The hyping of brand names and raising capital.
Many people think startups are doing exceptionally well because they get featured on publications and go through a hiring craze because they raised capital from top VC firms.
But when things move fast, they break.
No matter the valuation, there tend to be many unstable pieces in the foundation of startups that get hyped or scaled with funding.
When funding gets hyped, then entrepreneurs look for it. It becomes cool when it’s not.
You’re essentially giving a piece of your company away to someone in exchange to grow faster.
The problem: Most entrepreneurs get funding not to scale, but for vanity reasons:
- It seems cool.
- Their friends got funding.
- They want to feel successful.
- They want to get featured on tech websites.
What ends up happening is companies scale with a poor foundation. Many founders and employees realize what’s happening, but they don’t say anything.
There’s too much pressure, as the company already received funding and it needs to scale.
It’s like trying to stop a train going full speed. Employees who speak out get fired and founders who speak out see their company’s stock price drop and then have to fire employees.
What’s happening?
Lying and politics take control of the company. Nobody wants to admit what’s really happening, and then, out of nowhere, when a company misses their projected earnings, everything goes to shit and all the dishonesty gets revealed.
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