Trompe-l’œil: The Art (?) of Modern Business

*Trompe-l’œil (French for “deceive the eye”, pronounced [tʁɔ̃p lœj]) is an art technique that uses realistic imagery to create the optical illusion that the depicted objects exist in three dimensions.

I believe the free market of the 20th century was born out of a need that existed in the market that required growth. It was an organic growth that lead to the fact that investors understood that economic growth was because of a viable and profitable product or service.

But then something happened in the last 20 years. All of a sudden companies have been popping up with no real viable business model or revenue streams and yet they are drawing billions of euros in investment.

*Trompe-l’œil (French for “deceive the eye”, pronounced [tʁɔ̃p lœj]) is an art technique that uses realistic imagery to create the optical illusion that the depicted objects exist in three dimensions.

I don’t really know what to make of it to be fair. Maybe I don’t understand the stock-market but it seems that the stock-market has become its own product creator ie cash. So instead of being a cash curator to companies with viable business models they have become self serving and will source money for any company as long as it is dressed up in a fancy marketing sleeve. Should the stock-market itself be profitable? Does that serve the purpose? If that is the case then how can we be assured that stock-markets list viable companies rather than glitz companies that can raise VC capital but not revenue? Or is raising VC capital a source of revenue for the company?

A few  months back I was at an “entrepreneur” summit (I hate those) and some successful entrepreneur was a key note presenter. He spoke at length about his last 2 years on how he had invested in 4 different companies and exited tripling his cash reserves. When I asked him whether these companies were actually making money he gave me a blank stare. Sitting next to me was a chap who had made a wind up radio for the developing world. I ended up sitting chatting with him at dinner.

We live in a connected world these days and with slick marketing or a kick ass product its not that difficult to get a few million users overnight. But monetizing them is difficult. And I think that should be the main point of investors.

Erich Hugo

Trompe-l’œil: The Art (?) of Modern Business