When you take venture capital, it is not a matter of if you’re going to sell your users, you already have. It’s called an exit plan. And no investor will give you venture capital without one. In the myopic and upside-down world of venture capital, exits precede the building of the actual thing itself. It would be a comedy if the repercussions of this toxic system were not so tragic.
Let me put it bluntly: if a company has taken venture capital, you have already been sold. It’s not a matter of if, it’s simply a matter of when. (Unless the company goes under before it can exit, that is.) A venture-capital funded startup is a temporary company that has to convince enough people into using their platform so that they can make good on the exit they promised their investors at the very beginning. It is the opposite of a long-term, sustainable business.
Ello, goodbye. by Aral Balkan .
I signed up for Ello and I dig it, so I’m not quoting this to knock Ello. But Balkan isn’t wrong, and that’s sad. I have devoted my life to making products on a platform so ephemeral people still don’t want to pay for things on it.