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The idea is that the product itself will be judged by the market. A business plan is something that you present to investors (and the jury) to show them how you
by blackbear_ 3y ago
The idea is that the product itself will be judged by the market. A business plan is something that you present to investors (and the jury) to show them how you are going to reach that market in the first place.
Investors only want to make a return on their investment, and thus do not really care what the product is, as long as they are convinced that there is a market of appropriate size and that you can reach that market.
- slowmovintarget 3y ago> Investors only want to make a return on their investment, and thus do not really care what the product is... Here, in a nutshell, is the entire problem of misaligned incentives in modern business. The product becomes the the shares of stock. Larian's success with Baldur's Gate 3 is because they obsessed about the product and their customer. Apple's success is because Steve Jobs obsessed about the product and the customer (despite being publicly traded) and Apple continues to do so. So many other companies are all about maximizing short-term extraction of shareholder value. They're not about the product or the customer anymore. This breaks the market mechanism, so few arguments of how the market will generate winners or fix the problem still make sense. The market is Wall Street, the stock market, not the market where customers buy goods. How do we incentivize good product and customer service in a VC / activist investor / private equity world?
- pirate787 3y agoIt's funny I've been hearing this trope for decades, and at the same time hearing nonstop complaints about the "insane" forward looking valuations for Tesla, Nvidia, etc. From a P/E standpoint, Wall Street is less about "short-term extraction" than at any time in history.
- ethanbond 3y agoI don’t think the high P/E is from a longer time horizon but from expectation of a steeper curve.
- jeezfrk 3y agoPut in required delays and taxes for purchase of securities as a slowdown.
- eru 3y agoInvestors come in all kinds of shapes and sizes. Yes, if you can provide a good return on investment, you can attract many investors. But eg ESG investment is a thing. And so is Elon Musk fans essentially buying some entertainment with their shares. (The same might apply to Game Stop and cryptocurrencies.)