4 ms·

It's 10-100x above my goals/hopes/dreams but i still found the kernel of the argument interesting/applicable despite the difference in scale: "From an entrepre

by ido 3y ago

It's 10-100x above my goals/hopes/dreams but i still found the kernel of the argument interesting/applicable despite the difference in scale: "From an entrepreneur’s standpoint, it’s easy to become engrossed in the thrill of securing funding, expanding the team, and growing the business. Yet, more growth doesn’t always equal a better business. Some markets just aren’t that big. Some markets take longer to develop. Furthermore, personal priorities evolve, and one’s perspective on opportunities can shift over time. And, every round of funding shifts the goal posts further out. "

dangus 3y ago
I can think of so many examples of unwise founders doing the exact opposite. They don’t recognize that their business is still ultimately a niche with a limited addressable market. I think WeWork is a great example. That market did need some freshening up and maybe even some full blown disruption, as the incumbents weren’t delivering a modernized co-working experience attractive to young professionals. But the founder took a great idea way too far, mistaking a straightforward office subleasing business for a cultural movement that could change the way people live and work en-masse. It’s that founders’ hubris of “I invented the next iPhone and the world will never be the same again.”
- leoqa 3y ago
  In part, I don’t think this is people naively pursuing the moon shot. Rather the incentives and pressures are there to go for the cultural shift. Your investors are pushing you to do it, you can have a lifestyle business that makes you a comfortable millionaire or become a billionaire. People push for the billonaire option because it’s plausible if they have a revenue machine growing 2x every year and investors behind them. It’s likely their one shot at it.
- ProjectArcturis 3y ago
  He also had Masayoshi Son giving him billions and telling him to build it bigger and crazier. And Adam Neumann managed to walk away with dynastic wealth, so... I wouldn't call him unwise.
  - otterley 3y ago
    I don't think we should equate wisdom with the ability to accumulate a massive amount of personal wealth -- especially when there's a lot of controversy over how it happened. Besides, when it comes to getting rich, luck often plays a huge part, as it did here.
    - zaphirplane 3y ago
      I think he was charismatic, had a vision, marketed very well I suspect he knew it was near pyramid scheme when their valuation had 9 zeros
- ecshafer 3y ago
  I think WeWork was a great idea poorly executed. They took a huge amount of money, treated it like s tech start up, instead of having a frugal corporate office managing their various locations. But the great irony, given that WeWork might collapse at any moment (or already has?) is that it would probably be a great idea to start that right now or in the next year or so, as CBRE prices collapse and people increasingly look for cheap temporary and part time offices
  - toddmorey 3y ago
    Yes, exactly. It was a real estate company saying, "No, we're a tech company!" while contracting into an insane amount of real estate. Nothing about their technology changed the fundamental economics of corporate office space but they were building something that needed to do exactly that to survive.
  - yumraj 3y ago
    > I think WeWork was a great idea poorly executed. I would argue that it was a poor idea that was greatly executed. Everything was great for a while due to execution. But, when the realities or should I say limitations of the poor idea caught up, everything came crashing down.
    - ecshafer 3y ago
      IWG (who owns Regus) is a 45 year old company with almost 3 Billion British pounds of revenue a year. Its evidently possible to have a large successful business doing this. Shaking it up with more flexibility and nicer offices is a good idea overall I think.
      - deleted 3y ago
        [deleted]
    - paxys 3y ago
      Throwing an unlimited amount of investor money at a problem without caring about profits isn't exactly great execution.
- pjc50 3y ago
  WeWork was a huge success for its founder: https://www.theguardian.com/business/2021/may/27/wework-founder-adam-neumann-enormous-exit-package https://www.theguardian.com/business/2021/may/27/wework-foun... If Softbank are throwing money around, the rational thing is to build as big a net as possible to catch it. If that happens to involve free beer in offices then so be it.
toddmorey 3y ago
One thing I've definitely learned is it's easier than you imagine to scale a good business into a bad business. To over-invest in something that can't or shouldn't scale as quickly as the new investment pressures now dictate. In business there's the subtle art of keeping expectations and results in healthy alignment. I think there's more pressure to avoid having too little investment than too much, but both can kill you. And it's SO brutal on morale when doubling revenue feels like a failure because 5x was the wildly-unrealistic demand of your pretend valuation.
- benjaminwootton 3y ago
  This is true for a significant percentage of VC backed businesses. Many could be great small businesses, but they get inflated beyond what is practical by investors seeking a return. The founders $5m turnover business success is then relatively a failure at $30m and they are unceremoniously booted out.
  - debacle 3y ago
    Twitter and reddit would be phenomenal companies if they never took VC funding.
    - ProjectArcturis 3y ago
      They would have been outscaled by other microblogging and link-sharing sites who did take VC money.
      - anonzzzies 3y ago
        For that reason I would never go b2c; in a bootstrapped b2b, if you make 10m-50m/y and some unicorn comes, you can still exist for a long time and this unicorn can buy you even. In an ad based b2c, there is no way.
        ido 3y ago
        There are a lot of b2c business models aside from ads (e.g. actually selling/charging money from customers)

by ido 3y ago

dangus 3y ago

I can think of so many examples of unwise founders doing the exact opposite. They don’t recognize that their business is still ultimately a niche with a limited addressable market. I think WeWork is a great example. That market did need some freshening up and maybe even some full blown disruption, as the incumbents weren’t delivering a modernized co-working experience attractive to young professionals. But the founder took a great idea way too far, mistaking a straightforward office subleasing business for a cultural movement that could change the way people live and work en-masse. It’s that founders’ hubris of “I invented the next iPhone and the world will never be the same again.”

leoqa 3y ago
In part, I don’t think this is people naively pursuing the moon shot. Rather the incentives and pressures are there to go for the cultural shift. Your investors are pushing you to do it, you can have a lifestyle business that makes you a comfortable millionaire or become a billionaire. People push for the billonaire option because it’s plausible if they have a revenue machine growing 2x every year and investors behind them. It’s likely their one shot at it.
ProjectArcturis 3y ago
He also had Masayoshi Son giving him billions and telling him to build it bigger and crazier. And Adam Neumann managed to walk away with dynastic wealth, so... I wouldn't call him unwise.
- otterley 3y ago
  I don't think we should equate wisdom with the ability to accumulate a massive amount of personal wealth -- especially when there's a lot of controversy over how it happened. Besides, when it comes to getting rich, luck often plays a huge part, as it did here.
  - zaphirplane 3y ago
    I think he was charismatic, had a vision, marketed very well I suspect he knew it was near pyramid scheme when their valuation had 9 zeros
ecshafer 3y ago
I think WeWork was a great idea poorly executed. They took a huge amount of money, treated it like s tech start up, instead of having a frugal corporate office managing their various locations. But the great irony, given that WeWork might collapse at any moment (or already has?) is that it would probably be a great idea to start that right now or in the next year or so, as CBRE prices collapse and people increasingly look for cheap temporary and part time offices
- toddmorey 3y ago
  Yes, exactly. It was a real estate company saying, "No, we're a tech company!" while contracting into an insane amount of real estate. Nothing about their technology changed the fundamental economics of corporate office space but they were building something that needed to do exactly that to survive.
- yumraj 3y ago
  > I think WeWork was a great idea poorly executed. I would argue that it was a poor idea that was greatly executed. Everything was great for a while due to execution. But, when the realities or should I say limitations of the poor idea caught up, everything came crashing down.
  - ecshafer 3y ago
    IWG (who owns Regus) is a 45 year old company with almost 3 Billion British pounds of revenue a year. Its evidently possible to have a large successful business doing this. Shaking it up with more flexibility and nicer offices is a good idea overall I think.
    - deleted 3y ago
      [deleted]
  - paxys 3y ago
    Throwing an unlimited amount of investor money at a problem without caring about profits isn't exactly great execution.
pjc50 3y ago
WeWork was a huge success for its founder: https://www.theguardian.com/business/2021/may/27/wework-founder-adam-neumann-enormous-exit-package https://www.theguardian.com/business/2021/may/27/wework-foun... If Softbank are throwing money around, the rational thing is to build as big a net as possible to catch it. If that happens to involve free beer in offices then so be it.

toddmorey 3y ago

One thing I've definitely learned is it's easier than you imagine to scale a good business into a bad business. To over-invest in something that can't or shouldn't scale as quickly as the new investment pressures now dictate. In business there's the subtle art of keeping expectations and results in healthy alignment. I think there's more pressure to avoid having too little investment than too much, but both can kill you. And it's SO brutal on morale when doubling revenue feels like a failure because 5x was the wildly-unrealistic demand of your pretend valuation.

benjaminwootton 3y ago
This is true for a significant percentage of VC backed businesses. Many could be great small businesses, but they get inflated beyond what is practical by investors seeking a return. The founders $5m turnover business success is then relatively a failure at $30m and they are unceremoniously booted out.
- debacle 3y ago
  Twitter and reddit would be phenomenal companies if they never took VC funding.
  - ProjectArcturis 3y ago
    They would have been outscaled by other microblogging and link-sharing sites who did take VC money.
    - anonzzzies 3y ago
      For that reason I would never go b2c; in a bootstrapped b2b, if you make 10m-50m/y and some unicorn comes, you can still exist for a long time and this unicorn can buy you even. In an ad based b2c, there is no way.
      - ido 3y ago
        There are a lot of b2c business models aside from ads (e.g. actually selling/charging money from customers)