondering why you were talking about battery backups….good idea but you need a different buzzword!
    And even while 9 out of 10 Google results return battery related links, #10 was interesting…..

  10. Alex says:

    Hi Dan -
    I’ve actually started my own company and am working on finishing my first “smart-up” product. The only catch is that I need a good designer, and I can’t get ahold of you! :) What’s up with that!

  11. I think it’s important to note also that the number of clients has risen dramatically. I operate strictly within Maryland (unless somebody really wants to give me forklifts of cash…ya know how it is) and the number of small businesses here is astronomical! There are more and more people getting into the business, which is wonderful, because the number of clients has been on just as steady a rise as the designers.

  12. I agree starting an online biz today is alot easier but the hard part now is finding a great domain.

  13. Nick Toye says:

    I’m no longer waiting anymore. I always thought that I needed to work for an agency to get my experience, but all three agencies I have worked for have given me the experience on how not to run a web agency.
    Two of them have since failed and the third is on the verge of failure.
    Going alone and setting up myself is the best thing I have ever done.

  14. Anonymous says:

    What I am waiting for, really?
    Not an idea, for sure… Maybe just having enough real experience in Web design, then… I’ll go ahead! :-)
    @Alex:
    Well, you can’t get ahold of Dan Cederholm, but you’ll be able soon to get ahold of me, just wait and see!;) I am good and I plan to become even better;-)

  15. PS to comment #14:
    Sorry, “author/website” fields deleted by accident ;-)
    Michel

  16. Kim Siever says:

    What am I waiting for?
    It’s not experience. I’ve been doing this for nine years.
    It’s not lack of ideas. I have plenty of those.
    It’s not money. As Jonathan said, it’s cheap to start up.
    I guess what I am waiting for is someone who can help me make these ideas a reality, or clients who are willing to pay a proper price for my services.

  17. First “re-align”, now “smart-ups”. I understand the intentions, but new coinined terms is the last thing the web needs right now.
    Besides, “smart-ups” sounds like a new product from a diaper company.

  18. In a follow up to Snook’s comment, outsourcing is helping alot too. OR rather outsourcing coupled with cheap open technologies. With open stuff such as mySQL and php and ruby on rails, one can get small teams to build powerful apps in a short period of time.
    So now that you can get your apps built in a couple of months, run them on cheap shared hardware, and pimp out your blog to promote them, it makes sense that one doesn’t need 200 employees and $20million in VC money to get going.
    I too am working on a couple of things (not really consumer oriented like most people though).

  19. Rob – From paragraph 2:
    “I know, I know… the last thing we need are more buzzwords”
    ;-)

  20. I feel I’m example here.
    A 17 year old still doing A-levels (British Exams)
    Bought a mac mini, Style Master and Textmate for under £400 (Student Discounts used) and that’s my tools sorted (scrounged most of the rest)
    And experience learnt from an RSS reader, a plenty of wonderful blogs and conference podcasts, a few minor/free clients and of course, my parents.
    And I should hopefully be confirming a gig soon for the powerbook of my dreams

  21. P.S. … That is I’m an example to #8, not necessarily that I’m doing this smart. Time will tell.

  22. ChadL says:

    - Money: not so much of an issue as many before me have said
    - Ideas: I find it hard to believe nearly all before me have said they have a good idea. From one perspective, congrats all! From another, not all ideas are worth pursuing. What defines or distinguishes a good from a bad? That’s where more thought and effort is needed.
    - Time: Even with the technology available these days, it’s not always as simple as ‘drag-n-drop’ of .Net or the ‘generate; in rails. A true rich and robust application is more than that. Take your estimates and double them, then you’re getting closer to the true time it will take.
    - Confidence: This is the big one. And sometimes it’s over-confidence that is the problem. ;)
    - Gut: Change often means risk, and risk is something not all are made to endure.
    - Stability: in my case, this is the most significant factor. Running your own business can be full of ups and downs. The downs are not much fun.

  23. Not “less people”.
    Fewer people.
    Fewer.

  24. I found an interesting article last night not too long after originally reading this post. Paul Graham (best known for spam filters and the startup that eventually became Yahoo Shops) specifically discusses hashing out startup ideas. After reading that, go back to the root for more articles about funding startups, etc. Hopefully this will be helpful/inspiring.

  25. We’re hoping to launch the first quarter of next year, but it has taken us four years to get to this point.
    Our app is being built with one project manager/designer/part-time programmar and one hard core programmer. We have had to outsource several parts of our application to very select and skilled individuals – that are difficult to come by, extremely busy, and expensive.
    I think it is wonderful there is a re-surge of interest in the web. However, I suspect the “smart-ups” we see launching right and left lately have been in development for quite some time. I know it has been a long journey for us.

  26. John says:

    As with others, money is not a problem to me. I’ve read all the books (Bought both of yours, Dan!), have all the tools and think I have what it takes to produce a great user-friendly web application. What I lack is inspiration, or the motivation to try and undercut existing “web 1.0″ services with a “web 2.0″ alternative.
    It seems every time I decide on a good idea, I find it has already been done, or someone is in the process of doing it.
    Oh well, someday I’ll come up with a brilliant idea and make it big!

  27. Nick Finck says:

    Hey Dan, you’ll be happy to know that there is going to be a panel on this very subject at SXSWi this year in Austin. It won’t be age old experts, but more of those who the idea of starting up a small web business is fresh in their minds. Veerle Pieters, Matthre Oliphant, Leonard Lin, and Michael Buffington will be joining me on this panel. More details are here. We’ll probably use a quote from this post, if you don’t mind. :P

  28. Nick – Excellent, and quote away! Sounds like it’ll be a great panel. Sadly, I’m going to miss SXSW this year. I’ll be learning the subtleties of diaper changing and swaddling ;-)

  29. Nick Finck says:

    Ya, I think someone (Christina Wodke? Jeffrey Zeldman? etc.) proposed a panel on diaper changing for this year’s SXSW but Hugh rejected it… sorry man, this is not your year. :P

  30. MJD-S says:

    Yay! I’m free-range again and liking it very much (^^).
    I’m not so sure about other places but here in Japan quite a few of us have started working with the “collective” model – so someone gets a job and outsources some of the different bits to different specialists. So really a bit different from “Smart-ups” but kind of the same basic principles.
    Now if only we could think of a cool buzzword….

  31. After some reading and thinking I thought about some reasons why you need less money now. One is because there is less money around. I remember 1999, it was almost enough to say that you have an half baked idea and everyone, including your aunt, wanted to invest. And when you have an obscene amount of money you use it in stupid ways, like hiring 100 people to make one web site while giving them salaries with too much zeros in it. Another issue was that everybody was in rush to conquer the Internet, so you had to spend more money, hire more people. And one more issue is that we didn’t have an example of someone starting small and making it (there were examples form other industries). To sum it – everybody wanted to be Amazon, now we want to be Google.

  32. Ken Savage says:

    Ahhhh MyWay.com I too was a member of that mess and I had my little piece to do on cobranded sites. It took 3 of us to make updates in the CMS Accipiter(sp?) and are day was filled mostly iwth getting the community webcam working and fixing the Dilbert door than actual work.
    Thx for the memories, Dan.

  33. Shanghai Fan says:

    Smart-up does sound quite nice. Trouble is with having an idea and then putting it to use on the web are the greedy web companies who charge you a fortune to do it!

  34. DSS says:

    I like the word ‘Smart-Up’. It signifies that although in todays world anyone can start a business, it takes some Smarts to keep it running and make it so it’s not just a hobby. Web companies charging an arm and a leg to host or design a business website weeds out the people who aren’t serious about their business idea. If you’re serious, you’ll invest in your idea! ~DSS

  35. Rocketeer says:

    Well, personally I’m going to wait a couple of years then maybe think about a smart-up! By then I should be old, wise and look the right age for a smart-up…

  36. Nick Toye says:

    Buzzwords are not a bad thing and should never be in short supply. I went to an interview and watched as the interviewer jotted down about 5 of my buzzwords – the corporates love it!

  37. WD Milner says:

    In some wayss it is easier. People are more aware of the possiblities (and limitations) if the Internet and related technologies. At the same time, they are also more wary as that awareness also encompasses the “darker” side of the on-line world (viruses, spyware, scams, fraud, DOS attacks, etc).
    As for inexpensive. That is a relative term. Try and take an idea for a new internet related service to a bank or lending institution for some capital. After the “dot com” bust they are even tighter fisted than ever for anything internet related.
    As for starting a basic service for $100/year please I’d like the inside scoop on this! (no pyramid schemes please) ;^)

  38. Manu says:

    In general, entrepreneurs are being more realistic now. Investors as well: a 2-line description of an idea doesn’t get you funding any more (in most cases anyway). I agree that, in a way, it’s easier to be successful now because you can learn from all those startups that crashed.

  39. Robert G says:

    “but the hard part now is finding a great domain.”
    Haven’t you heard, this is the Web 2.0 Era. You don’t have to use vowels anymore. Pick the word you want, take out a few vowels, and presto, you have the next ‘flickr’.
    Seriously though, the major things holding me back are MONEY and FEAR. What if I fail and I can’t pay for kids’ health insurance?

  40. Reggy says:

    I think designing with web standards has generally made web development easier for everyone, as it helps to provide clear goals and systematic approach.

  41. Manu says:

    To Robert G: any chance you can avoid putting all your eggs in one basket? i.e. try something on the side, start small, don’t bet everything on it?

  42. Robert G says:

    Manu,
    Yes. That’s the route I am going to try. I know I could get so much more done working full time on my ideas.

  43. Jauhari says:

    I am reading my friends blogs includes this one :) also read some books :)

  44. Pete says:

    I’ve only been learning html and css for six months and have already put together more than a few pretty sharp websites. But I would have hated web design if I’d have to learn to code the way people did in 1995- all the tables and font tags are so clumsy, inefficient, and primative compared to css.
    Css makes web design easy. The only problem is inconsistent support means you need the knowledge and experience to know the quirks and bugs of different browsers. But when, say 10 years down the line, when 99% of used browsers conform to a consistently high standard the expertise of of a coder will surely be less of a commodity, (if the only thing you know is css/html) because people will realise that coding a webpage is no longer a minefield of esoteric technical issues, but a convenient and satisfying experience.
    What does this all add upto? I think it’s great that web authoring becomes more for ‘the people’. For the industry, yeah it means one designer with the tools can crank out a website
    for half the time and a fraction of the money it took in the past, which means less jobs more freelance/small businesses. Like any industry it’s supply and demand, so I guess this means continually building or extending your skillset to stay competitive.

  45. Michael says:

    The bomb.com – that has to be one of the best phrases I’ve ever seen. Truly brilliant, incredibly inspired.

  46. Mathieu says:

    Just left a 140-employee web design office with branches around the world for a 15-person firm which does almost as much in a faction of the time and cost… and with higher quality.

  47. Jonathan says:

    Michael:
    “Unable to connect
    Firefox can’t establish a connection to the server at thebomb.com.”
    I think it fits, somehow. ;)

  48. Britney says:

    smart ups, mashups.. it’s be cool to have a cgi generate mash up of buzzwords, just plug in your name and a few buzzwords.. It may be easier and hceaper ot get an idea out the door today, but competing for traffic is getting harder and harder with so many excellent places to sepnd time online, it’s easy to miss a lot of new good places…

  49. Elena says:

    Your name sounds Swedish or something. Are you from Massachusetts (I read “about”) originally? Just wondering:) Have a nice day!
    (And sorry about the off-topic comment. Didn’t know where to put it:))

  50. PAuL says:

    It is definitely much easier to start a business nowadays. Technolgy advances so much, cost of running a business dropped so much with outsourcing and lower hardware cost.
    E.g a Dell PowerEdge server starts from only $779 now! The average salary of an India IT professional cost less than a third of what a USA IT professional earned.
    The missing key ingredients might just be ‘The Purple Cow’… (i’m still looking for mine.)

  51. Minh says:

    I think it might be harder to open a web-designing business now. There are alot of applications out there can do the development for you. Even a freshman in high school can design awesome sites. XHTML and CSS validity is a different story. As long as it works well, most people (who are not web designers) don’t care. As far as web applications, Apache Server offers a variety of plug-ins to even run shopping carts and data-driven websites. It’s hard to make money, unless you can propose to some big name companies and get some contracts signed.

  52. alan says:

    im a high school senior, thinking to become a graphic designer and web designer, shall i proceed? it really seem to me that it’s tough field now.

  53. And now even the germans have the possibility to start a smart-up, because the german translation of “Bulletproof Webdesign” has finally released by Addison-Wesley. When will “Web Standards Solutions” be translated into German?

  54. Nathan says:

    I have ideas for several (dozen!) “smart-ups.”
    Interested standards-based designers are urged to contact me:
    onlyloveisreal@dotlove.org