Rant: Funding raised and valuations, the startup hype bubble

Startup hype bubble on thisissamstown.com

Hype and unicorns

Startups now become unicorns, everyday valuations go through the roof and the tech journos put funding news on a pedestal.

However, just let go of the noise and headlines for a second. What do you get at the end of the day?

A fait amount of bullshit and not necessarily results.

Funding and valuation have become the ultimate fantasy in the startup world. But is the point of any company out there not to actually MAKE money? Companies are born and die but they share the same goal: generating revenue and creating value.

Yet, startups have been allowed to play with millions and burn them for the past 10 years while the world would not care.

The “bubble” so many are speaking about at the moment is here. Created by letting kids in at an open bar and making it a trend.

The bottom line of this trend: the hype allows the “cool” kids to get millions when the companies with a business plan do not manage to raise the few do-or-die hundreds of thousands of dollars they would need to pass the tipping point and generate revenue – and profit – out of a solid business model. Yes, most founders I know do not have time to ask you what your superpowers are as the one and only question when recruiting but are rather interested in your background, achievements and personality.

News outlets are highlighting this trends too but seemingly for the sake of it when tech “writers” keep producing pieces about funds raised at the same pace, alternating with the neighbour’s – or drinking buddy – latest “tech”/fun/random project.

The bubble is there. It is just not a financial one, just a hype one.

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One comment

  1. Samuel Pavin · September 23, 2015

    Reblogged this on Samuel Pavin and commented:

    No holds barred view on current startup valuations and the killing of (good) potential.

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