Stayzilla, an Airbnb for homestays in India, is closing down its service. The company was founded six years ago and had raised $34 million from investors, including a $20 million Series B in 2015. Now is the time to pause and “reboot” however, CEO and co-founder Yogendra Vasupal explained in a blog post. The company reached a…
via Stayzilla, India’s Airbnb for homestays, closes its service — TechCrunch
Another one bites the dust, as start-ups and investors start rethinking their approach to creating unicorns. One of the largest ones being discussed (and also a poster child for Indian e-commerce) is Snapdeal, who in a recent email announced a lay-off of more than 1000 employees.
So why do it in the first place?
Well, it was good while it lasted, and at least the team that started it knows that they gave it their best and things did not work out – due to whichever reasons … be it a bad business model or unbalanced promotions, or whatever.
Over the years, investors have also become much more skeptical on which businesses would they put their money in.
One of the things that peeves me off is that the investor success stories which have 1000% gains and great exits had the investors not just invest money, but also time and efforts in different capacities.
As someone who works with multiple ideas, one of the key components that I myself do not have much is time. Money is a transient thing, sometimes you are floating in it, sometimes you do not have much to spare. However, as time goes by … one of the key assets that people should look at is the time required to nurture that unicorn.
If that time is not there, then its best that you don’t put in the money – thinking that some smart people will grow that money and give you handsome returns. Somewhere in that dynamic, people are forgetting to create sustainable value.
What is Sustainable Value?
Any transaction happens because of both the parties seeing a certain economic value in that transaction. A buyer gets a good or a service for a price that he can afford. A seller gets a reasonable price for goods/services that he/she are providing.
For a time being, the buyer or seller can extract more value from the market. This could work due to information asymmetry (or third degree arbitrage). However, as information is made available to every user and as customer discovery becomes faster and smoother, this arbitrage is being worn down.
So, how does sustainable value come from … simple, it comes from fair play, it comes from co-operation and knowing that co-operation is the winning strategy when it comes to game theory.
How many start-ups get the sustainable value creation point is something that I am most interested in.