Why Frauds are rampant in the Startup World? | Go Mechanic Scam | Value vs Valuation
107Please find the link to the Management Consulting Program that I personally lead at Blue Chapter! You receive personal feedback every week & work on an international live strategy project. This is not a mock project & our students proudly speak about this live experience in their interviews:)
https://bluechapter.com/consulting-experience-program-gen/
If you are applying for fall 2023/2024 MBA programs, check out the global MBA fellowship program:
https://bluechapter.com/global-mba-fellow/
****
Follow me here
LinkediIn - https://www.linkedin.com/in/pavan-sathiraju/
Instagram - https://www.instagram.com/pavan.sathiraju
****
Startups are changing our lives every day. Nykaa, Paytm, Bigbasket, etc. are having a great impact on our lives. But in this video, I’ve talked about the bad apples. The post by GoMecahnic’s CEO on LinkedIn is proof that everything isn’t right with the startups. This video will help you understand how startups work and what separates the bad apples from the good ones.
The basic goal of startups is to create value for their customers. In the 1990s there were only a few startups. Naukri’s Ad back from the 90s has the same value proposition as many other startups today. Startups promise faster growth and more growth in absolute terms. To reach this faster and absolute growth these startups need money that comes from investors.
More often than not when one takes $1 Million of funding then most of it goes into Amazon and Facebook Ads. Once the funding tires up the initial investor would want the company to raise more money. This is how multiple series of funding will happen. In this situation, the product or service offered to the customer doesn’t improve much. The $1 Million initial investment that an angel investor makes into a company is coming from other rich people around the world.
The person making that initial investment has to show his rich financers that he is making great returns off the investment. Even if that money is only on paper, it doesn’t matter as long as the growth is visible and the investors can take their cut from managing the investment money of the rich guys. Because of this, the investors make money but the founder starts working towards the superficial growth of the company rather than actually improving the customer experience or the product.
The laws regarding cheating on the investor’s money are well established in the US but not in India. In the end, I’ve shared the solutions to these problems and how we can fix them.
About Me
I publish meaningful and valuable content on this channel. My aim is to make business news more accessible and easy to grasp. If you find my videos informative and insightful then make sure to subscribe and leave a comment. I’ll see you in the next video
*****
Chapters
0:00 - Intro
0:32 - Naukri Ad
1:32 - Go Mechanic
2:32 - How Startups works
5:10 - How Funding works
6:44 - International Startup frauds
7:40 - Solutions
9:29 - Outro