Bravo announced several months ago that it was producing a new TV reality based in Silicon Valley, where the young and the restless contestants hustle for money to form a new startup. The show is now filming in Silicon Valley—if you consider San Francisco to be part of Silicon Valley. Although the heart of Silicon Valley has been moving northward for years, it’s still firmly entrenched in the South Bay (i.e., Mountain View and Palo Alto). San Francisco has become the top designation for new start ups that are squeezed out of Silicon Valley’s overcrowded office market.
But let’s forget about San Francisco and the $17,000 USD a month rental house with a tri-level deck and swimming pool that serves as headquarters for the series. I guess a rental next door to Steve Wozniak in Los Gatos wasn’t available.
The series, which is now being filmed and is scheduled to be broadcast this winter, shows hard-partying youngsters vying to start companies in a frenzy reminiscent of the dot-com peak of 2000. It is a world where everyone seems to think that a good idea can lead to instant success and untold riches, because, after all, it has so many times before. It is a place where you feel like a failure if only one investor offers to finance you, instead of many begging to get in.
Oh, boy. If that wasn’t bad enough, this little gem made me choke.
As the cameras rolled the other day, Ben and Hermione Way, a photogenic brother-and-sister team from England, discussed the $500,000 they got to develop a fitness app. “Four noes and one yes,” Ben said, sadly. “Not exactly people throwing money at us.” He added that he developed the idea for the business while drinking in a bar.
Considering that there are high school students developing their own apps on shoestring budgets, why would anyone give this brother-and-sister team a half-million dollars to develop a fitness app in an overcrowded niche? Developing an app can cost up to $150,000 USD, depending on how complex and feature rich the app is. If you’re going to develop a new app, do it in a niche that haven’t been done to death by other programmers.
I’ll be interested in seeing how these contestants spend the money they raise from investors. The classical mistake for too many Silicon Valley entrepreneurs is to get a fancy building, a sports car or two, top of the line equipment, a masseur and a celebrity chef. The money is flying out of the checking account so fast that they soon realize that they’re running out of cash, have no working product to ship, and no chances of scoring any more investment funds. Once the money is gone, it’s game over.
The worst part is the underlying business plan of doing a startup to develop an idea with the intention of being bought out by Microsoft/Google/Apple for an instant multi-million dollar payout. After the dot com bubble went ka-blooey, that particular pipe dream should have been laid to rest. Not with the young and the restless.