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I 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

I 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 ago
  I 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 ago
    How about “…find out who had a [sustainable] business plan”
pydry 3y ago
I 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.
Animats 3y ago
> I 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. That's the whole "drop-shipping" industry.

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 ago
I 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 ago
  How about “…find out who had a [sustainable] business plan”

pydry 3y ago

I 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.

Animats 3y ago

> I 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. That's the whole "drop-shipping" industry.