Sunday, October 25, 2015

Who Said It Would Work?

Most startups fail and I do not think startup co-ops are any exception to that rule. It often amazes me how someone can assume that their business will be a success against all odds. Having lots of planning and research can help the odds of success, but it is certainly very far from being guaranteed to be successful and meet projections. Projections on how a business will perform are nothing more than estimates, which can be made scientifically or simply made up. The fact that the projections of co-op performance were not met does not surprise me by the slightest bit because it is based on linear extrapolations of current trends with all other variables held constant. Essentially, this translates to risk in starting a co-op no matter how politicians want to sugar coat it. I believe disequilibrium is created when the market is not allowed to function the way it should just like how climate change is caused by human actions when the equilibrium is distorted. All things go to a natural state of balance at one point in time because there is not enough energy to keep something distorts equilibrium forever. There must be active energy added to the system to maintain the current state of events. This means that money must constantly be given to co-ops to ensure they would stay afloat, but the amount of money can decrease as efficiency from experience could increase. I am not sure if the co-ops are a good are bad idea, but I am sure that them failing does not come to me as a surprise. Maybe one day they will work or only some of them will succeed, but they should not be discounted as failures too soon because there is many businesses do, in fact, turn out to be successes. 

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