Bloomberg: how Ilon Mask’s sale of flame throwers will change start-up financing

The Boring Company Ilona Mask saved out $ 10 million from the sale of flamethrowers in five days. The action was conceived to attract funding for the company's main project for the creation of underground road tunnels. Bloomberg analyst Matt Levine Bloomberg believes that this approach may set a new trend in startup financing. We present to your attention an adapted version of his notes.

What happened

In January 2018, entrepreneur Ilon Mask announced a campaign to sell flame throwers for his new company, The Boring Company. Each device costs $ 500.

According to The Guardian, on the first day, the company's revenue was $ 3.5 million. In total, The Boring Company sold 20,000 flamethrowers and earned $ 10 million in five days.
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The name of the company is hidden fun game of words: translated from English, "boring" means "drilling" and "boring" - the main goal of The Boring Company is to create underground road tunnels .



The funds received should go on the purchase of drilling machines, hiring lawyers and lobbyists who will help Mask implement his plan for the construction of tunnels under certain areas of Los Angeles and the Baltimore-Washington Highway.

What does the funding startups

According to a Bloomberg analyst, Ilona Musk’s marketing campaigns can change the venture capital industry for startups, bringing it closer to the ICO area. In 2017, startups attracted more than $ 5.6 billion in the ICO market due to their bright ideas and competent marketing, prompting investors to buy their tokens.

By illustrating his campaign, Ilon Musk proves that it is possible to attract the maximum amount of funds in the shortest time possible without entering the cryptocurrency market - only with the help of creative solutions in social networks and their active discussion in the network.

The similarity of this action with the mechanism of the ICO is as follows:

• First , in a limited period of time, buyers are offered a limited number of flamethrowers, which is similar to placing a limited number of tokens during the initial circulation of coins.
• Secondly , the discussion of The Boring Company products on the Internet resembles the discussion of upcoming ICOs on BitcoinTalk, Reddit and Quora, only as a reward someone gets a real flamethrower, and someone gets a virtual currency.
• Thirdly , by taking part in the ICO, people like to invest money in the company's fund in an “unconventional way”: they are ready to buy virtual coins so as not to invest real money. Almost the same happens in the situation with flamethrowers: the company Ilona Mask gets money for business development, and investors like an amusing toy for themselves.

The advantage of such a promotion over the real ICO is that there are no obligations between the company and the buyers, as happens in the case of issuing startups of coins. Also for the sale of flame throwers do not need to deal with complex technical issues, as in the organization of ICO: it is enough to make people talk about the product and go to the company's website to buy it.

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