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It's all maths and some basic rules. And you don't have to be an economist or investment banker to do the maths for yourself. Any (technical) founder that can'

It's all maths and some basic rules. And you don't have to be an economist or investment banker to do the maths for yourself. Any (technical) founder that can't do the maths, or any (business) founder that doesn't "have a feeling" about this things deserves to be victim of investors. The main issue here is that founders are often victims of unfounded optimism and trust in their enterprise, so they think only about best-case scenario ("I don't care about ratched, I'll make those 2M$ next year for sure"), and are thus an easy prey. All being said, the article is still valuable both as a remainder of what to look at, and as a good promotion of authors book on the same subject.

danssig 15y ago
>deserves to be victim of investors. No, no one "deserves" to be taken advantage of. Where does this ridiculous "blame the victims" nonsense come from?
- markokocic 15y ago
  Nobody is "blaming the victims". They are founders, CTOs, CEOs that are leading the business and should know at least basic rules of what they are doing. There is nothing illegal in investors trying to do their own business, and nobody is "taking advantage of" our poor startup CEO/owner/founder. If you want successful business it is not enough to be "good at creating products" and completely ignorant on basic business issues. If I rephrase this instead "If business is led by people that can't comprehend basic rules of economy or do simple maths, that company can't possibly bring anything of value either to their customers or other stakeholders, and thus deserves to fail" would you still disagree. And it is good that unsuccessful business fails.
  - Hitchhiker 15y ago
    >>And it is good that unsuccessful business fails. I think they did not hear you ( or other similarly wise folk ) .. exceptions available at http://en.wikipedia.org/wiki/Too_big_to_fail http://en.wikipedia.org/wiki/Too_big_to_fail
  - danssig 15y ago
    >Nobody is "blaming the victims". They are founders, Founders can't be victims? I'll remember that if I ever feel the need to mug somebody. >should know at least basic rules of what they are doing There are no static "basic rules". What you "should know" is constantly changing. The more of this kind of junk you force would-be founders to know the more people are taking out of the pool of potential founders based on things that probably aren't relevant to what their startup would have been about. >If you want successful business it is not enough to be "good at creating products" and completely ignorant on basic business issues. This isn't being completely ignorant of basic business issues, this is being ignorant of the current traps that people who are supposed to be enablers will set for you. >If I rephrase this instead ... would you still disagree. Possibly. First of all, this isn't the case of "do simple maths", it's the case of learning ins and outs of something not related to your passion, namely how all kinds of stock types behave in various potential scenarios. And further, I don't want to exclude the wacky genius who understands something (say, search) vastly better than anyone else but just doesn't care about learning things like this. >And it is good that unsuccessful business fails. On its own merits, yes. Businesses failing based on things that have nothing to do with the actual business is not good. It's inefficient and may send the wrong signal to others, namely that X isn't a valid market when the reason for the failure actually had nothing to do with that.
awflick 15y ago
Its not just math but also legal definitions/terms etc that can create traps. I disagree with you that founders who are not across this deserve to be victims. It is impossible for founders to be across everything and intricate law and finance math is likely to be one of these area's. While a lawyer/business broker etc should be consulted in all of these cases sometimes even your lawyer can let you down and you're none the wiser. At the end of the day I think that investors who deal in tricks and traps are on the same level of scumbag as the dodgy bankers/Enrons/Madoffs of this world.

danssig 15y ago

>deserves to be victim of investors. No, no one "deserves" to be taken advantage of. Where does this ridiculous "blame the victims" nonsense come from?

markokocic 15y ago
Nobody is "blaming the victims". They are founders, CTOs, CEOs that are leading the business and should know at least basic rules of what they are doing. There is nothing illegal in investors trying to do their own business, and nobody is "taking advantage of" our poor startup CEO/owner/founder. If you want successful business it is not enough to be "good at creating products" and completely ignorant on basic business issues. If I rephrase this instead "If business is led by people that can't comprehend basic rules of economy or do simple maths, that company can't possibly bring anything of value either to their customers or other stakeholders, and thus deserves to fail" would you still disagree. And it is good that unsuccessful business fails.
- Hitchhiker 15y ago
  >>And it is good that unsuccessful business fails. I think they did not hear you ( or other similarly wise folk ) .. exceptions available at http://en.wikipedia.org/wiki/Too_big_to_fail http://en.wikipedia.org/wiki/Too_big_to_fail
- danssig 15y ago
  >Nobody is "blaming the victims". They are founders, Founders can't be victims? I'll remember that if I ever feel the need to mug somebody. >should know at least basic rules of what they are doing There are no static "basic rules". What you "should know" is constantly changing. The more of this kind of junk you force would-be founders to know the more people are taking out of the pool of potential founders based on things that probably aren't relevant to what their startup would have been about. >If you want successful business it is not enough to be "good at creating products" and completely ignorant on basic business issues. This isn't being completely ignorant of basic business issues, this is being ignorant of the current traps that people who are supposed to be enablers will set for you. >If I rephrase this instead ... would you still disagree. Possibly. First of all, this isn't the case of "do simple maths", it's the case of learning ins and outs of something not related to your passion, namely how all kinds of stock types behave in various potential scenarios. And further, I don't want to exclude the wacky genius who understands something (say, search) vastly better than anyone else but just doesn't care about learning things like this. >And it is good that unsuccessful business fails. On its own merits, yes. Businesses failing based on things that have nothing to do with the actual business is not good. It's inefficient and may send the wrong signal to others, namely that X isn't a valid market when the reason for the failure actually had nothing to do with that.

awflick 15y ago

Its not just math but also legal definitions/terms etc that can create traps. I disagree with you that founders who are not across this deserve to be victims. It is impossible for founders to be across everything and intricate law and finance math is likely to be one of these area's. While a lawyer/business broker etc should be consulted in all of these cases sometimes even your lawyer can let you down and you're none the wiser. At the end of the day I think that investors who deal in tricks and traps are on the same level of scumbag as the dodgy bankers/Enrons/Madoffs of this world.