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Another a16z investment that's a textbook case of a Ponzi scheme, with no chance of actually making money beyond the redistribution of funds from recent investo

Another a16z investment that's a textbook case of a Ponzi scheme, with no chance of actually making money beyond the redistribution of funds from recent investors to earlier ones. Meanwhile the company behind Helium gets rich from nothing, while pretending that there is an innovation. LoRa is marginal. It won't ever take over the world, the need for it barely exist. It is a low-power IoT solution with data transfer rates up to 37.5 kbps that's optimal for challenging environments, where 5G is too expensive to deploy. Not only it's a niche market, but the companies with remote facilities that need it in the first place tend to deploy it themselves. It's inexpensive, and easy to manage. Helium's other play is private 5G, citing the need for supporting underserved communities. They are underserved for a reason. 5G is expensive and complicated, it's simply not worth supporting a thousand people per deployment. Private 5G is more suitable for IoT use cases, only there you face companies like Amazon offering managed private 5G services with a low up-front cost. The reality of these markets is deploying private equipment when and where the public network is not reliable or predictable enough. Helium's model of creating a larger public network is both optimistic, and not what the market is about.

kotaKat 4y ago
And the private "5G" isn't even "5G". It's LTE, with commodity small cells that are only usable in America under the FCC CBRS definitions. On top of that, the entire Helium LTE core network is still run under a centralized operating company because of how the LTE core is designed.
gruez 4y ago
>Another a16z investment that's a textbook case of a Ponzi scheme, with no chance of actually making money beyond the redistribution of funds from recent investors to earlier ones. That's not really the "textbook case" of a ponzi scheme. The key feature that you missed is fraud, ie. the company/fund saying that the money is being invested but in reality it's being used to pay out earlier investors. If you subtract that, there's no difference between a ponzi scheme and a promising startup that failed to pan out (in both cases they involve "the redistribution of funds from recent investors to earlier ones").
- Comevius 4y ago
  A legitimate business might have a bad product, or a market that doesn't exist, or even unrealistic promises, but it wouldn't try to make an economy out of those promises, an economy no less that's only viable as long as there is a steady supply of greater fools, while convincing participants that it's not gambling. Helium has a few thousand lemonade stands and keeps rambling about how lemonade will be the only drink everyone will consume, so everyone should buy their lemonade stand coin, or join with their own stand. The people will be all over it. Back in reality however lemonade is cheap and available everywhere, but a few places, where people make do with their own. Your lemonade better reverses aging, because no matter how good your marketing is, your lemonade is unlikely to be it, even when there is a lemonade craze. And yet Helium is exactly where it wants to be. It's another cryptocurrency with a slightly better alibi, destined to be pumped and dumped all the same.
- cuteboy19 4y ago
  Agreed. It's more like an MLM. There is a nominal revenue generation but most of the money comes from getting more and more people to sign up for your scheme. But the end result is the same. It is destined for collapse
erulabs 4y ago
Meanwhile a16z regularly rejects profitable businesses because they "don't have a path to 1B". Well, congrats, Helium is worth $1.2B and generates $6,500 a month in revenues (1). I am not anti-crypto - but I am becoming increasingly anti-SV-VC. This is the best idea two hundred million dollars can generate? 1: https://mashable.com/article/helium-lime-web3-crypto https://mashable.com/article/helium-lime-web3-crypto
- rvz 4y ago
  I am highly skeptical of SV VCs. The newest over-valued startups like Fast (dead), Clubhouse (dying) and others have produced little revenues for their staff and they cannot justify their 97% inflated valuations. No matter the amount of billions they have raised, I still set in stone the same evergreen statement that 90% of startups in general fail. The exact same statement is absolutely true with crypto companies and projects just like Helium, especially with VC money which despite their inflated $1B valuation have generated $6K a month (in revenue), which is beyond pathetic. When all the cheap money goes away, not many of these useless tech startups or crypto companies will survive this crash.
  - Comevius 4y ago
    The allure for VCs is that if Helium makes it and becomes the next big thing then it's worth a trillion dollars, and if not it's still a cryptocurrency that can be pumped or dumped. Meanwhile there is an IoT craze, so there is a substantial amount of FOMO. Welcome to Silicon Valley.
  - landemva 4y ago
    Hardly a 'crypto company' and instead they use crypto for commission payments and an easy way for insiders to pump and dump. They could use Paypal or Venmo for commission payments, though insiders couldn't fleece people with the scam token.
    - Canada 4y ago
      It's not that they used crypto per se. They also could have used bitcoin, eth, or usdt.

kotaKat 4y ago

And the private "5G" isn't even "5G". It's LTE, with commodity small cells that are only usable in America under the FCC CBRS definitions. On top of that, the entire Helium LTE core network is still run under a centralized operating company because of how the LTE core is designed.

gruez 4y ago

>Another a16z investment that's a textbook case of a Ponzi scheme, with no chance of actually making money beyond the redistribution of funds from recent investors to earlier ones. That's not really the "textbook case" of a ponzi scheme. The key feature that you missed is fraud, ie. the company/fund saying that the money is being invested but in reality it's being used to pay out earlier investors. If you subtract that, there's no difference between a ponzi scheme and a promising startup that failed to pan out (in both cases they involve "the redistribution of funds from recent investors to earlier ones").

Comevius 4y ago
A legitimate business might have a bad product, or a market that doesn't exist, or even unrealistic promises, but it wouldn't try to make an economy out of those promises, an economy no less that's only viable as long as there is a steady supply of greater fools, while convincing participants that it's not gambling. Helium has a few thousand lemonade stands and keeps rambling about how lemonade will be the only drink everyone will consume, so everyone should buy their lemonade stand coin, or join with their own stand. The people will be all over it. Back in reality however lemonade is cheap and available everywhere, but a few places, where people make do with their own. Your lemonade better reverses aging, because no matter how good your marketing is, your lemonade is unlikely to be it, even when there is a lemonade craze. And yet Helium is exactly where it wants to be. It's another cryptocurrency with a slightly better alibi, destined to be pumped and dumped all the same.
cuteboy19 4y ago
Agreed. It's more like an MLM. There is a nominal revenue generation but most of the money comes from getting more and more people to sign up for your scheme. But the end result is the same. It is destined for collapse

erulabs 4y ago

Meanwhile a16z regularly rejects profitable businesses because they "don't have a path to 1B". Well, congrats, Helium is worth $1.2B and generates $6,500 a month in revenues (1). I am not anti-crypto - but I am becoming increasingly anti-SV-VC. This is the best idea two hundred million dollars can generate? 1: https://mashable.com/article/helium-lime-web3-crypto https://mashable.com/article/helium-lime-web3-crypto

rvz 4y ago
I am highly skeptical of SV VCs. The newest over-valued startups like Fast (dead), Clubhouse (dying) and others have produced little revenues for their staff and they cannot justify their 97% inflated valuations. No matter the amount of billions they have raised, I still set in stone the same evergreen statement that 90% of startups in general fail. The exact same statement is absolutely true with crypto companies and projects just like Helium, especially with VC money which despite their inflated $1B valuation have generated $6K a month (in revenue), which is beyond pathetic. When all the cheap money goes away, not many of these useless tech startups or crypto companies will survive this crash.
- Comevius 4y ago
  The allure for VCs is that if Helium makes it and becomes the next big thing then it's worth a trillion dollars, and if not it's still a cryptocurrency that can be pumped or dumped. Meanwhile there is an IoT craze, so there is a substantial amount of FOMO. Welcome to Silicon Valley.
- landemva 4y ago
  Hardly a 'crypto company' and instead they use crypto for commission payments and an easy way for insiders to pump and dump. They could use Paypal or Venmo for commission payments, though insiders couldn't fleece people with the scam token.
  - Canada 4y ago
    It's not that they used crypto per se. They also could have used bitcoin, eth, or usdt.