• wander1236
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    12225 days ago

    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.

    • @[email protected]
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      4325 days ago

      get millions in VC for some reason

      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?

      • AggressivelyPassive
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        3625 days ago

        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.

          • AggressivelyPassive
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            325 days ago

            As I described above. The endgame is to either IPO and sell off the shares to the dumb public, or find someone who’s willing to buy out the company because they hold a patent or have some interesting people on board.

              • AggressivelyPassive
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                424 days ago

                It does. Hype.

                People and smaller investors are told that this company is the next big thing, so they buy it at high prices.

              • @[email protected]
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                124 days ago

                Even as a dumb investor you can extract a lot of money via pump and dump. Just got to get in/out at the right times.

                Spread that out over several portfolios, and you can get rich without ever contributing a single thing to your community!

                • @[email protected]
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                  124 days ago

                  Yes but in order to do that you have to have another “dumb investor” lined up and convinced that the stock is going to continue to appreciate.

                  • @[email protected]
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                    124 days ago

                    Yep, which is why you’ve got to sell while folks think it’s still pumping time. Then everyone in the know dumps and it’s better luck next time to the bag holders.

                    If you aren’t in the know, well, hope you’re lucky.

      • @[email protected]
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        1025 days ago

        I think you overestimate the amount of knowledge, instinct and just plain research these VC people put on investments (I guess when you have money, if one of 10 hit you made it anyway?)

        When the game Pokemon Go came out, Nintendo’s stock skyrocketed to the point Nintendo had to come out and publicly explain they had sold the IP, were not behind the game and made no money from it… “Investors” thought otherwise and started pouring money literally at the wrong company

        There are plenty of similar examples…

        • @[email protected]
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          124 days ago

          In this case I think the VC folks probably got a fat return on the selloff. Not sure what the company who bought their asset got out of it though

      • @[email protected]
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        825 days ago

        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.

        • @[email protected]
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          225 days ago

          Well sure, but aren’t those “other people” concerned to see their money being spent that way? Or that they regularly take huge losses? Aren’t the “investors” concerned at all that people are no longer going to trust them with their money?

          • @[email protected]
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            25 days ago

            I’m not going to lie to you and tell you I know how all of this works, but from experience, the people running these scams are rarely the people who suffer.

            Here’s one I’ve seen myself:

            There’s a new hot startup. Wall Street rolls up to the C-suite of this company and makes an offer: Go public and we’ll give you thousands of “special” shares. (Some companies might even get multiple of these offers from different Wall St. investors.)

            Once the company agrees to go public, Wall St. gives that company’s C-suite Special Shares. Wall St. also gives these shares to friends, family and power people they would like to reward and/or influence.

            On the big day, the company goes public. (To the Moon, Baby!) Everyone with Special shares can sell anytime they like. Company employees have a 6-month “blackout window”. The general public is encourages to “invest now before the shares go up so they can sell after they go higher!”

            After the stock climbs in value, the Special Stock holders dump their shares and rake in the cash. Everyone else is left holding the bag.

            So who in this scenario are the losers? The people who bought the stock and watched it lose value? The people who sold their Special Stock after it went up and before it crashed? Who gets punished? Who goes to jail? Where does the money go?

            You saw this whole scam condensed to it’s essentials during the Crypto Currency scams a few years back.

            So many different variations on this scam. Keeps working too, so long as you don’t get sloppy and steal from rich people like Bernie Madoff did.

      • @[email protected]
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        225 days ago

        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.

        • @[email protected]
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          125 days ago

          Seems like you can slap AI on anything and it just becomes a money-printing machine. Which is why we’ve seen it slapped on seemingly every tech product in the last decade…

          • @[email protected]
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            124 days ago

            I use chatgpt a lot and think AI is a really useful disruptive technology. I really don’t want it crammed into every piece of tech I use, without a choice to opt out.

      • @[email protected]
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        122 days ago

        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.

    • @[email protected]
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      1825 days ago

      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

      • @[email protected]
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        825 days ago

        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.