085 | Momentum vs. Substance Investing | When A Startup Only Works In Boom Times скачать в хорошем качестве

085 | Momentum vs. Substance Investing | When A Startup Only Works In Boom Times

In this episode, Patric and Shub explore the critical difference between substance investing and momentum investing in the venture capital world. Using five cautionary examples spanning from 2010 to the COVID era, they examine why businesses built on hype cycles rather than fundamentals inevitably fail when boom times end. This Episode The distinction between substance investing and momentum investing, and why timing the market matters less than building sustainable business models. A retrospective analysis of failed boom cycle companies including Groupon, fab.com, Homejoy, WeWork, and Hopin, revealing the common patterns that led to their downfall. Why great founders alone cannot save a fundamentally flawed business model, challenging the venture industry's obsession with team over substance. The dangers of category crowding when VCs pile into trending narratives, creating overcrowded markets with too much customer choice. How to identify current boom cycle investments by looking for warning signs like negative gross margins masked by impressive growth metrics. Timestamps (00:00) - Introduction (01:26) - Defining substance versus momentum investing using Waymo's recent funding round (03:47) - Groupon: The 2010 daily deals boom and its spectacular collapse (09:47) - fab.com: The 2014 flash sales phenomenon that sold for pennies on the dollar (16:29) - Homejoy: The "Uber for X" era and why hyperlocal execution matters (20:48) - WeWork: The gig economy poster child that went bankrupt after raising $13 billion (25:20) - COVID-era virtual events: Hopin and the pandemic boom that evaporated (29:54) - Identifying today's boom cycle investments Resources or Companies Mentioned Waymo: https://waymo.com/ Groupon: https://www.groupon.com/ WeWork: https://www.wework.com/ WeCrashed (Apple TV Series): https://tv.apple.com/us/show/wecrashed/ Hopin: https://hopin.com/ Zoom: https://zoom.us/ Connect With Us Practical Nerds Website:[⁠⁠ https://practicalnerds.com/⁠⁠](https://practicalnerds.com/) Subscribe to the Newsletter: [⁠⁠  / ⁠⁠  ](  / practical-nerds-7180899738613882881  ) Foundamental: [⁠⁠https://www.foundamental.com/⁠⁠](https://www.foundamental.com/) Patric Hellermann: [⁠⁠  / ⁠⁠  ](  / aecvc  ) Shub Bhattacharya: [⁠⁠  / ⁠⁠  ](  / shubhankar-bhattacharya-a1063a3  ) #VentureCapital #StartupInvesting #BoomAndBust