And if that's true, they should be slapped, hard. They're no longer performing a socially useful function, and and have degraded towards pure financialization. Some middleman between fools and their money.
As much as I don't like Altman, VC should be pumping money into startups like Helios--companies pursuing cutting-edge technology that could totally fail (yes, that's an organic em-dash).
I do think that ZiRP distorted things extremely badly. There's an entire generation in this software industry that lives around the business-culture expectations set during that time which as far as I could see basically amounted to "I build Uber but for X" (where X is some new business domain).
Perhaps after a bit of a painful interregnum things will be a bit different now that rates are higher and risk along with it.
Also anybody can throw a SaaS together in a few days now. Separating the wheat from the chaff in the next few years will be... interesting.
That's a extremely strong statement, and may only be true in libertarian-land, where pure capitalism is a god to be worshiped and "good" has been redefined to be "whatever the unregulated free market does."
But in the real world, capitalism is a tool to perform socially useful functions (see the marketing about how it was better able to do that than Soviet central planning). When it fails, it should be patched by regulation (and often is) to push participants into socially useful actions, or at least discourage socially harmful ones.
I didn't say I agree with it.
You said:
>>>> I don't think there's ever been an argument that anybody...
I just made a such an argument, and the fact that I'm not alone can be inferred from the actions of the government in regulating capitalism. Also, if you read the newspaper, it's fairly frequent to see an op-ed decrying some particular market entity, and advocating for something to stop what they're doing.
Also you'll note I wasn't arguing "everyone at all times needs to perform a socially-useful function," but rather "we've identified a particular important area where the social utility is too low, lets do something about that problem."
Why would I want to do that? I think they should be disciplined until the perform a more socially useful function. Competing with them is an entirely different thing that's unlikely to accomplish that goal.
This was, is, and always will be a most braindead response in such conversations. I bet you even use the word entrepreneur unironically.
Spoiler alert: commercial fusion power may not be practical at all, but if it is, the timescales to delivery are measured in numbers closer to centuries than decades. Don’t fall for the hype generated to sucker those VCs you’re talking about.
I actually don't care that much about the specifics, just the general direction: pumping money into developing technology that doesn't exist, instead of looking to flip yet another software startup where GitHub stars would matter.
If you mentally say “well 90% fail so I’ll just throw in this dog shit to see what happens” then you increase the failure rate.
Another thing I was thinking as I was re-reading this thread is that for some VCs the fact that you can game your GH star count might in fact read as a positive signal. It shows you're willing able to play a kind of vicious PR game to get popularity.
Again, VCs not interested in pure technical excellence or geek "cred". They likely want you if you're the kind of person who can stand in front of a room and puff yourself up and make yourself look more important than you are, and frankly "acquiring" GH stars might just be part of that.
Using things like github stars is clearly stupid, but not in the way you're suggesting. They're using the GH stars as a proxy metric for "someone else will come along and give money bags to this person later, so I should get in early so I can take that money eventually."
They're operating on metric of success which is about influence and charisma and connectedness, not revenue or technical excellence.
Again, VCs don't care if you'll make a profitable business some day. They're just interested in if someone else will come along and pay out giant bags of cash for it later in a liquidity event. If they get even one of those successes, all the stupid GH star watching pays off.
Here's another way of framing it: any harms from the false positives around "He has a lot of GH stars" or "He went to Stanford" or "I know his father at the country club" are more than mitigated by the one exit in 1000 that makes a bunch of people filthy rich.
We shouldn't expect VCs to be something they're not. But we are missing something inbetween VCs and "self financing" and "bootstrapping"