How much money we can raise for transparently idiotic startups?

It&#x27;s not just AI startups. It&#x27;s almost all of them. The startup world is just a massive pump and dump scheme, and so it moves from field to field finding the next hotness. Self-driving cars, VR, EVs, AI, and so on. People soon realize that you can&#x27;t just take a bunch of hipster tech employees and suddenly create non-solutions that need to have problems created for them to even be solutions, much less choosing extremely hard and ill-defined non-solutions.<p>I truly wonder how much of the U.S. economy has slowed down because of all this wasted effort. Is it really a good idea for every company to try and reinvent what a company is? Every startup I&#x27;ve been spends a non-zero amount on just re-figuring out how to be organized, how to manage people and projects, and even just figuring out the logistics and tech needed to run a company. It&#x27;s a lot of wasted effort, time, and money. My time at startups has been the least effective portions of my career. Real work actually moves quite slowly at startups, in my experience.

The important thing to understand here is that you shouldn&#x27;t write on a latex balloon with a Sharpie. It works well for a while, but when the balloon inevitably pops or deflates, the Sharpie ink will re-liquify and get all over the place. Then you will learn the meaning of the phrase &quot;indelible on porous surfaces&quot;.

The weird thing with AI startups is the funding is kind of smoke and mirrors. So much of the funding is tied up in NVDA, MSFT, GOOGL, or AMZN incentives that the actual cash value is... murky.<p>May be hard to pay salaries with GPU credits.

If the proposal has &quot;AI&quot; in it, lots :)<p>But the comic beat me to it, I wish they were trying to be funny, but ...<p>Nice Comic BTW

As anyone who lived through the dot com era…. a lot. Thanks for the comic. It was great.

My head immediately jumps to YikYak but I know there were some others in this domain 10 years ago. I can&#x27;t think of many recently though!<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Yik_Yak" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Yik_Yak</a>

SMBC is a treasure, just like XKCD. Zach&#x27;s and Kelly&#x27;s books are quite nicely, some like Soonish are just good accessible futurism&#x2F;science reading, their comic collections are excellent, and they aren&#x27;t afraid to offend. For example, I was part of their initial Kickstarter for The Holy Bible: Abridged Beyond the Point of Usefulness <a href="https:&#x2F;&#x2F;hivemill.com&#x2F;products&#x2F;pocket-bible" rel="nofollow">https:&#x2F;&#x2F;hivemill.com&#x2F;products&#x2F;pocket-bible</a> and now I have a much-easier-to-get-through-and-considerably-more-fun Bible with Zach&#x27;s signature. It has provided for much silliness at many parties in my house. I don&#x27;t rotate in baptist&#x2F;fundamentalist circles though, those would probably be aghast at it.

One thing I noticed from the Sili Valley startups I&#x27;ve been involved with in the last 20 years: exec management&#x27;s parents went to school w&#x2F; the funds managers.<p>I have this theory that there&#x27;s institutional money burning a hole in various institution&#x27;s collective pockets. Those funds&#x27; managers are under pressure to invest a percentage in risky, high reward opportunities. So they have money that has to be invested. You would look pretty stupid if you missed out on investing in the next Facebook or Google.<p>So you get some valley VC firms managed by guys who went to MIT, UCB or Stanford in the 80s and made their cash founding 90s era startups.<p>Now these guys&#x27; college room-mates have kids in MIT, UCB and Stanford who are about to graduate. So they (the VC&#x27;s old room mates) channel some dosh into the VC&#x27;s funds. In return, the VC&#x27;s fund startups started by their room-mate&#x27;s kids.<p>For the parent, it&#x27;s great. They avoid estate taxes and if there&#x27;s a profit, they only pay capital gains rates.<p>The kids receive their pay in perfectly laundered equity which at the next liquidity event can be reified outside the IRS&#x27; jurisdiction, so they wind up paying 12% corporate tax in Panama instead of the on-shored 26% cap gains rate.<p>All that&#x27;s really required is a greater fool to take the series A shares off your hands when you do a series B.<p>My take on SiliValley is it&#x27;s turned into a tax avoidant generational wealth transfer system for the financier class.<p>Nice work if you can get it.<p>Academia supports the system with hype-filled pronouncements about how future tech (AI, RISC-V, Battery Tech, WISC, etc.) will completely revolutionize the world.<p>Analysts who should have been taught skepticism when corporate leaders imply their startup will have a market value in excess of western Europe&#x27;s GDP, jump on board to avoid looking like idiots on the off chance the firms they cover do take off.<p>Tech investing isn&#x27;t a scam, there are definitely corners that are producing solid tech. But they&#x27;re few and far between and very often not involved in the VC economy.

Ask Y Combinator, they specialize in this garbage.

While some people can raise a ton of money for ideas that don&#x27;t seem to make sense, the majority of others won&#x27;t raise a dime. It&#x27;s a matter of access (which could be a signal for early investors ability to cash in for later investors.)<p>For investors in the art market, they will invest in some artists and not others, irrespective of how appealing the art is, as provenance is the signal for ROI.

I would watch a remake of &quot;The Producers&quot; set in Silicon Valley with startups instead of Broadway productions.<p>For those unfamiliar, it&#x27;s about guys who fraudulently resell the same shares in the profit of a Broadway production 25 times over, and then try to ensure that it&#x27;s a failure so there won&#x27;t be any profit to pay, but accidentally create a success and are ruined.

Remember the dot-com bubble? Teenagers making millions creating simple static sites for desperate clients.. :D

I didn&#x27;t see a signup link for the AI balloon?

That&#x27;s one of my go-to daily comics.

Hi. I’m an artist. If you have a transparently idiotic startup idea and contacts with a lot of dumb money looking for unicorns to fund, drop me a line, I can use AI to create logos and promotional imagery for only a few thousand dollars up front and a small percentage of the VC investments you get.<p>The AI in question is Adobe Illustrator but if it gets us in front of more dumb money to say it’s the other AI then I do not care.

I thought this was going to be a long form essay&#x2F;prank&#x2F;experiment, where someone launched a crowd funding campaign for a &quot;transparently idiotic startup&quot;, and pulled off a $1M raise.<p>Ironically however, if you were to do that well, it would show high intelligence and creativity, which would probably make it an actual good investment.

Like a lot. Didn&#x27;t YC even fund that startup that wanted to turn middle class suburban homeowners into slumlords by building rental poverty shacks in their back yards?

Can’t help but think that all of FANGS would have seemed to be “transparently idiotic” early on. I mean, creating yet another search engine with no business plan is pretty idiotic. As is creating yet another social network or a book store. Come to think of it, all of the “v1.0” projects I worked on seemed pretty idiotic too and I thought they’d never make money. A good number of them have $1B+ yearly revenues today. To me the takeaway is: aside from the truly clinica cases, you can never tell what will take off and what won’t.

I mean it&#x27;s all about who you know.

But overall this is good. Why should we complain? Why would I rather have VCs hoarding their capital?

This isn’t just a poorly made joke it’s also not even making fun of the right thing.<p>The vast majority of investment is inside of public firms into themselves for ai.<p>VCs have actually broadly been sidelines as they both lack the capital to make major moves nor see small enough direct application to invest.<p>There are plenty of jokes to be made about AI, this is a dumb one.