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The question is: Does it have to be sexy to get this funding? Why can't it be more sexy to run a sustainable small business? - I think they could run reddit pr

The question is: Does it have to be sexy to get this funding? Why can't it be more sexy to run a sustainable small business? - I think they could run reddit profitable with less staff, which focuses on the core functionality instead of trying to grow into new markets and segments. Sure, there is a risk that some new platform disrupts that segment they are serving, but even then there is enough of a longtail to prepare an alternative and hardly those bets on expanding reach works. Let's look at Twitter as a sample case: the features which were successful, were the ones where they followed what users were doing and supported that (adding @-mentions, adding retweets, adding quote retweets, some degree of threading support, etc. all came after users used those things) most things where they added stuff their PMs invented is mostly forgotten already, but building all that cost resources.

kemayo 3y ago
That's why the venture capital industry exists, though -- to get reasonably-quick returns on their investment, at a higher rate than just putting their money into an index fund. If you're not going to potentially give them back 10x their investment in one big lump sum, you're not worth it to them. It's also why VC deals are generally structured as stock purchases, rather than loans that expect repayment. They're genuinely not in it for slowly raking in small returns over the next 50 years. (And then, of course, they spread their investments out so that the one big success that gives them 1000x their money back pays for all the companies that flamed out chasing inadvisable growth.)
ilyt 3y ago
> Why can't it be more sexy to run a sustainable small business? - I think they could run reddit profitable with less staff, which focuses on the core functionality instead of trying to grow into new markets and segments. Investor returns, obviously. The whole funding model is throw money, make it big, monetize, sell out. I do think it would maybe be possible to make company like Reddit "just" be profitable and keep on chugging but that's not what the investors throwing millions at it want. The funding model is antithesis to "just a sustainable company in their niche"
- johannes1234321 3y ago
  Yes, but how can we change society to make the small shop more sexy? I'm all for the founders having a good life and having fun, but they shouldn't have to try hyperscaling.
  - ilyt 3y ago
    What fucking society ? Society has nothing to do with that. Businesses like that exist just fine. Problems like that are entirely the creation of venture capital and stock market. The wider society have very little effect on that. And partially allows them to outcompete "healthily growing one" by allowing companies to run on negative income for years, even decades. Investor mentality is what spawns that. The ability for people not caring about the company or the niche it is in to force the direction or buy out the competition. And I don't think that can easily go away any time soon, and it is very double-edged sword as obviously some good had come from "someone with good idea getting money from investors to realize it"
JohnFen 3y ago
> Why can't it be more sexy to run a sustainable small business? What's sexy or not is determined more by the one doing the looking than the one being looked at. I find sustainable, non-exploitive small businesses much sexier, but I doubt most VCs do.
- johannes1234321 3y ago
  Yeah, VCs don't, that is obvious. But why are founders so willing to give up control for a small chance on a payout ... that's where I want to tackle that. But I guess it's the same reason people participate in a lottery - the small chance of winning big is a bigger thrill than a boring investment.
  - JohnFen 3y ago
    I think it goes to why a person is starting a business to begin with. Lots of people do it as you say, as a kind of lottery ticket. Their goal is purely monetary, and maximizing the return is the only thing that is important. Others start businesses because they believe in the product or service and the value it can bring to people. Making money is important because it allows that to happen, but isn't the primary goal. Personally, I'm not going to say one sort is better than the other in some absolute sense, but my personality falls more into the latter camp. I have no interest in making money just to make money. I am interested in doing cool things, and need money to do them.

kemayo 3y ago

That's why the venture capital industry exists, though -- to get reasonably-quick returns on their investment, at a higher rate than just putting their money into an index fund. If you're not going to potentially give them back 10x their investment in one big lump sum, you're not worth it to them. It's also why VC deals are generally structured as stock purchases, rather than loans that expect repayment. They're genuinely not in it for slowly raking in small returns over the next 50 years. (And then, of course, they spread their investments out so that the one big success that gives them 1000x their money back pays for all the companies that flamed out chasing inadvisable growth.)

ilyt 3y ago

> Why can't it be more sexy to run a sustainable small business? - I think they could run reddit profitable with less staff, which focuses on the core functionality instead of trying to grow into new markets and segments. Investor returns, obviously. The whole funding model is throw money, make it big, monetize, sell out. I do think it would maybe be possible to make company like Reddit "just" be profitable and keep on chugging but that's not what the investors throwing millions at it want. The funding model is antithesis to "just a sustainable company in their niche"

johannes1234321 3y ago
Yes, but how can we change society to make the small shop more sexy? I'm all for the founders having a good life and having fun, but they shouldn't have to try hyperscaling.
- ilyt 3y ago
  What fucking society ? Society has nothing to do with that. Businesses like that exist just fine. Problems like that are entirely the creation of venture capital and stock market. The wider society have very little effect on that. And partially allows them to outcompete "healthily growing one" by allowing companies to run on negative income for years, even decades. Investor mentality is what spawns that. The ability for people not caring about the company or the niche it is in to force the direction or buy out the competition. And I don't think that can easily go away any time soon, and it is very double-edged sword as obviously some good had come from "someone with good idea getting money from investors to realize it"

JohnFen 3y ago

> Why can't it be more sexy to run a sustainable small business? What's sexy or not is determined more by the one doing the looking than the one being looked at. I find sustainable, non-exploitive small businesses much sexier, but I doubt most VCs do.

johannes1234321 3y ago
Yeah, VCs don't, that is obvious. But why are founders so willing to give up control for a small chance on a payout ... that's where I want to tackle that. But I guess it's the same reason people participate in a lottery - the small chance of winning big is a bigger thrill than a boring investment.
- JohnFen 3y ago
  I think it goes to why a person is starting a business to begin with. Lots of people do it as you say, as a kind of lottery ticket. Their goal is purely monetary, and maximizing the return is the only thing that is important. Others start businesses because they believe in the product or service and the value it can bring to people. Making money is important because it allows that to happen, but isn't the primary goal. Personally, I'm not going to say one sort is better than the other in some absolute sense, but my personality falls more into the latter camp. I have no interest in making money just to make money. I am interested in doing cool things, and need money to do them.