Disposable Companies: A Conversation with Chris Shipley

What’s fascinating about Chris Shipley is not only her remarkable insight into business, but her sense of humor. She started out as a tech journalist in 1984 and slowly morphed into a product analyst, then became the founder of DEMO Conferences, a renowned forum for the technological debuts of products including Tivo, ASP services, and Salesforce.com. Her latest project is the development of the G/SCORE, a practical measurement tool that start-up businesses can use to judge their progress in seven distinct areas, including business execution, competitive landscape, and market opportunity.

Chris brings with her a self-described “human eye for usefulness, practical advancement, and social change” when she analyzes businesses. This human eye was very evident during our conversation, in which we spoke about a new, unpleasant mentality in many start-ups: the notion of “disposable companies,” instead of a focus on building sustainable business enterprises.

JI: You are going to speaking at the 2011 International Startup Festival in about a week and a half. What are you excited to see there?

CS: I’m excited to take the pulse of that entrepreneurial collective, because there are companies and entrepreneurs coming from a lot of different parts of the world. It’s always good for me to get outside of Silicon Valley. The particular narrative in Silicon Valley is aimed toward a certain kind of business building. I have a couple of questions or hypotheses or concerns about how those businesses are unfolded, and I hope I can go there and be proved wrong. I’ve been a journalist since 1984; I’ve seen a lot of things. I think we’re coming into a time with this current frothy period among start-ups that may not be fostering the best company-building or entrepreneurial practices.

JI: That “frothiness” that you refer to—is that just an overabundance of enthusiasm and not enough technical expertise—or is it a certain disrespect for the past? What is it that new entrepreneurs are disregarding?

CS: My concern is that we are abandoning entrepreneurship for engineership. I want to build a product, and I want to get a million people to use it, and then I’ll sell my product or company to Google, or Facebook, or something of that sort. It’s creating products for the purpose of building the company rather than building products for a passion for the product, with a passion for the customer, with an understanding of building a business. I think there’s nothing wrong with that and no value judgment is intended for an entrepreneur or individual who is essentially designing a business for the purpose of flipping it, but I think it’s really different from old-school entrepreneurship, which is about identifying a market need and building a company towards sustainability. The truth is that most companies will either fail or be acquired in a given period of time, but I think it’s also true that it’s literally a one in a million shot that you’re going to be the next Mark Zuckerberg. I think you either have to make a decision at this point that you want to build toward sustainability or you roll the dice to have that kind of outcome.

JI: Do you find that attitude among entrepreneurs of a certain age? Or is not based on age at all?

CS: Now I can crawl off my “entrepreneur soap box” and crawl onto my “entitled youth soap box.” I think there is a generation of young people well under the age of 30 who have lived a life where they get a ribbon for showing up. And they get the trophy for being part of the team and have not had to work as hard for their affirmation to expect that if they show up they will be rewarded. That’s a lovely life, and I’m glad that some people have that, but in my world entrepreneurship and building a company is really, really hard work. That’s the part where I get into this period of concern. If what we’re projecting in the story of Silicon Valley is if you drop out of school and build a company then you too be can be Mark Zuckerberg, then I think we’re fostering an image of “dream big, it’s easy, you can do it too” when in fact it’s not easy, it’s hard work. With that attitude, you will get the hell deluded out of you. If you’re successful enough to build a product that someone want to buy, your investors will take their money and go home, and you’re just a raw material in the process of their money-making machine. That’s really different to me. This period of building companies as an investment vehicle is a really different kind of motivation from building companies to create sustainable value, to create jobs in your community, to bring economic prosperity to your region. I may be old fashioned, but it’s my desire to see peace and prosperity through entrepreneurship. I don’t think that happens if we’re trying to sell the dream of being the next Zuckerberg.

JI: I’m relieved to hear you state your observations about sustainability. However, I think you initially need that idea that you’re going to conquer the world to venture out into it. And then after you are repeatedly confronted with reality, you start to adopt a more realistic view. Don’t you think that innovation requires a certain ignorance of how difficult it really is?

CS: Of course. If you knew something was impossible, you’d never be able to do it. That sense of possibility, that sense of wonder and dreaming, is really critical. What worries me is the sense that there is the notion of “disposable companies.” That didn’t work, so give whatever money is left back to the investors, and go try something else, where I can start with a clean slate. I’ll just whip through these ideas. The idea that you’re going to fail and learn from that failure and try the next thing and next thing, leads to an attitude of “we’re gonna get out of this business, because time’s a wasting, I’m gonna be 30 any day now. If I don’t have my serial success before then, who am I?” I think that’s the narrative that’s getting churned up in this frothy time. It’s counter to the reality, which is: every day you get on rollercoaster and it’s thrilling and scary and sometimes you throw up and then you go out and do it again, because that’s what it takes to build a business. Of course, I’d like to say all those things in a way that’s positive and inspiring, and not in the vein of, “You kids today!” I don’t know if that’s possible.

JI: [Laughs] I think it is. I think what’s important to emphasize is that at some point you need to invest in something on a longer term basis. And that’s not necessarily an anti-youth thing; it’s just something that should dawn on people at some point.

CS: I think that’s a good point. If life is disposable, what do you hold onto for the long run?

JI: I agree. Of course, a lot of people under 30 are concerned about the environment. Maybe the way to convey it is to link the idea of sustaining both our physical environment and our commercial environment, too.

CS: I like it. “Your career is a Styrofoam cup. What are you going to do about it?” •

Chris will be a featured speaker at the 2011 International Startup Festival in Montreal. Her blog can be found here: http://www.cshipley.com/products.html

As part of our conference series, check out these interviews:

• Jeff Clavier – A Cool Billion Dollars
• The 2011 International Startup Festival