6 ms·

I hope this doesn't sound too snarky, but ... If option 2 will become illegal in the future, would that mean that startups would have to optimize to turn into

by vog 9y ago

I hope this doesn't sound too snarky, but ... If option 2 will become illegal in the future, would that mean that startups would have to optimize to turn into real companies? You know, that kind of company that need to be profitable on their own? And perhaps, but only perhaps, with a sustainable income?

chronicy292 9y ago
No, because as a startup founder and now investor, I would work day and night to find another "loophole" for easy money. There are hundreds of thousands of people who think like this Sustainable income? If you're getting a check for $10 million, do you care?
- deleted 9y ago
  [deleted]
- pdpi 9y ago
  The point is that, as a society, we should care. And that means putting in the right checks and balances that at the individual level we still care.
  - amigoingtodie 9y ago
    Small kids do not need, nor should they have, smartphones.
    - devdad 9y ago
      A bit off topic but true. You don't deserve down votes in my book.
- coldtea 9y ago
  >Sustainable income? If you're getting a check for $10 million, do you care? Depends on the kind of values you have.
  - mike-cardwell 9y ago
    I would create an unsustainable business in return for $10 million. Does that make me a bad person?
    - nhaehnle 9y ago
      If you have to ask, the answer is probably yes.
    - amigoingtodie 9y ago
      No. It is called an exit-strategy. Mark Cuban became a billionaire by selling a domain name to Yahoo. Now he is a reality TV star.
      - ethbro 9y ago
        To be fair, he used some of that stardom to get Shark Tank to drop the automatic 5% equity grant just for appearing on the show, including retroactively to previous entrepreneurs. https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tank-to-remove-equity-clause.html https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-ta...
      - coldtea 9y ago
        That's orthogonal. You can have an exit-strategy, or become a billionaire, or a reality tv star, and achieve it by acting bad.
    - AstralStorm 9y ago
      Selfish for sure. Soneone is going to pay that 10 million. And I bet your service does not provide equivalent worth to the community. Heck, probably net negative even without the money.
    - pault 9y ago
      If you designed the business knowing that it would collapse at some point in the future, and knowingly sold it to someone that would be left holding the bag, I think that would make you a very unethical person. If you did this, real people would be hurt by your decisions, and you would have continued to execute your plan knowing this. Maybe you just haven't thought through the consequences, but I wouldn't want to be friends with someone that acted that way. Edit: Since it appears that I wasn't clear enough, I'm saying that misrepresenting the value of a business to employees, customers, and investors is unethical. If everyone involved knows the venture is doomed to fail and you can still retire off the profits, I don't see a problem with that.
- HelloNurse 9y ago
  An obvious third exit option is proven and popular: be bought and ousted by uncommonly optimistic investors or competitors, so that scaling, profitability etc. become their problem (even if founders linger at their former company as employees with negligible stock).
  - vog 9y ago
    How is that different from option 2?
    - AstralStorm 9y ago
      The company still stays as a separate entity. Call it option 3. The exit for the board is either sale or bankruptcy.
manigandham 9y ago
Why should it be illegal? Are you saying companies should never be bought by another? Mergers and acqusitions are a massive driver of the market so what do you expect to take up the slack? Profit isn't the only measure of value. Startups by definition are experiments in business models and scaling quickly. Maybe they build something that fails to sell but are still worth something to the acquirer. Remember there are 1000x more startups that fail completely and generate no value at all. If you want regulation then it should be for the acquirers from getting too big, usually called anti-trust laws, but I dont see what's wrong with people putting some money together to try and make something to sell.
- vog 9y ago
  > Mergers and acqusitions are a massive driver of the market Pardon if I missed something in economics 101, but a large amount of mergers and acqusitions lead to market distortion, which drives the market into the opposite direction of what is good for customers. Cartel law tries to limit the damage, but more often than not prevents monopolies at the cost of tolerating oligopolies. > Remember there are 1000x more startups that fail completely and generate no value at all Maybe that number would be lower if startups optimized for stable income rather than acqusitions? Because then, a startup that is "merely" able to earn a living for a few people is considered a success path, rather than a failure path to avoid early on.

by vog 9y ago

chronicy292 9y ago

No, because as a startup founder and now investor, I would work day and night to find another "loophole" for easy money. There are hundreds of thousands of people who think like this Sustainable income? If you're getting a check for $10 million, do you care?

deleted 9y ago
[deleted]
pdpi 9y ago
The point is that, as a society, we should care. And that means putting in the right checks and balances that at the individual level we still care.
- amigoingtodie 9y ago
  Small kids do not need, nor should they have, smartphones.
  - devdad 9y ago
    A bit off topic but true. You don't deserve down votes in my book.
coldtea 9y ago
>Sustainable income? If you're getting a check for $10 million, do you care? Depends on the kind of values you have.
- mike-cardwell 9y ago
  I would create an unsustainable business in return for $10 million. Does that make me a bad person?
  - nhaehnle 9y ago
    If you have to ask, the answer is probably yes.
  - amigoingtodie 9y ago
    No. It is called an exit-strategy. Mark Cuban became a billionaire by selling a domain name to Yahoo. Now he is a reality TV star.
    - ethbro 9y ago
      To be fair, he used some of that stardom to get Shark Tank to drop the automatic 5% equity grant just for appearing on the show, including retroactively to previous entrepreneurs. https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-tank-to-remove-equity-clause.html https://www.inc.com/will-yakowicz/mark-cuban-forces-shark-ta...
    - coldtea 9y ago
      That's orthogonal. You can have an exit-strategy, or become a billionaire, or a reality tv star, and achieve it by acting bad.
  - AstralStorm 9y ago
    Selfish for sure. Soneone is going to pay that 10 million. And I bet your service does not provide equivalent worth to the community. Heck, probably net negative even without the money.
  - pault 9y ago
    If you designed the business knowing that it would collapse at some point in the future, and knowingly sold it to someone that would be left holding the bag, I think that would make you a very unethical person. If you did this, real people would be hurt by your decisions, and you would have continued to execute your plan knowing this. Maybe you just haven't thought through the consequences, but I wouldn't want to be friends with someone that acted that way. Edit: Since it appears that I wasn't clear enough, I'm saying that misrepresenting the value of a business to employees, customers, and investors is unethical. If everyone involved knows the venture is doomed to fail and you can still retire off the profits, I don't see a problem with that.
HelloNurse 9y ago
An obvious third exit option is proven and popular: be bought and ousted by uncommonly optimistic investors or competitors, so that scaling, profitability etc. become their problem (even if founders linger at their former company as employees with negligible stock).
- vog 9y ago
  How is that different from option 2?
  - AstralStorm 9y ago
    The company still stays as a separate entity. Call it option 3. The exit for the board is either sale or bankruptcy.

manigandham 9y ago

Why should it be illegal? Are you saying companies should never be bought by another? Mergers and acqusitions are a massive driver of the market so what do you expect to take up the slack? Profit isn't the only measure of value. Startups by definition are experiments in business models and scaling quickly. Maybe they build something that fails to sell but are still worth something to the acquirer. Remember there are 1000x more startups that fail completely and generate no value at all. If you want regulation then it should be for the acquirers from getting too big, usually called anti-trust laws, but I dont see what's wrong with people putting some money together to try and make something to sell.

vog 9y ago
> Mergers and acqusitions are a massive driver of the market Pardon if I missed something in economics 101, but a large amount of mergers and acqusitions lead to market distortion, which drives the market into the opposite direction of what is good for customers. Cartel law tries to limit the damage, but more often than not prevents monopolies at the cost of tolerating oligopolies. > Remember there are 1000x more startups that fail completely and generate no value at all Maybe that number would be lower if startups optimized for stable income rather than acqusitions? Because then, a startup that is "merely" able to earn a living for a few people is considered a success path, rather than a failure path to avoid early on.