HN user

edrtfgdr

17 karma
Posts0
Comments7
View on HN
No posts found.

I worked for a famous consultancy that started doing this. They had startups within the company - them acting like a VC and the inventors owning equity.

Then times got tough at the parent so they introduced a 3month notice period, during which they charged you to the startup at full consultant rates - so all their 'investment' immediately went back to them as billable hours. Then they introduced a 'recruitment fee' where for each person leaving to go to the startup the startup was billed 1 years salary to cover the costs of replacing the person. The VC arm of the parent also managed other funds and these were invested in the startup - and immediately billed back to the parent in some way. Eventually the parent went bust before the SEC could investigate all this.

They simply pretend to be a new startup. Think up a new name and a new image to compete/compliment starbucks and open stores nearby. Only the stock analysts need know they have the same owner.

Then all the kids who are too cool for starbucks can go to new-cool-bucks, dispising the people who go to starbucks - while putting money in their pocket. It's like people who are too rich to buy VW but will happily drive an Audi.

Someone occupying an otherwise empty chair has zero marginal cost. In fact to a restaurant, people at tables has a negative cost just before the busy period - would you pick an empty restaurant? People in a starbucks at non-peak hours aren't a problem and may even attract other customers.

It breaks even on a very small amount of ads. There are plans to make more money with a job board and a contractor/client bidding board. They also have plans for internal enterprise versions for companies. It was recently valued at $1M during a recent podcast.