There are indeed many founders who specifically build companies just to cash out through acquisition, but from my experience there are way more founders who don't come from this point of view.
What really happens is these founders are focused on the product and don't really think much about the business model. This is understandable and actually much better than MBA types who spend months planning for stuff without even building, but the problem is there isn't really a good business model for these types of companies.
The only viable option is ads, and even this has been monopolized by big techcos so it's not easy.
Most founders don't even get to worrying about this point because their companies never take off. But the ones that do, come to a point where they need to make a decision whether to sell out or to find a viable business model.
Like I said, finding a viable business model is increasingly becoming difficult for consumer apps that rely on ads, so these companies tend to cash out.
From outside it may look like a bunch of "tech bros" hoping to strike it big with minimal effort but that's mostly not the case if you look inside. If you're curious, look up what this TBH company went through before having this "overnight success".
I know I must get with the times or whatever, but man this is sad. Essentially every consumer social app creator is just working for the ad industry, or for free.
But that's just the price they pay for working in an overcrowded market segment. The upside they have is that their work is (compared to a lot of other programming jobs) fun and hip.
If you want to make money with what you're doing you need to be either really good/marketing-savvy/popular or pick something that most people consider 'boring'.
The 'boring' things (i.e. the enterprise market) is also 'harder' most of the time because they require a broader range of skills and greater perseverance. You can validate and get growth in a freemium model, but then the hard work to get real sales process begins.
>The 'boring' things (i.e. the enterprise market) is also 'harder' most of the time because they require a broader range of skills and greater perseverance.
Please tell that to my boss/company owner. He sees news articles about how such-and-such social startup created an app in X days and wonders why we can't do the same just as quickly.
Sure, if you want me to write a Twitter clone I can do that in an afternoon. If you want me to write an app for a very specific enterprise sector filled with regulations, while making sure it integrates with our existing desktop software (that was originally written without internet connectivity in mind at all), that'll take an order of magnitude more days.
this IS sad, and it's something i've wrote about repeatedly since the advent of the iPhone and the app store, which was really the hotbed for these kinds of apps. the kind that may be based on some fun or cool idea that the founder had, but with absolutely no way to monetize so they get started by giving everything away. some of these ideas are indeed cool and gain traction, but still no way to monetize so ultimately, once you hit critical mass of users, the only way to monetize without driving away your early users is to do it in a way that doesn't cost the users money, thus ads.
i think there should be a lot more innovation in viable business models rather than concept of the product itself, but that doesn't seem to be a popular sentiment.
What really happens is these founders are focused on the product and don't really think much about the business model. This is understandable and actually much better than MBA types who spend months planning for stuff without even building, but the problem is there isn't really a good business model for these types of companies.
The only viable option is ads, and even this has been monopolized by big techcos so it's not easy.
Most founders don't even get to worrying about this point because their companies never take off. But the ones that do, come to a point where they need to make a decision whether to sell out or to find a viable business model.
Like I said, finding a viable business model is increasingly becoming difficult for consumer apps that rely on ads, so these companies tend to cash out.
From outside it may look like a bunch of "tech bros" hoping to strike it big with minimal effort but that's mostly not the case if you look inside. If you're curious, look up what this TBH company went through before having this "overnight success".