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At Least $1.48 Billion in VC Funding Has Gone Up in Smoke This Year as the List of Dead Startups Grows (businessinsider.com)
An anonymous reader shares a report: We're halfway through 2017 and already a group of startups that together raised $1.48 billion have shut down. Some of these startups are: Beepi, the website that brought together car buyers and used-car sellers, shuttered in February. Quixey, a mobile search engine that was able to crawl apps, laid off most of its staff at the end of February. Yik Yak -- the anonymous social media app that was at the center of several college harassment scandals -- announced its closure on April 28, after struggling to keep users on its platform. Maple, a New York City-based food delivery service, closed down on May 8. Sprig, a San Francisco-centric service that delivered high-quality meals on demand, made its last delivery on May 26. Hello was the company behind the Sense sleep tracking sensor, which was designed to sit in users' rooms, rather than on their wrists. It closed in June after failing to find a buyer. Jawbone was a pioneer in wearable devices, with a focus on fitness trackers and portable speakers, but it struggled to pay its vendors.
The hookers and illegal drug companies need to make a living too!
I tend to rant.
Is it just me, or does investing in a startup seem more like gambling?
1.5 billion is a drop in the bucket in America's economy much less the global one. This is /., I'd like to think we understand numbers well enough to know that.
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For each one that flops there's a million Facebooks. Or is it the other way round?
But hey, what do I know, I'm just playing with pother people's money.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
In order to have a business which ONE item of the following do you need?
I learned the correct answer over 30 years ago and to this day I see endless startups and investors still get it wrong. People who should know better. So it doesn't surprise me much that $1.5B goes up in smoke.
More at 11 PM.
It is like a 9$ an hour worker spending 1.5$ on a lottery ticket. Or a poor household with just 90K in net assets spending 1.5 $ on a bottle of shampoo.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Obviously they didn't provide enough ways to ignore preexisting laws and regulations as required by a startup to be successful these days. It's the economy of cost savings through flouting the rules.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Just call it the Rich paying their fair share.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
A lot of start ups try to repackage something mundane into something sexy (ex Juiceroo). It doesn't work. It's hard, but when I find a startup with some patents, I take notice.
Actual innovation is hard which is why there's so much BS out there.
Most people know that most businesses fail. There are numerous reasons why this can happen but that's not being discussed, what is being discussed is that "shit doesn't work out for everyone" which is kind of a "well duh" type statement.
Anons need not reply. Questions end with a question mark.
Money is like energy. Unless there is some huge devaluation event or you actually burn physical notes this money has not gone up in smoke.
What has really happened is that this $1.48 billion has instead ended up in the hands of people other than the VCs or the companies they were funding.
In the words some other group of people is now collectively $1.48 billion richer.
I am Slashdot. Are you Slashdot as well?
People are too embarrassed to buy from companies with names like that.
"I don't know, therefore Aliens" Wafflebox1
I don't know how they define a startup, but it's apparently very broadly interpreted if the 20 year old Jawbone is included.
Someone needs to resurrect Fucked Company. We're missing a prime opportunity for comedy.
If I remember right, these are the key steps:
1. Start Up
2. Cash In
3. Sell Out
4. Bro Down
Is it just me, or is investing in a new used anything sale site, social media app, or anything tracker particularly risky? Seriously, anyone who hands over money to someone who says "I've got this great idea for a web site that'll kill Facebook", or (in this day and age) says "people are going to pay me money to put a device in their room that watches them sleep" deserves to flush that money down the toilet.
The genius of the startups certainly isn't in their ideas. Its in finding VC funders who have that much money and that little sense. That has to be a damn small window.
Read "Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal" by Nick Bilton, which can be summed up in a Mark Zuckerburg quote: "[the four founders] drove a clown car into a gold mine and fell in." Twitter as a technology company was an afterthought as the founders squabble over who would be CEO, spent investors' money out the wazoo and didn't bother finding a way to make money.
beepi: never heard of it ... ... ...
quixey: never heard of it
yik yak: never heard of it
At Least $1.48 Billion in VC Funding Has Gone Up in Smoke This Year...
And that's just Uber! ;-)
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
Having lived through the last Dotcom Bubble, I'm very surprised it's taking this long for the current one to pop. This time, it's mainly situated in Silicon Valley, but last time there was an East Coast bubble outpost in NYC. This was because traditional media publishers and TV networks were desperate to buy into the bubble as well. I saw lots of huge 3-story Times Square billboard ads for companies like Beenz and Webvan as I walked to my "boring, old school" sysadmin job. I always wondered where these companies got their money from...I mean obviously from VCs, but do they just dump $40 million in the company's bank account and say "go buy Nerf toys, Aeron chairs and all the advertising you can book!"?
I'm sure the pop for this current bubble will be coming pretty soon. There are just too many copycat companies out there trying to squeeze the last few drops of blood out of the bubble. I've seen no fewer than 6 meal kit delivery services (like Blue Apron,) at least 4 clothing delivery subscriptions (like Stitch Fix,) and 10,000,000,000,000 magic DevOps tool vendors. (Guess what line of work I'm in these days...I can't tell you how many 5-person startups have offered to solve 100% of my application problems using their One Cool Trick.)
A favorite phrase back then was "this time it's different!" Indeed it is -- this time we have The Cloud. A startup doesn't have to spend millions to buy or rent a data center, and they can coast on VC fumes for much longer than Bubble 1.0 startups. They can also advertise on Facebook and Google instead of those Times Square billboards. So I imagine this will continue for a while, but just like the last bubble, this one isn't sustainable either.
Too many investment dollars chasing too few good investment opportunities. It's time to shift some capital to wages, increasing aggregate demand. That would result in better returns on existing investments, and give rise to new markets for new investment opportunities.
so that they don't pay taxes on their profitable lines of business, well, you couldn't be more wrong.
Now, if we stopped letting them write off Business As losses for Business Bs profits...
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if you were a billionaire it wouldn't matter. First, it wouldn't be a big risk to you. Second, you'd use the losses on failed businesses to avoid paying taxes on successful ones effectively shifting the risk to the working class in the form of taxes, third you'd have enough investments that the risk would be minimal and fourth if all else failed you'd be Too Big to Fail and get a government bail out. Again, at taxpayer expense.
This is why socialists exist. We're realists. We don't honestly believe we're going to ever have an even playfield so let the rich have their cake so long as we get ours. In practice the working class fight among themselves to keep anyone from getting cake and the rich laugh all the way to the bank...
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not if you're taking companies like Uber. I suppose you do need a) and d). But b) can just be the tech equivalent of lego bricks. As for capital, that's for pleebs. Make it an app and let the users bring the capital and take all the risk. Rely on the bad job market and lax employee protection laws to get away with it.
It's a whole new world of 'sharing'. And by sharing, I mean you get to share your meager capital resources with the richest people in the world. Oh what a brave new world and what not.
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By your reasoning, the trick Enron did (where they repeatedly "sold" an item back and forth between a subsidiary to pad their revenue) was legitimate.
The important thing isn't the money spent. It's the value obtained from spending that money. I spend $5 on a hammer and use it to fix something that would've cost me $20 if I hired someone, then I gained $20 of productivity for the $5 purchase, for a net gain of $15. My economic productivity increased by $15. It's the productivity increase which is important, which is why the Enron trick doesn't work (no productivity was increased since they were just passing it back and forth).
In the case of failed businesses, $x was spent but less than $x of productivity was generated. The true loss is the difference between these two, so is less than $x. But it's still a loss.
Put slightly differently, $1.48 billion is an amount. Economic activity is a rate. Yes that $1.48 billion is still out there in different hands. But the potential for $1.48 billion of economic activity every 6 months from these businesses is now gone. (Not that this should concern anyone. $1.48 billion is less than 0.01% of U.S. GDP. Some losses are necessary when exploring the solution space of viable business activity, and 0.01% is vanishingly tiny. Bad ideas fold. The money gets re-spent on new ideas, most of which hopefully turn out to be good ideas.)
Perhaps players in, for example, the automotive sales market were having trouble taking "Beepi" seriousli.
What IS it with the infantile names? It's a plague. I know, I'll start up AppNameli to help people name their startupslies.
Don't disappoint your bird dog. Go to the range.
It is Trickle Down.
VC is the ONLY way to get the rich to part with money, by appealing to their greed. Without VC there would be no trickle down at all.
If telephones are outlawed, then only outlaws will have telephones.
So the dead startup owners... what do they do? Take the cash & pay off their debts? Or take the cash & blow it on something, & tell the VCs after the fact that the cash is gone?
Not a fiction but an extremely durable logical construct. As long as any individual can only see their sliver of the economy, and everyone else values the money as they value it, and it's able to provide the holder with the necessities he requires, the construct continues.
It is traditional to use the last million on coke and whores.
Sleep your way to a whiter smile...date a dentist!
If anything, this is a positive story about booming investment in entrepreneurship.
it has been redistributed. In this case, it has gone from the greedy filthy rich to the general population. This is a good thing.
According to Forbes, 9 out of 10 startups fail. Necessarily, this is a costly process. After a failure,, many entrepreneurs pick up the pieces and try again and keep trying until they succeed. For most of them, it is a learning process. Part of that is learning how to manage risk, which is an inevitable part of running a startup or any business for that matter. Some of it is almost like random chance. All the necessary prerequisites need to come together at the right time, including a technical component that actually works and a target market that actually wants to buy what you are offering them. If any prerequisite fails to materialize when needed, the whole enterprise may flop.
startup, n.:
An otherwise normal business which is not making money.
Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.