“Booming tech sector just ripe for emerging entrepreneurs” hails the business opinion post.
Yeah fair enough, my friend Aaron does have a point, it’s a good time to start something. It’s always a good time to start something. I love Aaron’s confidence and how he’s gone out and done something, can’t fault that, this post though is not about that.
We do though have to be very very careful how we sell the end game though, the focus is far too much on acquisition and not making something that will last. I’ve heard too many organisations peddling the “lotsa money in the app economy” and “you could be like [insert fave startup here]”.
Keep in mind that the failure rate of startups is 98% (hence we try again and again and again) let’s put some numbers down.
Facebook have done 46 acquisitions so far. A quick look on Crunchbase tells us that there’s 220,926 companies listed, so that gives us a baseline number.
0.0002% of companies listed potentially acquired by Facebook. Not a good start.
I mean the odds aren’t as bad as winning the Euromillions (1 in 116,000,000) or the UK National Lottery (1 in 13,000,o00)
Population of Northern Ireland is 1,800,000 approx. So that gives us 360 people in NI that could potentially be acquired. But wait, we need to factor in our 98% failure rate. Seven people in NI could be acquired! What’s the probability that those seven people have a tech startup considering it’s a minority as it currently stands…..
So can we stop pedalling this please? The reality is that you won’t, I’m sorry.
3 responses to “Can we stop the “you could get acquired by Facebook” cheerleading please?”
I’d love it if more start ups focused on how they intend on being profitable, buy out is one way of the founders making money but that is much more likely if the business is viable as a business, not just the tech value
Basically a founder’s attitude to profitability is really down to the level of grant handouts are readily available. The more free money the less thought it put into sales. Only when an investor or VC gets involved (i.e. puts their own or someone else’s money in) does the emphasis shift to selling and making money as the monthly board meeting question one will be “what’s the turnover this month?”.
Sadly too true, because the people responsible for grants don’t really understand business