• aesthelete@lemmy.world
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    1 year ago

    You’d think at this point that investors would wait for a thing to fill out the question mark second step in their business plan before investing in it, but you’d be way, way wrong.

    Every new tech company comes to the investor panel with:

    1. build expressive to run new tool and give it away to end users for free

    2. ???

    3. profit!

    And somehow they keep falling for it.

    • Punkie@lemmy.world
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      1 year ago

      Because people assume all these investors know what they are doing. They don’t. Now, some investors are good, but they usually don’t go for shit like this. At lot of investors are VCs, rich upper class twits, who can afford to lose money. Pure and simple. It’s like a bunch of lotto winners telling people they know how to pick numbers, betting outside bets once in a while, get lucky, and have selective bias.

      Plus, they have enough money to hedge their bets. For example, say you invest $1mil in companies A, B, C, D, E, and F. All lose everything except A and B, which earn you $3mil each. You put in $6mil, got back $6mil. You broke even, tell people you knew what you were doing because you picked A and B, and conveniently never mention the rest. Then rich twits people invest in what YOU invest in. So you invest in H, others invest in H because you did, drives up the value. Now magnify this by a lot of investors, hundreds of letters, and it’s all like some weird game of luck and timing.

      But a snapshot in time leads to your 2) ??? Point. Many know this is a confidence game, based on luck, charm, and timing. Some just stumble through it, and others are fleeced, but who cares? Daddy’s got money.

      Money works different for rich people. It’s truly puzzling.