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.
The Current Thing Company raises funding to help consoomers stay up to date on virtue signal gear
Comrades: I have launched a new startup - The Current Thing Company! My pitch to Shark Tank is below. All new paid subscriptions will go towards building this company and put you at the front of the waitlist; you can also send funds via Cash App to @yuribezmenov22.
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.
Glassdoor is the best reference for any company. It is obvious when management forces employees to pump fake positive reviews, but the negative reviews are where you get real talk. This one sums it up perfectly:
Anyone who has ever taken a business class knows that employee satisfaction is directly connected to business performance. (Well, maybe not anyone, unless all the C-level people at Aspiration are lying about their business credentials.) So it should also be no surprise that Aspiration as a business is barely scraping by. (If you're reading this and you're a customer, get out while you can.)
Throughout my time at the company (1.5 years), there were at least 4 rounds of layoffs. I never received an annual review or any feedback/support in my position. My boss was an egotistical misogynist with very little intelligence, so I suppose my expectations should have been lower. He claimed to understand the philosophy of customer experience, but that understanding amounted to sending us Business Insider articles on the topic and sharing ten year old (no joke) PowerPoint presentations from his previous job (that I doubt he even made). And the cherry on top - he also repeatedly displayed behavior that in any normal workplace would be considered sexual harassment.
But not at Aspiration! Even after reporting him to HR nothing changed. (I've been told there is not HR department now.) Don't believe the marketing. Aspiration is not an innovative start-up doing something unique and different. (All their 'green' initiatives are marketing ploys. News flash, it's 2021, carbon trading doesn't work, idiots.)
It's a company run by greedy, middle-aged men clinging to hierarchy and power by capitalizing on people's fear of climate change to pad their personal bank accounts. (And screwing over employees in the process.) If you're interested in working in socially conscious finance, go to a credit-union and get involved in the cooperative/democratic economy. Don't waste your time at Aspiration.
Finally, Aspiration CEO Andrei Cherny is a King NPC: Harvard, Clinton speechwriter, chief drafter and lead negotiator of the 2000 Democratic Party platform when Al Gore was the nominee for president, Director of Speechwriting and Special Advisor on Policy for the John Kerry 2004 presidential campaign, Senior Fellow at the Center for American Progress. Advised Barack Obama, Joe Biden, Hillary Clinton, and the top executives of companies such as Microsoft and Intel.
Aspiration has raised hundreds of millions of dollars from luminaries such as Leonardo Dicaprio, Robert Downey Jr, and a bunch of random funds you’ve never heard of. Seasoned VCs have stayed far away from this one, another sign that it’s a fraud. Aspiration planned to go public via SPAC, but pulled back once the market turned. Too bad, as it would have been fun to profit off shorting the stock.
Magic Leap
All you have to do is look at a picture of the product to realize that this is an obvious slow motion train wreck. Magic Leap has raised $3.5 BILLION over a decade without much market traction to show for it. An October 2021 TechCrunch article summed it up well: “Seven years after raising $542M at a $2B valuation, Magic Leap raises $500M at a $2B valuation”.
What else is a scam?
https://empatheticpeople.com/
"but that’s a tough sell to individuals and corporations during a downturn"
I once started a business where I built software designed to address an allegedly vexing problem in corporations, and it was education-related. It also was during a strong economic period. The minute the idea of paying for something to minimize the costs this supposed problem I was trying to solve had, the minute people didn't want to hear about it.
I also had approached individuals on this, and naturally it was fine until they have to pay for it. There was a competing startup I remember reading about at the time that had for years earned no revenue and had no business plan but raised tons of money. (It's still around today, albeit with a subscription model now!) But when I presented it to my local startup/dev community, the same people who complained about lack of competition and the fact that locally most startups are at most two degrees of separation from the same four people dismissed it because they said we already have (only) one business that does that. Selling education in general is a valuable idea, but I only see it "successful" in limited cases, and the path of many education providers is to converge to the very antithesis of whatever their mission was.
On the "yoga babble" stuff, funny thing is when inexperienced, entry-level web devs said nearly 15 years ago that all of this was nonsense and any woke/ESG/whatever stuff they push REALLY is just a mask for colossal business failures to secure those top valuations, they weren't blown off as being too immature to understand the way the business world works.
Last week, I saw a handful of people who 6 years ago scoffed at the notion that companies should be profitable now act like the smartest person in the room saying Uber and other companies are failing or losing tremendous value, because they were built on gimmicks and unsustainable business models that yielded market share but not stability. They were totally in on whatever this gimmicks that brought high valuations and little-to-no product, but now they act like they knew all along that that model isn't effective!