Just watched the video interview of three major VC guys
talking to Mike Arrington
and can't help myself notice that ultimately it's not about the products these guys are investing in... it's about the hype...
Why are the VCs investing in hype?
Because they are buyers and sellers in one person - they want to buy the most overhyped deal in the world and later sell it at a bigger price to a bigger "fish" (i.e. company) or do an overhyped IPO. That's their goal. They don't care about the startups they invest in, they care about how much they can sell these for. And you can't blame them for that. This is why they don't buy similar companies with better products... if they don't appear on Techcrunch and are not overhyped, they don't matter.
More on VCs this Friday:
While I still advocate the 37signals way and don't search for VCs for my Nozbe
or for the new app I'm working on, there are some valid points in the article like "the sole investor in 37signals is Jeff Bezos, who is in fact a typical example of VC backed startup which was running on losses for years to gain the market dominance" or "VCs are not for everyone" - but because of Techcrunch and overhyped stories of millions of dollars valuations, many startup founders believe the VC way is the only viable way. It's not. Trust me. Trust 37signals :-)
This is a very cool article by a wise man. I can't agree more. I see lots of talent go to the big companies and their startup ideas they might have had... simply die. It's even worse - I saw several times talented startup owners who accepted engineer positions in big companies and killed their startups (to a well deserved fury of the abandoned and cheated users). Especially in Europe people prefer to go for "security" of a steady paycheck than change the world.
Question: What do you think of VCs? Are you Entrepreneurial?