Here are a few recent recent developments at Basis State:
NEW COMPANIES ONBOARDEDWe recently onboarded two companies.
1. Adtech SaaS reporting tool for web publishers and intermediaries (SSPs). It harmonizes reporting between 17 of the major ad exchanges to give a consolidated view of daily ad revenue. The tool could be an interesting strategic asset to ad platforms that make decisions on revenue.
2. Edtech SaaS tool for creating and managing IEPs (Individualized Education Plans) for special education. It is sold mainly to public school districts. It could be an interesting expansion product for other SaaS tools that are sold into schools, or a complement to special education service providers.
Both companies are very early in terms of market traction. Basis State will be focusing on running operations to positive cash flow and making product changes that increase strategic value, while beginning the search for a strategic acquisition.
NEW COMPANIES WANTEDWe will continue to search for interesting companies through the rest of 2019. If anyone comes to mind please let me know. Desirable features: SaaS, enough revenue to fund a lean operation (>$100K ARR), not heavily propped-up by services.
MBA INTERN WANTEDGreat opportunity for an Intern to run with some pieces of our M&A process, such as thesis development, prospect list creation, outreach, and dealbook & data room management. The experience will provide lots of good talking points for those fall interviews in venture, investment banking or private equity. Approximately 10 hrs/week, hours & location flexible. 2nd year MBA student preferred but not required.
There’s a right way to do software product management. There are schools to teach it, certifications prove it, and plenty of articles on it. This is not one of them.
This is an article on how to manage an early-stage product when resources are too constrained to do it perfectly. When money is too tight to hire a full-time, certified product manager. When there’s not enough time to manage formal processes. When perfect is the enemy of good.
In short, this is an article on where 99% of product management starts — no money, no time, and infinite ambiguity.
While not a complete guide, here are 4 tips that have helped me manage less-than-perfect initial products:
#1 Fly Your Tattered Product Flag
There’s a difference between being incompetent and making measured trade-offs. Whatever product you develop initially will take its beating from the market, and morph wildly before achieving market fit. That’s also to say, effort to optimize a product before it hits the market is probably not well-spent.
As an investor, advisor, stakeholder, I get concerned when a company releases a gorgeous product before it has any users. It concerns me far less when a company releases something slightly janky, or barebones simple. That’s a signal that the company is saving dry powder for when the product vision becomes clearer.
So rather than apologize for your initial product, wear it as a badge of good sense.
#2 Discuss the Economics with Your Technical Team
Unguided, your technical team will likely create the best technical solution for your technical needs. That’s pretty much their job, done well. But the best technical solution is not always the best business solution. For example, sub-scale, contracting human review can make a lot more sense than building automation.
Developers tend to be naturally analytical. If you take the time to share the economic rationale of one approach vs. another, your technical team is going to get it. And with time they’ll incorporate that thinking into their own decision-making.
Plus, without a lens into how they are made, business decisions can look like they’re based on gut and not fact. Showing that there’s rationale behind the decisions can foster trust.
#3 Sometimes, it’s Okay to Give it Away
When you first create a product, the thing you need most is market feedback. Any friction to getting that feedback is probably not worth whatever benefit it brings. If you spend months negotiating a big contract, those are months that could have been spent iterating towards a product that has some chance at long-term viability.
I have found that the fastest way to get the feedback I need is to suspend whatever is giving customers pause. In order of importance, these items tend to be (1) setup fees, (2) contract term, and (3) price. If one of these items is impeding your ability to get your first customers, knock it down.
It took me many years before I became comfortable with foregoing good terms to get feedback. Here are the objections that I had rattling around in my head, and what I’ve learned about them since:
Objection: You will erode your perceived value
Learned: You’re a startup. No one has heard of you. You have no perceived value to erode…yet.
Objection: You need to prove willingness to pay
Learned: Once your product is stable, and appreciated, you can charge a fair price for it. If existing customers won’t absorb the new price, then you didn’t get the value right, and it’s back to the drawing board.
Objection: Investors need to see commercial traction
Learned: Investors need to see commercial traction on a product with market fit. Traction on a product that hasn’t found its fit is the single biggest sinkhole of early stage capital and should be terrifying to investors.
Objection: You will deplete your runway
Learned: Nothing depletes your runway faster than spending time on the wrong product.
#4 Think Hard Before Playing Pufferfish
The guidance often goes, startups should make themselves look bigger than they are to gain the trust of prospects. There’s some solid logic to this. Prospects can be wary of tiny companies, because tiny companies often go out of business.
On the flip-side, any large customer is going to test your capacity at some point. At that point, it’s better to be known as a strained 3-person company than an incompetent X-person company.
Also, fakery is exhausting, and if you’re caught, it will erode goodwill. You should be focusing on building good relationships with early customers rather than perpetuating a lie.
Once the market has validated your product, you’ll have plenty of time to do product management the right way. Until then, time is a scarce resource, and letting go of perfection is one way to use it to its fullest.
I frequently hear investors say they are looking for passionate founders. I think in this instance “passionate” is just a proxy for “driven.” Driven founders work hard, and push through adversity to get to success.
Really, investors are not interested in just any flavor of passion. It’s important to consider whether yours is the type that investors want.
Here are some founder passions that I’ve seen:
- To make a difference in the world
- To make money
- To be TechCrunch famous
- To build a remarkable internal culture
Investors can also have passions. They might take the form of a thesis on a certain type of business, or a focus around businesses with a particular aim such as environmental responsibility, ending poverty or curing disease.
But VC passions live within strict guide rails of fiduciary duty. As “dual fiduciaries,” VCs represent the interests of their portfolio companies as well as the limited partners in their fund. Limited partners generally have one overriding interest: return on capital. In turn, making money rules the day.
Any of your passions could potentially conflict with your investors’ fiduciary duty. For example:
- Your passion is to make a difference in the world, and you find an avenue to deliver a greater return at the expense of impact
- Your passion is to make money, but your odds of a personal return conflict with the VC portfolio model
- Your passion is to be TechCrunch famous, but there’s another leader out there who is better equipped to take your venture to the next level
- Your passion is to build a remarkable internal culture, but getting to attractive economics requires trimming perks or headcount
Your term sheet may (or may not) give you the final say in sticking to your passion, but either way, running a business that’s at odds with your investor interests is no fun. Best case, you get your way, your investors turn their attention elsewhere, and you end up with all the overhang of a VC-backed business but none of the value-add. Worst case, you don’t get your way, and you’re dragged along with a business about which you have no passion.
And when you’re tired and the chips are down, which happens often in the early stages, you’re going to need to call on that passion to keep pushing.
So be realistic about the intersection of your passion with investor fiduciary before you take that check.
Companies acquire sub-scale SaaS for three reasons: (1) to accelerate a roadmap, (2) to access a new type of customer, (3) to avail a new product to existing customers.
This article focuses on #2.
Determining your value when you are being acquired for your customers (or types of customers) depends on the market you’re addressing, and whether your existing product is being factored in the equation.
The two types of customers that are usually pursued via acquisition are either of a new size, or from a new region. SaaS companies often buy their way back in to SMBs, which is counterintuitive since growing SaaS companies can’t seem to ditch their small customers fast enough. I’ll explain that next.
Small, then Large, then Small + Large
Growing B2B SaaS companies follow a somewhat predictable sequence when it comes to target users. At first, the company just wants some sort of traction…any traction really. And small-ticket customers are usually easier for an unknown brand to acquire than large-ticket customers.
The problem with smaller customers is they tend to churn. They pivot, swerve, lack dedicated resources at the controls, run into cash crunches, or flat-out go out of business. So as the B2B SaaS co. gets its footing and starts to think about efficiency, it runs the numbers and realizes that bigger customers pay more and churn less. That begs the almost cliché “move up-market.”
But it’s crowded up-market. Eventually, competition applies pressure on growth and the company looks for new user segments. One obvious place to look is back at small users.
The case for an acquisition to re-enter the SMB space is that the acquirer has lost touch with smaller users. Running an SMB SaaS co. is entirely different than running an Enterprise SaaS co. Acquirers are buying their way into SMB savvy.
|Sales||Support||Billing & Admin|
|SMB||Formulaic||Automated, Reactive||Low Touch, High Volume|
|Enterprise||Consultative||Proactive||High Touch, Low Volume|
The return to SMB can take the form of moving from service-heavy to self-serve, closed tech to platform, bespoke integrations to an open API. While none of those are overtly SMB-focused, they tend to open access to SMBs.
There are two reasons a company might buy another company to get into a local market: (1) help localizing their product, (2) an in-market sales team.
In the case of the former, valuation will go according to the Accelerate a Roadmap model.
But in my experience, most international acquisitions of sub-scale SaaS are for the local sales team. It’s hard for a company to set-up a sales office overseas. First, they need a competent local manager. Then, that manager needs to hire and train. An acquisition puts the initiative on the fast track.
They key to determining value is whether the acquirer plans to keep your product intact, or plans to use its own product to address your market.
Scenario 1: Your Product Persists
If your product is going to persist beyond a transition period, it is fair for you to look at value as a traditional revenue multiple. At a minimum, there’s a return in your future cash flows. You’re being acquired for your market, and your product will persist, so your customers should stay put.
The way value is determined in this scenario is not entire dissimilar from the way it is determined by an investor during equity financing. A line is drawn into the future based on market and expected growth, and a value is set based on some point in the future. The acquirer is basically investing in your business, they’re just investing in total control.
Scenario 2: Acquirer Uses its Product to Address Your Market
A situation where an acquirer will wind down your product and address your market with their own is trickier. These are the factors to consider:
Factor 1: Is the acquirer’s product ready for your market?
If you and your team are going to be fitting the acquirer’s product to your market, your value will look like an “acquihire”, plus whatever base of customers can be migrated when the new product is released.
I have tested ‘standards’ for acquihires (e.g. $X/engineer). They don’t work. Truth is, there are too many variables at play to apply standards. How critical is it that the team be a cohesive unit? How rare are the skills on the team? How valuable is the knowledge they acquired while working on their venture? Standards should be tossed to the side and these questions should be answered one by one.
Factor 2: How much of your current base will actually migrate?
The answer is far less than 100%. There is a portion of your current base that has been meaning to cancel anyway, and the news of a change of control will give them their reminder. Add in changes to the product that some will find irritating, and the churn climbs.
During due diligence there’s a good chance you’ll be asked for your customer list. Often it is done with the aim of gauging how many of your customers will be net new to the acquirer. In some cases fulfilling the request isn’t a big deal, but in others, you should try to avoid it. For example, if the acquirer is a direct competitor, knowing your customers isn’t particularly relevant since there shouldn’t be any customer overlap to discount, and can be dangerous if your deal falls through.
An alternative I have used is a list of customers by billings (or whatever other data is requested), with pseudo customer names like Cust1, Cust2. This will give the acquirer what it needs to assess revenue concentration, impending large renewals, and other critical factors to valuation.
Putting it All Together
If your product will stay intact long term:
Value = Current Revenue * Anticipated Growth
If your acquirer will deploy their product to your customers:
Value = Acquihire Value + (% Customers Migrating * Revenue * Anticipated Growth)
When acquirers buy a sub-scale SaaS business, it’s rarely for the business’s revenue. The revenue-based valuation rules that apply for scaled SaaS companies do not apply sub-scale.
Instead, sub-scale SaaS valuation is based on the particular reason the target is receiving interest, and this can vary.
As I’ve mentioned in previous articles, there are three main reasons why companies acquire sub-scale SaaS: (1) to accelerate a roadmap, (2) to access a new type of customer, (3) to avail a new product to existing customers.
This article will discuss reason #1; you are being acquired because a company believes your tech will accelerate their roadmap. There are 3 factors to consider in this scenario.
Factor 1: Acquirer’s Cost of DIY
The most obvious element of value in buying vs. building is that the buyer doesn’t have to pay their cost to build. I’ve heard a lot of entrepreneurs mistakenly assume that this is the only, or perhaps primary, component of value. “Why would they buy my co. for $X when they could just build it for $Y?” The answer is, there’s value way beyond the direct cost to build. Still, the cost to build represents value and should be factored.
To quantify, first consider the ways in which big companies do things differently. They tend to pay more for labor, they tend to have more project overhead in the form of product & project management, and projects tend to take longer because of all the various functions peering into development.
The extent of these differences will depend on the size of the co., where they’re located, culture. The point is, think in terms of what it would cost the acquirer to build, not what it cost you to build.
Factor 2: Foregone Opportunity while DIY
More than cost savings, the acquirer wants the ancillary benefits of the new feature…just sooner. To quantify this factor, calculate these benefits over the time period it would take the acquirer to develop.
The value might come from any of these effects:
- Increased close rate
- Decreased churn
- Ability to charge more with the new feature
- Cost savings (a more efficient workflow, lower infrastructure costs)
Tiny changes in large revenue streams create lots of incremental dollars. If a big company can have a revenue-impacting feature a few months earlier, it can make a big difference.
Factor 3: Integration & Transaction Expense
No one likes working with someone else’s code. Building it yourself, there’s no learning curve, no undesirable design to undo, no unwanted redundancy, no messy integration. Further, even the smallest acquisitions usually carry a cost surpassing $100K in due diligence and legal expenses. The size of the Integration & Transaction factor will depend on how dissimilar your code is to the acquirer’s, and how complex the transaction. Nonetheless, it’s important to remember to discount the value calculation by Factor 3.
Putting it all Together
The equation for setting your value looks something like this:
Acquirer’s Cost of DIY (+)
- Developer cost at acquirer
- Admin / project overhead cost at acquirer
- Timeframe to complete at acquirer
Foregone Opportunity while DIY (+)
- Time to develop
- Increased close rate
- Decreased churn
- Upcharge potential
- Cost savings from efficiency (workflow, infrastructure)
Integration & Transaction (-)
- Learning curve
- Integration time
- Ongoing redundancies
- Due diligence & legal expenses
You’ve developed a feature that enables a user to create an explainer video with a few clicks. Big Marketing Platform has been working to develop this feature, but it’s been slow going. Competitors have released the feature, prospects are taking notice, and users are starting to complain.
It cost you a small seed round to build the software, but that’s irrelevant. Big Marketing Platform pays its developers $160K/year and it would need 3 of them to build this over the course of 3 months. In addition, the build requires 50% of a project manager’s time at $120K/year and 25% of a product manager’s time at $200K/year. Big Marketing Platform loves meetings, so the 3 month build would likely expand to 6 months.
So the cost is:
Dev. $160K/12*6*3 = $240K
Prod. & Proj. Mgt. ((.5*$120k/12)+(.25*$200K/12))*6 = $55K
Big Marketing Platform’s product is not showing as well as it did before competitors launched the video builder feature, and some current customers are upset. Adding the feature would increase close rate by 5% and decrease churn by 10%. Over the next 6 months, Big Marketing Platform is expected to do $20M in bookings and have $5M in churn. Adding your feature would create (.05*$20) + (.1*$5M) = $1.5M
You’re a small company with limited operating history, and this is an asset sale. So the acquirer’s due diligence and legal expenses will come in at around $100K. You expect that integration and learning curve will take a month, and will involve the full time effort of 3 developers and 50% of a project manager, or $45K. Double that because maintaining someone else’s code sucks indefinitely. So total factor is $190K.
So your value is $295K + $1.5M – $190K = $1,500,105
One big takeaway from this exercise is that the bulk of your value resides in the foregone opportunity. I find this is almost always the case.
A Side Note on Negotiating
Remember, whatever calculation you’ve made will be wrong in the acquirer’s eyes. The acquirer will have its own set of calculations from real inputs, and in their view, will arrive at the right valuation. Use your numbers as a guide to understand how they are thinking about value, but don’t get too stuck on them.
“When they teach you how to drive a racecar, they tell you to focus on the road when you go around a turn. They tell you that because if you focus on the wall, then you will drive straight into the wall.” – Ben Horowitz
Ben Horowitz has a great point. There are a myriad of pitfalls that can kill a startup, and worrying about all of them while trying to execute is a folly.
But I have found that not being aware of them at the outset is also a mistake.
I have spent a lot of my career looking into startups that are falling short of where they aimed originally. They are headed for the wall, if they are not already pinned up against it.
For the most part, these companies were not doomed from the outset by a bad idea. Nor did they make a single big mistake. They usually had one bad habit that ground away at them over time, until the only thing left to do was to make a hard turn to avoid crashing.
The most common bad habits:
- Staying in the basement too long (over-speculating, over-designing, over-building)
- Concession strategy, trying to be many things at once
- Being slow to pivot when the evidence is screaming the right answer
- Scaling prematurely
And you can usually spot the bad habits without having any company history, just by meeting the founders. Founders who love the tech are prone to staying in the basement too long. Founders who are gentle are prone to concession strategy. Founders who talk better than they listen are prone to being slow to pivot and scaling prematurely.
We all have tendencies that pull us in various directions. It’s important to understand those tendencies, and how they can pull you towards the wall if you if you don’t design ways to guard against them.
Weak tendencies, just being aware of them could be sufficient.
Stronger tendencies, you might need to find a co-founder who can counteract.
And the strongest tendencies might dictate which kinds of startups you are capable of leading. For example, I don’t like long odds over long timeframes. I will not build the next Facebook, because in 2006, I would have snapped-up Yahoo’s $1B offer in a second. Had my co-founders disagreed with me I would have remained firm. Had my investors disagreed with me I would have remained firm. And in hindsight, I would have been dead wrong and responsible for an immense disservice to all stakeholders. So knowing that tendency steers me away from taking on go-long / go-huge plays.
In short, know thyself, and study failure before you start. Understanding all the ways in which you could hit the wall will help you set up your venture in a way that lets you focus on the road.
Building a successful VC-backed company requires getting everything just right. Getting it right means hitting a bullseye where three factors intersect: Founder Competency, Market Reality, and Investor Approach.
When you hit that intersection, you have a big exit and sail away to your private island. When you miss, you either hire or negotiate, depending on how you miss.
Let’s start by defining the three factors.
This can be either markets you understand, or innate skills. They will drive your ability to execute well in a one type of venture, and struggle in another. Highly technical founders can have a rocky road building sales-driven orgs, and vise versa. Founders that start in the SMB market might struggle with a pivot into, say, government contracts, even if they spot an open niche. Adapting is hard.
Investors try to stick to a general approach across their portfolio. At the broadest level, most investors look for scalable tech that can create a big category and have a huge financial outcome. Ventures that live in the cracks simply don’t fit in most portfolios.
A level underneath, most investors have some other thesis, or collection of theses, that guide their investments. For example, the aging US population needs accessible tech. Or industries with information asymmetry are ripe for disruption.
Investors usually talk about their approach when raising funds. Deviation merits some explanation, so there’s friction to changing the approach to accommodate a single portfolio company.
Again, adapting is hard.
While Founder Competency and Investor Approach are visible from the outset, Market Reality isn’t totally clear until a venture has been in the market for a while. What we think is going to happen once we’re in market is usually wrong in number of ways. Our customers might be bigger or smaller than we expected. Our core use case might appear from out of the blue by some happy accident. We pivot and adapt, and hope that the pivots don’t take us too far out of our competencies, or our investors’ approaches.
Market Reality Doesn’t Align with Founder Competency: Hire Leadership
When startups find that their Market Reality doesn’t align with Founder Competency, it’s far from a death sentence. If the founders are sufficiently humble, they’ll find leadership that can fill in the gaps. Investors are usually very helpful in tapping their networks for talent.
Sometimes the transition goes well and sometimes it causes fissures. New leadership might change the tenor of the place in a way that demotivates the team. Or they might try to run a playbook that worked for them in the past that doesn’t factor the nuances of the new venture. Overall, misalignment between Market Reality and Founder Competency is sub-optimal, but workable.
Market Reality Doesn’t Align with Investor Approach: Negotiate
VCs rely on reputation for deal flow, so they are generally forgiving towards portfolio companies that are still finding their way. On the other hand, when it comes to re-investing, they have a fiduciary responsibility to their LPs to not “put good money after bad.”
If you find yourself with a decent business, that you are good at running, that doesn’t fit the approach of investors, you’re in a tough spot. You can’t expect your investors to reinvest in a business that doesn’t fit their model, and you can’t expect new investors to come in if your old investors are sending a cautionary signal.
Those lengthy docs you signed as part of your financing are designed (in part) to protect investors in this scenario. What happens next depends on those docs, and your investors’ willingness to make adjustments. The conversations that follow are awkward, humbling, and may not work out in a way that you like. But the next step is always an honest conversation.
One of the keys to making a VC-backed startup work is making sure all parties are aiming for the same bullseye. Also, understanding how you might miss, and the impact to your viability, should be an important factor in deciding whether you want to seek funding at all.
“Sounds like a feature, not a product.” Anyone who has been on the VC trail a few times has probably heard these words. It’s one of the most common reasons for VCs to pass on your business.
It makes sense. Features don’t get to VC scale, and they can easily get knocked-off by large platforms. For example, Google is notorious for obliterating swaths of startups by adding free features to its suite.
The entrepreneur’s response to the feature-not-product dilemma is often to head back to the drawing board and create a bloated vision around the feature. “We’ll add X, then Y, and eventually disrupt market Z!” The problem is that this fills a VC need, but not a market need. In all likelihood, you started with a feature because the market just wants the feature.
Believe it or not, you can create a business out of a feature. It may not be built to last, or get you famous, but it can deliver a better return than a decent exit after several rounds of VC financing (i.e. after dilution & liquidation preference).
Here are some keys to a successful feature business:
Capitalize for a Modest Exit
Don’t take VC for your feature business. Just don’t. Your investors won’t be happy with your modest plan, the market won’t be happy with an artificial attempt to make it bigger, and you won’t be happy when the proceeds from your sub-scale exit go 100% to your investors. If you uncover a scalable business down the road, you can always raise capital then. VC is designed for scale, period.
Embrace Being Invisible
Whereas most businesses cringe at the thought of letting their brand sit in the background, feature businesses should seize opportunities to ride alongside larger brands. There are two reasons for this: capital efficiency and acquisition positioning. Most of the capital burn in software startups goes towards acquiring customers, so if you’re running lean, it can make sense to give up some margin and brand equity to let someone else do your selling. And, this type of partnership can build the business case for eventual acquisition.
Make Hay While the Sun Shines
Remember, your feature business could get undercut at any time by a larger platform. Make conservative long-term plans, harvest profits while you can, and if you get a good offer for the business, take it.
Your Valuation is Not a Multiple of Revenue
Your prospective acquirers will be looking at your ability to accelerate their feature roadmap, bring a new feature to their existing base of customers, or inject a new set of customers into their base. They will not be growing your current standalone business, so it doesn’t make sense for them to value your business based on revenue. As you consider valuation, consider the value that you are bringing the acquirer; it might be considerably higher or lower than typical revenue multiples.
You probably didn’t set out hoping to create a feature business. But if that’s what you have, structure it correctly for the win.
Startup failures send perfectly good tech to the scrap heap. That’s nothing new. What is new is that more and better tech is getting abandoned earlier. It’s an inefficiency created by our convergence around a common playbook.
It starts with taking the path down a very narrow funnel
The standard startup playbook goes something like this: build a product, get some market traction, raise capital, scale revenue, sell for a multiple of revenue. The machine that generates VC returns and founder fortunes has been tuned to this sequence of events.
More often than not, the plan derails somewhere along the way. When the breaking point is revenue at scale, perfectly good tech is often scrapped.
Trouble begins with a big leap from a solution to scalable economics
As entrepreneurs, we look for problems without available solutions. “Hailing cabs is the worst, I wish there were a better way.” Then we create a solution, and can usually find some customers to pay for it.
But a good solution and promising early adoption don’t necessarily portend good economics at scale. As we move beyond early adopters, the cost to acquire customers often outstrips what they’re willing to pay for the solution.
A bootstrapped business that faces this scale constraint can stick to its profitable niche, drop its acquisition costs through channel partnerships, or trim overhead to operate at a slimmer margin. Any of these would be rational moves to keep the business healthy.
However, any of these moves is anathema to the VC-backed playbook. The goal is scalable revenue, and your job is to pivot until you find it, even if the odds start to look slim.
Then, investors get fatigued
The beginning of the end is when your seed investors show fatigue. The runway is getting short, your investors are hesitant to re-up. Without their support, your odds of securing new investors are severely hampered. You are facing a period without cash, or a down round that will likely impact you and your co-founders.
Finally, founders get fatigued
Faced with a down round or a period without cash, you and your co-founders might question the mission. You could look for a buyer, but with a telling P&L and balance sheet, buyers will smell blood and negotiate from a position of strength. Your perfectly good tech is valued as scrap as you near the end of your runway.
By limiting our options, we destroy value
The value of tech and the scalability of a business model are two very different things, but once you are on the VC track, the two become conflated. When the scalable business model fails, it drags the tech down with it.
It doesn’t have to be this way. Good tech can have value within a niche, or wearing another company’s brand, or folded into another company entirely. Just because the tech doesn’t scale as a standalone business model doesn’t meant it is worthless.
When an entrepreneur creates a solution to a problem, it might become an acquirable asset, or a small/medium-sized profitable business, or maybe even a scaled enterprise. Any of those outcomes can create wealth. But in our adherence to a common playbook, we’ve voluntarily crossed two options off the list, and left ourselves with scaled enterprise or bust. The unfortunate result, among other things, is the destruction of perfectly good tech.