With all of the capital they have, you would think they would hire competent people from big tech. Instead they just find some stanford grad with a few years of experience to manage 50 people. It doesnt even make sense

It does if you consider self-selection: the competent person from big tech (i) can see a disaster a mile off (ii) has more to risk

I’ve seen that in practice. A non-crypto fintech I was at was acquired by a traditional lender and a number of staff took off immediately after the acquisition. A bunch went to FAANG (or FAANGish) places and a bunch jumped to crypto shops. In general the ones who jumped to crypto were either pure promoters or were able developers who had no understanding of finance, economics or the payments system.

It's more (iii) the narrative.

Give us your money to invest in this new, fresh face that's going to change the world.

If you're an old face - why haven't you changed the world already?

The story isn't as catchy.

It has nothing to do with what makes sense. For a large subset of VC (obviously not all) - it's more about what you believe you can sell to others than what you believe is actually going to succeed.

I've seen a couple startups with ~10 people and no market fit paying $500k/y to hire a FAANG VP. That's even more damaging than a fresh grad kid managing 50 people!

Thinking about it, market fit would be the latest point to hire an experienced adult. Preferably from one to two levels below the role a start-up is hiring for, e.g. director level for a VP position.

Maybe hire earlier, as soon as an adult is needed to set up proper structure, processes and operations. If a company screws this up, e.g. when inexperienced founders hire former COOs and senior VPs from big names for those big names only, things can turn south pretty well.

Getting the FAANG VP is usually critical to landing the next round of funding. If sending $500K/year [1] out the door brings in $50M for your next round of funding, it's well worth it. Particularly if you recognize that your enterprise is a Ponzi scheme [2] and that getting that next round of investors is how everyone gets paid.

[1] seems ridiculously low BTW, that's a line manager or extremely skilled software engineer at a FAANG, VPs make multiple millions per year.

[2] and anyone running a crypto startup should.

Competent people will tell leadership what's wrong which leadership perceives as a threat to their egos/power. Incompetent people will tell them they're doing great while simply cashing their checks.

Incompetent people usually hire equally incompetent people as to not be found out. I have seen it done subconsciously and outright deliberately.

I once heard that a well-known gig economy company would open up new cities by giving employees essentially-unlimited credit cards and telling them to buy whatever they thought was needed, with no controls or multi-person approvals.

It'll be interesting to see how VC changes in the modern environment - will they still be all-in on founders willing to unsustainably burn money just to incrementally boost the probability of growth, or will they begin looking more for experienced operating teams who reach and maintain profitability (or a rapid path to get there at all times)?

> I once heard that a well-known gig economy company would open up new cities by giving employees essentially-unlimited credit cards

That's pretty documented in the history of Uber :-)

Can anyone recommend a reasonably accurate history of Uber?

Ubers lie was it would be profitable at scale. They were never profitable at all while growing, but always claimed that if they just had a few more markets they'd finally be profitable.

Turns out unsurprisingly, if your revenue is negative and you multiply it by 1000000 it's really negative.

Super Pumped: The Battle for Uber is the most well-known tell-all book. I think they also made a TV miniseries based on the book but I haven't watched it yet.

Wild Ride: Inside Uber's Quest for World Domination is mostly a summary of the headlines involving the company rather than a tell-all but it's accurate enough if you want to familiarize yourself with the subject.

I don't believe anyone has written a book about the technology team specifically which is sad because they actually made some really great technology, especially in the monitoring space, and I would love to hear the story of how that came to be.

This happens because of the boom-bust cycle we see in capitalism. I was a child in the 1990s when the Netherlands went through a boom that looked like the Japanese bubble and lasted 20 years.

I don't expect anything to change because it never does.

> will they still be all-in on founders willing to unsustainably burn money just to incrementally boost the probability of growth

From some previous experience, outside of crypto - which was DIFFERENT™ - this already started changing in 2019 or so. Softbank was one of the most infamous players, and when they started to pull back, so did some others.

Not that there aren't still some "huh"-inducing things - like the new thing from the WeWork guy - but it seems a bit saner-paced on the ground, and now even crypto will get its reckoning.

I don't get what the issue is here.

Option A- you task some employees with buying office furniture and equipment and then waste everyone's time by having some extra meetings and emails and bureaucracy where someone asks "is that a good price for 50 desks? Did you get multiple quotes?" and the employee says "yes" and then they approve the expense.

Option B- the same employees make the same decisions, but without the extra meetings and emails and paperwork.

Being more efficient, giving employees more autonomy and focusing on what actually matters is why startups displace incumbents. These are good things.

Well, yeah as long as you trust the employees and they know what they are doing, sure. Otherwise, those 50 desks are going to be expensive.