3 ms·
I think the OP misunderstands the words "billion dollar company". Which is actually completely understandable, since money is in the title you assume it's about
by pbiggar 12y ago
I think the OP misunderstands the words "billion dollar company". Which is actually completely understandable, since money is in the title you assume it's about the money.
Typically founders are product people, they want to solve a problem that exists in the world. But, to solve that problem, they need to make a big impactful company, that grows to dominate a particular niche or industry and disrupt the current way of doing things.
To these founders, "billion dollar company" is a shorthand for all these ideals: to make a great and lasting company, to solve a real problem for a very large number of people, and to make a real impact in the world.
It's not coincidence that this phrase is also important to VCs, for whom "billion dollar company" may have a different meaning, that being "make back the fund for our LPs". I say "may" because that's a simplistic view: many VCs are looking to make the world a better place too, and in many cases they have more money than they need already.
And to journalists, these mean "companies which we have to pay attention to". And when you think about, they're not paying attention because of the value, but because of the impact. Which is why journalists are always talking about consumer companies, because they have much more impact in the world than more successful enterprise companies.
Of course, that's not to say there aren't people in it for the money. But we rarely need to worry about them, since they rarely succeed.
- sethbannon 12y agoI agree that some use "billion dollar company" as shorthand for all the things you mention (a great lasting company, solving a real problem, and making a real impact). My point is that while it's often used as a proxy like this, it's a dangerous proxy because it's easily disconnected from the company's original mission(s). In this sense, it's an unhealthy simplification. Surely there must be a better stand-in for a startup's hard-to-measure progress towards achieving their mission than their valuation.
- softdev12 12y agoI couldn't agree more with your full post. It's almost become so obvious and cliche that people have forgotten why business exists. It's as if all the media hype puts the focus on the riches of the founder and not the value created by the product. Every once in a while you see a publication do a retrospective of a failed startup. And every once in a while you see a blog post from a startup that exploded. But the statistics are completely skewed with distorting the reality of startup success. Mentioning that there are now X number of billion dollar startups masks how many startups are simultaneously failing. I would love to see a study that showed the total number of inflation-adjusted billion dollar startups as a percentage of the total number of startups started over time. This percentage may actually be decreasing, even though the media seems to be suggesting that there's a tech bubble.