The old saying is "lose money on every sale but make it up on volume". The new equivalent is "fake it 'til you make it". Amazon is the classic example of one that worked out. Many have a non obvious revenue model that involve selling ads or customer data, that's how TV manufacturers can sell TVs at cost.
But investors seem to be losing patience with business plans that just burn piles of cash with no plan to ever become profitable. This seems to have hit streaming companies, which everyone assumes are all profitable, but actually most are not. MoviePass seems to have been doomed, as was WeWork. There was Theranos. Seems like there is a blurred line between "fake it 'til you make it" and outright scams and pyramid schemes. All of us can attest that you need to ramp up to a certain number of customers to achieve economies of scale, but it should be possible to show some math how that leads to eventual profitability. Otherwise you're like the underpants gnomes. https://www.youtube.com/watch?v=a5ih_TQWqCA -----Original Message----- From: AF <af-boun...@af.afmug.com> On Behalf Of Robert Sent: Monday, June 3, 2024 11:52 AM To: af@af.afmug.com Subject: Re: [AFMUG] MoviePass documentary I consulted for three VC's after Nscp and L3... The wisdom in their thoughts at the time was a home run in one out of 20 was doing well... Their thoughts about founders was about 1/3 idea and 2/3 the ability of the founder to gather talent around them... Your rolodex was as important as your execution... Seed money is easy. A good presentation deck and glib tongue. Getting money for the first round isn't that hard. Getting the second round was the test of your business. 1MM seed, 4-10MM first, unicorns got 100MM for second, and the sky was the limit on the 3rd... On 6/3/24 7:18 AM, dmmoff...@gmail.com wrote: > " ...the startups that light piles of money on fire until it runs out > seem to be actively flying the plane into the dirt. Maybe they have > golden parachutes." > > If at first you don't succeed, try and try again. > > I read a quote from one of those zillionaire entrepreneurs that he had > to fail at seven businesses before he hit it big with one. So I guess > it takes a lot of practice to get it right. My question is how did he > get investment the 8th time after having those seven failures on his > rap sheet? Or the 2nd-7th time for that matter. That's gotta be > somebody with connections in the good-ol-boys network. > > If investors would just give me 8 chances at startups I'm sure I could > be a self-made zillionaire too. > > -Adam > > > -----Original Message----- > From: AF <af-boun...@af.afmug.com> On Behalf Of Ken Hohhof > Sent: Friday, May 31, 2024 6:42 PM > To: 'AnimalFarm Microwave Users Group' <af@af.afmug.com> > Subject: Re: [AFMUG] MoviePass documentary > > That'll buff out. > > Or if you're a Monty Pyton fan, "It's just a flesh wound". > > Or if you've watched Roadkill on Motor Trend TV, "Dzus it back on". > > The pilots here can tell me if there's really an expression CFIT > (Controlled Flight Into Terrain). But I think that's supposed to be > unintentional, whereas the startups that light piles of money on fire > until it runs out seem to be actively flying the plane into the dirt. > Maybe they have golden parachutes. > > -----Original Message----- > From: AF <af-boun...@af.afmug.com> On Behalf Of Bill Prince > Sent: Friday, May 31, 2024 3:27 PM > To: af@af.afmug.com > Subject: Re: [AFMUG] MoviePass documentary > > Bet that smarts. > > bp > <part15sbs{at}gmail{dot}com> > > On 5/31/2024 10:09 AM, Ken Hohhof wrote: >> fly the plane into the ground > -- > AF mailing list > AF@af.afmug.com > http://af.afmug.com/mailman/listinfo/af_af.afmug.com > > > -- AF mailing list AF@af.afmug.com http://af.afmug.com/mailman/listinfo/af_af.afmug.com -- AF mailing list AF@af.afmug.com http://af.afmug.com/mailman/listinfo/af_af.afmug.com
