Stop asking "but how will they make money?"(andrewchen.co) |
Stop asking "but how will they make money?"(andrewchen.co) |
So obvious you can't give one concrete example?
But you are correct, there is an easier option,
You can make lots of money by doing an IPO of a business, using a vague business plan, offering massive levels of success and just hope you hook a lot of unsuspecting investors.
Then all you need a few suckers (any one remember the FB IPO) to invest in you IPO any you will run away with lots of money.
Unfortunately most of these IPO investors will loose most of their money but what does that matter.
But to be fair, there are a lot of "projects" that can't stand alone, but are valuable to existing businesses. The current vogue is for these to be initiated as startups.
It sounds more glamorous than a bigco project, and sometimes it is. Sometimes it's even more profitable for the founders than the cushy bigco job (with benefits and accounting and budgets etc) that they didn't have during those years of effort.
But usually not. The rewards have to come from elsewhere.
The problem is you can make more money by creating a project does not need to stand alone. The business plan does not need to make any business sense. You only need to get through the IPO.
FB cooked the books for decades trying to find a good time to do their IPO and they finally managed to get away with it. Some people made a lot of money on that IPO and a hell of a lot of other people got screwed!
But give FB 5 years and unless they can actually implement a business plan that works, not the work of fiction that is their current plan, they too will be gone.
Now because I suspect FB will be gone in less than a decade, to me that makes their IPO nothing more than a scam.
I guess time will tell.