This is how tech startups work, isn't it? Use investors to build a product with no business model, then the founders cash out via purchase or IPO, and soon after the fact that you have no business model comes to light and the product falls apart trying to find a business model, while users move on to the next shiny thing with no business model.
Glad I'm not the only one thinking this. Seems obvious, but I always felt like I was missing something. How is it that most of the tech/SV world is just the same con being run over and over again, yet it keeps working? Does it operate on the same psychological glitch as a lottery? Do the giant corps buying these startups all think "I know how it's been in the past, but surely THIS startup WON'T turn to shit the moment I buy it because it was never a real business to begin with! This time for sure!"
Or are the real suckers the investors, and the corps are just doing these purchases in a performative capacity to keep razzle-dazzling them?
Discord has a business model: Get people engaged in a community, sell them Nitro so they can boost their communities [1][2]. The "buy benefits for you community" scheme is wildly successful in mobile games, so I wouldn't be surprised if it works well for Discord.
I’d slightly revise your description of the scheme from no business model to a intentional no revenue business model allowing for the valuation speculation to run rampant (i.e. at anytime we could stop investing in our growth, then it’s all profits). Of course by the time they go public like say Uber and set multiple records on quarterly losses and the investors drop the bag on the public it becomes obvious they can’t stop spending or the business will go under so instead they will continue accumulating billion dollar plus losses every quarter so by the time the shit hits the fan original founders and investors are on to the next thing and can always say they took a xx billion dollar startup public and that’s when the company lost its culture and the corporate greed ruined it.
coldpie|4 years ago
ergot_vacation|4 years ago
Or are the real suckers the investors, and the corps are just doing these purchases in a performative capacity to keep razzle-dazzling them?
wongarsu|4 years ago
1: https://support.discord.com/hc/en-us/articles/360028038352-S...
2: https://discord.com/nitro
throwaway_kufu|4 years ago
duxup|4 years ago
We don't want to pay. And we're upset when they vanish or change dramatically try to find a way to remain viable financially.