Home 3 Myths of the Startup Bubble: Chris Shipley on How to Survive the Inevitable Crash

3 Myths of the Startup Bubble: Chris Shipley on How to Survive the Inevitable Crash

After 25 years of evaluating tech startups and watching more pitches than almost anyone else on earth, Guidewire Group’s Chris Shipley says we are definitely in a bubble right now. Specifically, we’re in a lean startup bubble: an inflated economy of startups serving startups, filled with dangerous myths and sure to come crashing down, just like previous bubbles have.

“We’d like to believe it’s different now but it’s not,” Shipley told the audience at the International Startup Festival in Montreal this morning. “Every bubble starts with a truth and ends in perturbation of that truth.”

Shipley says the first bubble she saw was built up by scientists building Artificial Intelligence in the 1980’s. Everyone was going to buy AI, people thought, and today the only company that made it from that group was Boreland, because of the founder’s entreprenurial orientation. Pen computing and dotcoms were the other bubbles that preceeded today’s startup bubble and Shipley says that a number of myths have been constants throughout each.

Myth #1: It’s All About the Rockstars

“Exits these days aren’t very good,” Shipley said, “so why don’t you take your eye off the door and focus on building your business.”

As the long-time leader of the


launch conference, where nearly 100 startups are chosen to launch twice a year, Shipley has seen and evaluated thousands of startup companies. While the mega-wealthy and famous rock stars are the best known players in the field, Shipley says they are just the tip of the spear of the startup world. A far larger group of in-the-trenches entreprenuers are more important to learn from.

Some are lucky, some are good, some are both. When the bubble pops, it’s better to be good than lucky, Shipley says.

Myth #2: Super Angels

“There are super people and there are angels,” Shipley told the audience. “When you put them together, those are just investors.”

“They are investors and they don’t love you or your idea, they love that you’ll work hard to make money for them,” she said. “It’s critical that you understand that relationship.”

Myth #3: Flip or Fail

Shipley says she sees a lot of young startup founders that feel like they are a failure if they don’t sell their first startup to a larger company before they turn 25. She said it’s important to recognize that building a sustainable business is an alternative.

“The fail fast philosophy is about learning,” Shipley said. “It’s not about creating disposable startups.”

Aiming to build something that will last was the key takeaway from Shipley’s talk. “Exits these days aren’t very good,” she said, “so why don’t you take your eye off the door and focus on building your business.”

Shipley’s years of concentrated startup wisdom can be enjoyed at public tech events throughout the year, she posts notices about where she’ll be on Plancast and posts a few times each week on Twitter.

Disclosure: The city of Montreal paid for the author’s transportation and lodging in order to cover the International Startup Festival. Those accommodations included a delicious cheese and fruit plate, which was much appreciated.

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