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I hope this becomes a trend. I still think Clayton Christensen's "Be patient for growth, not for profit" quote is the sanest way to build a business. I unders

I hope this becomes a trend. I still think Clayton Christensen's "Be patient for growth, not for profit" quote is the sanest way to build a business. I understand the idea of giving startups money to explore business models but I also think it can lead companies astray and into some very problematic business models like Ubers where subsidizing is disguised as a business model. It's not that it doesn't work (it works remarkably well) it's just that it's creating a lot of companies taking in a lot of talent who aren't creating anything and I personally do not think the few that do end up being successful makes up for it. If you are forced to look at your finances you are foced to look at where you can create value that people want to pay for.

maxxxxx 9y ago
It would definitely make the job market a little saner. Right now it feels more like a lottery where you have to gamble on potential winners.
coffeemug 9y ago
I hope it doesn't. "Finances first everywhere" is dumb in technology for the same reason it's dumb in research -- you get predictable incremental improvements rather than quantum leaps. We get what we pay for, and it absolutely makes sense to invest into curiosity-driven technological research. People want "finances first" investment, but then complain that all we get is a bunch of sharing economy clones. If you want something other than doordash, uber, airbnb, instacart, caviar, lyft, etc. you have to be prepared to invest into ideas that have no financial story in the short term.
- ThomPete 9y ago
  I am unconvinced about that argument but I am willing be convinced. Can you give some examples of quantum leap companies? I don't see why you would need SV money to make quantum leaps as a company or why that's important. Edit: I can see from the responses that there is some confusion. I am of course not talking about companies who do some sort of research based incubation. I am talking about the host of companies who do no research or innovation and simply use VC money to get a team of the ground.
  - lwansbrough 9y ago
    I suppose Magic Leap is a good example. No one would buy a silly incremental AR headset, but they will probably buy whatever Magic Leap is working on (provided it is as futuristic as advertised.)
    - maxxxxx 9y ago
      I have my doubts they will ever deliver anything. More likely they have sucked up a lot of investment other companies would have put to better use.
      - JibJabLab 9y ago
        Might be hard to pull off considering they've done live demos to certain investors.
        joefourier 9y ago
        With a refrigerator sized device that they have been unable to miniaturize, and a glass-sized product that is not really any better than Hololens or Meta.
    - notyourday 9y ago
      Vapor Ware is always a great example.
  - askafriend 9y ago
    You don't need to look much further than the story of Google. Search was thought to be a "solved problem" and many at the time thought that there was zero money in search. Plus it was an incredibly saturated market with existing providers. If you took the finances first approach, you would have missed Google. Another good one is AirBnB. Staying in other people's homes was a pretty ridiculous idea at the time. Who would want to stay in a stranger's home? How does a company like that make any money? It's more obvious today but that capital had to be invested in order to open up the market for AirBnB to come in underneath the hotels and cement itself. If you took the finances first approach, you would have missed AirBnB. Yes, my examples are cherry-picked (I know someone is going to bring this up). But you asked for examples and here they are :)
- watwut 9y ago
  Ultimately, investors want money back and them some. Or at least they should want it, definitely those who don't play with retirement and what not funds money instead of their own. Moreover, tons of money being poured into financially bad shops kills real market and skews incentives. Companies that could be able to make profit die. Meanwhile, startups are motivated to target quick growth instead of actual profit - until bubble breaks and everyone is effed for no fault of their own.

maxxxxx 9y ago

It would definitely make the job market a little saner. Right now it feels more like a lottery where you have to gamble on potential winners.

coffeemug 9y ago

I hope it doesn't. "Finances first everywhere" is dumb in technology for the same reason it's dumb in research -- you get predictable incremental improvements rather than quantum leaps. We get what we pay for, and it absolutely makes sense to invest into curiosity-driven technological research. People want "finances first" investment, but then complain that all we get is a bunch of sharing economy clones. If you want something other than doordash, uber, airbnb, instacart, caviar, lyft, etc. you have to be prepared to invest into ideas that have no financial story in the short term.

ThomPete 9y ago
I am unconvinced about that argument but I am willing be convinced. Can you give some examples of quantum leap companies? I don't see why you would need SV money to make quantum leaps as a company or why that's important. Edit: I can see from the responses that there is some confusion. I am of course not talking about companies who do some sort of research based incubation. I am talking about the host of companies who do no research or innovation and simply use VC money to get a team of the ground.
- lwansbrough 9y ago
  I suppose Magic Leap is a good example. No one would buy a silly incremental AR headset, but they will probably buy whatever Magic Leap is working on (provided it is as futuristic as advertised.)
  - maxxxxx 9y ago
    I have my doubts they will ever deliver anything. More likely they have sucked up a lot of investment other companies would have put to better use.
    - JibJabLab 9y ago
      Might be hard to pull off considering they've done live demos to certain investors.
      - joefourier 9y ago
        With a refrigerator sized device that they have been unable to miniaturize, and a glass-sized product that is not really any better than Hololens or Meta.
  - notyourday 9y ago
    Vapor Ware is always a great example.
- askafriend 9y ago
  You don't need to look much further than the story of Google. Search was thought to be a "solved problem" and many at the time thought that there was zero money in search. Plus it was an incredibly saturated market with existing providers. If you took the finances first approach, you would have missed Google. Another good one is AirBnB. Staying in other people's homes was a pretty ridiculous idea at the time. Who would want to stay in a stranger's home? How does a company like that make any money? It's more obvious today but that capital had to be invested in order to open up the market for AirBnB to come in underneath the hotels and cement itself. If you took the finances first approach, you would have missed AirBnB. Yes, my examples are cherry-picked (I know someone is going to bring this up). But you asked for examples and here they are :)
watwut 9y ago
Ultimately, investors want money back and them some. Or at least they should want it, definitely those who don't play with retirement and what not funds money instead of their own. Moreover, tons of money being poured into financially bad shops kills real market and skews incentives. Companies that could be able to make profit die. Meanwhile, startups are motivated to target quick growth instead of actual profit - until bubble breaks and everyone is effed for no fault of their own.