sir_toejam
Posts: 846
Joined: April 2005
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| Quote | | But maybe some of the junk tech companies weren't set up under false pretenses, they just quickly figured out that (a) they had a ton of money; and (b) their business plan couldn't work. Now what? Wouldn't YOU be tempted to stash away a bundle, go through some motions, and give up? |
It's true that some of these companies started out with what they thought were "legit" business plans, then realized too late they wouldn't work. However, it's even more basic than that. some of them were deliberately set up on the premise that the presentation of a flashy logo and a lot of PR would suffice in leiu of a product in order to generate increases in stock value. This was considered a legitimate business plan in and of itself.
Again, when we think in terms of "legitimate" business plan, you and I don't necessarily just think in terms of just equating that with "profitable". Which means we include moralistic limitations to what constitutes a "legitimate" business plan. There are a lot of investors who would see any business plan that would generate a significant return on their investment as "legitimate", regardless of whether any real product or service was intended or whether it was all an elaborate front intended to deceive.
####, I used to have a collection of these "companies" stored away on my links, but that was many computers ago. I suppose it wouldn't be to hard to track some historical examples down; I'm sure someone has archived a few examples somewhere.
I personally dealt with the mindset involved in forming feaux companies like this; the CEO of my own company was such a shark on raising investment capital in LA that he was famous, at least in "shark" circles  . He got called on it once or twice; but suffered only minor penalties. less than a slap on the wrist, really. His name is Rainer Poertner and he used to manage the Rolling Stones, once upon a time (no kidding!.
I'd say he ran the gamut, from the production of products that were misrepresented as to their efficacy (entirely), using PR to generate capital investment instead of actual product sales (hmm, you might remember a product called "Soft Ram" that came out about 8 years ago?), to the co-option of businesses like the one I was involved with that actually DID produce legitimate products and services, but changed its business model almost yearly to accomodate the latest "trends" in internet investment.
in any case, the bottom line is that, imo, what constitutes a legitimate business model, in itself, is dictated by preconceptions based on morality, rather than immediate profitability.
many folks don't care about whether the companies they invest in survive long term, only whether they generate significant return in the short term.
There are an awful lot of ways to generate investment dollars short term that have nothing to do with a legitimate business model like you put forth, and I would agree with.
| Quote | | always come back around to information, though. If I took a risk based on an accurate representation of the situation, and the risk didn't pan out, I don't mind. But if the representation was wrong, then I very much mind. |
indeed, but as i pointed out, wouldn't you mind if the information was accurate, but representative of the type of business model I described above?
I could come to you and say, "I have an idea on how to make money by pushing a fake business".
that would be exactly representative of the situation, and there would be risk, but also accurately represented.
they could even show a pretty good track record of success on significantly increasing your initial investment with this "business model".
would you bite?
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