Entrepreneur Thinks Tech Startups Waste Money
A writer over at Entrepreneur argued that plenty of money is flowing into tech startups, but it’s not being used wisely. The piece argued that an “excess of capital is creating some bad habits in the startup and venture capital worlds.” The article made the point that excessive money makes it so entrepreneurs try to build solutions first and only look for problems later, instead of learning to shape products around successes and failures. It also argued that startups squander money and go to market before they’ve tested whether a product is really what the market wants. Read more here.
Retail Companies Snapping Up Tech Startups
Over at CNBC, the site reported that the consumer and retail industry has made the most purchases of tech companies — 32 percent of cross-sector deals involving tech — according to PricewaterhouseCoopers’ deals team in their mid-year review and outlook. This particularly affects tech startups. Nordstrom, for instance, announced back in March that it bought two digital retail start-ups: a sales communications platform called BevyUp, as well as a brands-to-customer texting service, MessageYes. One-third of huge deals like that this year have crossed sector lines, according to the report, but the retail sector seems to be doing the most of this startup buying these days.
Bloom Goes Public and Fortune is Surprised
Bloom Energy recently went public, and Fortune did a profile on how a company that has lost money can survive such a move. Bloom has been around since 2001, Fortune reported, but it’s still considered a green tech startup. Bloom is an almost two-decade-old startup that has lost $2.3 billion and has less cash than annual interest expense. But, somehow it’s still gone public. It doesn’t really make money, Fortune explained, but its technology works well enough that Bloom saw revenues in the $370 million range last year. Read more here.
How Tech Giants Scare and Subdue Startups
The Economist did a piece recently on how tech giants scare tech startups and make life difficult for people trying to break into the industry with a startup. Or, if the giants can’t do that, they snatch up possible competitors. “Tech giants try to squash startups by copying them,” the Economist reported, “or they pay to scoop them up early to eliminate a threat.” Venture capitalists are reportedly worried about backing startups in online search, social media, mobile and e-commerce, possibly because of tech behemoths like Amazon, Facebook, and Google. That makes it hard for tech startups to get off the ground. If they do gain some traction, often one of the “big dogs” copies their idea, or does it better. It’s a tough world out there for tech startup hopefuls.