Our age of startup decadence

The modern day answer to startup woes does not work.

The modern day answer to startup woes does not work.

Ask an economist what the Greek financial crisis of 2010 and the fall of Rome in 476 AD have in common, and the answer is decadence: the luxurious self-indulgence that precedes a society’s decay.

Startups today have reached a new level of decadence unseen in the first tech bubble. What started as free lunch has evolved to five star meals by renowned chefs. $5 kombucha in the fridge? Check. An annual company trip to work remotely in an exotic location? Check. Want to experience burning man without the dessert heat, HR recruiters at one of the hottest startups will boast about their life-changing summer camp. Decadence, backed by a frothy late stage financing environment, has become the answer to all startup woes.

In their defense, startups have a hard time today. In the first tech bubble, a few would quit a startup to join IBM. And Microsoft required a move all the way up to Seattle. Today, Facebook or Google offer far more compelling financial and career opportunities than their old counterparts. They are also nimbler, smarter, and not only will they steal your talent but they will also steal your product ideas and out-execute you. Startups today have it rough!

But the answer is not decadence: no one quits their job because they don’t have a five star chef or a summer camp. Instead, employees quit when they do not like their boss or when they feel the place is a train wreck — a situation that decadence only amplifies. What employees want is a vision and purpose, a boss they respect, and a sense of reward for their efforts. Building, not indulging, is what keeps teams motivated.

This is not a case against having fun at the workplace. It is a case against throwing money at the problem of morale — only to realize decadence is a bottomless pit that will only make your problem worse.

Creating a purpose and building competent management are hard things to do — much harder than a company weekend in Cabo. But if it wants to succeed, a startup should invest its energy and capital there instead. Or succumb to the fates of Kozmo, Webvan, and Enron.