Tempup artists

Tech is seeing its equivalent of the 1960s sexual revolution. Though once taboo, it’s gradually becoming acceptable for a startup to be like a hookup.

You aren’t always interested in forming a long-term relationship, and you don’t want all the commitment, strings, compromises and messiness. Sometimes you’re just in it for a quick sale, and building what I’d call a tempup. The tempup is all about testing a hypothesis quickly, and generating a small but meaningful return for the founders.

But the investor ecosystem hasn’t fully accepted this new normal yet. Tempups still need to conceal their intentions. Even if they truly just want a hookup, they need to use the language of long-term relationships to attract capital. In tempup rhetoric, every market opportunity is still in the billions, every financial forecast is for 3+ years, and every funding discussion is about bringing on the ‘right partner’.

As with sexual liberation, I’ll reserve judgment on whether tempups represent the moral decline of civilization, or the right step forward to a more flexible, accepting society.

To me, there’s a more pressing question: when will we start comfortably talking about reality?

Yesterday, in announcing his new $50m fund for 500 Startups (congrats btw!), Dave McClure asked “why hasn’t VC scaled?” and my colleague and mentor Roger quickly asked “why should it?” in response.

Something about that conversation, and the discourse around lighter, cheaper-to-build startups misses the mark for me. I believe that Roger and Dave are in two completely different businesses. True, their purposes sometimes converge — a tempup, like a hookup, can occasionally become a meaningful long term relationship. But the forms, functions, and scaling characteristics of venture capital firms are designed around the institution of startup marriage, which has a singular purpose. Programs like 500 and many of the startups that join them have different goals in mind.

That trend alone is not alarming to me. Neither business is better or worse, but they are just different and should be acknowledged as such. What’s more worrisome is rise of a “seduction community” in startup-land, whose objective is to ‘hack’ the signals in VC courtship to conceal tempup ambitions.

Before I explain what I mean, let’s review what’s brought about the revolution. Like sexual liberation, it’s sparked by social change:

  • Tech is exiting the growth stage and entering the early phases of maturity. Big, successful companies like Google are cash-rich, but suck at creating and testing new ideas and entering new businesses.
  • Talent in the information economy is difficult to find and assess through interviews, and competitively hard to attract.
  • Starting a company is largely democratized through open-source tech stacks, variable cost pricing for infrastructure, approachable programming languages, and easy distribution on ubiquitous platforms (browser, app stores, social).

These changes make today’s market a perfect storm for building tempups. It’s cheap and easy to start, and your FNAC tempup has a decent chance of getting bought quickly. Your small hypothesis test about a market leads to great evidence that a new product has potential and your team has the right stuff. It can be a win-win for companies and entrepreneurs, and there’s no shame in that at all.

A new breed of investor is evolving to meet this need. They’re structurally set up to fund lots of similar companies and okay with the ‘relationship’ being shorter-term. Dave related it to making Model T’s, and I couldn’t agree more. Today’s more, shall we say promiscuous founders may be less romantic than the companies of times past, but as an investor, there’s money to be made in these tempups too. Just like satisfaction can be found in both hookups and long term relationships. Different strokes for different folks.

Unfortunately, the language of entrepreneurship is set up around romance, and investors still mostly look for the signals that a company is going for a grand slam rather than a base hit. And that’s where it gets dirty. Enter the tempup artist.

Remember back in 2005 when an entire generation of guys obsessed over Neil Strauss’ book The Game? It was about his forays into the seduction community, a shadow world of “pickup artists” who hacked the signals of social value and attraction to convince women to accept their advances. Men attended a bootcamp, where they were trained on all the right body language, social proofing, and psychological tricks to get women to chase and fight for their attention.

Sound familiar? I don’t think it’s intentional, but accelerators have taken on some striking parallels to seduction bootcamps. You work in an intense environment, refining your pitch into a ‘routine’ with all the right signals – exponential curves (peacocking), paying customers, angels and advisors for social proof, and war stories about how you got out of the building and pivoted to prove your resilience. You demo, work the room, and show that you’re the real deal and going for a grand slam. You make yourself artificially scarce, and go for the holy grail: a big-name VC putting their money in unprotected at a high price.

Sure, all courtship involves putting the best foot forward. Everyone has their game, for sales and deals and jobs, just as much as for sex and love. Dancing the dance is fine when there’s a shared long-term objective. But tempup artists are insidious, in a kind of sociopathic way, when they know their companies aren’t remotely in it for the grand slam. TUAs wrap their true objective (a quick, life changing exit) in the signals and qualities that indicate almost the exact opposite objectives.

I believe it’s high time to talk openly about those true intentions, and make sure all parties involved are playing for the same reasons. Of course, I know perfect clarity is tough to ensure because motivations change — you may think you want long-term right now and later decide it was actually just a hookup. So the best we can ask for is honesty at all times. Things get messy when expectations aren’t voiced actively and often.

So when Dave asks why VC hasn’t scaled, what I hear is “why hasn’t everyone adjusted to tempups”. And I think the answer is that, like hookups, they’re not right for everyone. The values and likely outcomes are different.

Certainly more investors will enter the market over time, with funds structured to have the same goals as tempup founders. They’ll fund thousands of startups like Dave envisions, and be okay with most of them going after small markets and smaller but faster returns.

But in order for that to happen, we need to change our discourse and acknowledge the quantum differences between these strategies. Just like there’s room for both hookups and serial monogamy, tempups and long-term ventures can coexist in the world. So long as we can discuss them openly and make sure the objectives are consensual.

Via xkcd.

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2 thoughts on “Tempup artists

  1. swyx says:

    classic xkcd.

    this is possibly your most salacious post yet!

  2. for those who were interested, Mike Arrington wrote yesterday about investors starting to request protection from acqui-hires. so there is noticeable reaction to tempups in the market. http://uncrunched.com/2012/04/24/some-investors-may-request-protection-from-aqui-hires/

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