Bogus Startups burning VC money!
I got a call from a recruiter to interview for a role at a startup company. Upon arriving in the office I saw that the office is extremely swanky. Free breakfast tacos. Fridges full of soda. Beer taps. Everyone with latest Apple hardware. I could compare this office to something from a more established company.
During the interview I learnt that they have chosen a very specific community like DBAs and IT Admins and Network Guys and they build free online tool for this specific community. They have around 150K such users world wide.
So I asked how does your company make money. And they gave me a “we run ads senator” type of answer. Well you don’t make any money from ads if you have 150K users in total.
They also boasted about recently getting 50M funding from VC.
I am wondering is it really this easy.... doesn’t anyone see that this type of business model only worked in the past. How come VC pour money into such companies now.
Or maybe I am wrong .... maybe it is possible to have a swanky office with ad supported free online tools for as little as 150K users.