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Comment by babayega2 | Hacker News Reader

One of the funny/sad consequences of watching Silicon Valley, is that a lot of my friends (in my African country where only 4% has electricity) think that the startup need to expand no matter what, even if it has no viable business model, you can run a "budgetivore" business for many years like Linkedin/Amazon and in the end you will find a business model.

So imagine. Instead of building good and sound startups that can be champions in the country/region, they waste the meager resources available in the country on fake startups/crypto-scams.

Sad.

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That's not what your African friends think, that's literally a very huge part of the startup ecosystem anywhere.

I have worked in few startup incubators, and most of the companies I've seen are merely interested in getting a good evaluation and getting bought from someone else.

The amount of startups I've seen with the interest of actually making any "profit" is very low.

I think this is also a reflection of several changes in how stock markets have changed in the last decade where the name of the game hasn't been anymore about making a successful product that makes money and possibly pays dividends but the chase for endless and endless growth of stock price.

There are companies out there that literally have the stock of their price in the hall of their offices, imagine that and not customer satisfaction/retention/profits or anything else being the biggest indicator of a company's success.

It's a sad reality.

I myself am interested in creating a new business in the tech world, one that makes honest good money but is not seeking a 100M/1B valuation and I feel such a unicorn.

Isn't is because of a "free money" thing?

IMO, absolutely.

I just don’t know who exactly to blame for that. It seems to be a competition between gov spending, “quantitative easing” (brrrrrrrrrt), and the Fed’s insistence that near zero percent rates forever would work. It seems to me that all of those cause the other though.

The era of Free Money couldn’t end fast enough. We’re likely in for some hard times, but it wasn’t sustainable, and we had a 10 year period with almost zero innovation.

I hope it works out, because seriously the last decade plus shouldn’t have gone down the way it did.

Incredible opportunity costs, considering e.g. Google could probably go through Twitter like, 80-90% cuts and still stay functioning. Keeping the most capable people in golden handcuffs for a decade is quite a tragedy. On the other hand they still worked on many open source projects so it could have probably been worse

> I have worked in few startup incubators, and most of the companies I've seen are merely interested in getting a good evaluation and getting bought from someone else.

Startup incubators seem like they would be biased towards those looking for an easy pre-paved path. I participated for one in university and less than half of that cohort was interested in ever making money or getting traction at all, including myself.

We were there to polish our resumes for job hunting upon graduation.

My team didn't make a single sales call or engage with a single customer. The program managers brought us an extremely large potential government contract (15 million) and we turned them down as it was after the program ended and we were planning to be job hunting.

Its a world out of balance. Problems fester if there is no money in solving them, which seems to be the case for vast parts of our experience. Yet talented and eager people are unemployed, or their efforts are thrown away in endless churn.

Its a systemic failure of the organizational networks and legal structures that should bring people together, with the right incentives, to develop lasting solutions. People dont need billions to get incentivised. There is nothing wrong with building a small company that fits a niche. The unicorn mania is deeply sick.

There is so much knowledge nowadays, so much talent - before we even get to augmented powes using tech - that the situation will start bordering on the insane.

The challenge is that financial-economic systems are so tightly tied to power that they cant evolve. What is clearly needed in many parts of the world, and definitely in silicon valley, is to dismantle the adulation of super-sized entities, ultra rich etc. and encourage a strong middle class and SME enterprize. This was always the backbone of stable and prospering societies.

no startup can compete against an america company backed by endless cheap money. Not that founders dont want to turn a profit its just a cruel game and its the way its until cheap money ends in USA(it never happens bcz no gov wants recession on their watch).

Cheap money has ended, hasn‘t it?

Wait until the elections

Debatable. The latest Cleveland Fed nowcasts have inflation forecast to dip just under 5% starting this month, while the federal funds rate is 5-5.25%. So in real terms, that’d be the first time it’s positive, and it’s still a very very low number.

If we get that recession, we could see those rates reverse and end up negative again before too long.

It's still substantially cheaper for Stanford graduates with friends on Sand Hill who can mumble the words "crypto LLM" than even the most ambitious Burundian with a great idea.

Yes but only very recently. Many funds are still sitting on huge sums that were raised in the past years.

> One of the funny/sad consequences of watching Silicon Valley, is that a lot of my friends (in my African country where only 4% has electricity) think that the startup need to expand no matter what, even if it has no viable business model, you can run a "budgetivore" business for many years like Linkedin/Amazon and in the end you will find a business model.

> So imagine. Instead of building good and sound startups that can be champions in the country/region, they waste the meager resources available in the country on fake startups/crypto-scams.

So is the problem here just that your country has fewer resources?

There are plenty of rich people in developed countries who could be champions of the country/region but waste the resource available on sociopathic business models which are absolutely as predatory as crypto scams, all while dodging taxes, drawing on corporate welfare, and creating lower-paying jobs that displace higher-paying jobs.

Nobody likes a crypto scammer, but I'd argue that the average large-scale landlord in the US does far more damage.

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