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Yes, startups don't compete based on product quality - Competitive advantage lies almost entirely in the ability to raise funding and generate noise. A mediocr
by jondubois 11y ago
Yes, startups don't compete based on product quality - Competitive advantage lies almost entirely in the ability to raise funding and generate noise.
A mediocre idea with a mediocre team can go a really long way if you put enough money and fame behind it.
I think most big investors don't even know what a good idea is anymore - Their investment in itself can have such a strong influence on outcomes that it skews their perception of everything and creates self-fulfilling prophecies.
Big investors must think the world is a relatively fair place - Because it looks like this within the confines of their immediate networks.
- rokhayakebe 11y agoCompetitive advantage lies almost entirely in the ability to raise funding and generate noise. Wrong. Competitive advantage lies in the ability to 1) acquire users, and 2) monetize them profitably, 3) defend/maintain your position.
- untog 11y agoOr: 1) acquire users 2) get more funding 3) get bought by a larger company 2 and 3 require funding and noise.
- hellcow 11y agoArguably 1, 2, and 3 require funding and noise.
- rokhayakebe 11y agoThere are thousands of very profitable businesses that never raised a nickel of VC. Case in point, I never worked for a VC funded company, yet every company I have worked for has been profitable.
- bdcravens 11y agoSure, but this discussion isn't about the value of bootstrapped versus funded companies, even though you seem intent on making it about that. This discussion is about startups that are truly trying to do something new (as opposed to a company that is new).
- rokhayakebe 11y agoDoes innovation require VC funding? Does getting noise require VC funding? I do not see the data.