THE BLOG
04/06/2011 03:42 pm ET Updated Jun 06, 2011

Startup Fever: Why it Matters

Last month, in the midst of the South by Southwest Interactive Festival when I was reporting on the Startup Bus here on Huffington Post, Michael Taylor of the New York Observer wrote a piece called "Abolish South by Southwest!" in which he cast smart-aleck barbs at the culture surrounding the Interactive portion of SXSW, calling it a "sham of technological confabulation" that uses ideas of techno-utopian progress as a pretense for a self-congratulatory, evangelical frat party.

Easy enough to dismiss as attention-getting snarkiness, right? But a few days after that piece ran, Taylor and I appeared as guests on a Minnesota Public Radio segment about Startup Bus and SXSWi. He elaborated on his serious point behind the admittedly tongue-in-cheek article, namely a concern that the rash of entrepreneurial ventures spurred on by movements like the Startup Bus were creating a misallocation of capital toward sure-to-fail "whimsical" projects, and away from "serious" existing businesses.

The venerable Mr. Taylor bemoaned the fact that there were Startup Bus projects that dared deal with such fluff as bar trivia, and bemoaned further "cheerleader" media hype surrounding a field where less than 50 percent were destined to successfully find a market. Oh, and the irony of a real-life conference "like our parents went to" being held in an age when we have apps and social media available to "erase [physical] distance." Unfortunately, Mr. Taylor got the last word before the segment ended.

My first instinct in terms of a counterpoint -- after dismissing as not worthy of response the notion that without a startup to fund, "misallocated capital" would magically be directed toward established businesses, a notion that ignores the pesky little reality of a free market -- would have been to point out the many Startup Bus projects that were not even remotely frivolous. "Help Near Me" from the Cleveland bus dealt with finding geo-located human services to aid individuals in crisis situations, and" Mom and Pop Co-ops," also from the Cleveland Bus, was a system to enable small businesses to amass aggregate buying power in order to compete with mega-retailers like Walmart; or the finalist from the New York bus, "TripMedi," which offered a service for making intelligent decisions about finding affordable healthcare procedures overseas, aimed mainly at those who are uninsured and priced out of the American market; or maybe "Isitgood4me" from the Miami bus, an app to scan food barcodes to compare with personal dietary restrictions...the list goes on.

But in retrospect that counter-argument would miss the broader point at hand. The fact is, whether the startups are frivolous or not, the crazy energy and direct, interactive spirit of real-life collaboration behind projects like Startup Bus is exactly why they matter, and the very reason they can have a broader impact on innovation culture at large.

For me, the value of startup culture crystallized even more completely a few weeks ago when I was a judge for a mobile app development competition sponsored by NJ Mobile Meetup in the Converge Coworking Space at Kean University.

After judging, we had the opportunity to chat with a number of the participants and got an impressive view of the collaborative process that prevailed over their 24 hours of work. Just as in the case of Startup Bus, where participants reported a virtual love-fest of cooperation and skill-sharing across competing teams, those who had come into this mobile app competition with more creative ideas than tech chops were readily assisted by those with more advanced skills. Even the teams who didn't have a project ready for judging came out of the experience with new knowledge, and everyone came away with new connections forged by a shared, high-pressure, and focused work session. The experience provided lessons valuable across the board, whether the fledgling entrepreneurs succeed in getting investment dollars for their own venture or end up joining the traditional workforce as an employee.

Getting a massive amount of creative people not just thinking about their own startup, but going through the tangible steps in an intensified and collaborative way, can only be positive for overall business culture. At the very least, this flock of creative and enterprising souls coming up with new ideas -- even if they ultimately fail -- can goose existing businesses out of staid complacency and into generating their own innovation. Particularly in the exponentially flourishing area of technology, a culture that doesn't encourage the support of new, young - and yes, even crazy -- ideas is a moribund culture that will not keep up with rapid fire changes in the global marketplace.

So rather than considering the startup trend to be a hype-driven bubble leading to little more than broken dreams and wasted investments, we should be appreciating the culture of networked innovators that it engenders -- a culture of dynamic energy and readiness for challenge. After all, exuberance doesn't have to be irrational.