Well yes, that's called a regular company. Not sure if I'm missing something here?
Richard (CEO): Because... to make money?
Russ: No. If you show revenue, people will ask how much, and it will never be enough. The company that was the hundred x-er, the thousand x-er, becomes the two x dog. But if you have no revenue, you can say you're pre-revenue... you're a potential pure play. It's not about how much you earn, it's about what you're worth, and who's worth the most? Companies that lose money. Pinterest, SnapChat, no revenue. Amazon has lost money every fucking quarter for the last twenty fucking years and that Bezos motherfucker is the king. There's no revenue. No one wants to see revenue. Go!
Richard: Oh, um, I just thought that mainly the goal of companies is to make money.
Russ: Yeah, no no no, that's not how it works. I don't want to make a little bit of money every day, I want to make a fuckton of money all at once. ROI. ROI!
— Silicon Valley, "Bad Money" (2015). https://www.youtube.com/watch?v=BzAdXyPYKQo
Radio on Internet
s/optimist/gullible
You listed a number of things that have been super hyped flashes in the pan that never really panned out (or in the case of self driving cars, have taken way longer to pan out than people expected), but you didn't list the things that were super hyped and then became big successful sectors.
I remember when I thought "web 2.0" was overhyped, but now it's just the water we all swim in. I remember when that went from blogs to being social media, and I thought that was way overhyped too, but it turns out it was a big deal. The cloud was overhyped, "big data" was overhyped, SaaS was overhyped.
And it's true that all of these were overhyped! But they also turned into real business sectors.
It's certainly difficult to predict which hype-y things are going to mature into sustainably large markets, and which are going to fade into obscurity, but a model of "things that are hyped are doomed" is not predictive.
My own prediction is that AI tools are both overhyped and also very promising. I have no illusions that this prediction could be totally wrong. And even if it's right, I'm even more uncertain what the successful business models are going to be after the dust settles. We'll see!
Perhaps this is where we differ. I offered a list of things that, granted IMO, were all hype with little substance. Or perhaps just on a timeline so long that many people got the hype timing wrong.
Your list was mostly things that were obvious winners. They were mostly building steam with real world use cases and trending hard before the buzzwords got associated with the movements (eg. Web 2.0 and saas). These were obvious enhancements to the status quo. I’m not sure they were overhyped as they did very much become the defacto standard for their time. It doesn’t mean they will hold that title for ever, but tremendous economic value falls under those umbrellas. I’d argue intrinsic value too (unlike crypto).
AI/LLM might do that in some regards. But doing it in a way that makes lasting business sense is still tbd. AI eating the world, still very much tbd. So I do think we agree on this point.
We don't often see that because it gets totally drowned out between cynics and moralist scolds battling vapid hype-bros and pumpers, and also because it's boring.
It turns out there's actually a lot of tedious classification, OCR, entity extraction, and enterprise search to be done.
Amusingly much of the money made in SaaS was also in boring products!
My point is that hype vs. skepticism just isn't the useful metric.
I agree with you that this does not mean that it's impossible to identify which technologies have a "there" there, and which don't. I just don't think the level of hype is a very helpful input into the calculation.
A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers. That's a different model to with different risk/reward characteristics, but it's how most non-innovative entrepreneurship is done, I believe - things like building restaurants, buildings, etc.
This is indeed a "middle path" in terms of raising money by selling equity, but selling a smaller amount of it for less money, which keeps more ownership stake and control in the hands of the founders, but necessitates slower spending cause they raised less capital.
> A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers.
What do you think angel investors are if not financiers, and what do you think those investments are if not debt?
The only difference is that in the software- and software-adjacent world everyone expects a 100-fold return on their investments.
No, those are equity investments, usually. It's a different thing with different rules.
Equity investments give the angel investors ownership of the company - equity. This is either direct selling of shares of a company to angels, or (more typically nowadays) via instruments like convertible notes, which convert to equity in future funding rounds. Other than this ownership stake, they are typically not entitled to anything else.
Debt investments, on the other hand, don't give any ownership to the financier. They only entitle them to receive some future payments from the borrower.
These are completely different things, and large companies often use a mix of both. But in startup-land, the typical investment is done via equity.
They have to get loans and founders are usually on the hook if the venture fails.
This is different from what the article advocates.
But yeah “building for profitability” sounds a lot like… good business!
This seems like pulling a fast one on VCs if you then pivot to bootstrapping a nice family business. That ain't why they threw $1m at your PowerPoint.
In "dragons den" style traditional business they'd offer you $50k for 50% at that stage. Maybe.