The good old “make a tech startup with a gimmicky product idea, get millions in VC for some reason, create an underwhelming product that was never meant to be any good, then get bought up by a big company that will sit on the IP and never do anything with it” strategy of making money.
This is the part I don’t understand. Pretty much everyone agreed these would be terrible products and yet these companies somehow drum up tens of millions of dollars in investments. How?
Because the investors are always using Other People’s Money. They “invest” OPM and if it succeeds they take a huge cut and proclaim themselves to be geniuses. If it fails, they shrug and make up some BS to console the loser.
Most of the people sitting on piles of money don’t have any knowledge or radar to help them negotiate where to put it. They lean heavily on other people to tell them what to invest in.
When AI first started getting big everybody was guessing where the curve was going to be and where the technology was going to head. The people guiding the venture capitalists were putting their oars in the water early.
To be fair there’s a lot of money to be made in AI assistants if they can manage to run the back end affordably. If you’re asking Google, Siri, and Alexa complicated questions they’re miserably fit for the task. But when we get to the point where you can expect a reasonable answer from something like look up all the places to rent cars near Tucson Arizona give me the cheapest price with the best reviews. Or tutor my kid on basic calculus, test him, and give me a report on where he needs more assistance. That kind of stuff is worth money and something that many people with money will pay for.
This form factor is off-putting and honestly AI at this point is still only mostly right.
The VCs are all over AI and there’s opportunity there. Just not on every product and probably not yet.
The good old “make a tech startup with a gimmicky product idea, get millions in VC for some reason, create an underwhelming product that was never meant to be any good, then get bought up by a big company that will sit on the IP and never do anything with it” strategy of making money.
This is the part I don’t understand. Pretty much everyone agreed these would be terrible products and yet these companies somehow drum up tens of millions of dollars in investments. How?
It’s called exit capitalism. They hope to create enough hype so they can sell off their share to the next idiot for a higher price.
Investors are not smart people
Because the investors are always using Other People’s Money. They “invest” OPM and if it succeeds they take a huge cut and proclaim themselves to be geniuses. If it fails, they shrug and make up some BS to console the loser.
I used to work in a company that was VC adjacent.
Most of the people sitting on piles of money don’t have any knowledge or radar to help them negotiate where to put it. They lean heavily on other people to tell them what to invest in.
When AI first started getting big everybody was guessing where the curve was going to be and where the technology was going to head. The people guiding the venture capitalists were putting their oars in the water early.
To be fair there’s a lot of money to be made in AI assistants if they can manage to run the back end affordably. If you’re asking Google, Siri, and Alexa complicated questions they’re miserably fit for the task. But when we get to the point where you can expect a reasonable answer from something like look up all the places to rent cars near Tucson Arizona give me the cheapest price with the best reviews. Or tutor my kid on basic calculus, test him, and give me a report on where he needs more assistance. That kind of stuff is worth money and something that many people with money will pay for.
This form factor is off-putting and honestly AI at this point is still only mostly right.
The VCs are all over AI and there’s opportunity there. Just not on every product and probably not yet.
They used the phrase AI and humane in the same sentence. Investors who aren’t very technical would get very excited about it of course.
Look at the bright side, some engineers had fun working an a new thing.
I’d’ve had tons of fun working on it, but they probably paid their engineers chiefly in equity, so I never would have taken the position anyway.
You’re literally describing venture exit. Once the asset reaches the desired value, you sell your part and hop. Rinse repeat.
Obviously not the case for most of us wagoids