Everyone tends to follow well-trodden existing paths. Nobody can run a mile under 4 minutes, and then suddenly even children can when they see it is possible. I myself, recall as a kid just looking at people I admired or wanted the lives of and going through their biographies and wikipedia pages to see what I can do to follow along their path as close as possible.
Even my degree in Computer Science came from reading the top 20 richest people in the world and seeing they were in the tech field. One thing everyone falls prey to going after the current new trend.
When you are raising money and have this startup working in an area right as a trend comes out, you are golden. Everyone is pumped and funds are getting FOMO seeing their competitors invest in the hype while they haven’t closed any deals in it yet. The valuations of those start-ups that fall within this trend are suddenly higher, supposedly meaning they are doing better and everyone is happy. Of course, the only thing that actually matters is working towards a sustainable business model, but you can’t ignore how useful being part of a hype cycle is.
When smart startups see a trend coming up they suddenly explain how their product is right in the AI or crypto space. This lets them raise a couple million dollars and buys them enough time to pivot or figure something out.
The laziest and most logical conclusion to this is to simply look at the next hype cycle and build a startup around that immediately. Unfortunately, most people aren’t close enough to VC circles and Silicon Valley to catch a cycle in time. Usually people jump into it when it’s too late.
My first startup, Shotput was semi-lucky/semi-purposefully thrown into the Kickstarter hype at the time in 2014. We raised 2 million dollars in less than a week and were valued at 10 million. Only 6 months later, everyone was jumping in. Products that were underwhelming and didn’t deliver were raising 10 million dollars. Even potato salads raised fifty thousand. This is how fast a hype cycle can die.
So what’s the trick?
Build your startup with whatever idea you want and watch for the hype cycles. Then just latch onto that as fast as possible. Don’t actually change your business model or anything, just focus on growing an amazing company.
Funny enough, I started getting calls from Google Ventures and other logistics companies regarding Shotput about 5 years later. It turns out Silicon Valley threw away the Kickstarter hype and decided it fit into a new buzzword related to logistics side of the business. Unfortunately we shuttered Shotput, but if it was around now, it could have raised as a solid “Microfulfillment” startup.