There's a lot of capital floating around out there. Most of it is actually foreign, either OPEC sovereign wealth funds (like how Saudi Arabia put $3.5B into Uber) or wealthy Chinese businessmen. All that capital is seeking a productive return: it has to go do something, if it sits in a bank account it'll just shrink because of inflation. Right now, tech is basically the only sector of the economy that has noticeable growth. Hence, anything vaguely connected to tech gets plenty of funding, regardless of how ill-considered the idea is.
The fundraising climate has tightened fairly significantly since 2015 - that's why all these companies are going out of business. But around 2012-2013, the way you got funded was you went out, painted a picture of how everyone in the world would be using your technology-enabled product, and asked lots of people for money. There were so many people with money to invest that you'd be bound to find somebody.
So how does one find Saudi or Chinese money that needs to do _something_
time + money == more money
money + money == more money
2 x money == more money
Where's the compelling drive to grow an industry? Where's the compelling argument for making money with a real capitalizeable asset? How do these projects fundamentally grow an area of the economy, put people to work, so they will want to buy these things. make life better and make investors more money?
This kid is what we should be investing in: https://qz.com/909614/a-cameroonian-17-year-old-won-the-goog...
Putting this kid to work is what we should be doing, not goofing around with some stupid ass Mindfulness app in SF. This is exactly the plan I'm working on. If somebody doesn't scoop this kid up, I will at some point.
Africa and South America each represent 6% of the world's app revenue. You want to make some money? Help these continents compete. Help the governments involved learn how to manage their information and build out their IT infrastructure. Help bright kids like the one I linked to use their talents to help you make money and grow their local economies at the same time. That's what I'm interested in.
If vc's in the US have been reduced to investing in yet another goddam coffee machine to sell to the US market, then I'd suggest silicon valley has exhausted their strategic thinking, and have been reduced to daddy and friends giving college grad something to do. It's a waste of money that could be so much more strategically spent.
Until they are identified, I don't think VCs will put their money at risk. (They may already exist; I'm pleading ignorance here.)
They're already putting money at risk by investing in startups that are obvious flops. Or even startups that do stuff that won't fly even with western-style legal framework (Theranos).
You might want to take a look at this project: https://www.kountable.com/
I'm quite proud that I once was a part of the team working on it.
What we should try to do is invest in opportunities that get them to the point when they can take a stab at building a startup around whatever they come up with.
It almost seems as if many of these firms are throwing money away without even thinking over the 101 level business requirements: expenses, revenues, growth rate, 2nd derivative growth rate, market size, profit per employee etc.
I'd guess there is more money floating around than there are startups which meet all the metrics. Thus there's investment in riskier ventures (remember it doesn't matter if any startup succeeds as long as the fund comes out on top as a whole). Moreover startups which do have all these metrics may have many competing VCs which in turn lowers the return for the VC.
It's not much different from food delivery (or grocery delivery), but it seems hard to make a profit. Food delivery companies from arbitrary restaurants have been a thing for a long time, it's great that now there's enough floating VC money to support lots of competition, maybe this time one of them will find out how to be profitable. And the VCs of that one will make a handsome return.
EDIT: changed "self-driven" to "self-driving"
Properly hedging requires constant adjustment of the steak to lock in the "winnings" and replacing the losing company with a different one that does similar things but has better management.
Delivery is nice too, but the picking is what I really hate. Showing up, picking up a box, and leaving would be fine too. However, if delivery is the main option, I'll take it.
The fact that I strongly dislike Tesco and STILL just set up an account for grocery delivery so I can pay them to pick groceries and bring them to me, because I hate going shopping so much, suggests that this service is needed by at least some people.
I also wanted to use buymie.eu, but I have an aversion to services that would work perfectly well as websites but insist on an app instead.
Most people I know use it with an 'unlimited' subscription and feel the money they save, by knowing exactly what they will be spending and by not having impulse buys, plus the time saved makes it worth it.
Ocado might be seen as an exception but even that was started out as a partnership between Waitrose and another company (I forget which). I'm also discounting more niche services, such as Graze, btw.