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The wealth that PG and his friends accumulate through app startups does not come from nowhere. The millions of dollars that make a handful of men rich depends o

The wealth that PG and his friends accumulate through app startups does not come from nowhere. The millions of dollars that make a handful of men rich depends on extracting value out of: 1) Government funding. GPS, the Internet, touch screens and the CPU. All funded by government research where the tax dollars contributed by each and every citizen is the investment capital. 2) Global cheap labour. Miners in Africa (mining litium for batteries for example) and factory workers in china provides the infrastructrue for YC startups to make enormous profits. 3) Open source software. Unpaid labour provides the free tools that a startup need to "grow fast" without much investments. Most people involved in 1-3 don't see any return on their investments. Something to think about.

jgalt212 11y ago
You forgot to mention regulatory capture. AirBnB breaks all sorts of local laws and profits from this, but because of its political connections/lobbying efforts it's been successful and stopping itself from being shut down or even fined in most markets.
twoodfin 11y ago
Can you ballpark for me how much more the government spent on the Internet than private industry? Because I'm pretty sure it's the reverse by at least two orders of magnitude.
- karlheinz 11y ago
  Some classic examples: * TCP/IP (USDOD) * HTTP and HTML (CERN) * The initial research for the Google algorithm (NSF) * Compaq and Intel’s early stage funds (SBIR) * Tesla was launched with a $500m guaranteed government loan In fact, 77 out of the most important 88 innovations between 1971 and 2006 (rated by R&D Magazine’s annual awards) were fully dependent on US federal government support (1) (1) http://ser.oxfordjournals.org/content/7/3/459.abstract http://ser.oxfordjournals.org/content/7/3/459.abstract
  - twoodfin 11y ago
    That doesn't answer my question. After all, you can use the same argument to say all of computing depends on governments needing more accurate ballistic tables. My question was: In building the Internet we use today, how much money was spent by governments, and how much by private industry?
    - karlheinz 11y ago
      I'm not the right person to answer this question. My initial comment was an attempt to illustrate the fact that startup funders and VC's that get rich don't make innovations in a vacuum. They rely on a complex network of global labour, government funding, university research and the entire history of human knowledge. Therefor I don't think funders and capital owners should feel so certain about their privilege to extract enormous amounts of private wealth for the prize of rising income inequality.

jgalt212 11y ago

You forgot to mention regulatory capture. AirBnB breaks all sorts of local laws and profits from this, but because of its political connections/lobbying efforts it's been successful and stopping itself from being shut down or even fined in most markets.

twoodfin 11y ago

Can you ballpark for me how much more the government spent on the Internet than private industry? Because I'm pretty sure it's the reverse by at least two orders of magnitude.

karlheinz 11y ago
Some classic examples: * TCP/IP (USDOD) * HTTP and HTML (CERN) * The initial research for the Google algorithm (NSF) * Compaq and Intel’s early stage funds (SBIR) * Tesla was launched with a $500m guaranteed government loan In fact, 77 out of the most important 88 innovations between 1971 and 2006 (rated by R&D Magazine’s annual awards) were fully dependent on US federal government support (1) (1) http://ser.oxfordjournals.org/content/7/3/459.abstract http://ser.oxfordjournals.org/content/7/3/459.abstract
- twoodfin 11y ago
  That doesn't answer my question. After all, you can use the same argument to say all of computing depends on governments needing more accurate ballistic tables. My question was: In building the Internet we use today, how much money was spent by governments, and how much by private industry?
  - karlheinz 11y ago
    I'm not the right person to answer this question. My initial comment was an attempt to illustrate the fact that startup funders and VC's that get rich don't make innovations in a vacuum. They rely on a complex network of global labour, government funding, university research and the entire history of human knowledge. Therefor I don't think funders and capital owners should feel so certain about their privilege to extract enormous amounts of private wealth for the prize of rising income inequality.