An Open Letter to the Start-up CEO Who Believes He Owns a Business

On market saturation, venture capital, and the future of a freemium world.

LJ Pemberton
3 min readJun 17, 2014


Dear Sir,

Don’t get me wrong. You’re charming. And really, I’ve never heard anyone be quite so articulate about their idea. Disrupting the mobile app industry with your new mobile app is truly revolutionary. I bet there’s a CEO in the Valley worried about your app right now. I bet he stays up at night wondering if he’s wasting his life competing in an over-saturated market where very little important work gets done while venture capitalists throw money at earnest gentlemen who are just hoping to get enough users so they can charge advertisers the big bucks to reach their audience, and then at least they will be making money and won’t be one of those companies that stays artificially propped up under rounds and rounds of funding without ever turning a profit—but who cares because Instagram and WhatsApp never made money like a business but someone was willing to buy their user base so that’s the same as a business, right? But that guy isn’t you. He’s losing faith, and you sir, have not.

You have a great idea and you know how to turn it into reality. Obviously you’re just going to sell your users (oh, I’m sorry, users’ data), the way Facebook and Google and all the other big boys do. Using the same, proven monetization strategy as everyone else (even though studies show advertising is less and less effective), makes you a rational actor in a rational world. Aggregating data on people and selling their personal details for almighty ad-spend dollars is obviously the only way to turn a profit. Only troglodytes think companies sell goods and services. That’s not you. You’re a revolutionary, and in more ways than you think. You’re ushering in a post-capitalist utopia of freemium goods and services for everyone! People will soon be able to get food and housing and cars and televisions and books and hell, just about everything for free, because companies will have paid precious ad-spend to cover bedroom walls and ceilings and sheets and chapter margins and car doors with ads for products people want to buy.

The only problem is, if no one is paying for anything, then no one can be paid for anything, amirite? I’m not sure anyone will be able to afford to buy all these products if there isn’t much cash circulating for wages. It’s a bit of a Catch-22, wouldn’t you say? I mean, you probably already know graphic designers can’t hardly get paid anymore, and that these days writers are really just content creators who help attract more advertising dollars. And you’ve probably read a few articles about the Rust Belt and how manufacturing has gone overseas, and I bet in the back of your mind when you see an automated check-out machine at the grocery store, you think about the person whose job has just been replaced by a robot.

I imagine you think about those things, because I want to think the best of you. Because you’re one of the brightest minds in America and you want to change the world. You really are so charming. But I bet you don’t often think about yourself as a culture maker, which is a shame, because the decisions you make and the business models you endorse are building the world you will grow old in. And the one I’m trying to live in now.

So, Mr. Start-up CEO Who Believes He Owns a Business, I’d like to leave you with one of my favorite quotations from a mathematician who helped advance computer science and telecommunications in America, and in many ways, made your current life a possibility:

“If you do not work on an important problem, it’s unlikely you’ll do important work.” —Richard Hamming


Laura Jean