Hi-Tech fallouts unite!

The current economical situation of the world had gotten me thinking about various things. I would say that while most people think about “how to survive the economical desert” we are currently passing – my thoughts are going to another place – I see an opportunity.

About 6 months ago a team of 58 engineers joined forces in Israel to create the itribu.com service, a “pay-it-forward” type service. The amazing thing about itribu is the fact that it was completely built within a period of less than 72 hours!

Is that logical? creating a full service in less than 72 hours? is that actually doable? even extreme programming techniques and scrum/agile don’t offer this kind of development turn around. Actually, coming to think of it, I’ve created web based services in the past on my own which took less time to develop. I’ve developed a web based telephone conferencing system in less than 2 days, on my own, so – developing a full grown service with 58 engineers in 72 hours – sounds logical.

You are probably wondering: “What is he talking about? how does itribu relate to the current economic situation? where is the opportunity?” – the answer is simple, you’re simply too stuck thinking in normal development and financial paradigms – that you are blind to the obvious. Over the course of the past month, over 2000 engineers were let go from their jobs in Israel. These are highly qualified, highly original individuals ranging the full spectrum of the hi-tech industry. Imagine that a company that had let go 10 engineers, and imagine that these engineers had decided to start a web based service. Now, imagine that these 10 engineers get into a single place for a full weekend. Can they build a service in a single weekend? the answer is a definite YES!

If creating a service is so simple, how come people are not doing it – the answer is usually simple: EGO and PRIDE. When I talked about this idea to a couple of friends of mine they both replied a simple thing: “Hmmm… Ok, sounds cool, but, what is our take in the company? how much money are we going to make from it?” – and then I actually realized: the world had completely forgotten what the term start-up means. In 1996, when the ICQ team started working on their product, they had no idea they would end up selling ICQ to AOL for 400,000,000 USD. When Sergey and Larry started Google they basically had nothing in their pockets, they almost closed Google due to a poor business model in the beginning – that’s the idea behind a start-up, you have an idea and you go for it. We had become so obsessed with business models, revenues, making money, ego, status, driving a big car – all he things that had become synonyms to Hi-Tech success, but had completely forgotten that it takes time to get there. VC’s start giving money to any company that looked like a Web 2.0 application, when actually, there was nothing behind the idea. In my view, any team of 10-15 engineers can surely spend anything between 2 to 4 weekend building a service, continue on to running it – the VC’s will shortly follow once your service becomes a craze – trust me (I’ve seen it happen more than once).

Digium started from a loan Mark got from his folks for 5000$, and grew into a multi-million dollar company. In 2006 Digium received an investment of roughly 13M$ from Matrix Partners, but that’s long after Digium was already racking up about 14M$ sales per year. JaJah started off from funds of their founders, slowly growing in number of users, shortly to follow by investments from Intel Capital and Sequoia – in other words, obsess about creating the service first – the money will soon follow after wards. Starting to argue about who gets what and how much is stupid, after all, if you don’t build it – its value is still 0!