Why I’m excited about profit-sharing startups
Every year there is a list of the startups that failed and 2023 failures was no different. There is also the list of likely IPOs for the year. Is it going to be Space X, DataBricks and Reddit for example.
This article along with a host of links reaching out to sites such as Creator Fund, Humanism and Weekend Fund and other interesting stories re-iterate that it is great people and not great ideas that are the right way of being an entrepreneur. The concept of investing that asks for a return of 1-5% of future earnings is an interesting movement from going down the VC slog.
The article lists these points:
- There’s a culture shift in tech toward profit-generating businesses.
- There’s a tech shift that enables talent to build more with less.
- There’s a regulatory shift that makes exits challenging.
… believe a few big shifts will drive more founders and investors to pursue profit-sharing models in 2024 and beyond.
This tweet talks about Gumroad issuing dividends back to our investors. I always understood that investors wanted to see a return, or a positive change in the return capabilities within a 5 year horizon. Also interesting is this Challenging your assumptions about starutps video.
Combined with Why the Future of Startups are Studios really helps me consider what I started back in 2011 with a number of technology leaders in New York as a viable alternative to what we know about funding a startup. We were always able to get through the first 3 steps easily.
- Generate an idea
- Flesh out the idea
- Launch and experiment
- Create a project
- Create a big company
I believe Graham was ahead of his time with Ultra Light Startups some 15 years ago.
About ‘Things I Read About Recently’
Most days I take some time early in the morning to scan my inbox newsletters, the news, LinkedIn or other sources to read something new covering the professional and personal topics of interest. Turning what I read into some actionable notes in a short committed time window is a summary of what I learned today, what I should really learn and use, or what is of random interest.
Some of my regular sources include TLDR, Forbes Daily, ThoughWorks Podcasts, Daily Dose of Data Science and BoringCashCow. Also Scientific American Technology, Fareed’s Global Briefing, Software Design: Tidy First? by Kent Beck, Last Week in AWS to name a few.