How To Build a Killer Business (Part 3)
Yuri's predictions on the next wave of startup failures
Comrades: You only find out who’s swimming naked when the tide goes out. As the bubble bursts, many private tech companies will go under and join Theranos, WeWork, and Fyre Festival in the Startup Hall of Shame. I may be biased, but The Current Thing Company and Pfizer are better investments.
On a daily basis, another country or crypto scheme is collapsing. From Sri Lanka to Terraform Labs, Ghana to Luna, Albania to Dogecoin, Netherlands to NFTs, BoJo to Joe’s bike, DEI to ESG, shipping Strategic Petroleium Reserve to the CCP to fund Hunter’s crack habit, the Liberal World Order scams are unraveling.
The 3 companies I will analyze below are my non-crypto top candidates for Hindenburg implosions. I conducted diligence using only publicly available information, as I have developed enough pattern recognition to spot potential disasters without private information. Unfortunately, you can’t short these stocks because they’re not publicly traded.
Section4
The most important element of any startup is its CEO and founding team. Section4 was launched by NYU Professor Scott “Prof G” Galloway a few years ago to cash in on his megaphone. He has published a few books and is most well known for his blog, “No Mercy No Malice” where he pontificates about business and life. Every entry he writes has the same predictable structure and tone:
“I’m brilliant and successful with a mild dose of faux self deprecation. Orange Man, Spaceship Man, and older white men like me are bad. Wokeness is also bad but I will always simp for Democrats cuz democracy and racism. I am jealous of CEOs who have accomplished more than me, so I will rant about why they and their companies suck. Here are a few cool looking charts that rarely show original new insights. Life is So Rich, Scott.”
A wise mentor once told me that the more time a CEO spends on media appearances, the worse the company is doing. Like serial virtue signaler and rapist Dan Price, Prof G is a poster child of this phenomenon. Not only is he distracted by his blog and Tweeting, he was the host and producer of a show on CNN+ that never saw the light of day.
Section4 itself has a noble goal of making elite business education more accessible, but that’s a tough sell to individuals and corporations during a downturn. Prof G strikes me as a bipolar manic depressive, which must be fun for his employees. He recently laid off 25% of his staff and the remaining 75% won’t last much longer.
Aspiration
One of Professor Galloway’s more clever terms is “yoga babble”, which he used to skewer companies like WeWork that use woke feel-good terms to inflate valuation and mask major business model flaws. Aspiration is the peak “yoga babble” Frankenstein of the ESG zeitgeist. According to its website’s “Who We Are” section:
Different by design. We didn't set out to build a bank. We set out to build a better world. Welcome to Aspiration – where we're on a mission to help everyone Do Well and Do Good.