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by Fred Grott.
Original Post: Michael Arrington You idiot
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I am about to cause a firestorm, wear your flame suit. I do not know what Michael has been toting or ingesting but his latest essay titled Profit Maximization V. Survival Maximization is full of bullshit to be very blunt. Now, I am borrowing my thesis from Paul Allen and Bill Gates of Microsoft and applying to start ups.
Paul Allen and Bill Gates complete thesis is that being frugal in all areas during both peak economic times and low economic times provides opportunity cash during both situations to use to pursue innovations and market/business development Now before we tackle the start ups without a business model case lets think back. How many low economic times has Microsoft survived and open up new markets? Quite a few, right?
Okay, we have a nice start up with no business model lets say facebook. During peak economic times when VC and investment money in facebook is at an all time high you are being frugal in areas of development such as 1-n hiring and choosing low cost ways of technology implementations. Facebook did choose PHP and etc over Enterprise Java so they get a passing grade there. But in other areas they goofed up in not being frugal. that means now they will have less opportunity cash to finish market and business model development. Do not get me wrong they might still hvae enough but why risk that why not have as much as possible?
The problem is most start ups without business models do not have the running room of full adequate seed capital or funding even during peak economic times. Which means if they follow the facebook model without adjustments in areas of ebbing frugal they will not survive a market crash. the exact tiem to make survival frugal adjustments to enable a start up without a business model to survive during peak economic times not during the market crash.
Another case study in frugality during peak economic times to survive during low economic times is Mahalo! Jason Calacanis has composed many essays on that subject at Calacanis.com and Silicon Alley Insider. Mahalo will survive because it made frugal choices during peak economic times.
Most start ups tha will survive without a business model during this low economic times made macro event frugal choices during the peak economic times and to talk about the micro event frugal choices during low economic times without this context is just as bad information as a recent WSJ article on facebook. In my own defense during the MS buying Mahalo.com? rumor on FriendFeed during July how many fake journalists/analysts/cheerleaders were caught not analyzing information? Avery big one in fact and he still is not following my FriendFeed streamas a result, right?
Please Michael Arrington I want to see yu engage the brain on these issues, please..as its damn f'ing important for every start up founder.
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