Vijay Anand | The Startup Guy.

Let’s Build a Business That Doesnt Make Money.

Posted on: March 30, 2008

This was a conversation I was hearing from an entrepreneur who was joined by a few others who quickly chimed in the same tune. This is a recollection of those dialogues.

Entrepreneur: I read the book “Search” a few days ago, and for six years google did not know how to make money.
Entrepreneur #2: I agree, its all about creating traction and growing your user-base
Entrepreneur: Yep. My question then is, why are these investors asking for business model every time we go talk to them? We need some “real investors” around here.

My thoughts:

I think there are some levels of evolutionary cycles that I must have missed. The first one is where supposedly there can be a business which doesn’t have to make money. I fail to understand how a business that doesn’t make money, nor has the intention of doing so even qualify for a business. Shouldn’t it be more of a NGO/non-profit initiative? I think people have totally gotten wrong the concept of using “Free” as a marketing tool, with Free as in Open Source. I am already having nightmares as to how Chris Anderson’s Next book on FREE is going to get twisted and run tales in board rooms and investment meetings.

And the second most important decade that I must have missed is the bit where every family slaved their butts off for generations and gave it to the families of the VC firms so that we can demand that they give us money without having a business that makes money.

Hmm. Let me now think if I have to smile, Laugh out Loud or go find a corner and cry about this state of affairs.

Thankfully, I am not the only one talking about it. Here’s another perspective of the Same. Is your Great idea a Real Business?

Advertisements

4 Responses to "Let’s Build a Business That Doesnt Make Money."

I don’t know.. VCs might ask about a business model, but my impression is that often they themselves are looking more at the scaling potential, where scaling can be user growth, not necessarily revenue growth.

Money tip – Get working on an idea that (a) will come good five years from now but; (b) isn’t good now because the infrastructure isn’t there.

[…] your investor Vijay Anand muses about building “businesses that don’t make […]

Came across this article on Silicon Alley Insider and got reminded of this post – http://www.alleyinsider.com/2008/4/_free_is_killing_us_blame_the_vcs

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: