I recently, very briefly, worked with a Web startup based in Beijing (the "Startup"). The CEO of this company, an apparently very intelligent, focussed individual with great talent motivating sales and marketing people, takes as his guiding principle a quote from Guy Kawasaki, "Don't worry, be crappy".
The problem with that approach for the Startup, as I see it, is two-fold. To start, Kawasaki makes clear in his commentary that he's referring strictly to products that are truly innovative breakthroughs, exemplars of a whole new way of looking at some part of the world. Very few products or companies meet that standard (and even if yours does, Kawasaki declares, you should eliminate the crappiness with all possible speed). No matter how simultaneously useful and geeky the service offered by the Startup's site is, it is, at best, a novel and useful twist resting on several existing, innovative-in-their-day technologies. (A friend who I explained the company to commented that "it sounds as innovative as if Amazon.com only sold romance novels within the city limits of Boston" — hardly a breakthrough concept). Indeed, Kawasaki makes clear that he's talking about order-of-magnitude innovation; the examples he cites are the jump from daisy-wheel to laser printing and the Apple Macintosh.
The second, more insidious, problem with the approach, and the trap that many early-1990s Silicon Valley startups fell into, is that you take crappiness as a given, without even trying to deliver the one-two punch of true innovation and a sublimely well-engineered product that immediately raises the bar for would-be "me-too" copycats. (Sony, for instance, has traditionally excelled at this, as has the Apple iPod (learning from the mistakes Kawasaki cites for the earliest Macintosh). Deliver crap, and anybody can compete with you once they understand the basics of your product. The wireless mouse is a good example of this.
If you tell yourself from the get-go that you'll be satisfied if you ship a 70%-quality product, what will happen is that, as time goes by, that magical 70% becomes 50%, then 30%, then whatever it takes to meet the date you told the investors. And if management doesn't trust engineering to give honest, realistic estimates (as is typical in software and pandemic in startups), you have a recipe for disaster: engineering takes a month to come back with an estimate that development will take 12-18 months; management hears '12' and automatically cuts that to 6 and pushes to have a "beta" out in 4. The problem is that, if you're dealing with an even marginally innovative product, things are not cut-and-dried; the engineers will have misunderstood some aspects of the situation, underestimated certain risks, and been completely blind to others. This was pithily summed up, in another field entirely, by Donald Rumsfeld:
There are known "knowns." There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we don't know we don't know. So when we do the best we can and we pull all this information together, and we then say well that's basically what we see as the situation, that is really only the known knowns and the known unknowns. And each year, we discover a few more of those unknown unknowns.
Companies that simultaneously forget the ramifications of this while taking too puffed-up a view of themselves are leaving themselves vulnerable to delivering nothing more useful or profitable than the old pets.com (not the current PetSmart) sock puppet — and probably nothing that memorable, either.
And that further assumes that they don't fall prey to preventable disasters like losing the only hard drive running a production server built with non-production, undocumented software. If Web presence defines a "Web 2.0" company in the eyes of its customers and investors, going dark could be very costly indeed.