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Difference is that, from the outside perspective, majority of the activity around crypto are just scams while at least other companies try to solve a real-world

by anon2020dot00 4y ago

Difference is that, from the outside perspective, majority of the activity around crypto are just scams while at least other companies try to solve a real-world problem.

scarface74 4y ago
Let’s take DoorDash for instance. They couldn’t make a profit on food delivery during a world wide pandemic when everyone was ordering in and staying at home. We can say the same about companies that made open source software and we’re going to make money via “services or supper contracts”. That hasn’t worked out well for mLabs or ElasticCo. Most startups are just Ponzi schemes.
- pavlov 4y ago
  Elastic is a Ponzi because they make one of the most useful databases in the world, have hundreds of millions in revenue from satisfied customers, but haven’t completely figured out the monetization? The crypto whataboutist apologies are something else.
  - scarface74 4y ago
    “They are for profit business that hasn’t figured out how to make a profit in a decade” Sounds like a good investment to me.
    - alphabettsy 4y ago
      Maybe or Maybe not, but it took Tesla more than 15 years. Amazon took 10.
      - scarface74 4y ago
        Two differences: 1. Amazon had positive margins early on and was reinvesting money to build infrastructure and real assets. Most startups aren’t. All Bezos had to do to turn a profit at any time is stop building warehouses. 2. Amazon completely pivoted and almost all of its profit comes from AWS. And no Amazon did not use excess capacity to start AWS. It was built from the ground up as a separate service [1]. Every company likes to point to Amazon and say we can do it too. That’s just like a company claiming if they bring their former CEO back after 10 years they can become a three trillion dollar company. And standard disclaimer since you brought up Amazon, I work at AWS. [1] https://readwrite.com/popping-the-amazon-web-services-capacity-myth/ https://readwrite.com/popping-the-amazon-web-services-capaci...
    - pavlov 4y ago
      Elastic is IMHO a weird pick for this argument. Annual revenue over $1 billion growing at >30%. The money comes from corporations whose most valuable data flows through the system created and provided by Elastic. How is that a Ponzi in any sense? It’s not like Elastic makes money from selling its own stock on endless promises. The product exists, works, and generates a billion dollar in sales. The valuation may not be attractive, but it seems clear to me that this can be a profitable and stable business if they decided to stop buying growth.
      - scarface74 4y ago
        I know it’s a thing for startups. Bragging about “revenue” and ignoring lack of “profits” makes no sense. The entire idea of a business is to make more than you spend. Anyone can sell dollars for 95 cents. https://www.elastic.co/about/press/elastic-reports-strong-second-quarter-fiscal-2022-financial-results https://www.elastic.co/about/press/elastic-reports-strong-se... What is Elastic doing to “buy growth”?
        pavlov 4y ago
        The usual things enterprise software companies do: spend on sales, marketing, and R&D on features that would be attractive to new leads. If they stopped doing those things and just served the existing customers who bring in the $1B revenue today, I’m guessing they could be profitable fairly quickly and start paying dividends (or returning capital through stock buybacks). But that kind of stable enterprise software company would be mostly attractive as a takeover target for a larger player or private equity; it’s not the story that investors in public markets want to hear. So Elastic’s valuation would be slashed. This doesn’t make the company a Ponzi though. Seeking growth is a valid strategy and one that’s still sought out by many investors despite the valuation correction from last year.
        scarface74 4y ago
        How is it “stable”? It’s based on open source software and they are trying to make money on hosting and support. Unfortunately, the three large cloud providers (including the one I work for) are taking the open source distribution and hosting it, providing support and integrating it with other services.
    - danaris 4y ago
      I know nothing about Elastic specifically, but... "Ponzi scheme" has a specific meaning. Many cryptocurrency projects appear to fairly closely fit this meaning, while "for-profit business that's making year after year of losses and being propped up by VC funding" does not. Not everything that's a very bad investment—or even outright fraud—is a Ponzi scheme.
      - scarface74 4y ago
        What do you call when everyone who puts money into something are just doing so hoping to sell it to someone else before the party stops? BTW, the party has stopped for non profitable companies.
        danaris 4y ago
        That sounds more like purchasing an asset you expect to appreciate, because you're actually selling it on to someone else. That's not the case in a Ponzi scheme, where you're expecting ongoing returns from your investment (which only come from suckering more people in).
- gunapologist99 4y ago
  > Most startups are just Ponzi schemes. Most startups (in the tech sense) are ventures. They are attempts to generate new cash flows and create something new that didn't previously exist (or a new twist on something that already existed). They are unproven. They are risks. But the vast majority are not Ponzi schemes.
  - scarface74 4y ago
    What exactly do you call it when: 1. Investors pour money in to companies not hoping that they become profitable. But hoping they can get their money back via an IPO while they are still not profitable. 2. The investment bankers dump their allocation at IPO and get to take advantage of the hype. Then sell the stock to retail investors. 3. The retail investors fall for the hype even though the company still isn’t profitable and the stock price drops? That’s the definition of a “Ponzi scheme”. Everyone throws good money after bad hoping that there is a “bigger fool”.
    - Kudos 4y ago
      You're describing an IPO, not a startup.
      - scarface74 4y ago
        What do you think the purpose of startup investing is? Or even to start one?

Difference is that, from the outside perspective, majority of the activity around crypto are just scams while at least other companies try to solve a real-world problem.

scarface74 4y ago

Let’s take DoorDash for instance. They couldn’t make a profit on food delivery during a world wide pandemic when everyone was ordering in and staying at home. We can say the same about companies that made open source software and we’re going to make money via “services or supper contracts”. That hasn’t worked out well for mLabs or ElasticCo. Most startups are just Ponzi schemes.

pavlov 4y ago
Elastic is a Ponzi because they make one of the most useful databases in the world, have hundreds of millions in revenue from satisfied customers, but haven’t completely figured out the monetization? The crypto whataboutist apologies are something else.
- scarface74 4y ago
  “They are for profit business that hasn’t figured out how to make a profit in a decade” Sounds like a good investment to me.
  - alphabettsy 4y ago
    Maybe or Maybe not, but it took Tesla more than 15 years. Amazon took 10.
    - scarface74 4y ago
      Two differences: 1. Amazon had positive margins early on and was reinvesting money to build infrastructure and real assets. Most startups aren’t. All Bezos had to do to turn a profit at any time is stop building warehouses. 2. Amazon completely pivoted and almost all of its profit comes from AWS. And no Amazon did not use excess capacity to start AWS. It was built from the ground up as a separate service [1]. Every company likes to point to Amazon and say we can do it too. That’s just like a company claiming if they bring their former CEO back after 10 years they can become a three trillion dollar company. And standard disclaimer since you brought up Amazon, I work at AWS. [1] https://readwrite.com/popping-the-amazon-web-services-capacity-myth/ https://readwrite.com/popping-the-amazon-web-services-capaci...
  - pavlov 4y ago
    Elastic is IMHO a weird pick for this argument. Annual revenue over $1 billion growing at >30%. The money comes from corporations whose most valuable data flows through the system created and provided by Elastic. How is that a Ponzi in any sense? It’s not like Elastic makes money from selling its own stock on endless promises. The product exists, works, and generates a billion dollar in sales. The valuation may not be attractive, but it seems clear to me that this can be a profitable and stable business if they decided to stop buying growth.
    - scarface74 4y ago
      I know it’s a thing for startups. Bragging about “revenue” and ignoring lack of “profits” makes no sense. The entire idea of a business is to make more than you spend. Anyone can sell dollars for 95 cents. https://www.elastic.co/about/press/elastic-reports-strong-second-quarter-fiscal-2022-financial-results https://www.elastic.co/about/press/elastic-reports-strong-se... What is Elastic doing to “buy growth”?
      - pavlov 4y ago
        The usual things enterprise software companies do: spend on sales, marketing, and R&D on features that would be attractive to new leads. If they stopped doing those things and just served the existing customers who bring in the $1B revenue today, I’m guessing they could be profitable fairly quickly and start paying dividends (or returning capital through stock buybacks). But that kind of stable enterprise software company would be mostly attractive as a takeover target for a larger player or private equity; it’s not the story that investors in public markets want to hear. So Elastic’s valuation would be slashed. This doesn’t make the company a Ponzi though. Seeking growth is a valid strategy and one that’s still sought out by many investors despite the valuation correction from last year.
        scarface74 4y ago
        How is it “stable”? It’s based on open source software and they are trying to make money on hosting and support. Unfortunately, the three large cloud providers (including the one I work for) are taking the open source distribution and hosting it, providing support and integrating it with other services.
  - danaris 4y ago
    I know nothing about Elastic specifically, but... "Ponzi scheme" has a specific meaning. Many cryptocurrency projects appear to fairly closely fit this meaning, while "for-profit business that's making year after year of losses and being propped up by VC funding" does not. Not everything that's a very bad investment—or even outright fraud—is a Ponzi scheme.
    - scarface74 4y ago
      What do you call when everyone who puts money into something are just doing so hoping to sell it to someone else before the party stops? BTW, the party has stopped for non profitable companies.
      - danaris 4y ago
        That sounds more like purchasing an asset you expect to appreciate, because you're actually selling it on to someone else. That's not the case in a Ponzi scheme, where you're expecting ongoing returns from your investment (which only come from suckering more people in).
gunapologist99 4y ago
> Most startups are just Ponzi schemes. Most startups (in the tech sense) are ventures. They are attempts to generate new cash flows and create something new that didn't previously exist (or a new twist on something that already existed). They are unproven. They are risks. But the vast majority are not Ponzi schemes.
- scarface74 4y ago
  What exactly do you call it when: 1. Investors pour money in to companies not hoping that they become profitable. But hoping they can get their money back via an IPO while they are still not profitable. 2. The investment bankers dump their allocation at IPO and get to take advantage of the hype. Then sell the stock to retail investors. 3. The retail investors fall for the hype even though the company still isn’t profitable and the stock price drops? That’s the definition of a “Ponzi scheme”. Everyone throws good money after bad hoping that there is a “bigger fool”.
  - Kudos 4y ago
    You're describing an IPO, not a startup.
    - scarface74 4y ago
      What do you think the purpose of startup investing is? Or even to start one?