There is Too Much Money in The System

By Joey Bertschler, Bitgrit

Nowadays it seems like every start-up with a somewhat decent pitch deck manages to get their hands on substantial funds in the form of investments. The concept is simple. Find yourself some gullible if possible not tech-savvy investors and throw buzzwords at them.

“AI, Decentralized, Ecosystem, Leverage, Scale, Blockchain, Disrupting, [insert random tech term]”

Amazingly, it works. You would think after thousands upon thousands of ICOs scamming people out of billions of dollars there wouldn’t be any new investments for a while. But the focus has simply shifted.

The wrong people get hired and promoted, budgets for e.g. marketing are comically high and virtually always close to nothing of value is produced in the end. Money is wasted and investors puzzled as to why. Lot’s of presentations, close to no prototypes/MVPs.

Resourcefulness in itself has become increasingly scarce.

Personally, I can’t wait for the market to crash. People act as if they can just keep acting the way they do. There have been many recessions on a regular basis and this will not change in the future. If you are not a genuine company or entrepreneur this will absolutely wreck you. If your product is valuable, your team strong and you know what you are doing things will be bad, but if any of those is lacking you and your company is over.

Thousands upon thousands of fake entrepreneurs will fall flat on their noses. 

But for now, this kind of empty-shell borderline scam model of a start-up works. There is simply too much money in the market. Losses will affect only a tiny fraction of a big portfolio and most likely go unnoticed for quite a while and/or investors will simply show way too much patience. Like an amateur investor buying stocks and then refusing to sell them as he watches them plummet thinking their value will rise again eventually until the stock has become virtually worthless all because someone couldn’t cut their losses aka “Pickling in Salt”.

Far too many businesses are started aiming towards nothing but funding & exit. No product, no value.

If there is an MVP — it’s crappy.

We live in a time of entrepreneurship hype and new technologies such as Blockchain and Cryptocurrency are gaining momentum fast. This doesn’t just apply to investors as ICOs have shown. No due diligence and integrity = everybody loses.