Yet they're somehow looking at a $120B IPO next year.
<snip snip> A network effect (also called network externality or demand-side economies of scale) is the positive effect described in economics and business that an additional user of a good or service has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.[1]
Pump it with cash, then dump it on the public market with an ipo to all the less sophisticated investors that aren't reading the financials.
Sure, every once in a while, you'll come across a Facebook type business that ends up being profitable, but in the meantime you can still make money on the losers when you cash out.
Do these actually exist? My understanding is that retail investors aren't significant and I don't believe that institutional investors don't look at financials.
What you're talking about with IPOs is not quick or easy, and definitely not guaranteed in any way. Taking a company public essentially counts as an exit for most funds, and if it was that easy to just sell up everything then the entire VC field would look different. That process is more for private equity and banking firms who maneuver through financial engineering rather than early and mid-stage VCs.
Bullshit idea crashes, trashing the livelihoods of the developers and later investors, but you and your money are long gone.
This can look suspiciously like the slower and more professional version of a pump 'n dump stock scheme - although historically it's sometimes written off as "irrational exuberance".
If by some miracle the bullshit idea actually flies, your remaining stock gives you a slice.
If you don't like it then go write software for bigco and shove your money in an index fund. Nobody is forcing developers to work for trendy startups or forcing investors to invest in freshly IPO'd startups.
As you well should.
How the fuck have we gotten to the point where chopping up vegetables is a task too onerous for the "I'm too busy in my hustle to bother with this shit" types? These ass backwards Silicon Valley 'products' should be taken behind an alley and burned to the ground.
Coral reefs are dying, mass exctinction is underway, our oceans are deadened and acidic, the little life that remains is full of microplastics and metals, glaciers are receding, entire fucking nations are sinking, fires are blazing larger than ever, antibiotics are no longer effective, heck, even drinkable water is getting scarcer, but fuck it, what we need is yet more asinine packaging to let the fat, overfed, heavily consuming American have yet another morsel of convenience because god forbid he have to get off his electric wheelchair to exercise his muscles and bike to a grocery store to buy some fucking Brocolli.
Fuck it all.
(1) https://steveblank.com/2018/09/05/is-the-lean-startup-dead/
Yup.
Shameful to admit, but I only this month finally got around to read "Lean Startup". I'm in a process of copying notes and writing down some thoughts, so I have this fresh in front of me: the book frequently talks about the goal of a startup being to "discover how to build a sustainable business around that vision" (emphasis mine).
But then, it shows to build unsustainable growth and keeps portraying companies that got sold as examples of success. Such is the double standard, and the only way I can reconcile those two views is by concluding that the goal is for you to make money via the discovery, and for someone else to use that discovery to build an actually sustainable business. But if it is so, then there's no surprise people skip the "sustainable business" part, as you can make even more money in an unsustainable way.
