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If these guys found some sort of magic formula that actually predicted the value of a startup down the road, they’d keep the information to themselves and make,
by vegashacker 19y ago
If these guys found some sort of magic formula that actually predicted the value of a startup down the road, they’d keep the information to themselves and make, well, unlimited amounts of money.
This is a bit unfair. It might be that their software isn't a perfect predictor, but just improves the prediction powers of a human VC by some amount. Their publicly available software, then, might be the company's bootstrap. Once they make enough cash to invest and ride out the swings, they can do (approximately) what Arrington is saying.
- gojomo 19y agoAlso: even if you could create an excellent predictor with the right inputs, a tiny startup wouldn't be able to collect the inputs -- including inside/detailed info -- all by itself. So starting as a service to the people who can demand such info (investors) makes sense -- and if it works, then they can "raise a fund themselves and beat the tar out of" the old guard. That's how it usually works in finance -- prove yourself first in the service of others, then once you have a track record, run your own show.
- jyothi 19y agoTotally agree. A pitch as a service to provide data points makes so much more sense - provide contacts, connections, past track record, competition profile, team profile, current user base, marketing efforts etc.. would be excellent.
- edw519 19y agoOddly enough, the real estate guys who sell seminars and books are the first to admint that they make far more money from the seminars and books than from real estate. Maybe that says more about their customers than their skills.