5 Remarkably Stupid Ideas Silicon Valley Keeps Falling For
The tech world has brought us some incredible, world-changing ideas, like the website where your weird aunt tries to sell you weight-loss products, or the app that tells you what Rob Schneider had for breakfast. Miracles, truly miracles. But even the most innovative industry can be vulnerable to outright bad ideas. And tech? Hoo boy, does tech have its share of those. Here's but a sampling ...
"Throw Free Money At Customers" Is Now A Business Model
The main lesson tech learned from Uber isn't "People will happily ride alone with a potential serial killer solely to avoid public transportation," but instead "Investors don't care if your company loses money, as long as it keeps growing." This has created a new type of company where the entire business model is basically: 1) round up some cash, 2) give it away to customers without any real hope of making it back, and 3) nobody knows. Here's a topical example:
MoviePass' whole deal was buying movie tickets at full price, then selling them to subscribers for a tiny fraction of that. Anyone familiar with the concept of "math" will see a problem there. They seriously figured they could make a profit off of people who bought subscriptions but didn't use them, like a gym membership (forgetting that most people actually enjoy movies).
Then there was car sale site, Beepi, which would hire mechanics to check and detail your car, sell the service for a small commission, and deliver it to the buyer with a bow on the front. They threw $150 million at this (must have been some fancy-ass bows) before going out of business.
But the king of "burning through investor cash without a clear idea of how to make it back" is music streaming. Market leader Spotify pays 70 percent of its revenue to music labels before trying to cover its own overhead. Tidal pays even more, and has been struggling to do so. At some point you have to wonder whether these guys might be better off shoveling cash into some lotto scratchers.
For every Uber or Amazon success story, there are 99 MoviePasses, Beepis, or Kozmos. Not that this is bad ... from a consumer perspective. If a bunch of investors want to foot the bill for your rideshare to a cheap movie while streaming Jay-Z's entire catalog, then great! Just don't expect it to last forever.
Literally Everything Should Connect To The Internet
Think of a household object. Chances are good that somebody is currently trying to sell a version that can go online, whether that's useful to a single soul or not. Usually "not." Take L'Oreal's recently premiered Keratase Hair Coach ($200), a WiFi-enabled hairbrush that uses a gyroscope, accelerometer, microphones, and a "three-axis load sensor" to analyze your brush stroke and send hair-brushing tips to your smartphone. It also collects data to give you a daily "hair score," meaning that for the first time ever, you can be flunking hair.
Look, presumably, there are people who want DARPA-caliber tech to detect every time a single hair breaks, but they're all aging countesses who want an excuse to be cruel to their stepdaughters, and that's not a growth market.
Then there's the Griffin Connected Toaster ($99), which sends a notification to your smartphone when your toast is done. Perfect for those who can't hear the sound of the toaster while swimming in their giant money bin. For some real Star Trek meets Idiocracy shit, the toaster can also pair with the upcoming Griffin Connected Mirror (estimated at $1,000), which displays the weather, news headlines, and toast readiness while you brush your teeth. So much more convenient than glancing at your phone.
There are even
A Keurig For EVERYTHING
The moment Keurig announced their "DRM for coffee" (fancy machines that only work with the company's own coffee pods), all of Silicon Valley desperately scrambled to come up with one for every other drink ... even if it meant making existing products hilariously worse in the process. The most famous example is the saga of Juicero, the $120 million company that expected you to pay $400 for an "industrial-strength" juice squeezer because they didn't think anyone would try to squeeze the packets with their hands.
Hands typically cost $0. The company is no longer with us.
Meanwhile, Teforia, the "Keurig for tea," raised millions to market an "internet-connected tea infuser," which used "machine learning" and "advanced algorithms" to produce the perfect cup of tea. It originally cost $400, then $649, then $1,000, and then went out of business in late 2017, because it turns out people can make a good enough cup of tea without taking out a bank loan.
But the best/worst example has to be Kuvee, the $179 WiFi-enabled wine bottle. Instead of using a corkscrew like some sort of savage, you would slot "proprietary wine cartridges" into your Kuvee. A touchscreen would let you access information about the wine (normally accomplished by reading a label) and show you an estimate of how much was left (normally accomplished by looking at the bottle). As a bonus, battery life was awful, and you had to awkwardly remove and insert various cartridges if your guests wanted white and red wine. It was in no way an improvement over not paying $179 to only buy wine from one company.
Like Juicero and Teforia, Kuvee soon went kaput. But don't worry, we're sure the "Keurig for horchata" will be along shortly to fill the gap.
New And Exciting Ways To Pay For Water
Reefill was launched after its founder somehow came to the conclusion that "living in Manhattan, there's no place to get a drink of water." His solution was for the customer to pay a $2 monthly subscription to fill a water bottle from a network of "smartphone-activated water fountains" in coffee shops. We're talking about tap water here. Which most of these shops already give away for free. It's the perfect service for when you suddenly need to lose $2 for tax reasons, and no other scenarios.
Reefill's machines do have a button that lets you get tap water for free, while needing a subscription for "chilled and filtered." Thing is, the "chilled" part doesn't always work, and New Yorkers already pay for their water to be filtered via, you know, taxes. Reefill also claimed its real target was bottled water, which is for sure a wasteful product that future generations will point to when explaining why they hate us. But ... people are already free to carry a bottle and fill it up in coffee shops. Nobody's like, "Man, if only this was more expensive. Then I'd do it more often."
Then there's the trend for untreated and unfiltered "raw water," which is currently flying off the shelves around Silicon Valley, presumably accompanied by an increase in toilet paper sales. Entrepreneurs include Mukhande Singh (real name Christopher Sanborn), who buys spring water for 2.5 cents a jug and sells it for $38.49. His "Live Water" supposedly expires after a month, but is free of "mind control drugs." So keep that in mind -- that is, if the powerful psychics at Aquafina let you.
Another raw water seller is Juicero founder Doug Evans, who says he sneaks across private property in the dead of night to collect spring water. Again, Silicon Valley gave that guy 120 million U.S. dollars. We fully predict that these people will be selling you fresh, nutritious urine by 2025.
Everyone's Getting Into Blockchain (And Nobody Knows What It Means)
"Blockchain" is a magic word that makes Silicon Valley investors throw money at you. Dozens of failing startups have saved themselves by pivoting to blockchain. Like Kik, the pervert-infested instant messaging train wreck that was close to going out of business before they announced a blockchain move. That nabbed them $100 million in new funding, even though "the child sexting app has its own cryptocurrency now" might not be a guaranteed success story.
The dumbest part? The definition of a blockchain is so fuzzy that nobody seems to agree on what it is, or how it works, or what practical use they could possibly get out of it. The first blockchains were (to oversimplify it for those skimming this in the subway) strings of information that everyone could see, and were updated for everyone with every transaction. So if you paid your friendly dark web dealer for a duffel bag full of meth and AK-47s, they didn't have to trust that you sent the money; you could both check the blockchain. Nice and easy!
But many famous "blockchains" don't fit that definition. MasterCard's highly publicized blockchain can only be viewed by invitation, so that's out. The World Food Program loudly touted their adoption of groundbreaking blockchain technology, even though it only had one user (the WFP itself), making it indistinguishable from a regular backed-up database.
And investors keep falling for it. "Uber for buses" company Skedaddle raked in millions after announcing a blockchain project to "completely eliminate tipping" in some unclear way. Wearable tech company Loomia also sucked up new investment after promising to give each user a blockchain profile, as did P2P marketplace Listia ... even though neither project seems to have any advantages over their existing payment tech. It's really only a matter of time before that one surviving Blockbuster store unveils a blockchain-based lending system and instantly becomes worth more than Nestle.
On the upside, we just said "blockchain" like a hundred times, so we'll be drowning in VC money by the time you read this. So long, suckers.
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