In theory, I love startups.

I’m an ambitious, non-conventional technology freak. An “idea” guy who can’t stand being slowed down by tenure, regulations, or precedents.

I got a firsthand taste of startup culture at Andrew Hyde’s Startup Weekend in Boulder. I sat down with 5 like-minded guys… and we cranked out more in 48 hours than I had in the previous 48 weeks at a traditional company. It was an exhilarating, empowering experience.

Austin Hallock, Gerhard Rivera, Harry Love, Cameron Roberston,
Elijah Chancey & Me @ Startup Weekend II Boulder

While we were busting out design drafts and hacking up code, I overheard another table nearby. A smug group of characters was sipping coffee, dropping names and taking turns alluding to how successful and important they were.

They were loud. And they didn’t seem remotely interested in participating or creating anything; they were just there to gossip and take in the scenery.

It was then that I started to notice a palatable shadow side behind the glitz and gloss of Web 2.0 / Twitter / startup culture. Sure, there’s some solid people and mind-blowing ideas backed by generous investors. But, clearly, some folks are just along for the ride: talentless hacks, hanger-on’ers, greedy moneylenders, narcissistic hipsters and douchebags.

Here’s why the ego side of startup culture reminds me of Hollywood, drugs and multi-level marketing…

Hollywood

Funded startups are big-budget productions. Many use stars, style, and talent in order to make a splash and gain critical mass:

• Auditions in front of rich and powerful producers (investors)
• Mega-budget blockbusters that bomb at the box office (marketshare FAIL)
• Name dropping, status worshiping, and blackballing
• Style over substance
• Everyone is a superstar (or thinks they are)

Drugs

At a pre-Series A meeting for FleshOfTheStars.com, in the movie “Knocked Up“

Some startup ideas are genuinely inspired. Others seem “chemically” inspired:

• Baked… oblivious to how useless their idea is %99.999 of humanity.
• Tweaked out… obsessing on one technological facet, missing the big picture.
• Coked up… so full of ego it stinks to be in the same room with them.
• Drunk… in lust with a pretty idea that they’ll regret “the morning after.”
• Turned on… inspired, like Jobs and Woz’s acid trip to the Apple II.
• Addicted… couldn’t survive a day without their pimpdaddy (angel) or dealer (VC).

MLM

Funded startups have some striking similarities to a pyramid scheme. A “field of dreams” that isn’t profitable but oneday might be if enough people become true believers…

• The dream… A non-existent or unsustainable business model.
• The pitch… Doesn’t make logical sense without an immaculately-rehearsed explanation.
• Get-rich-quick mentality… TechCrunch mention -> Google acquisition.
• The pyramid funnel: Acquirers -> VCs -> Shareholders -> Employees -> Users.
• Rich “mentors” and sponsors who want a big slice of your pie
• Most fail or collapse, but quickly resurface under different names with similar pretenses

But what makes some people bite the hook and become true believers in startups and MLM… is good ol’ fashioned third-chakra greed. Material visions of multiple 30″ Apple Cinema Displays, hybrid SUVs, parking spaces in Vail or homes in the Valley make people fall in lust with far-flung ideas — that don’t make sense to normal people — and devote their whole life in pursuit of a technological “pipe dream.”

Some investors are in the game because they’re truly passionate about technology and want to help others – no question, they’d do it for free. But there’s another element that revolves entirely around money – treating web technology (and the people who love it) like sharecroppers or racehorses. The Donald Trumps clamor to get bought out by the Warren Buffetts and Microsofts… CEOs aren’t satisfied by complete control and high-salaries… they wanna be the Sultan of Burnei.

Valley Alchemy: From Silicon to Gold

Funded startups are a like material alchemists… refluxing intelligence and ambition with silicon vapors — hoping to yield mucho dinero.

“Visions of acquisition dancing in their heads.” image: Money Mind

This drive to create ’something out of nothing’ sometimes yields very great things:

Old startups like Google and Apple created the basic tools that my lifestyle and livelihood depend on. Napster, Digg, Flickr and Tribe.net have bestowed me with epic enjoyment, buzz and good connections. And new startups, like Boxee and Songbird, have got me stoked about the future of unlocked digital media.

It also can yield a whole lot of nothing:

At startup-related events… sometimes find myself in conversations that seem contrived or surreal. I go home and check out the sites on business cards I collected.. or I read TechCrunch… it feels like a dreamy Nintendo Wii game. It looks real on the surface: alpha invites, splash pages, quirky names and snazzy logos. But when I scratch deeper…. it’s Tinseltown. A “Second Life” world of digital illusions.

Splash pages and bling bling.

Cashing my Reality Check

When I got to an SEO conference or a developer meetup… I find that people behave differently. Most people there either run a “real” business that generates a sustainable income – or they work for a company that does. A real, economic market (not investors’ dreams) keeps them in business… and it also keeps them humble. While less glamorous than startups, I find the humility and pragmatism refreshing.

Anyways… I’m not bashing startups or taking a piss at ambitious people trying to create something. I think some startups are way cool. The genuine entrepreneurs and innovators out there inspire me.

But I just can’t help but noticing that along with the hot ideas – there’s some noise & hot air wafting about… and some of it is the stinky kind.