Startups - revolution or evolution?

Rumors of "Bubble 2.0" are running rampant. Many relatively new startups bite the dust. Other new startups hit the jackpot. What determines the success or failure of a technology company?

Today at TechCrunch there is a very thoughtful post by Mike Arrington about pulling the plug on one of his own startups - Edgeio. Here is somebody who has seen more Silicon Valley startup successes and failures than anybody, who has the best connections you can hope for in the valley, and had a brilliant technical team and great company advisors. Yet the company still failed.

My working hypothesis is that startups follow more along the path of biological evolution than along some easily predictable business paradigm. Evolution works *away from failure* rather than working *towards success*. Most biological species - historically over 99% - fail and become extinct. In the same way we should expect most startups to fail. Not so much because they did anything wrong, but because they simply could not work away from failure fast enough to keep afloat.