What is a groovy kind of startup?

Seems once again I'm parasitizing on bright ideas of Profy. It shall be so.

I don't like terminological disputes since there is a serious risk of necessity of dancing on the head of a pin. And I'm far from being an angel.

Nevertheless, I don't think that what Svetlana calls a 'few months ago startup' was and is in fact a startup. As a former investment banker (ouch), I hate naming great ideas without any opportunity of being profitable as businesses – in every fiber of my being. Think it's a conceptual misunderstanding.

Take a subculture: it's usually very influential, attracts thousands, and the significant part of its influence is contrary to any cash flows. There's something in, let me say, the web applications industry that reminds me of a subculture – an army of guys taught coding (not necessarily at Stanford) and currently inspired by numerous stories of success.

Probably, they just sublimate their healthy ambitions, nothing more. In fact the number of success stories – in terms of cash – is modest. Attracting audience is definitely a hit, but not a business.

In my view that comes from a certain gap in perception of popularity and target audience, i.e. those who are ready to satisfy some needs and those who are ready to buy stuff – either upon reading ads or directly. I may be wrong, but something is definitely wrong here.

Remember the dot-com bubble? My VP in a private equity boutique, an American, told me of traffic growth expectations prior to the crunch: optical cables were being laid on parallel streets and everybody talked of 'selling information' (no one really understood what it meant).

So what? Now they are talking of a potential collapse of the Internet in 5 years due to capacity limitations. The idea was cool, the trend was correct, but inside that pool something went bad. Ha, almost poetry. I mean, those, who are successful, realize the importance of money from the very beginning. Communism wouldn't last for long

Illustration: kaist.ac.kr