Way back in the early 1990s when I co-founded my very first startup our Series A round was half a million dollars; we went on to raise an additional fifteen million over the next two years as we were considered a hot company with great prospects. Back then, the average VC fund was around two hundred million dollars and any software company consuming more than twenty million before reaching breakeven was considered to have gone off the rails.
That all changed with the dot-com boom. In 1999 I walked into the offices of a VC firm that had backed my first startup and one of the partners told me, “We only invest in $50 billion opportunities now.” At the time that should have meant they were considering only aerospace, oil & gas, defense, and healthcare.
What they were doing, however, was throwing money at companies that believed they could sell hundreds of thousands of dollars of tech to burger franchisees. Just imagine: instead of making monthly profits from doling out McSlop using minimum-wage employees, the lucky franchisee could invest half a million dollars in the latest close-circuit camera equipment (gotta make sure those employees are putting just the right amount of ketchup on each burger!), expensive logistics analysis software (gotta make sure those employees aren’t taking a second too long to get the burger into the warmer!), and expensive customer-ordering software (gotta make sure we cut queue times down from 30 seconds to 28 seconds!). Losing millions was the order of the day in order not to miss out on what was believed to be the greatest land-grab since the settling of the American West.
Things became so risible that a friend of mine actually started a company called Red Inc. and raised $5 million for “a revolutionary new Internet technology that will live at the heart of all B2C transactions.” He burned through half of it before the investors realized they’d been taken. But it didn’t stop them from pouring ever-more money into ever-more harebrained business plans.
Astonishingly, this didn’t work out for the VCs. The dot-com crash saw funds drying up and VCs going straight from mad spending spree mode to tightwad over-cautious grandmother mode.
Today we’re nearing the end of another absurd venture-driven bubble. Whereas individually some venture folk are modestly intelligent, collectively they resemble small children playing soccer: everyone’s clustered around the ball and no one has a clue where they’re going.
This problem has been exacerbated by the fact that thirty years ago venture folk were usually experienced senior executives or seasoned entrepreneurs; for the last twenty years they’ve mostly been kiddies who came fresh out of MBA school to become associates at a VC firm and then became partners ten years later. They’ve zero real-world experience of how to get things done. Following the herd (of other VCs who are likewise clueless) is their only strategy.
Which is why we’ve seen multi-billion dollar investments in companies like Uber and Tesla, hundreds of millions poured into autonomous vehicles, and — my personal favorite — $50 million into a company fitting small vans with pizza ovens so they can lose $100 on every pizza delivered piping-hot to a customer’s doorstep.
Fortunately the inevitable catastrophic crash hasn’t happened yet, which means there’s still time to take in a $20 billion Series A funding for the absolute best, most shiny, and must-have idea of the end of 2019: Pie In The Sky, Inc.
Here’s the pitch: Generation Z has an attention span of under eight seconds so they need instant gratification. Generation Z also eats a boatload of pizza. Logically therefore there’s a multi-trillion dollar market opportunity for the company that can get hot pizza to the consumer in under 8 seconds.
Forget yesterday’s pizza-van concept and forget pizza delivery by UberEats and Fooby. These are so last-Tuesday-afternoon-at-3.27pm. The winner will be the company that can go from order to delivery in 8 seconds or less.
Here’s how Pie In The Sky will be the winner and achieve the world’s first hundred-trillion-dollar pre-money valuation:
First we spend a billion dollars on buying huge RVs which we convert (at great expense) into Mobile Order Factory Operations (hereafter MOFOs). We saturate each city so that there’s a ratio of one MOFO to every thousand people. The MOFOs are continually making fresh pizza in anticipation of the orders that will flood in as Generation Zsters stroke their smartphones and place their orders through our super-compelling viral addictive app that automatically links to all their social media accounts and their medical records and their credit card data.
Sure, 99% of the pizzas made in the MOFOs will be thrown away because no one actually orders them the moment they roll out of the oven but hey, the USA is a wasteful society so this is basically patriotism in motion.
Now we spend another couple of billion on Big Logistics Trucks (henceforth BLTs) that follow the MOFOs around, restocking them with flour and yeast and tomato sauce and toppings because, hey, these guys are going to get through a lot of ingredients every day. But don’t worry: when we’re making money we can write off the entire expense and reduce our tax bill just like Amazon does.
Next we spend another billion or so on making the software that enables our PieIntheSky mobile app (native iOS and Android!) to communicate with our ordering system which communicates with the logistics system which communicates with the billing system which communicates with the MOFO internal systems which communicate with the BLT systems which communicate with the mapping system which communicates with the autonomous drone navigation system. All these systems will be home-rolled because hey, we’re super-smart and besides, who wants to buy grandad’s ERP system for a paltry few million and change? Duh!
All this custom software (that we’re sure we can create in three months for under five billion dollars using Agile methodology combined with microservices, ’cause microservices are super cool this week) will enable our autonomous drones to take the piping-hot pizza from the MOFO straight to the customer’s open mouth by homing in on the GPS coordinates of the phone they used to place the order.
By cleverly ensuring local saturation, no MOFO will be more than 200 meters from each customer, ensuring that the drone flight-time will be five seconds or less.
As the drone approaches the eager hungry customer, the customer opens their mouth and the drone positions itself using sophisticated image processing technology provided by our multi-billion dollar FaaS stack to drop with extraordinary precision a hot slice of pizza directly into the mouth of the recumbent customer.
No one else will be able to offer this service.
Seriously. I mean, like no one.
Our competitive advantage will come from raising so much venture capital that we can buy every RV in the nation and hire every mechanic in each of the fifty States to do the conversions. We’ll also buy up the nation’s entire supply of flour, tomatoes, and toppings. This will ensure we lock out any potential competitors and by the time new RVs roll off the manufacturing line and the next growing season rolls round we’ll be so far ahead (and so deep in the red) that no one will be able to catch us. This is definitive first-mover advantage!
Furthermore the upsell opportunities are huge. Our autonomous drones can be equipped with repositories for carbonated drinks, so that the customer can remain in classic slumped-on-sofa posture with head tilted back and mouth wide open, receiving alternately slices of pizza and squirts of their favorite overly-sweetened fizzy drink.
Our drones can also deliver a wide range of additional product offerings including ice-cream (specially made by a separate fleet of Mobile Ice-cream Location Factory vans, henceforth MILFs) and beer (brewed by a separate fleet of Bitching Beer Creation trucks, henceforth BBCs), and post-emesis products for customers who over-indulge (supplied by a separate fleet of Basic Accident Recovery Function vans, henceforth BARFs).
Our initial calculations (which we’ve just made up on the spur of the moment) show this is a thousand million trillion dollar market opportunity.
So if you’re a venture capitalist reading this article, you know what to do: don’t hesitate! Wire that check for $5 billion to my personal bank account right now, and we’ll consider letting you in on the ground floor of the millennia’s most desirable opportunity. You really, really don’t want to miss out on this one.
Remember: this is the deal they’ll still be talking about many years from now…