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As crypto collapses we asked one entrepreneur whether the .COM era is back – Exclusive Interview with Online Shop’s Terry McGinnis

mm by Richard Brown
December 6, 2022
in Business
As crypto collapses we asked one entrepreneur whether the .COM era is back – Exclusive Interview with Online Shop’s Terry McGinnis
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If you found yourself at the forefront of the crypto collapse, and the looming recession you’ll probably be wanting to get a life raft as soon as possible, many investors are cashing out or looking ways to cash out as per a previous article by Jennifer Ross. The recent crash of FTX and other crypto juggernauts have put investors who very bullish on prospects promised by blockchain technology into a frenzy. 

There are some investors who are looking at beacons of hope as they once did during the early 90’s and the early 2000’s where the trailblazers of the .com era were born, names such as Jeff Bezos, Larry Ellison, and Alphabet Inc’s own duo Larry Page and Sergey Brin. 

With so many start-ups having visions of what they envision to be the ‘utopia’, many investors were quick to invest – sometimes overlooking the numerous red flags that the startup was presenting, all in hopes of attaining valuations and exits that they saw others do with likes of Amazon – but found themselves be stuck with something like Pets.com, where more and more capital was required to survive, burn rates that would make even billionaires blush and ponder ‘isn’t that a bit too much?’, with the added hype of crypto companies, and the eventual downfall of the crypto hype… the startup and VC bubble seems about to burst and the future may seem quite bleak. 

As most startups face the axe due to their unreliable nature of minimizing costs and extremely high burn rates – several seem to understand that they are a business first and foremost, rather than capitalizing a dream of their ancestral startups such as Amazon and Apple, where losing money was part of the goal to grow and capitalize on owning the entire market in their niches. 

“If you would of asked Bill Gates why was Microsoft so successful, I’m pretty sure it wasn’t because they had the idea of – lets create a product and then get a bunch of investment to expand and grow until nobody can compete with us, then lets focus on the profit. No, they created products that the market needed, innovated and focused on being profitable. That’s something we are aiming to do. When you have extremely large capital, you forget how to be resourceful, how to be lean and how to innovate, both in product and in your marketing. We have a lot of competitors; we learned a lot over the past year and a half and we’re very, very resourceful. The next generation of successful IPOs will be made by those who could survive war of attrition.” Stated Terry McGinnis, founder of Online Shop. A new startup who is going head to head with the likes of Shopify and Cart.com 

And as so happens there is a lot of truth in those words. Many startups who enjoyed large valuations and continued large capital investments from investors, are now seeing their valuations dwindle to that of worthless paper as the recession looms, many are unable to find ways to continue their less than optimized marketing efforts, maintenance of lavish and luxurious office spaces and employees who require both stock and over bloated salaries just to keep them entertained. 

Terry continued to add that “a lot of our less established competitors have no clue about how to win over customers without spending most of their budgets on established marketing channels and copying others. It’s boring, unimaginative and less than creative. The industry deserves a better class of founder, a better class of start-up – and this is what I am aiming to provide. There’s a lot of copy and paste start-ups, following same strategies, with slightly different ideas, following same principles. It’s like there’s a council where everyone repeats the same in verbatim with little to no original thought or idea. It defeats the whole purpose of ‘technological innovation’, especially when you’re in software – it’s just lazy. 

I hate following a blueprint someone else made, I’d rather create my own, from experience and historical learning. And this is what we are doing. We’re not following principles set by others – we make our own, and I hope this example will be followed by others as ironic as it may sound. Founders should realize that the landscape is changing, and once you change things, there is no going back – it’s changed forever. This realization might be a very sad truth for many, only the most adaptable to change will survive. Many founders do not even have the critical or business skills needed to negotiate contracts, or to even function as a proper business, how can you call yourself a founder when you’re unable to negotiate contracts, and have to spend millions on ad campaigns to keep growing and growing? That’s not being a founder, that’s just following trends, being lucky due to a healthy economy. I found very few founders who can match my own business prowess, many do not understand the basics of business, let alone should be allowed to run a company that is aiming to become the next unicorn, as egregious as it may sound, they tend to focus on the social proofing, and clout that comes from whatever they’re trying to ‘establish’, most times failing. If you are aiming to live in infamy, or chase avarice and fame, you better be able to back it up with something the market needs, or else you’ll find yourself another statistics in a mountain of failed start-ups.” 

According to recent studies investment done by EY, there is a prediction that most investments will dwindle in the software sector for the next five years in the US – a country which has been a bastion of hope for many startups looking to become the next Google, Apple or Amazon. With the rising costs of Silicon Valley many tech giants are now choosing to relocate to Texas, including many of its tech talent – making Austin the new San Francisco. There is little excitement from institutional investors on the newest crypto companies or NFT marketplaces, and the investment thesis is set to change to that of the late 90s and early 2000’s, where companies such as Online Shop are more favorable to invest in than those which promise to deliver the world but cannot even go past a mountain without heavy VC artillery. 

“The current market with crypto/blockchain companies has been a blunder, a lot of hype and a lot of money incinerated. Our entire portfolio of crypto based companies is now on fire, and is being liquidated. We are changing the way we approach early start-ups, what we look for to ensure same mistakes don’t happen over frivolous excitement. We are being much more careful and much more investigatory than before. We want to see longevity based on merit, brand and overall usefulness over a period of ten years rather than what the market deems exciting for now. A lot of our clients are now extremely hesitant to invest in anything that has crypto or blockchain in their proposals.” Says Mark Callaghan of an early stage capital firm in Denver. 

Could this shift in investment ethos be the good news many startups which focus on profit over expansive growth were looking for? 

“I believe what we’re doing is a lot more reminiscent of the .COM start-up era, well at least of those that survived it. But the excitement is there nonetheless, we don’t want to overpromise, our mantra has always been under promise and overdeliver. Profit is king – when you want to make money instead of just lighting it on fire, you become ingenious and resourceful. That is what is separates us from the rest.” Added Terry. 

If you are interested in Online Shop’s or Terry’s very own journey make sure to visit onlineshop.com, or Terry’s website, LinkedIn or Instagram where he posts updates in his journey of growing the startup.

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