You know, I’m tired of reading these articles about startups and unicorns landing millions upon millions of dollars of venture capital and running their “companies” like a frat house. I say “companies” in quotes because they aren’t real companies. They’re fake. Sure they might be in business but if they weren’t given the money they wouldn’t exist.
Why? Because they aren’t profitable. They are simply propped up by their venture capital suitors. Most have no viable business model and no long-term plan for success. It’s just fake business running on somebody else’s money.
You see, these companies are sustained by the flow of cash infusions to keep that talking point of needing more money to expand, grow fast and gain market share. Translation: We can’t make enough money on our own. These companies are the equivalent of a grown up child living off Mom and Dad’s dime, borrowing the family car and asking for gas money with the hopes they can eventually move out on their own.
Raising money to grow a legitimate business is not a bad thing. The trouble begins when young, impressionable would-be entrepreneurs see these lucky recipients of cash injections as Tech Gods and geniuses when all they did was gain investment and obtain an outrageous valuation. This tech folklore is not grounded in reality and gives the wrong impression of what building and sustaining a real business really is.
The real kicker is when startups turn their companies into what amounts to a frat house culture. Beer kegs and drinking while working? Not cool. It’s foolishly irresponsible. Promoting a culture of drinking at work is a disgrace and lacks professionalism. Moreover, it also opens your business to unnecessary workplace liability and the potential for HR nightmares. Startups rarely have the real world experience to know the risks they are taking could cost them their entire company.
It’s usually after a series of bad decisions, poor judgment and a lack of judicious financial management that startups find out the company they started is not the fabled unicorn, but rather a bucking brahma bull kicking them straight in the teeth.
Those who succeed know the difference between the two.