Redfin CEO Glenn Kelman told a crowd at SXSW that he’s not so sure the Next Big Thing will be a software-only startup and why “End-to-End” Startups just might be.
On the third day of the 21st annual South by Southwest Interactive festival, Redfin CEO Glenn Kelman had a plea for entrepreneurs: Stop building software-only companies. Think bigger.
His thesis, which he presented to a crowd of about 100 people at Austin’s Hilton Downtown, is simple. The future’s most audacious–and financially successful–startups will be end-to-end startups. These companies control the entire experience, from the software to the real-world element. Think Amazon, Uber, Airbnb… Kelman came armed with a list of examples.
“Look at Facebook, Google, and Amazon,” he said. “Amazon may have a 10th of the traffic of Facebook and Google, but it has twice the revenue. Just because you can grow traffic doesn’t mean you’re doing something meaningful for people.”
Unfortunately, Kelman added, Silicon Valley investors aren’t always so keen on companies that can’t scale fast. E2E startups typically require tons of cash, and the software-obsessed VCs don’t always have the nerve to invest every audacious real-world idea. Why? Because for both the VC and the entrepreneur, being audacious is hard.
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