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A Postmortem of a Startup

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Re: A Postmortem of a Startup

#21

Post by frankdejonge »

Etheryte wrote: post #19
dzonga wrote: post #13

well written. I think your fatal mistake even though you folks are smart was not understanding the complete value chain of your business. What I mean by understanding the economics of the value chain is you've to understand how your customers make money, how their customers make money & how their suppliers make money. From there - you can workout your value proposition - are you saving your customers money (means the…

I don't think the last paragraph is correct, many unicorns don't generate profit, yet are hugely successful by any other metric. In many cases, generating profit is actually undesirable for tax reasons.

I believe that why they said "if not revenue growth". Those successful, yet unprofitable companies do have revenue growth, or market share growth.

Re: A Postmortem of a Startup

#22

Post by mytailorisrich »

AJRF wrote: post #4

Thanks for writing this! > Housing in Britain is expensive because getting planning permission is difficult. Isn't the real problem that supply is artificially constrained because house prices and the economy are interlinked in a way in a special way in the UK economy, such that the majority of home owners don't want it changed (because more supply == downward pricing pressure) I think the only entity that could mean…

Supply is somewhat constrained and demand is also artificially inflated (at national level it is 100% caused by immigration, which is kept high by the successive governments).

Everyone relies on the property market going up. Beyond the obvious reasons, another important one is that fixed rate mortgages are not fixed for the life of the mortgage but only for, usually, 2 to 5 years after which rates jump so everyone is continuously worried about remortgaging.

Re: A Postmortem of a Startup

#23

Post by AJRF »

AJRF wrote: post #4

Thanks for writing this! > Housing in Britain is expensive because getting planning permission is difficult. Isn't the real problem that supply is artificially constrained because house prices and the economy are interlinked in a way in a special way in the UK economy, such that the majority of home owners don't want it changed (because more supply == downward pricing pressure) I think the only entity that could mean…

NIMBYism is not unique, but the importance of house prices to the UK economy is more severe than other countries.

- The UK has a very strong household wealth affect (consumption is tied to house price growth / decline). The US and UK borrowers borrow at a rate against household wealth not seen in other nations (look at the chart on page 6 - https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1117.pdf)

- It has had dramatic, sustained house price growth (400% real price growth since 1980) vs US (200%), France (200%), Germany (150%), Spain (Collapsed in 2008), Italy (Stagnant since 2008)

Some Links:

- https://www.bankofengland.co.uk/-/media/boe/files/working-pa...

- https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Uni...

Re: A Postmortem of a Startup

#24

Post by philipallstar »

> Housing in Britain is expensive because getting planning permission is difficult.

It's true that planning departments are very expensive, don't do much positively, and still seem to allow awful-looking things to be built, and I'd probably happily do away with them, but the fundamental driver is the incredible onboarding of people from overseas for years that crushes the combination of the existing population and the new people into a number of dwellings that isn't that dissimilar to the previous year.

You can't take on a net number of people each year that would require a new city the size of Nottingham to be built to accommodate, and say "well, it's all the planning process' fault."

Re: A Postmortem of a Startup

#25

Post by margorczynski »

I think the problem with startups (from a business perspective) is that they're ego-driven and instead of looking at the business reality in an objective fashion they mostly try to "revolutionize" and "make a difference".

It isn't as sexy as doing the next Facebook or disrupting global healthcare but just copying an existing archaic & expensive product and doing it better can yield a great and stable business. There's a plethora of software products (offline & online) which cost way too much and work like crap - all you need to do is do it better for a more reasonable price (where those old companies have a big headcount and lots of mouths to feed producing a hard price floor for them).

Re: A Postmortem of a Startup

#27

Post by mytailorisrich »

morsecodist wrote: post #12

This is interesting and they make some good observations but I can't help but think the deck was stacked against them because they are trying to come up with a technical/business solution to what is fundamentally a political problem.

Planning permission is partly a political issue, partly down to expertise. You need experience, you need to know the rules, you need to know the tricks, you need to know how to draft the application. You need to know the game. Indeed this is not something that is waiting for a technical solution.

It's great that they tried, though. But it strikes me that they seem to be 20 something students (not meant disparagingly) with no experience in this so perhaps lacked the insights and understanding of the pain points. It does seem that VCs were happy to fund based on an AI play, though ;)

Re: A Postmortem of a Startup

#28

Post by froddd »

philipallstar wrote: post #24

> Housing in Britain is expensive because getting planning permission is difficult. It's true that planning departments are very expensive, don't do much positively, and still seem to allow awful-looking things to be built, and I'd probably happily do away with them, but the fundamental driver is the incredible onboarding of people from overseas for years that crushes the combination of the existing population and th…

Reducing the problem to ‘people coming from overseas’ is an equally reductionist argument.

There are properties going unused, for very many reasons. Second homes, holiday homes, etc. This also drives the price of properties up. This is one of the inputs to the problem. Planning permission laws is another input. The size and change of size of the people needing housing is another input.

Re: A Postmortem of a Startup

#29

Post by spacebanana7 »

mytailorisrich wrote: post #22
AJRF wrote: post #4

Thanks for writing this! > Housing in Britain is expensive because getting planning permission is difficult. Isn't the real problem that supply is artificially constrained because house prices and the economy are interlinked in a way in a special way in the UK economy, such that the majority of home owners don't want it changed (because more supply == downward pricing pressure) I think the only entity that could mean…

Supply is somewhat constrained and demand is also artificially inflated (at national level it is 100% caused by immigration, which is kept high by the successive governments). Everyone relies on the property market going up. Beyond the obvious reasons, another important one is that fixed rate mortgages are not fixed for the life of the mortgage but only for, usually, 2 to 5 years after which rates jump so everyone is…

It's curious to think about what house prices in the UK would be like without immigration.

With a sustained negative fertility rate over the past few decades, there could've feasibly been stable prices with no new houses built at all.

Re: A Postmortem of a Startup

#30

Post by mytailorisrich »

Etheryte wrote: post #19
dzonga wrote: post #13

well written. I think your fatal mistake even though you folks are smart was not understanding the complete value chain of your business. What I mean by understanding the economics of the value chain is you've to understand how your customers make money, how their customers make money & how their suppliers make money. From there - you can workout your value proposition - are you saving your customers money (means the…

I don't think the last paragraph is correct, many unicorns don't generate profit, yet are hugely successful by any other metric. In many cases, generating profit is actually undesirable for tax reasons.

Generating profit is highly desirable for any business.

For tax purpose you need to differentiate between "profit" and "taxable profit". You can try to lower your taxable profit to minimise tax, e.g. by re-investing your profits, but ultimately it is better to turn a profit and to have to pay some tax on it that to have an unprofitable business.

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