LET ME TELL YOU A STORY
And this week – The tale of the “pro-bono” startup.
Once upon a time, in a country near near-away, there was a startup called “The90%”.
The visionary CEO was in charge of moving money from VCs to the CFO, the CFO moved the money to the CTO, the CTO moved the money to the hard-working R&D group, and the R&D group, by some miraculous alchemy, transformed the money to something new, unheard of before. They called it an “Invention” and immediately told all their friends and family about it.
As the days went by, every time the VCs asked how their money is doing, the CTO proudly announced: “we don’t have it anymore!” and presented pictures of the shiny new “Invention”. The VCs were very impressed, certainly, you do not see an “Invention” every day, and they too went home and told all their friends and family about the “Invention”. ??
Everyone was excited, as now EVERYONE knew all there is to know about the “Invention”. The local paper even run an editorial on how shiny this new “Invention” was. Readers were excited too, as they now knew all about the “Invention”, were able to use it freely, and it only cost them the price of the subscription.
One day, one of the more junior VCs asked if it is possible, if it is not too much hustle, to please somehow convert the “Invention” back to money, preferably to more money than it cost to produce it, as their partners are interest in some mythical concept named “ROI”.
When the CEO and CTO finally stopped laughing, they explained to the junior VC that their company is not named “The90%” for nothing – it is called that since it is doing what 90% of the startups in the world are doing – converting VC money to “Invention”, and then directly converting the “Invention” to “public knowledge”, without protecting the “Invention” with IP before it is published.
If you are a founder and want your company to be in “The10%”, or if you are a VC and want your portfolio companies to someday have an ROI – let’s talk.