I think you’re vastly underestimating how hard it is to pick winners and stifle competition.

Using your logic, if it was so easy why didn’t Google stop OpenAI? Meta? Perplexity?

because the capital bubble made it suddenly unaffordable - google can afford $X00k to bench talent, but talent will only take that deal for several years at which point they are financially free, bored, and current equity prices are just too outrageously attractive

Maybe they killed a hundred similar companies and those three slipped through?

Hundreds of Facebooks?

Very unlikely

I think that maybe we underestimate how hard it is to choose the right companies to “kill” when you’re a competitor. The default mode is to say that they won’t go anywhere because of many factors (they don’t have the resources, the access, the capability, etc). But sometimes they do. And in restrospect it’s obvious, but it’s not by the time you had the chance to stop it. And I think it’s probably good.

Also hard to marshal the resources you need internally to "kill" a competitor. Sometimes the way to handicap a startup rival is to build the feature / product yourself, but then the bigtech firm runs into the challenges of moving a large org quickly.

> why didn’t Google

Because hubris.

One glaring flaw of well-capitalized large tech (perhaps the only one) is thinking they can build something better internally, when they have enough cash to simply buy best of breed off the market.

At times Google understood this: Android 2005, YouTube 2006, Writely/GoogleDocs 2006, DoubleClick 2007, Motorola Mobility 2012, Waze 2013, DeepMind 2014

Either thinking they can build something better internally, thinking the new thing doesn't matter, or realizing that it does matter but not having the ability to move fast and commercialize it.

e.g. Microsoft circa 2000 didn't think they could build a better internet. They just thought that the internet didn't really matter that much. Google in 2022 knew that LLMs mattered, and had spent a ton of money, but OpenAI just got a better product to market faster.

I'd add HTC's mobile phone unit to the list of strategically important Google acquisitions (and prehaps Dropcam, too). Without either of those -- even with all the fits & starts, they'd never have gotten to where they are today, building pretty great hardware with pretty good support and a decent supply chain, and largely with "good" software on top.

I think they are both winning. Googling gives "The 2024 Y Combinator (YC) top companies have a combined valuation of $458 billion. In 2023, these companies generated a total revenue of $57.2 billion." Which is not bad starting from basically nothing 20 years ago. I don't think the S&P is doing badly either.

Plot a graph of the companies against their revenue and profit numbers and you'll end up with 2 massively skewed incline curves. Plot a graph of their companies which are public, and they're mostly trading below their debut.

YC did do the right thing (investing in super early stage startups) at the right time (ZIRP environment), but now with the proliferation of too many startups and applicants, I'm not so certain on how much of a future it has with getting the next best thing. Already seeing quite a few startups that either bootstrapped or raised without YC, while a number of YC companies are stuck in pivot loops.

I like this metric. YC doesn't own all of that but that doesn't matter for this exercise. That $458 billion is disjointed. It cannot move as one (when needed) like say Microsoft can. It cannot buy GitHub or OpenAI. But then it wont self distruct either. That is both a plus and minus.

Yeah. I think YC's ownership is of the order of 3%.

If you make buyout offers to 10000 startups, how many of those say "no" to those offers? Not everybody is willing to send an "our incredible journey" post to all their users.

> A Google can stop 10000 potential startups simply with RSUs

The real killer here is the Bay Area housing market. You need those RSUs to pay for a place to stay.

If the engineers are just middlemen for plumbing that money to property owners, seems like owning property in the Bay Area might be a good idea.

It seems there is the opportunity to disrupt that market, so that tech companies can pay property owners directly, without the middlemen.

That's not nearly disruptive enough. I'm raising seed rounds for HackerRV - a high end, compact RV rentals for knowledge workers that does away with the need for houses. Starlink comes standard, with additional subscriptions available for showers at aelect locations, and mail delivery addresses. Our previous venture (BackyardBnB) was scuttled by literal NIMBYs.

Or they can disrupt the actual middleman, which is the property owners. The land is there regardless of who owns it, it turns out.

That was the policy intention in the 70s. Prop 13 plus zoning most land area for SFH ensured that boomer property owners could get rich. Back then it wasn't clear just how rich, though.

older generations did just that. In the Internet boom, people commonly talked about "place being obsolete" and other detached thinking.. perhaps lessening the emphasis on buying real property nearby. Of course, not everyone played by the same rule book. Observe the result.

Sure I'd rather have $1m in FAANG shares than SF real estate over 10 years but maybe I am wrong.

Especially as SF real estate relies on NIMBYism that might change whereas FAANG relies on an enormous brain trust, branding and monopolies.

You don't have to live in Bay Area to run startup?..

I think it massive improves your odds of a unicorn. But a regular old business aiming for a humble $10m valuation based on profits, of course not.