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netskeptic 12/4/2012 | 10:56:01 PM
re: Startup Shelf Life > Equipment backing $18 million in annual revenue
> fetch $1.5 million in fire sale. Talk about
> shelf-life.

If these $18M of revenue are accompanied by say $36M in operational expenses, the $1.5M for would be a like a very good price.



ergo 12/4/2012 | 10:56:01 PM
re: Startup Shelf Life and considering from what insignificance this thread started - now, here's some proof of inflationary expansion.
(supposedly that's what happened just after the big bang)

cheers, folks
ergo 12/4/2012 | 10:56:01 PM
re: Startup Shelf Life this collection looked interesting, being the most-discussed topic.
but it just appears to be the mothly Anonymous Startupaholics meeting. how sad. maybe we should all just go to atlantic city and play slots.
optical_man 12/4/2012 | 10:56:00 PM
re: Startup Shelf Life "this collection looked interesting, being the most-discussed topic.
but it just appears to be the mothly Anonymous Startupaholics meeting. how sad. maybe we should all just go to atlantic city and play slots."

You are correct. We should all stay in early Industrial England, and keep toiling away at the mill. That's a guaranteed ($1.50) paycheck per week with no upward mobility (except heaven when we die at age 42).
All those people who left for America? Well some of them will drown on the way over (some boats sink) and many of them will starve on the streets because America is not the promised land, it's all a myth.
Yessiree, we should stay here in Liverpool where the livin's, well, we're livin, right?
ergo 12/4/2012 | 10:55:58 PM
re: Startup Shelf Life going further back in history, Greenland was the promised land. didn't work out for most.

upward mobility?? VP one day, columnist the other, that what you're dreaming of?
optical_man 12/4/2012 | 10:55:55 PM
re: Startup Shelf Life "Well said. Paul Krugman (not a fan of him) gave a good analogy: a population dependent on fishing vs a population dependent on gold digging. Fishing provides rewards approximately commensurate with effort, while gold-digging is much more driven by luck."

Well, I don't know who he is, but I'm not a fan either. This is a stupid analogy he makes. Fishing vs. Gold Panning? Come on. The Gold Panners in the Klondike forgot to gather food each day and eat, and that's why we have the "Great Gold Famine"? What a bunch of bunk. Sure, most of these guys came back broke and cold, but there was no mass deaths of a hundred thousand people. These guys were HARDY FOLK, just like you and me. Got burned on that gold thing? sure!, but died? nope.
This guys analogies are stupid and simplistic, and I would question the audience that sat there and clapped.
Me believes that we are at a stage where when someone hears this at the XXX conference, we would stand up and say "Sir, this is SO FLAWED on so many levels, can you please talk to us like we are not stupid?, thank you Sir."
Just me?
LRfan 12/4/2012 | 10:55:55 PM
re: Startup Shelf Life Good article Doug Green.
Have any more?

big daddy 12/4/2012 | 10:55:54 PM
re: Startup Shelf Life I can tell that Paul Krugman has never been fishing.
wall2main 12/4/2012 | 10:55:54 PM
re: Startup Shelf Life Start ups face risks at multiple levels -- the team, execution, funding, market size, market timing, competition. Its no secret that in any market space about 1 in 10 (or pick your favorite ratio) start-ups will succeed and the others will fail. VCs know this and engineers/employees know this. VCs invest in multiple companies across industries, hoping to have some hits. Since the odds of failure are so high, engineers have to join a company based on the technical vision of the company, among other factors (Statistically, it can't be just to make money - thats a losing proposition). If the startup succeeds, everybody is happy. If the startup fails, the VCs lose their money, and the engineers had a chance of working on some cutting edge technology which can help them with the next step in their career.
The point is that its hard to paint VCs and engineers with the same broad brush in terms of their motivation in investing their time and money in start ups.

As a side note, I know of engineers who are 'doing a VC' on the startups by working at each startup for about a year or two. This way, they also get to 'diversify their investments'.

- wall2main
dietaryfiber 12/4/2012 | 10:55:53 PM
re: Startup Shelf Life

I think we are now getting somewhere. I think the problem is the change in investing environment. During the bubble, people built companies that were designed to get bought and provide a new R&D group for a major company. Thus, many of these companies would have no revenue and 200 - 300 employees.

Turn the clock forward. It take a minimum (if evreything is brilliant) of 3 years of shipping product to get to break even in that kind of company. So, since many of them are 2 years old the VCs see that this is at least a 5 year investment. Also, the VC is recalibrating the market opportunity and is evaluating the technology versus other startups.

Many of the bubble firms are just coming up short in that evaluation. I am not a VC but have talked to a lot of them. They are retargeting their company to go after the RBOCs, but draw the RBOC network as a CLEC network. They are simply incapable of changing to meet the changes in the environment. So, the VCs bail on the company.

I also think the VCs do a company a disservice in many occasions. Many of them are looking to get to the "liquidity event". This leaves the startup cutting corners to get something out there. This limits the competitive advantage that the company might have.

Finally, this leads me to the teams. During the bubble too many startups existed. This gave rise to the B and C players to be a part of them. This in turn diluted the personnel quality of many startups, especially in the senior management ranks.

So, the bottom line to me is that the entire industry went insane. It is stranding many firms who are caught in an unrecoverable position. My take was you were trying to blame the VCs. They shoulder a part of the blame. But the finger can be pointed in many many directions. This includes greedy engineers and management teams that saw themselves as the next Cerent. VCs act consistently to enhance their finances and want the firms they fund to succeed. When they feel that they won't, they pull the plug. Its just that simple.

dietary fiber
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