SAN FRANCISCO - The implosion of office space company WeWork this week is being digested as a lesson for Silicon Valley startups - in what not to do.
The consensus among venture capital investors at the TechCrunch Disrupt conference and elsewhere was that unlimited power and money were not good for building companies. Some of the problems were blamed on Japan’s SoftBank Group Corp , a backer of WeWork that has become one of the most powerful tech investors globally. SoftBank declined to comment on the criticism.
While interest rates remain low, don’t expect the flow of money to stop, said David Golden, managing partner at Revolution Ventures. He noted that big checks from investors could inflate values, making it more difficult to raise funds later - another issue highlighted by WeWork’s recent valuation struggles.
And at the conference, the general mood among the startups was upbeat. Garry Drummond, the CEO of 802 Secure, who was showing off his cyber security hardware on the floor, said he was raising up to $8 million in a series A round and that the WeWork debacle was not having any impact.But the wealth of funding has a third problem, also seen in WeWork, of undermining spending discipline.
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In a way, you can say it was a modern day Icarus...
WeWork not a Silicon Valley company, based in NYC
More of a lesson than Theranos?
See Dotcom
Four short weeks ago it was the rule and not the exception. Funny how quickly that changes.
I think this lesson should be $UBER and other real tech companies. $we will always be a bas example dor tech... dreams and aspirations don’t count as technology.
Start ups have been taught to drive revenue and ignore profits for a decade or more. This might finally end it. wework iposhitshow
WeWork was not a Silicon Valley company.
Nope. WeWork was designed to extract money out of the shareholders and it failed.
This is actually what WeWork does: