But aren't startups doing the same thing as PG said nowadays? That is, portfolio companies use each other's products to boost their revenue and user base.
https://www.cnbc.com/2022/11/14/spacex-just-bought-a-big-ad-...
Your definition for "a bunch" is a bit questionable, but good on you for posting the source.
I think if it had been $500k or $1M I would've called it a bunch, but $160k seems low.
[1] That's right M is for a thousand, because M is a thousand using Roman Numerals. You thought you would never have to remember that.
The ad campaign SpaceX is buying to promote Starlink is called a Twitter “takeover.” When a company buys one of these packages, they typically spend upwards of $250,000 to put their brand on top of the main Twitter timeline for a full day, according to one current and one former Twitter employee who asked to remain unnamed because they were not authorized to speak on behalf of the company.
Which means 160k spent is actually well below typical deal and these deals are pretty normal for Twitter. So one may actually be worried that maybe SpaceX got a deep discount or something.
Just selling to other early-stage startups doesn’t generate much growth/revenue or make you look like a solid business to a sophisticated investor. SaaS/B2B companies that make it big do so because they get huge numbers of small-medium businesses using their platform, not just startups - E.g., Slack, Stripe, Square, Shopify, Canva, Zendesk, Zapier, Segment.
Having other startups using your product is a good early source of product feedback and a strong signal to very early-stage investors, but that alone doesn’t give you the huge growth you need for bigger funding rounds.
It’s very different to the scenario PG was describing in the late 90s; in those days, a startup would be founded, quickly IPO to raise several $million from unsophisticated retail investors, then spend much of it on advertising on Yahoo to drive traffic and artificially push the share price up. Hence when the music stopped in 2000 all that ad spend dried up and Yahoo’s share price crashed.
All those companies I mentioned above are going fine; slowed growth, sure, but they have real businesses with broad customer bases well beyond the startup ecosystem, so they’re all able to continue operating and keep doing OK.
A uses B uses C
C uses A but not B
B uses C
"Ooooo, A uses B I should use them for C!"