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That's the problem with tech startup culture. $10 million businesses get pumped and stretched to be $1 billion speculations and they collapse so now you don't h

That's the problem with tech startup culture. $10 million businesses get pumped and stretched to be $1 billion speculations and they collapse so now you don't have useful $10 million service any more. It's like demanding every car on the road must be modified to be a souped up sports car that goes 300 mph and you're totally willing to destroy the vehicle in the process. Many years from now people will look back at this and think "these people were insane."

dmix 2y ago
> Many years from now people will look back at this and think "these people were insane." Well to be fair, if they were all insane then these VC's would have gone out of business long ago. Every year we get one of these big VC bomb news cycles, with this same narrative in the comments that the valuation system is broken and VCs are out of touch, but they still seem to be getting sufficient ROI to be successful as the only niche capital market available to startups. It's still possible these persistent edge cases where VCs all jump onto the latest social trends are far higher risk than they properly account for among their executive staff, but that doesn't mean the whole idea is flawed... it's also possible they have accounted for this risk and think they can eat occasional social-trend play hoping for a Facebook. idk I'm not a VC.
- kristopolous 2y ago
  The private profit model works because there are unicorns. The problem is you really can't make a horse into a unicorn and doing so comes at the cost of something called "the public good", something that investment capital used to feel an obligation to until about 30 years ago, before everything got Jack Welchified. It's hyper growth and catastrophic collapse, as a business practice. Investors are in for the growth and the costumers and employees are holding the bag during the collapse. This practice has come to pollute conventional sectors as well. Look at the stock ticker $BIG, belonging to the retailer Big Lots or RiteAid. They'll come in, ride it on the way up through unsustainable debt based growth to make line go up, liquidate their profits and leave it to collapse and burn
- OccamsMirror 2y ago
  VCs will make their money even from companies that eventually flop. The whole is a great example of Greater Fool Theory: https://investing1012dot0.substack.com/p/institutionalized-belief-in-the-greater https://investing1012dot0.substack.com/p/institutionalized-b...
  - dmix 2y ago
    yeah exactly, this is a way to account for this dumb losses because even when it bombs it's still credible enough to have another dummy

dmix 2y ago

> Many years from now people will look back at this and think "these people were insane." Well to be fair, if they were all insane then these VC's would have gone out of business long ago. Every year we get one of these big VC bomb news cycles, with this same narrative in the comments that the valuation system is broken and VCs are out of touch, but they still seem to be getting sufficient ROI to be successful as the only niche capital market available to startups. It's still possible these persistent edge cases where VCs all jump onto the latest social trends are far higher risk than they properly account for among their executive staff, but that doesn't mean the whole idea is flawed... it's also possible they have accounted for this risk and think they can eat occasional social-trend play hoping for a Facebook. idk I'm not a VC.

kristopolous 2y ago
The private profit model works because there are unicorns. The problem is you really can't make a horse into a unicorn and doing so comes at the cost of something called "the public good", something that investment capital used to feel an obligation to until about 30 years ago, before everything got Jack Welchified. It's hyper growth and catastrophic collapse, as a business practice. Investors are in for the growth and the costumers and employees are holding the bag during the collapse. This practice has come to pollute conventional sectors as well. Look at the stock ticker $BIG, belonging to the retailer Big Lots or RiteAid. They'll come in, ride it on the way up through unsustainable debt based growth to make line go up, liquidate their profits and leave it to collapse and burn
OccamsMirror 2y ago
VCs will make their money even from companies that eventually flop. The whole is a great example of Greater Fool Theory: https://investing1012dot0.substack.com/p/institutionalized-belief-in-the-greater https://investing1012dot0.substack.com/p/institutionalized-b...
- dmix 2y ago
  yeah exactly, this is a way to account for this dumb losses because even when it bombs it's still credible enough to have another dummy