Here is the thing you have to understand about VCs (and therefore, companies and websites that have accepted VC money), always and forever. Repeat it like a mantra.
--- Venture capitalists do not invest in the company. Venture capitalists invest in the exit. ---
Eventually any site, app whatever has a Sell Out Moment. They get bought by a big established corp, they go IPO, something. There is an "Exit". If you accept VC money, you are *promising* that Exit day is coming and it will be *big*.
Generally the VC model does not look like you invest in a company and you expect your investment to get a bit bigger. It looks more like, you invest in ten companies and you expect nine to fail and one to make back *more than 10x* what you invested in it.
VC startups, when they're trying to build groundwork for an Exit, often do warm & fuzzy market-irrational things like build a personal relationship with happy customers. The exponential payoffs the VCs want don't look like making people happy.
This isn't to say new VC-funded social companies won't make good products—they might even *stay* good products longer than you stick around! But you need to be aware there's a ticking, *legally unavoidable* time limit.
This is why I have more long-term trust in Mastodon (run by a nonprofit, & set up such the nonprofit is effectively extraneous) or Cohost (funded, as I understand, through conventional bank loans, which are non-exponential and can be someday paid off without sacrificing kittens).
@mcc 😔 Sigh. Just earlier was complaining about how Skype has become barely functional trash.
Is the internet just going to continue to be built on such unstable foundations?
@mcc Everything you say is 100% true and I've seen it at multiple startups. I worked at a startup that sold Android-based POS systems for restaurants and venues. After I left, I checked back a year later and they had merged with *five* other VC-funded startups.
More recently I worked at Zwift to make what was going to be some very innovative hardware (you can find leaked photos, I'm sure). Then they laid everyone off and now sell a Zwift-branded (rebranded) very boring-looking smart trainer.
@mcc Since I'd seen it before, it didn't surprise me, but it was quite amazing to go from 2021 with Zwift acting like a super-fun cool startup with a $1 billion valuation from VC funding to design first party hardware in shiny refurbished expensive offices in Long Beach (despite COVID), and then suddenly the screws tighten and your manager and coworkers all suddenly start leaving for other opportunities. That's before the mass layoffs.
VC funding always comes with some serious strings attached.
@mcc I don't really trust cohost either. Social systems have the hockey stick growth built into them, it's one of the things that makes them so attractive. If everyone jumped from Twitter to a privately funded site taking no equity funding not already run by a billionaire, it wouldn't be able to keep the lights on no matter the good intentions (and subscription models only scale so far and eventually grow their own perverse incentives anyways).
In the end it's just another place that's locking in your data for a future payday, whether they know or admit that or not.
mcc
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