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Ariel C.G.

@aral you forgot the part where you burn money to attract more users while killing possible competitors, and then raising your prices to try and make some profit (spoiler: many times you don't). See any startup that offered a killer free tier and when everyone started using it they enshittified it and made it more expensive, while locking you in making it hard (or impossible) to take your data somewhere else.

But guess we'll never learn as a society to not trust companies that lose money on purpose...

18 Aug 2023 at 13:25 | Wall-to-wall | Open on masto.es
12 comments
Aral Balkan

@arielcg That was the bit I was referring to with β€˜To understand this better, if you have a sustainable small company, a startup is what will put you out of business.’ :)

But yes, exactly that.

18 Aug 2023 at 13:32 | Open on mastodon.ar.al
Jeremy Kahn

@arielcg @aral

All the lessons from folklore about faerie markets

apply triple to venture capital

"don't accept gifts or eat the food; trades will always turn out to have a catch; you'll probably end up a slave to the Fair People"

18 Aug 2023 at 13:49 | Open on dair-community.social
Tom

@arielcg @aral

That's not the worst part, they don't even have to make a profit later. They just burn capital to keep prices low, put enough competitors out of business to make the IPO/sale attractive then cash out to the rubes who bought their BS.

After that, why should they give a shit? The VC/founder business model NEVER has to work long term for the players to win big.

18 Aug 2023 at 13:56 | Open on fosstodon.org
Ariel C.G.

@Tallish_Tom @aral yeah, but you need to at least "make the effort" to make the IPO and that someone is interested. See Reddit's (poor) attempt at it by killing third party tools or making them pay insane amounts; and all the ads and gift-thingys they show you.

18 Aug 2023 at 14:18 | Open on masto.es
Tom

@arielcg @aral

Yeah I mean stings are _hard_. That's why they make good movies πŸ˜„.

18 Aug 2023 at 14:39 | Open on fosstodon.org
Ben Cox

@Tallish_Tom @arielcg @aral & many of the rubes are the employees.

(Equity compensation is wage theft. Pass it on!)

18 Aug 2023 at 14:35 | Open on electronicmusic.social
Michael Roberts

@Tallish_Tom @arielcg @aral - Working or thinking long-term is actually seen as a negative.

18 Aug 2023 at 14:40 | Open on indieweb.social
Rob Landley

@Tallish_Tom @arielcg @aral It also grinds up founders who WANT to make a sustainable business but are naieve enough to take VC funding.

You could be profitable at 6 people (like a dental practice) but have to hire 20 in a big office to show "growth". So you overshoot your revenue and must pursue a second and third round of VC funding.

Teaching someone to swim by giving them a 500 pound scuba tank with a second tank on the bottom of the ocean. Keeping your head above water vs go straight down.

19 Aug 2023 at 2:29 | Open on mstdn.jp
Cory Birdsong
Glitzersachen.de

@arielcg @aral
no no, the part "the part where you burn money to attract more users while killing possible competitors" should read "the part where you burn money to summon a venture capitalist from the dungeon dimension". The pentagram on the floor is not optional.

19 Aug 2023 at 1:26 | Open on hachyderm.io
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