Startups are the new hot thing right now, with new companies launching new products, on a far more rapid schedule than ever before, promising to change your life for the better, but are they all they’re cracked up to be?

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The rise of startup companies

Ever since the movie "The Social Network" premiered, the incorporation of startups has risen dramatically. Everyone wants to be the next Zuckerberg with the next great product to make millions. Unfortunately, this is rarely the case, and many are caught in the daze of their product being so amazing, that they don’t stop and think that in reality: it’s mediocre at best. Whilst this does not cover the entirety of startups as a whole, this statement does hold weight to a great deal of them. Many prefer to use their venture capital funding to host countless parties, rather than properly investing it into building a great product.

The startup expectation

If you’ve been in the software development industry for long enough, there is no doubt you’ve been approached by aspiring entrepreneurs touting that their idea “will change the world” and want you on their team to make it happen. While that’s all well and good, the expectation that is then thrust upon one is that of little to no pay, long and grueling work hours under the title of “Rockstar developer”. The expectation is that you will be as passionate about their idea, as they are, which in most cases, is simply not the case and to most, it will just be another job.

The compensation for one’s work is also incredibly low paying in most cases, and developers are expected to do a load of work upfront, in exchange for shares of the company, IF they achieve their venture capital. This is incredibly destructive to the people working under the company heads as they typically have no guaranteed payout for their efforts, instead they are strung along on the hope of the company turning a profit. Whilst it’s typically their own doing, it is still an absurd setup.

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Is there a real need for your product?

The other issue that seems to be incredibly prevalent in the world of startups, is that of product usefulness. That being, whether the product has a need, or whether it’s a shot in the dark. It feels like people would rather launch a product without determining the need and market for it in an instant just to be doing something, than waiting and determining whether or not it’s a decent product idea. Prime examples of this can be found on certain YouTube series, such as Kickstarter Crap, which plainly shows the absurdity of some ventures and how little thought goes into the product.

The “startup tax”

Another problem that is quite prevalent in newly launched startups is the hidden “startup tax”. Otherwise known as startups that feel like they can charge far more than the average amount for something, simply due to the premise of it being a startup product. This isn’t the case with startups alone but appears to be a growing trend in “hip” businesses such as quirky bars and coffee shops. Whilst this promotes a quick influx of income to the business, it increasingly becomes a less viable option throughout the lifespan of the business and can eventually lead to bankruptcy.

How can startups be done well?

Despite the above negativity surrounding a large amount of startup companies, they can be done incredibly well and become immensely profitable for the people involved. It begins with properly determining whether the product is marketable and has a use case for the target demographic as there is little to no point in developing and putting time into something that doesn’t have a use case. From there, properly budgeting and managing the scope of the product, setting up milestones and having non-percentage based pay to properly incentivize and reward the team for their efforts, ensuring that people remain engaged and passionate, and allow them to dedicate more time to the product as they are being properly compensated for their work.

Closing words

Startups are a great new way of allowing many people to start their own businesses and create exciting new products, whilst many get caught in the trap of being too caught up on themselves, and end up wasting the time and resource of many people in the hopes of achieving a very distant goal. They can be done well with the proper resources and time invested into them, but sadly it is rarely the case that this occurs.