DHH's "Reconsider": "Our definition of winning didn’t even include establishing that hallowed sanctity of the natural monopoly!"
Sam's "Playbook": "We also ask how the company will one day be a monopoly."
VC businesses like Twitter and Uber create centralized points of stagnation that seem great at first, but can't innovate the way open systems can. If Twitter was open we wouldn't be wondering if they'll improve their product or who will be CEO, because there'd be a dozen people innovating on it. Instead, because the network is owned by one group of people, that basically doesn't happen.
We still get that sort of amazing, eco-system creating innovation when a rare innovator declines VC (wikipedia, bitcoin). But when a VC steps in, the only innovations that flourish are those that benefit the capitalist.
Venture capital is, ironically, the enemy of innovation. It doesn't support it; it captures it and restrains it, tying it down with the bonds of capital.
What I find funny is that if you make an analogy to music you find exactly where these platitudes lead to. "Great team" like One Direction or Britney Spears. "Make something that people want," such as Hit Me Baby One More Time.
Innovation is more like this: "The Velvet Underground's first album only sold a few thousand copies, but everyone who bought one formed a band." [Brian Eno]
When I see VC's like Peter Thiel who openly (and correctly) complain about the lack of innovation, I have to scratch my head and think, "Well, then, get out of the way."
Perhaps, but how successful would TBL's creation be without the Kleiner-Perkins investment in Netscape. The paid web browser probably wouldn't have taken off and the VC funding allowed Netscape to invest in building a quality browser while not charging end users to download.
VC has it's place and we shouldn't write it off entirely. But we should also realize that there are other ways for important changes to develop and VC isn't the panacea as it's often presented as here.
> Joy was prompted to state this observation through his dislike of Bill Gates’ view of “Microsoft as an IQ monopolist.” He argued that, instead, “It’s better to create an ecology that gets all the world’s smartest people toiling in your garden for your goals. If you rely solely on your own employees, you’ll never solve all your customers’ needs.”
Maybe it's not VCs, but you can't bootstrap everything. Or maybe you can, but it will probably take a lot longer.
To name 4: Google, Docker, Tesla, Apple. I'm happy that they were able to raise enough VC that they've innovated and created stuff that I happily use. (Well, I don't own a Tesla. But I've driven one.)
"If Twitter was open... a dozen people innovating on it..."
Though not 100% independent of their funding model (loss-aversion bias might lead us to conclude that big companies take less risk), presumably Twitter has at least a dozen people trying to innovate on it?
They may not be doing what [parts of] the community wants, but that's not quite the same thing as not innovating.
Things like GPS are society-level upgrades. Uber is just one application of GPS.
Twitter is flowing in the sea of red and as far as I know never had a dime of profit. Who gives money to twitter by this point? Twitter has a lot of users, but it does not monetise the platform well. Also IMHO, Twitter has waaaay too many employees and I imagine that it's internal processes are very inefficient.
Uber is great example of unicorn startup. Though we'll see how it will turn out.
This is outrageous, I was so naive of HN community, that things like this are not happening here.
Personally I found this article more interesting than "Reconsider". I mean c'mon, it's trivially true that the humbler road doesn't get the press but is more spiritually satisfying &c &c. Whereas this article brings together valuable knowledge from different domains.
For those who want a unicorn valuation, I'm sure Sam's piece is great. Or maybe it's not, I don't know.
But what I do know is he kept mentioning how competition never kills startups. It's failure to execute. Why balance burnout and cashflow and hiring and funding in some kind of race to become a unicorn if competitors won't actually kill you?
Why not grow at a reasonable pace, running a reasonable business, that makes reasonable money?
But on the macro scale there are always windows of opening and closing opportunity on what makes for a viable business before (new technology takes over/bigger companies start paying attention/governments try to regulate you out of existence), and it is that more general climate of whether it's possible to execute at all that pressures the potential unicorns into a do-or-die mode. Monopolistic competition like e.g. Uber vs. Lyft is an exceptional case for technology; the expectation is that if you succeed at all you will probably be in complete control until the technology ecosystem itself shifts.
There is a second half to this, of course, which is that the type of people who found a fast-moving VC-backed startup are so deeply enmeshed in their plans for the company that they will put themselves into an unsustainable overdrive and expect everyone around them to do the same. Their enthusiasm can be entirely real and still be basically toxic and lacking in conservative sensibility. There are a lot of commonalities among founder personalities, IME.
Try reading it through the eyes of an investor putting capital to work rather than the person doing the work.
Angels? Really? You’ve plucked your self-serving moniker from the parables of a religion that specifically and explicitly had its head honcho throw the money men out of the temple and proclaim a rich man less likely to make it into heaven than a camel through a needle’s eye. Okay then!
Most of our hires were introduced through people I know. In a small business this is often the only logical way to hire because you already have some level of trust with the referrer and thus they've acted as the first gateway for a candidate to get through (and they usually can vouch for the candidate's work).
Also, many small businesses are concerned largely with staying alive and making a profit, so that may mean they will be focused on "non-interesting" problems of making the business operate well. Factor this into your decision as to who you want to work for as well.
The general consensus I'm hearing is that the way you get hired at a smaller company is just through networking, but if there's no network near me to speak of am I just simply out of luck?
And yes, I'm aware that I will have to work on some "non-interesting" problems, but I'm okay with that as long as I feel like my work is being valued by my coworkers and that I'm not just another drone.
Also, chatting with random people at coworking spaces could be fruitful.
He has an unfortunate tendency to see the way that he was successful as the only way to be successful, and seems to lack the ability to benefits in other ways of doing things. We used to see this in PG's writings too: back before he started YC he appeared to be utterly convinced that it was Lisp that made his company successful. After he started YC and he saw a lot more his writing became a lot stronger IMO.
Regarding DHH, I'll just point at [1], with the comment that Facebook made $891 profit last quarter. It's also currently valued at ~$300B.
[1] https://signalvnoise.com/posts/2585-facebook-is-not-worth-33...
To be fair that blog post was written in 2010 when Facebook was still a private company and had nowhere near the level of advertising, reach, etc. that it has today. In particular they had barely scratched the surface of mobile and were only making money off Farmville and other ephemeral apps.
The trajectory was clear enough that all those investors DHH called "star struck" put money in.
To quote him: Irrational investor exuberance indeed. I think it would be more sensible to class them as "investors who had more foresight than DHH".
He berated them for being dumb. Since we can now see that they weren't dumb at all we should consider DHH's insights questionable.
They were desperately buying anything they could on the secondary markets. That isn't luck, it's seeing an opportunity.
It's like Pinterest 2 or 3 years ago (say around the time of the 27M A16Z B round). Putting as much money into that as you could isn't being lucky, it's seeing an opportunity. Their 2014 and 2015 rounds are basically just ways to print money.
That's the whole crux of why people don't respect VC.
Um. Some people don't respect some VCs. I don't agree with everything Marc Andreessen says, but I'd be pretty silly if I didn't respect his opinion on technology.
> We found 39 companies belong to what we call the “Unicorn Club” (by our definition, U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors). That’s about .07 percent of venture-backed consumer and enterprise software startups.
That being said, the term is now almost a pejorative moniker for overpriced vaporware or at least "proof of the bubble". or something. Still though, a fusion company would be the rare breakthrough on a big idea that would warrant such a moniker. Unicorns missed the ark during the great flood, so at IPO time we'll see if tgey go extinct or evolve into narwhals.
0 http://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club...
Aileen is a woman.
> and pursuits beyond Hacker News
What foreign language is this?
Here in Seattle, there's a great community of small software businesses with meaningful profits and impact. We have ties to the broader Seattle startup and technology community, without being a proper subset.
I don't see it as an either-or proposition. Right funding for the right business, as it were.