Over the past twelve years, I have followed the rise of the startup – defined as a small business with global ambitions – from my roost at TechCrunch. During this period, I've seen news stories pass from a sleeping pond at the back of the Sports section to a behemoth, a force that controls global conversation. Why? Because the reports of activity became war reports and battles took place between VCs, companies and ideas that changed the world.
During this period, VCs went from glorified bank windows to rock stars. Incubators arose to socialize the nervous founders and turn them into capital F The founders and the path of the startups became a codified journey from failure to success.
We are now seeing the same thing happen in ICOs. But something is wrong. Startups that come out of the ICO craze are not judged on the character of their founders, on their technologies, or on their likelihood of success. They are judged, simply, on quantitative measures that interrogate a token with a question: "When Lambo?"
This is the wrong approach. Token-based startups should be given the same level of socialization and control as the old VC-based startup validation process. But something is different, and that's an important difference.
In the old model of VC, a group of men – and it was mostly men – judged an idea. If a certain number of arbitrary risk points appeared, they would smile and say "No" to the founder, sending them on the road for another "No". Unless you were professionally hooked, went to https://techcrunch.com/2015//05/15/clunk/, or had your own money, the same late investment seed was not available and the result of https://twitter.com/kteare/status/391689067370278912 undercapitalization has flowed from countless startups.
Now, however, something new is being prepared. While it is always nice to look at the chips in comparison with other chips, this kind of quantitative masturbation can easily hide a multitude of sins. Due diligence in dealing with token companies is required, but this must be done by the wisdom of the crowd. Instead of trying to impress a guy in a polar vest and chinos on Sand Hill Road a founder must impress the world. They must tell a true and human story of real value and explain their product without mumbling and shaking hands. And they have to do it again and again.
Cryptocurrencies were supposed to give us an equal age of decentralized decision-making and mathematical certainty. But the founders have forgotten one thing: humans do not offer any mathematical certainty. Instead of looking at the numbers, these startups need to be evaluated based on their value to humanity, their technical ability to solve a real problem and their understanding of interpersonal interaction. The future is not a number. Instead, the future is a multi-to-one survey of a startup and the decision – by the decentralized crowd – whether to continue funding or not.
Again, if your main driver is greed, then check a chart that compares TRON to TRON. That's your right. But if your goal is to make startups that will lead us deeply into the future, then the old ways are the best. Many things are about to change.
A few years ago, I spoke to Deepak Chopra about his vision of a global voting system. In short, he was working on a way to take the global temperature. If a politician wanted to spend money on a road or, failing God, go to wear, they could ask the question to the crowd via their cell phones. One vote per person, defined by biometric checks. This idea of pie in the sky is slowly taking shape and I think it will be very exciting. And he will find his perfect home in the future of start-up financing.
The era of centralized decision-making in which the analytics was used to help make decisions about the seat of the pants is over. Now we are entering a new world and people accustomed to old habits should probably be careful. After all, when the crowd speaks, even the VCs listen.