SoundCloud's Collapse
This shows us, that company valuations are ridiculous and actually mean nothing.Is SoundCloud worth a billion dollars? Well, it might be on paper or in the imaginations of the founders, but what does it really mean? To me, it's worth nothing.The real problem is: these companies start to operate from the perspective of "having" those millions of dollars. This is why they hire too many people for too much money. They spent hundreds of thousands on marketing.But in the end, you know what? They need to beg for money to pay their debts. They need to lay off dozens of employees because they don't have the money to pay them.What if SoundCloud would have kept a small, yet highly skilled engineering team of maybe ~20 people, some marketing and sales, and try to not outgrow themselves? Probably they'd be having a huge surplus each year because their costs would be small and sustained.When I read stories like these, I actually feel good about my bootstrapped, down-to-earth startup. We don't make millions, we don't "disrupt" the industry, yet we solve our customers' problems and delight them. We won't ever run out of money, as we carefully check each and every expenditure, and have growing savings in the bank.