They’ll run out of money in 2-3 years if it’s not working.
No. They won't run out of money in 2-3 years, they IPO. Or at least, they did in a zero-interest rate environment.
"VCs pay the angels. PE pays the VCs. IBs pay the PEs. All for the hope of an IPO so the market will pay the IBs."
"The entire market ecology has a tough time adapting to the end of cheap (even free) money, with cash flow, rather than "valuation" being the central focus. Those who entered finance after 2008 are, basically, unskilled labor. Lehman in 2008 was a picnic compared to 2000 if you were doing tech related ventures."
Each one gives him some new way to ‘level up’ in the game that is startups, without having to launch a real product or business. It’s all about grooming the startup to look good to VCs.
I joked with him that his real business should be consulting with startups that go through accelerators since he’s a veritable expert at it now.
Witnessed it first hand in private equity and now startups. Usually the mission is to build a compelling product and sell it to the best of your ability. VCs are gasoline.
Making the process more gamified changed the incentives to be about getting more gasoline from VCs instead of making a real company that makes its own gas.
This doesn't stop, either. I've been at a company that's over 7 years old, a leader (top... 1? top 3 at least) in their space, over 500 people, and still goes on and on about being a startup. My inner cynic says this is because they can't let go of 'what got them there' and transition to big-boy pants, so they continue with the myth of the fungible tech employee, etc.
> The idea was always build something impactful and make it as profitable as possible via fulfilling your company's mission.
This is why it's important to really venture out with your network and environment. I used to feel this way regarding startups in general but going out of my way to meet people not in SV, SF, VC and going out of those places really help. There's a lot of cool stuff being done outside of our little bubble here in HN
Nah, the idea was always to make a lot of money. It was never to build something impactful or useful. Sure that may be stated goal, but without path to monetisation it aint happening, and for so many things that are either good or helpful, they can't be monetised ...
This leads to a rat race by which instead of making the best product to solve the problem they originally intended, they try to market their company as best as possible to VCs.
The idea was always build something impactful and make it as profitable as possible via fulfilling your company's mission. You can see the ramifications already in the last 2-3 rounds of startups, all of them looking for easy money "uber for X" "AI for Y"...