Using rage bait as a core product feature, rather than just a marketing tactic, actively repels the potential investors, customers, and talent a startup needs. Successful VC-backed companies must build a supportive coalition, which this strategy fundamentally undermines.
Launching with a provocative stunt like Chad IDE's 'brain rot' editor can generate massive attention. However, this strategy backfires if there isn't a compelling, accessible core product to convert that attention into user adoption. Without a real product behind the curtain, a stunt remains just a stunt.
A VC firm's brand can be disproportionately defined by its most controversial investments, even if they represent a tiny fraction of the fund's capital. A single high-engagement, 'slop' company can easily overshadow a portfolio of solid, less sensational businesses in the public eye.
Hyperscalers face a strategic challenge: building massive data centers with current chips (e.g., H100) risks rapid depreciation as far more efficient chips (e.g., GB200) are imminent. This creates a 'pause' as they balance fulfilling current demand against future-proofing their costly infrastructure.
Mega-funds like a16z operate on a different model than smaller VCs. They provide Limited Partners with diversified, almost guaranteed access to every major tech company, prioritizing strong absolute dollar returns over the high multiples sought from smaller, more concentrated funds.