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by my_username_is_
3887 days ago
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Interesting question. I would say that yes, startups (as a whole) are likely diluting their own markets. When a startup notices a real pain point and tries to solve it, but cannot make a sustainable business out of it, it shakes the customers' trust in trying an unproven company. This can have negative consequences. Think of it this way: currently, people have faith in the 'startup brand'. A potential customer's internal monologue may be something like: "Oh a startup is trying to solve this problem that I have? They're probably doing something really innovative and they're inevitably going to build a successful company because of it." After the same customer gets burned a couple times by a new company shutting down, they're not going to be as likely to put their faith in the next new company that comes around the block. The 'startup brand' to them comes to mean a bunch of naive kids who will fail in the next year or so. Even if this company can do it better than before, it may not be worth the risk of frustration/headaches/delays that using the old startups' software has caused them in the past, so they choose to not try the new product. This makes user acquisition a lot harder, and I'd imagine that it would be a net negative (when compared to a scenario where the weak startups didn't try to start a company). |
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