When Money Is Cheap Idiots Become Entrepreneurs

in LeoFinance3 months ago

Hey Jessentrepreneurs

As a business owner, you're thrown into the realm of the unknown, you don't know where your next meal is going to come from, you don't know if your idea is going to work, you don't know-how industries, and the world change will affect your business. You're constantly looking into the variables and trying to figure a way through the madness.

As you can imagine, dealing with so many variables and uncertainty, many look to others for advice, guidance and influence. We tend to look at those we feel are successful in the hope of replicating that success.


Price and profit signals are destroyed

In the business world where money is meant to signal that you're on the right path and satisfying peoples needs. If your product or service is superior, you should make money as a reward for your time, labour and effective output.

In a fiat money economy, the price signals are heavily distorted since a privileged class can access money easier and cheaper than others. This distortion, and misallocation of resources, I believe, encourages new entrepreneurs to seek validation for their business models in the wrong places.

They seek validation in

  • How much money they can raise
  • The company they keep
  • Their reach on social media
  • Their fame and clout

And profitability, satisfied staff and customers, which should be your key metrics, are ignored and, in turn, suffer. We are building a generation of companies that cost more to serve us less, which shows up in inflation of the price or shrink-flation of the product.

Dumb ideas getting funding

As we come to terms with the death of fiat money, we get increasingly desperate to keep it going. The bigger the promise of value and returns, the likely you'll get funding. So many investment companies and banks are sitting on cash they don't know what to do with and are desperate to find opportunities to fund to give them a greater return.

In that desperation, they turn to snake oil salespeople, scammers, friends, family and people who would never survive in a real capitalist economy. These people have no business sense but all the business connections and are willing to take money to try out a range of stupid ideas.

Have you ever seen the startup scene or the news and wonder who these dumb ideas get funding? Who are the morons backing these morons?

No, there's nothing with you; this is just the state of the business world today.

Breaking the spirit of entrepreneurs

I have a digital business, my cost to run is meagre, and I can scale it to more people and countries fairly easily as the capital comes in. I run a lean business, and I am fortunate that my skills allow me to operate in this market.

I'm not saying digital businesses in Africa is a walk in the park, we do have issues like poor access to electricity, high cost of data, slow internet, low penetration of eCommerce, and online payments, but this will improve with time. In the African markets, we're still very early.

But then I look at other business models, and I don't have to look far to find entrepreneurs who amaze me. I know people who make their own clothing, bake for a living, and do so with modest means and generate an income.

I see them having to jump through hoops such as minimum wage laws to employ people, I see them have no access to affordable banking, I see them hit with our countries high inflation, and they are often carrying the cost of those burdens it works.

Sound money makes for sound business

In a sound money system, their labour would not only be rewarded at a fair market rate, but they would continue to improve their services and products as things cost less to acquire, and they can set aside funds to grow their businesses to scale.

In a hard money world, smaller margin businesses tend to make sense, and it even unlocks more frequent and microtransactions as they become worthwhile for these businesses.

As long as money is cheap to manufacture and remain on a fiat system, this reality will be nothing but a dream.

Have your say

What do you good people of HIVE think?

So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."

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This is a case of what is happening in Nigeria. It's sad but people do not have there knowledge of how to circumvent it.
The naira has been devvalued, the labour market has been monopolized by people who don't care.

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I can’t imagine how bad it must be because I think it’s shit where I am and I’ve met Nigerians here and they would never go back if they can help it!

They’d much rather deal with South Africa and we’re a banana republic shit show so I don’t even want to imagine how bad it gets if this is an improvement

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This is very true. It’s like a bubble and a trend you can policy and make it shiny before presenting your idea to someone and get the funds and the they are ready to fund you as well because they know that people like shiny things. But will this work for long time, that’s the question?

I have no idea if it will work and that we create so many good companies that it outweigh the bad ones but if I look at how much debt it’s taking to generate GDP it doesn’t look like the strategy is working

broken and sick systems ... munger and buffet putting feet into mouths again ... wall st. created casino capitalism and the fed is "disgusting", not crypto ... old dudes that need to go away

How pathetic of a human being must you be to yell and scream that we're finally taking the punch bowl away from them and moving towards a meritoracy? We're not even titing it in our favour, all we saying is lets level the playing fields. You can choose to play in crypto too, but they just want to retain supremacy through nepotism.

It makes me laugh and I cheer on everytime we hit new highs as we move closer to the eventual flipping and its going to be glorious

Charlie and Warren can have fun staying poor and when they finally capitulate we'll show them how to hold the hardest money ever created lol

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We can blame "the connection" and absolute perfection on "advertisements" for poor ideas controlling more cash in the business sector.

It's crazy how of the late, satisfying the costumers is barely top 5 of a company's vision, and investors really don't care about that, it's just all about the possible profits ahead.

As humans, we get overly excited about every new shit, and that has caused all the imbalance in the system, whereas instead of people seeking better projects to build, they go in search of what will hit the temporary trend and earn them a bank to smile at.

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Absolutely, the more I look at the more I see it as central bank money laundering and handing money to friends. The "business" is just a vehicle to obfuscate the capital flows, so normies see a business, and those on the inner circle pocket shares, bonuses and salaries from borrowed/printed money and the salaried workers think they adding value because they measure their value by their salary and not the profit of the company or production of the company

It's a simulation of business, not business itself

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I am not surprised about dumb ideas getting funded. I believe it was like 90% of start ups fail and it can either because the idea is bad or the people running the project just don't know how to run a business.

In a way, I don't think its the start-ups that are the problem but the zombie corporations. They are only sucking in money without really having a positive influence on the economy.

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They are by no means the only problem but they are a massive problem because they reduce barrier to entry for ideas, gobble up capital and human resources to be wasted on shit, they are effectively zombie companies too. they also discourage potential entrepreneurs since funding isn't based on merit but nepotism.

It's a bigger problem than we think, but since its all kept in the shadows you don't see how bad it is, many of these business models aren't based on profit but profiting from the fact that if they remain open long enough the inflation rate will erode their debts while they go after a large enough market, consolidating as they go and killing profitable businesses in the process

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Doesn't look like this cheap money problem is going to end anytime soon. Not when they're spending 4 trillion.

Then creative destruction will come at the monetary level, you can hold it back for so long but if people aren’t allowed to disrupt markets then they disrupt the entire economy, hence Bitcoin

As people move into a Bitcoin economy they take their skills and value with them and it kills the fiat system even faster

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