Startups Aren't Succesful, They're Hollow Commodities
Hey Jessenture Capitalists
As a digital marketer and business owner, I have been in and around the startup scene, both locally in my native South Africa and abroad for some time now. Speaking to aspiring entrepreneurs both in tech or traditional markets all trying to make it big, to strike it rich, to be masters of their destiny. The startup scene is filled with bright ideas, bright people with shit ideas, shit ideas and shit people with shit ideas and guess what?
They all don't matter!
Startups aren't about how revolutionary your product or idea is or how it can produce insane levels of productivity to bring about the improvement of those around you and create jobs. That's all the narrative used to show something a lot more sinister that will catch up to many who are about to retire. I know startups and retirees sound like two opposites but stay with me, I'll get to it and oh what a tangled web we weave.
Image source: - businessinsider.com
TLDR - The simple reason pension funds looking for yield propping up the market and incentivising gambling on TAM (Total Addressable Market).
Startup culture
Startup culture by definition isn't inherently a had thing it has been tainted by the promise of riches and attracted the wrong crowd who are willing to game their way into some cash since all it takes having no morals or work ethic.
Have you ever wondered why startups are never about making a profit, it's all about getting more funding, more funding is what keeps startups alive since most of the time they're pieces of shit. Any idea can get off the ground with enough funding and stay alive for a considerable amount of time, look at Theranos.
Pension power
To make a long story short, pension funds don't know what to do with your money. Pension funds around the world are desperate for yield and can not get it from government bonds, corporate bonds, investing in stocks or asset markets like real estate anymore. They're tapped out and are looking for riskier investments to the returns they promised their investors.
They looked to venture funds who had an appetite for risk and would do the work in finding startups and as the capital came in these guys went to work.
The exit strategy
VC's would identify early-stage companies and give them cash for a piece of equity and encourage them to grow their business aggressively. It keeps funding these businesses until they make themselves look good enough so that other investors would want to get in.
Once a more prominent VC gets in or an institutional investor, the first VC exits, sells the equity at a markup, takes their fees and thinks they're the shit. The pension fund then gets greedy and wants them to repeat the start of the Ponzi miracle because they're getting the yield they need /promised investors.
All we're seeing is one private equity holder selling the bag to another for an inflated price, hoping to eventually get the startup to IPO and dump it on retail investors. The problem is a lot of these startups don't make it that far, and when the boomers start to retire in their droves and pull their pensions, the startups are going to feel the pinch and some pension funds are going to be stuck holding the bag for yield that will never come and go bust.
The self-sustaining startup
When the party is over we're going to have startups looking to bootstrap themselves into an income stream and living within their means, grinding out profit through sheer determination, will and ingenuity and who really wants that? Who wants competition when you can buy your way into the market with other peoples money?
I say bring it on, may the excellent startup purge begin and we see who is left standing!
Have your say
What do you good people of steem think?
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Let's connect
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"Well, it's going to come from somewhere!!"
While there is IT and many 'doctors', everything will be fine. No matter how many naive 'patients' they might pierce side to side and take them for a wild ride on top of their horns in the process. };)
What better way to steal from the poor then to use tax to prop up shitty tech companies that never have to deliver while the owners and developers profit! They don’t see the effect of it they just see their bank accounts
Very well articulated post. It's all about the money for investors and the entrepreneur. I think the idea is convincing the investors that this plan is going to keep bringing them money and they'll be fine.
Yes i agree i think the company feel they already a success once they get the funding and it’s not about creating value in the market but hitting arbitrary numbers that would mean more funding and so the merry go round goes on until they go bust or IPO
Sometimes I wonder if that's such a bad thing in a capitalist economy. People aren't exactly loyal to anything these days and only care about short term gains. I'm more of a romantic for now anyways, I might change one day. Who knows!!!
I don't think its the worst thing in the world eventually all shit businesses die, some just take longer than others and on business is immune to that no matter how big you get. I feel like it will even out eventually as we move money out of the hands of central powers and individuals take ownership and stop leaving funds to banks, hedge funds and pension funds to mismanage and create these skewed economies.
That's somewhat utopian and will take at least 200 years. That's still within the bounds of your view anyways.
Yes it is lol but we have to set some goals that are bigger than us! It’s foolish to think we actuallt matter to the next generation all we can do is not leave them with too much shit like we got and then continued to fuck up
Yeah but the problem is that only 3% of the populace actually give a shit about "making the world better for the next gen". The others are working tirelessly to fuck shit up and make instant gains.
I keep wondering why I wasn't born evil.
Lol you my friend are way to self aware and it’s only going to lead to you having a miserable time! Well I’d say if you weren’t in africa you could pull off the evil because it doesn’t take much but to out evil some of the fuckers on our continent you need to be extreme
Hey, first great post and a different way of introducing this concept for the startups 😄
Personally myself, i have some tech ideas that i think in the future i can open a startup to develop these days. But i find it very difficult and at some point i think it is better working as a freelancer dev or in a big company rather than in investing in a tech startup. It is getting very difficult these days to have a Startup to represent a proper value
I think startups are just the more glamorous route and get most of the media but it’s not the only way to release a product! It can be incubated in an established company or an open source project these days or switch between them so if you have an idea find the best solution for you!
If it eventually means start up and funding good luck with that seed round, those term sheets can make or break your idea
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