Agreed. Baffling for an app that makes substantial iteration maybe once or twice a year. My theory is these companies like to hoard Dev talent in prime locations.
For instance, let's say you have a company that's making an app. Your company is ten people. The venture capitalists will often throw money at your company to grow it to a larger size.
I can only speculate on why this is, but I would guess that it's easier for them to sell the company for a large price if the company itself is relatively large.
For instance, HPE paid $1.1 billion for Nimble Storage. They have 1100 employees. If Nimble only had 30 employees would they be able to justify that valuation? Probably not.
One of the most appealing business models, which I shared is DNVB's(1). For example, NATIVE, the deodorant brand I use. Had four employees, 1m customers, in business for 2.5 years and just sold for $100m to P&G(2). Yes please.
(1) https://medium.com/@dunn/the-future-of-brands-6682841bd4
(2) https://www.racked.com/2018/1/19/16905724/natural-deodorant-...
I suspect your contention is accurate only for founders who are previously "connected" to the Silicon Valley world.
Yes, P&G isn't SV. I meant more that the founding team was already pre-connected to the VC world, possibly through law school connections. They had already raised prior to P&G noticing them in the first place, and very likely leveraged those connections for an introduction to P&G.
DNVB businesses whose founding or management teams have no such connections is not in a position to even meet such people, let alone attract interest from them. Hence, we quietly bootstrap and slowly build our businesses away from any serious equity funding opportunities.
They actually had 100s of employees at the time of sale.
To take it a step further, the formulas were likely done in a lab not their own, potentially using third party bookkeeping and what’s left? Customer service and marketing which both can be outsourced as well.