I've had the benefit and misfortune of working for several "start ups." Here's what I've observed:
- If the startup is a partnership where the partners know and understand what they're getting into, it usually works out at least reasonably well.
- If it's being done by Wall Street venture capitalists that look at nothing but bottom line figures, it's almost always a disaster - if not in the short term then certainly in the long run.
The trouble with the latter is that they are bean counters. They look at the bottom line, not with a long term vision, and wonder "How much of a bonus can I get myself if we do this, this, and this," even though the effects they have may be devastating to the long term future of a company. I've seen the bean counters talked into taking other people's money (investors) and literally blowing it on imbecilic products that no one in their right mind would financially back. Why? Because they don't know what they're doing, but they know that in one way or another, even if investors lose their shirts, they'll make a buck on it...maybe lots of them.
Wall Street investors have likely been telling the people at Dell not to develop for the future, but rather to react to the immediate need for them to make a profit. Ship employees jobs overseas and lay as many Americans off as possible - sure it's devastating to the work force, sure it kills the motivation of the Americans to work there, sure those with talent will see the writing on the wall and leave, but there's a buck, a fast buck to be made, and that's all that matters. So what if the products go down the tubes and the company ends up in the dumpster - this process can be repeated time and time and time again with other firms. The bean counters just keep finding other moving targets.
Scott McNealy, former owner of Sun Microsystems relented that he had ever used Wall Street to finance his company numerous times. Instead of allowing him to innovate, Wall Street demanded instant return in spite of the fact that it was killing the company. Innovation costs money, but if those controlling the purse strings are obsessed with their own
immediate need to obtain more and more and more shiny objects at the expense of other peoples livelihoods and investors money, so be it.
I'm not a fan of Dell, but I can understand how they got into the predicament they're in. Unlike Sun Microsystems, at least they now stand a chance to be a
real company that produces real and innovative products and they've partnered with a company that can likely help them innovate, rather than reacting to the demands of investment firms whose only intention is to rape the company for what they can get out of it.