Are You Smarter than the Largest and Most Famous VC on the Planet? Find Out Now...
The answer is probably not, but you also might be as well. If you're not aware of what Vision Fund is, it's one of the largest (if not largest, I'm not going to look it up) venture capital funds in the world run by Masayoshi Son, and it is responsible for some of the game-changing companies we know today. They've invested in the likes of Uber and WeWork while leading the way with dozens of other companies.
Now that you know what it is, you're probably saying to yourself "Wow these guys must be WAY smart. How could I possibly be smarter than them?" As it turns out, some of the things they've invested have turned out pretty horribly, and to be honest it's probably easy to understand why...
Ummm these companies don't turn a fucking profit! Most people have no fucking clue how tech/startups work. They have a basic understanding of the big boys, but there's an underlying culture within the venture capital/investment/startup world that frankly most people don't understand. Hell, even I don't understand some of the more nuanced aspects of it, but once you start subscribing to VC Twitter, you start to get the gist of what's going from both sides of the coin. The worst is that for YEARS, investors have asked about one thing and one thing only: growth. HOW FAST CAN YOU GROW? They want to see what's called the "hockey stick" because it shows exponential growth in users and time spent engaging with the company. They care about revenue, but they don't care about profit (revenue is money in, profit is money after expenses is subtracted from profit for dummies).
They don't care because ultimately, investors don't want small dividends paid through their shares. They want the big sack of money dropped on their desk after the investment either goes public or is sold to a different company at a higher valuation.
But SURPRISE... if you're going to be a business that lasts more than five years, you need to be profitable and someone forgot to tell Son about this finicky little detail when it comes to build long term, self-sustaining businesses.
So to answer the question: we're probably not, but we're not as dumber as we think we are.
Now that you know what it is, you're probably saying to yourself "Wow these guys must be WAY smart. How could I possibly be smarter than them?" As it turns out, some of the things they've invested have turned out pretty horribly, and to be honest it's probably easy to understand why...
Ummm these companies don't turn a fucking profit! Most people have no fucking clue how tech/startups work. They have a basic understanding of the big boys, but there's an underlying culture within the venture capital/investment/startup world that frankly most people don't understand. Hell, even I don't understand some of the more nuanced aspects of it, but once you start subscribing to VC Twitter, you start to get the gist of what's going from both sides of the coin. The worst is that for YEARS, investors have asked about one thing and one thing only: growth. HOW FAST CAN YOU GROW? They want to see what's called the "hockey stick" because it shows exponential growth in users and time spent engaging with the company. They care about revenue, but they don't care about profit (revenue is money in, profit is money after expenses is subtracted from profit for dummies).
They don't care because ultimately, investors don't want small dividends paid through their shares. They want the big sack of money dropped on their desk after the investment either goes public or is sold to a different company at a higher valuation.
But SURPRISE... if you're going to be a business that lasts more than five years, you need to be profitable and someone forgot to tell Son about this finicky little detail when it comes to build long term, self-sustaining businesses.
So to answer the question: we're probably not, but we're not as dumber as we think we are.
Comments
Post a Comment