Monday, July 27, 2015

Tales From the Valley: Amazingly Bad Startup Idea

Heard of an amazingly bad startup from Uber driver in San Francisco. You rent out your (exorbitantly expensive, small) San Francisco apartment during the day to startups that can't afford real office space. They save money and your apartment "generates income" during otherwise idle hours when your stuff would otherwise just be sitting there, unmolested by strangers.

It was not clear whether the same startup would work from your apartment every day (can they keep some pens and letterhead there, then?), or if every morning the startups would look for a new empty apartment.

More interestingly, this startup is marketing itself via Facebook ads. That is important because the supposedly mature, profitable startups in advertising businesses (FB) derive revenue from these dubious new startups. Since the dubious new startups are unprofitable and funded by equity, when they are eventually exposed as worthless mimics, not only will they evaporate but so will significant amounts of revenue at the "mature" unicorn companies.

Previously on the startup bubble:


CP said...

One other thing.

This is a sure sign of overproduction, just as roughnecks living in Wal Mart parking lots in North Dakota marked a major top in oil.

The VCs are totally oblivious to economic history if they aren't taking these signals to go to cash.

Musical chairs.

James said...

Bill Gurley talked about Facebook's dependence on money-losing startups for ad revenue:

CP said...

A correspondent writes,

"Its like Air BnB but for during the day."

"Instead of just staying home and working at your small SF apt, you can rent out someone else's to work at"

That's a funny point - presumably these people live in San Francisco - why don't they just have the group work session at their tiny apartment instead of someone else's?

Stagflationary Mark said...

July 27, 2015
The Onion: Airbnb Vs. Hotels


eah said...

presumably these people live in San Francisco

I wouldn't assume that.

Anonymous said...

You know, you could just live within your means and not have to rent out your apt during the day...

CP said...

We need to find this thing and see what valuation(s) it raised money at so far. Anybody got google-fu?

Adam V said...