The VC market will dry up even more if they see their chances of an exit diminishing because of an overzealous government.
I don't have any numbers and probably more than 50% do fail, but not 90%. Plenty of bakers, restaurants, accountants and small shops succeed in making money for the owners, employment for the staff and value for the customers.
Good. Agreements should as much as possible be free between consenting parties. It shouldn't be normal to expect the government to be involved in approving things except where there's a great reason to need it.
The problem with this ideology is that will destroy society and reduce it to ashes.
> It shouldn't be normal to expect the government to be involved in approving things except where there's a great reason to need it.
If you think preventing company towns isn't a great reason to need approval, fair enough, but then why are you saying company towns are bad?
And if a town is dependent on one major employee should we do what exactly?
Where is here?
I'm really struggling to understand why you're asking questions tartly instead of just reading what I said, which I tried to make very simple to understand, and replying just as simply.
You said the government shouldn't involve itself "unless there's a great reason to do so," which I interpret as implying you disagree with the reasons. Do you think anti-trust measures are a great reason?
Step 1: Adobe buys Figma
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Step n: Adobe takes over a small town and forces people to make websites?
Please tell me how the government’s actions has stopped that conclusion.
> profit from doing so
Is the first actually a requirement? I can think of plenty of companies that do the second part well, but have nothing to do with the first one.
I understand you think they provide a service since you seem to not understand what a patent troll is.
As a reminder, a patent troll company is a company "that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or contribution to the prior art" (https://en.wikipedia.org/wiki/Patent_troll)
They don't sell any services, don't do any (reasonable) licensing, nor provide any goods.
Not to mention “trolling” is already passing judgement on the activity to begin with. The actual service is licensing. I’ll leave it to the courts to determine whether enforcement of patents qualifies as trolling or not.
Oh I'm sorry. I meant to say "Patent Trolling Companies", is it easier to understand now?
I'm sure you are aware that there actually is a category of companies that just participate in "patent trolling", and do nothing else. Not sure why you're being so pedantic about the grammar instead of trying to reply to the actual arguments...
They don't seem to be significant enough to the overall general statement that companies exist to serve their customers with goods and/or services.
I'm not sure how valuable it is to argue with someone who cannot read two messages up in the message hierarchy...
Do you mean the one you mentioned 4 messages up? And dropped with this?
> Ok, lets hear you argue for what service a patent troll provides.
Sure - the one you dropped was domain flipping. Clearly buying something at a certain price and then selling it again is not nothing - that's why people pay for it. Just like house flipping. Or just buying anything speculatively. I assume you realised that, and dropped it for that reason.
In the vast sea of companies, those are a super teeny tiny share of companies.
The purpose of a company is to make a profit and provide a good or service. In that order. Everything else is a hobby.
Generally speaking, private non-subsidized companies that offer goods and services for sale cannot actually survive without any profit, right? They can bootstrap for a while with investment, but they tend to die, statistically speaking, if they prioritize goods and services over profit. The way companies tend to survive death is by doing everything they can to ensure that the sale of their goods or services generates a profit. You might also be temporarily forgetting that it’s also incredibly common for companies to pivot on what products they make and sell whenever they’re not making enough profit.
TBH it actually seems really funny to me argue about which comes first, because the kind of company we’re talking about needs both, it doesn’t otherwise exist. But the idea parent shared, that profit takes the highest priority, is often absolutely true in practice, many companies will do everything they can to avoid not making a profit, from lowering the quality of their goods and services, to coming up with other more profitable products, to merging with another company that has more customers for your product and/or a longer runway.
That has changed, especially since the 80s, where the prevalent world view turned to "let's have the market figure out purpose", which equates to anything that is profitable is good.
We've since learned that this isn't automatically true (as exemplified in this abandoned merger, for example), and my understanding is that right now there's no clear opinion in society whether profit or purpose comes first in companies.
The vast majority of companies are little "lifestyle" businesses without any intention of ever getting acquired by anyone. Your local pizza shop doesn't expect to be a unicorn.
That said, even a mom & pop should be mindful of exit. What happens when the owner(s) wants to retire? Or has a serious health issue? Or has a family member with a health issue? Etc.?
You don't have to be a unicorn to build something that someone else wants to acquire.
Editorial: And this is why I dislike words like solopreneur, mompreneur, and so on. Sure you can have a one person business with a steady revenue stream. But that's not a 'preneur. If you are the business and the business is you, you're ability to exit is highly limited. That's not a 'preneur. If you get hit by a bus and your customers are screwed and the business tanks. That's not a 'preneur. You're much closer to a m&p TBH.
I realize that's counter to conventional wisdom on social media, but such snake oil ideas deserve to be called out already.
> What happens when the owner(s) wants to retire?
Maybe they just close down the shop.
> Or has a serious health issue?
And purchase disability insurance.
Being a mom & pop is not the same as being an entrepreneur. They are two separate mindsets. One use exit as a North Star the other just retires and closes up shop.
There's nothing wrong with the mom & pop mindset. But it's not the same mindset as being an entrepreneur and focusing on value; with exit being a clear and ideal way to see the value.
You might not like the definition, but that doesn't mean it's wrong.
Even if we accept your assertion that it's the best way to value something, that doesn't mean it's the only way to value something.
It comes from The Market. It comes from some other entity saying, "This is worth X to us, and we're willing to pay that. Here's an offer."
THAT is value. I've already said this, but I'll say it again:
Revenue !== value.
Value is what someone is willing to pay (for the company). It is set by the market. Revenue may or may not be used by the suitor to determine value, that is, how much they're willing to pay to acquire the generated value.
Revenue !== Value
To clarify, they are all business in the legal sense. But a "solopreneur" who gets hits by a bus, leaves customers high and dry, and can't exit (i.e., have someone else carry on) is not to compared to an entrepreneur who generates value such that an exit is possible, and customers are less likely to get screwed.
Notice the modifier. That indicates it is not the only (and to many people, not even the most important) type of value.
At the extreme, imagine all these social media "creators". In some cases, tons of revenue. But their revenue-producing-hobby is such that no one could take the torch and carry on. If that person is abducted by aliens, the company also disappears. No one else can buy it and carry on. That is, no value created.
I'll keep repeating this:
Revenue !== value
Entrepreneurs create value. Not revenue. Value.
The problem with this thread seems to be that people are confusing revenue with value. If it was about revenue, then the definition would say that. It specifically says value.
Or again, the "influencer" model. TONS of revenue but when was the last time you heard of such a person selling? They're not because there's no value. The influences walks away, the house of cards collapses. No one is going to pay for that. So, sorry, no value - regardless of revenue.
Therefore, if you ever want to know the value of your business as a reflection of the alleged value it creates, put it up for sale (or sell shares). You will quickly find out if you're actually creating value or not, or at least someone thinks you have the potential to create value. But that isn't revenue.
That's it. You want to measure value? Then be prepared to ask the market (i.e., exit) Anything else is a proxy, a deception, or something you tell yourself to make yourself feel good.
It's bizarre that we live in a time where we can't even fathom a business that is fundamentally very profitable, we just envision growing the company until it's attractive enough for someone else to take on the unsustainable cost of running the business: either get acquired by a large company or hoist your debt onto the public market.
Investment really did used to be about more than a complex "greater fool" game.
Sorry, but it absolutely is. Entrepreneurship is just starting a business and taking on the majority of the risks and rewards. There is nothing in the definition that says you have to sell the business or exit in any way.
I'd argue that taking on VC money is actually less entrepreneurial than going it alone - you're offloading a big chunk of the risk to your investors.
The entire purpose of starting a company is to make a profit by delivering a product or service that the market will willingly buy. The operative word there is "profit" -- something that seems to have going conspicuously missing from companies that are being built for the purpose of being "exited".
Why? People can start companies for whatever reason, also your company itself can be the product and big tech companies might be the market you're targeting. Users might just be along for the ride (and they get cheaper and/or better products because VCs are willing to subsidize their development).
Both those things can be true and both can be legitimate interests.
Certainly not in terms of expectation value. Most of the value of a startup at any given funding round is driven by the possibility of a public listing. This is true even though most successful startup outcomes are acquisitions.
> Of the literally hundreds of companies that YC has invested in, only 5 have gone public.
The correct number is 18, not 5. [1]
[1] https://www.ycombinator.com/topcompanies/valuation (select the "Public" tab.)
The best I could find is that YC has invested in 4000 companies..
I imagine this claim is satire, given how outlandish it is. But if I were to take it at face value for a second... Acquired by whom? Other companies... Who were started to... Get acquired themselves? Where did these other companies get the money to begin with? Etc. This is just a stupendously ridiculous take, I just cannot consider it was made in good faith.
> Of the literally hundreds of companies that YC has invested in, only 5 have gone public.
YC is a droplet in the ocean of the economy. Even if we just look at the US, about five million businesses were started in 2022 alone. https://www.census.gov/econ/bfs/index.html
or to make profit. Being acquired used to mean you failed, and had to suck your pride in and let someone else buy you out to pay off your debts.
Admittedly these are the people getting the lions share of VC money in the first place though.
And in my feeling, I've seen PE getting more active in tech last year (maybe just because valuations went down).
If there was no options in that niche, the market objectively would be a lot tougher.
If the business model is to be acquired that will require the business model to change, I'd prefer that than a bunch of companies only working to be acquired, fucking customers in the process (and all of the externalities deriving from that, like wasted man-hours to move away from products that will be killed).