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Call me cynical, but I didn't find this recent wave of startups to be innovative. It was defined by a systemic deployment of playbook tactics, copying what work
by arthurofbabylon 3y ago
Call me cynical, but I didn't find this recent wave of startups to be innovative. It was defined by a systemic deployment of playbook tactics, copying what worked elsewhere. Nothing new, just trying to capture industries/value. Perhaps with the deterioration of venture capital infrastructure we will see more innovation – that is wholly new solutions and paradigms.
I also think it is worth pointing out that historically (not recently) a lot of startups began not in order to make money but to provide real value to humans/society. I like to remind people that it is easier to make money when you first build something that people value than to build something that people value once you've made money.
- jarym 3y agoI think we saw this in some Hollywood studios - they find a movie that worked and treat it as a 'playbook' to just rinse-and-repeat it in all variations. Eventually, audiences just become fatigued and the 'business creatives' lose to some other genuinely creative theme that takes hold. Then they return to exploit it :-(
- warent 3y agoNothing new, just trying to capture industries/value. None of what you said sounds cynical imo, just un-businesslike I suppose. Who cares about shifting paradigms / something brand new? Not every business has to change the world. Most shouldn't. The whole point of a business is to capture value full stop. Not to play around with lofty surreal visions of grandeur.
- JohnFen 3y ago> The whole point of a business is to capture value full stop. That is certainly one school of thought. But businesses that are about something more than just "capturing value "are more likely to actually become valuable. Creating value is almost always better than just capturing value.
- warent 3y agoAh it was a miscommunication then, my bad! I interpreted "capturing value" as meaning "capturing potential value" i.e. some untapped resource, or in other words generating value. So it sounds like we're talking about the same thing then just in different ways.
- JohnFen 3y agoAhh, ok. Yes, when I've heard businesspeople say "capturing value", they've meant it in a manner analogous to extracting a natural resource. The value is already there, and they want to capitalize on it. That's not necessarily a bad thing. But I think it's better to create value where none existed before.
- scarface_74 3y agoWhat wave of startups has had a good consistently profitable idea since Facebook went public? AirBnB and who else?
- paxys 3y agoAre you trying to say there have been no profitable companies created since Facebook?
- bbor 3y agoStartups are a special kind of company I’d say. I’m kinda curious myself… I guess openai, tho technically I doubt they’re profitable. I’m probably just forgetting a ton of obvious ones!
- scarface_74 3y agoOpenAI is only surviving because of free/reduced priced hosting on Azure.
- bbor 3y agoVery true but I think it should be considered successful nonetheless, in a way that the rest of the “”pre-profit”” startups aren’t. I mean, being the final spark for an event the size of the Industrial Revolution is pretty good! But I’m probably just biased.
- scarface_74 3y agoThe metric for success for a for profit company is profit anyone can sell dollar bills for 95 cents. OpenAI is particularly a bad example since they have negative marginal costs. Which means the bigger they get, the more money they lose.
- scarface_74 3y agoTech companies that have gone public since Facebook. Name a few besides AirBnb that are consistently GAAP profitable not by their own made up metrics like Uber
- SkipperCat 3y agoI think a lot of startups were just trying to be 'rent-seekers'. Placing themselves between customer and product/service suppliers and trying to make money by providing a small service. Or sometimes just trying to grab all the inventory and auction it off at higher prices. This may work when interest rates are close to zero, but when they creep up, it becomes easier to make money holding t-bills. And thus, those startups go kaput.
- voisin 3y ago“It’s only when the tide goes out that you find out who was swimming naked” (Buffett) It’s only when there’s an opportunity cost of capital that you find out who actually had a business plan.
- namaria 3y agoI agree with the first half. Having a plan is not really what matters, you can have a bad plan (and arguably, if the competition is for funding, there will be a lot of polished, bad plans). We're finding out who actually has a good idea/insight.
- voisin 3y agoHow about “…find out who had a [sustainable] business plan”
- pydry 3y agoI think that was a function of the VC model of "throw 15 baseballs, hope one gets hit out of the park". Hit it out of the park is usually meant somehow jamming yourself into a pre-existing economic relationship (taxis, food delivery, apartment rentals) and extracting rents. Hopefully high interest rates will cause those "startups" to die a grisly death.
- lotsofpulp 3y ago“Somehow jamming yourself” by doing research and development to create hardware and software that enabled the pre existing relationship. Bringing GPS/mobile broadband/mapping apps/smartphones together to create a better experience is obviously worthy of something.
- kristopolous 3y agoIt's the wrong way of managing risk. Startups are about increasing risk and that means good startups are about managing that risk. There's different strategies for doing it. The current one en vogue attacks the ambition of the ideas
- AstralStorm 3y agoBy managing risks, do you mean "move fast and break things" or "get a way too small team for way too big project" or "put the demo in production" and "skip the documentation, we'll do it later" because first mover advantage?
- seydor 3y agoIt's not always easier. There are too many gatekeepers and rent seekers now who will prevent useful services from becoming profitable
- ryanmercer 3y ago"Hello moneybags, I have this idea for an app, it's super niche and wastes almost as much time as doing the task without the app except we get to charge them for it! Our costs are really cheap because we mostly pay in equity and we're exploiting the generosity of other startups to keep our 3rd party service costs down!" <- feels like 70%~ of ideas.
- USB5 3y ago[dead]
- brtkdotse 3y ago> Call me cynical, but I didn't find this recent wave of startups to be innovative I’ll stick my neck out and say that the vast majority of startups never were innovative, it’s just that money was essentially free for a decade.
- darth_avocado 3y agoBeing around the VC funding ecosystem, I can confidently say you’re not cynical. Some of the most frivolous startups got their funding in the zero interest rate era because no one was doing their due diligence. Sky high unicorn valuations allowed VCs to basically just fund everything. You didn’t have to have much beyond a pitch with made up projections and execution plan to get money, especially if you knew someone in the VC circles. But now that most of those bubbles have burst, VCs are back doing what they were always supposed to do: due diligence. You’d be hard pressed to find funding unless you have a name or have a business that’s already doing great. And on the flip side, startups themselves are noticing this. My buddy’s startup has been approached by a bunch of different VCs encouraging him to pitch for funding and he’s refused. He’s realized that he’s already making money and has a solid business execution. He’s not willing to give up the gains for some extra cash. He’s taking the slow growth route.