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The most successful global tech bets are efficient and practical startups
- MattGaiser 5y agoGiven that the goal of venture capital is to make blockbuster amounts of money, it seems problematic to have this discussion without numbers on what the return on investment is for these companies.
- codingdave 5y agoThat, or the goal of "make blockbuster amounts of money" is a different goal than "make a successful tech company". There is certainly overlap in that Venn diagram, but they are not the same thing.
- jacobr1 5y agoThere are different scales though. It is very hard to turn a $50M investment into a $500M exit. That requires chasing unicorns. But you can find many more opportunities to turn a $1M investment into a $10M return. Same 10x factor, very different investment scale, and also very different portfolios.
- zwieback 5y agoProbably good to have both: SV and a few other mega hype environments and rest of the world for everything else.
- aeoleonn 5y agoNot very useful article. It's short (10 paragraphs) and doesn't provide much analysis beyond about 4 statistics and 2-3 anecdotes. I wish it had more data and visualizations of data.
- sorenKaram 5y agoI had a similar thought, although I do think the article is somewhat useful - I haven't come across many other people supporting the view that efficient and practical startups are a better investment and create higher quality and more useful tech than unicorns. I do strongly wish the article had more data. Note that the article is labeled as an 'Idea' on the website. See https://restofworld.org/series/ideas/ https://restofworld.org/series/ideas/ . I don't think that label should prevent data from being included, though.
- Iwan-Zotow 5y agoDid Theranos (and Elizabeth Holmes) looked like efficient and practical startup? You bet!!!
- MattGaiser 5y agoI don't see how a startup like Theranos, real or not, could succeed without venture capital. You can't iterate your way to a medical device and casually fail along the way with paying customers.
- HWR_14 5y agoIronically, didn't Theranos casually fail along the way with paying customers? I would imagine that VC would be required to build the machines, but I'm not sure how many rounds. It seems like if their tech worked, it should have required far less than what they raised to hit sustainable revenues. Maybe 10%?
- zwieback 5y agoNot to a lot of experts, though. I remember sitting in a conference room at the time discussing options of entering this market and people were basically "we don't know how they can possibly do this, it's either some unknown technology magic or a scam". So it shouldn't really have looked efficient or practical to anyone, more like a PowerBall lottery.
- HWR_14 5y agoI thought that Theranos fell on the other side (flashy unicorns) from efficient and practical in the author's thesis.
- antonzabirko 5y agoI think those SV unicorns are flashy because they're practical, and efficiency comes with money, generally.
- tfang17 5y agoCompanies that aren't capital intensive (most software companies) don't need VC funding. I'm the cofounder of Eureka Surveys (eurekasurveys.com). We're based out of Utah, bootstrapped, and have been profitable since our inception. Retaining 100% control of the company has been invaluable to our success - not needing to become a unicorn in X years is a competitive advantage.
- giantg2 5y agoNice! Keep that capital with the workers/founders instead of increasing the wealth of greedy VCs.
- tfang17 5y agoAnd to our employees!
- whall6 5y agoLet’s not forget that greedy VCs can’t invest in your business without YOUR approval.
- giantg2 5y agoWhich was the action I am applauding them on - the choice not to use VC.
- mandelbrotwurst 5y agoSure, but if they’re systematically subsidizing the growth path of your competitors, giving them a massive advantage, withholding that approval becomes a tougher call.
- MattGaiser 5y agoIsn't the survey space enormously fragmented though? Is there something that prevents a company from spending a billion dollars and wiping out everyone in the space? Are there just too many niches?
- pm90 5y agoHmm, not sure what the narrative is here. You scout for startups that have managed to succeed on their own and then convince them to accept investments? OK, but… you aren’t really part of their success then, right? What did your investment enable the startups to do that they couldn’t otherwise?
- edoceo 5y agoGrowth and scale!
- arcturus17 5y ago> The most successful global tech bets are efficient and practical startups No? I mean, it depends on your notion of success, maybe? The article does nothing to prove the headline and talks only about an obscure Romanian company. In Spain where I live - traditionally a venture capital backwater - "successful" startups in the last couple of years have been backed by eye-watering amounts of capital compared to the old standards. Zero-interest rates and the resulting phenomenon of "money not knowing where it can drop dead" is catching up outside the US as opportunities become saturated there and investors are lured to emerging venture markets.
- axiosgunnar 5y agoThe article is an ad for the author's VC firm.
- whall6 5y agoJust like most articles on HN are ads for someone’s project.
- sjg007 5y agoThe submarine
- ajklsdhfniuwehf 5y agobut most other ads have some bait. This one starts with a story and then offers nothing. "we tried to sell ice to a eskimo. They told us they don't need ice. So here's why it is very obvious why eskimos won't buy ice. kthxbye"
- wave-creator 5y agoThe challenge is growth. Employees of so called "practical" startups, will compare compensation/wlb options of working at the startup vs fast growing unicorn. Without growth, it is hard to keep great talent (at least that has been my experience). Also, big tech/unicorn can just spin up a new product line to compete in the same market as the startup. In some situations, they might sell for loss to gain market share (e.g. microsoft teams vs slack).