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I think everyone knew, even without looking at any data, that startups were in a bubble thanks to Covid, when every "shoeshine boy" was studying to be a webdev

I think everyone knew, even without looking at any data, that startups were in a bubble thanks to Covid, when every "shoeshine boy" was studying to be a webdev at a start-up. Like how many food delivery apps that are actually profitable can the economy handle?

TylerE 1y ago
I think the real real giveaway is that like 90% there's a big exit, it's an aquihire and the "product" is quickly dumped.
- JCM9 1y ago
  Yep. Many / most aquihires are pretty ugly financially. While the headline sounds impressive (“X startup acquired for $250M”) the reality is that with preferred cap tables and terms most folks see nothing and investors are merely trying to recoup some losses or make a modest (less than S&P500 index fund return) return on investment. It’s basically a fire sale to salvage what’s left from the wreckage. Founders might get a little something and most shareholder employees get nothing.
  - nkingsy 1y ago
    Don’t they usually get a better stock package than the average new hire?
    - gdbsjjdn 1y ago
      In my experience what the founders usually get is a bigger locked up retention package. The investors want the cash, and the acquirer wants the founders to stay.
    - deleted 1y ago
      [deleted]
    - mandevil 1y ago
      The employees along for the ride on an acquihire? Sometimes yes, sometimes no. Depends a lot on how generous the founder/target of the acquihire is.
dsr_ 1y ago
The problem is usually not "there are 300 food delivery services" but "there are three food delivery services and they control the market".
- dheera 1y ago
  It's restaurants that don't want to deal with 300 apps. They will pick the top 3 and call it a day.
  - dsr_ 1y ago
    .. and that's also a problem.
- PhantomHour 1y ago
  It's a business model problem; The "Uber" business model relies on a monopoly. The business model is 1) "Have artificially low prices to push all competing business into bankrupty", 2) "Now that we're a monopoly, raise prices massively", 3) Massive profit, so long as no government starts doing anything about the fact that both steps #1 and #2 are illegal. That business model fails the moment you have multiple startups dumping the market, none can move to step #2 because they'd bleed all their users to whichever competitor is still in step #1.

TylerE 1y ago

I think the real real giveaway is that like 90% there's a big exit, it's an aquihire and the "product" is quickly dumped.

JCM9 1y ago
Yep. Many / most aquihires are pretty ugly financially. While the headline sounds impressive (“X startup acquired for $250M”) the reality is that with preferred cap tables and terms most folks see nothing and investors are merely trying to recoup some losses or make a modest (less than S&P500 index fund return) return on investment. It’s basically a fire sale to salvage what’s left from the wreckage. Founders might get a little something and most shareholder employees get nothing.
- nkingsy 1y ago
  Don’t they usually get a better stock package than the average new hire?
  - gdbsjjdn 1y ago
    In my experience what the founders usually get is a bigger locked up retention package. The investors want the cash, and the acquirer wants the founders to stay.
  - deleted 1y ago
    [deleted]
  - mandevil 1y ago
    The employees along for the ride on an acquihire? Sometimes yes, sometimes no. Depends a lot on how generous the founder/target of the acquihire is.

dsr_ 1y ago

The problem is usually not "there are 300 food delivery services" but "there are three food delivery services and they control the market".

dheera 1y ago
It's restaurants that don't want to deal with 300 apps. They will pick the top 3 and call it a day.
- dsr_ 1y ago
  .. and that's also a problem.
PhantomHour 1y ago
It's a business model problem; The "Uber" business model relies on a monopoly. The business model is 1) "Have artificially low prices to push all competing business into bankrupty", 2) "Now that we're a monopoly, raise prices massively", 3) Massive profit, so long as no government starts doing anything about the fact that both steps #1 and #2 are illegal. That business model fails the moment you have multiple startups dumping the market, none can move to step #2 because they'd bleed all their users to whichever competitor is still in step #1.