Mike Rundle has written a post called The Catch-22 of Web 2.0 in which he says he feels like “the only person seeing certain things happen – like watching a train wreck in slow motion”.

Mike is a top web designer who makes some cynical points that don’t make too much sense from where I’m sitting.

So let’s go through them one by one…

I Can Give You $10 Million But Don’t Ask Me What Ajax Really Means

“Venture capitalists have the money that entrepreneurs seek, but have they ever written a line of code? Pushed any pixels?”

Mike seems to think that you need to be code-literate to succeed as a VC. This is abject nonsense. VCs with a hands-on background in technology are indeed a rare breed, but why on earth does a VC need to know how to code?

An entrepreneur’s tech team / CTO / beta testers are far better judges of technology than a VC, who should be more concerned about valuation, risk and exit strategy. Beware of VCs who do know how to code lest they start calling the shots (“build the entire application in Flash, for the SEO benefits!”). Do you really want your friendly VC to help out with the technical specification for your new web app?

If you are a VC you do not need to know how to spot real vs fake AJAX. You do need to be able to work the financials and judge risk, etc. Entrepreneurs should be able to communicate the user and business benefits of the chosen technology, which in any case may change. Neither VCs or entrepreneurs should get too hung up on tech buzzwords du jour.

I Want To Start A Software Company Even Though I Can’t Code

“Communicating your vision to a development and design team is difficult because we rely on the little details that non-technical people wouldn’t think about, and without those details figured out in a reasonable time, scope is bound to creep.”

True to some degree, but surely this ‘non-technical people’ comment is a generalisation at best? Maybe Mike needs to define that term a little better. For example, my coding skills are almost non-existent but I may perfectly well comprehend why Technology X beats Technology Y. And if I don’t understand, then it is surely the purpose of the technology team / CTO to explain them?

As an analogy, one of my favourite bands is Pixies. Now, Pixies didn’t know a thing about musical theory, about scales, about why you shouldn’t go from a B major to an F major. Or why you couldn’t use a drumstick to play a guitar solo. Did they need to know all that stuff before deciding to compose music? No. Sometimes ignorance can lead to real innovation.

Mike continues: “The odds are stacked against non-technical entrepreneurs because development and design is expensive, and the best team in the world will still get pissed off if the founders are flakey or change their mind a hundred times.”

Do all techies and designers have a tendency to display diva-like hissy fits in the event of too many iterations? Since I hold the belief that good web design is all about iterations, from pre-alpha to 5-years-after-full-launch, I think this statement sucks.

If the ‘best team in the world’ gets regularly pissed off then you can either

a) explain in polite tones why something needs to change and ask nicely if they’d be so kind as to consider doing it, or…

b) sack them. Since they’re so expensive they really shouldn’t be giving you any trouble, but it doesn’t always work that way.

And no, you really, seriously, do not need to be able to write standard-based code to launch a ‘tech’ business. The internet is a channel to market, that simple. Do you need to be an architect to open a high street shop?

I Know You Gave Me Millions But I “Need” More

“To date, Technorati has raised nearly $20 million and has grown to dozens of employees, but their blog numbers and link counts are consistently incorrect, plus the service has been plagued with outages for months. My question is why they don’t fix these core problems before expanding or taking more and more money?”

I’m in agreement with Mike on this one. I think some firms have taken on worrying amounts of VC money and must surely be in the back pockets of their investors. But then each business is different and the founders may well be happy to divest 90% of the equity to VCs. What they do or don’t do with that money is where it gets interesting.

I sometimes get the sense that people are cashing in as much as they can, perhaps fearing another crash, or looking to pay themselves some fat salaries for the next few years. If you lived through Boom 1.0 you can understand that to some degree, but hey, it ain’t a bubble folks. Not a bubble. The goalposts have permanently changed.

Industry Pundits’ Own Companies Are Struggling

“Note to everyone: being famous, smart, and rich doesn’t guarantee your idea or execution will be spot-on.”

Mike’s poking a stick at TechCrunch’s Michael Arrington here, who also sits on the board of edgeio, a startup that “has seemingly failed to lift off the runway”. Seth Godin also gets the treatment, with Squidoo described as “lead-bottomed”. Ouch. 

None of this fundamentally matters of course – industry pundits are exactly that, and since TechCrunch itself makes many thousands of dollars a month I don’t think we can write of Arrington just yet. Meanwhile Seth has sold a gazillion books to all manner of business folk and experienced success at Yahoo. And it isn’t as if Arrington and Godin have bet their houses on their recent ventures.

Should we write off the pundits because they haven’t devised startups that have had YouTube or MySpace levels of success? I don’t think so.