Sometimes I feel like I don’t understand the start-up world. It seems like funds and valuations are worth more than running a real business.
Thing is I’ve been feeling the perspective is mine. Maybe I’m just naive. Then I read this.
And the thing is this: twenty-five to fifty percent of all the businesses I have ever looked at were more than capable of being a little scrappier. A little less cush. A less nice office. They all could have built an amazing business with less money. It pays to be scrappy in the early days. Work to build something real. Ditch the company happy hours and use that money to create an amazing product. If you have that amazing product, you don’t need the VC.
Businesses with a decent plan are a good idea, but yeah, there’s this unhealthy obsession with FUNDING that has been bothering me for a while. Businesses have existed before the internet age, and like the writer wrote, got by at first by just being scrappy. People are in love with the idea of running a billion-dollar startup than actually creating a profitable website/community/product/service. Fire up a terrible new blog or ecommerce site with no business plan and it’s like, HERE’S MY NEW STARTUP. You can’t create a small business anymore BECAUSE SCALE. I read an article recently about this. Can’t remember where. Snapchat was valued at billions and is making 100-million dollar losses. So really, what are we doing?
Snapchat na just cruise. The valuation is a result of their user base which is about 100million and investors find that remarkable I guess. I don’t see how they plan to make money, but investors are convinced enough to give them billions. The discover tab on the app is for companies to place ads, but I doubt they are getting exciting views.
Acceleration is at the center of it all. Capital venturists are driving this. It’s simple, for the West’s capital reserves to maintain fait value, it has to pursue growth.
Africa, SEA, LATAM have the biggest potential for growth. And the West has got the capital that drives that growth.
So gone are the days, when people staved away 3 yrs of judicious savings to start their own business to break away from the rat race. Every kobo is from hard sweat and blood. They weren’t even called comapnies till they’ve hit certain milestones.
Gone are the days when people borrowed money to start their own businesses from weary relatives, with the caveat of been labeled big fat debtors in the family with that noose around your neck for as long as they’re in debt.
Today its all pretty neat: Got a fancy idea? Can you make it squeak?
If yes? Then you can have OUR money. Make us proud; Steve!
It doesn’t mean we won’t show you the door when you fail to do your Job. (Pun intended)
Who wouldn’t want to be the next Steve, many would claw and kick their way into any kind of boot, even when it doesn’t fit.
StartUps are Businessess first before whatever coolness that name “startup” applies. Build a business first then design it for growth. Simple.
Virgin Air was a business
Apple.Inc was a business
Ford Motors was a business
General Electric was a business
Hertz was a business
AT & T was a business
General Motors was a business
MICROSOFT was a business
IBM was a business
So you see, the reason for today’s startup nonsense is because nowadays, a startup is created before the business and that most of the time is = FAIL.
Too many rich people not knowing where to keep their money. And startups are a high risk high reward investment. Startup valuations have become as bogus as the New York Stock Exchange gambling syndrome.
