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Comment by wilg | Hacker News Reader

I would love to do something in this space and would love to know if anybody has ideas for or examples of a sustainable, scalable corporate structure that is less susceptible to these antipatterns and isn't focused on an exit. But that can still compete with the big players. Product is obviously a big part of it, but I think there needs to be some structural changes.

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Maybe I'm missing something, but isn't it a fairly simple answer that most founders just prefer mindlessly chasing rounds of investment and "growth for the sake of growth" and cashing out on an exit, rather than just growing organically with minimal outside investment/influence?

Anyone can choose to build a quality app/service/startup based on the merit of the actual product with company growth fueled by actual need of technical talent and profits from a monetization model, rather than just taking venture capital and hiring six-figure salaried engineers just to fill another open office chair and implement selfie filters.

I wouldn't say it's mindless. Organic growth is okay for a lifestyle business, but if you want to compete with Google/FB/etc you need fast growth (or a really fucking good business plan). If you want fast growth then you need capital that you're okay with pissing away. You can front all that capital yourself if you're rich (e.g. Gabe Newell's M$ money going into Valve) or you go the VC route. VC route is simply less risky. Less chance of competition beating you to the punch, and no chance of losing all your money.

At least that's my understanding.

To succeed in social, you need to exploit network effects to scale your user base. You might get a flash in the pan with some seeded content or go viral for a brief second. In the long run, you need to spend big and more than established competition even in niche markets if you want to create a beachhead. Even if you had the capital to do it yourself, you probably shouldn't since that's not smart in terms of risk. So then you will need to resort to investment from VCs (even angels can't fund a social product beyond seed). At that point, you have conflated your purpose from a do good-social enterprise to a venture that needs to provide 50x return for your investors.

Remember the value per user that acquiring companies pay for when they acquire said company and compare that to how much you will need to spend to acquire them from scratch. If you can't nail the distribution (sales & marketing) side of the equation, the product won't have a chance to get off the ground let alone survive.

You have two very simple options:

>option #1: a not for profit, so "the next Google" isn't owned by anyone.

>option #2: give every user a non transferable share of in a for profit entity so users are owners of "the next Google" and have "skin in the game" and incentive to use the product in lieu of Google.

I think your starting point is already flawed. Scale is needed for high value liquidity events which is needed for ROI to investors and employees compensated with equity.

If you realign the goal to return maximum value to your employees as soon as possible, then you can align incentives to maximize the creation and growth of markets to sustainably capture value and give it to the people that made it possible.

So just don't take VC money and build a company to give back to your employees as much as possible as soon as possible and do it without competing directly in any existing market or trying to take existing market share. Sounds tough.

Thought experiment I had with some friends recently:

How would you compete (with/out Google) as [("search engine + ads") + privacy)] if you started now?

I do Google & Facebook -free marketing with clients... I believe it's a realm worth considering more.

something like a public benefit corporation? https://en.wikipedia.org/wiki/Public-benefit_corporation

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