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Plenty of paragraphs that are utter nonsense. Example: "First of all, over 95% of startups fail. Every venture capitalist knows this. Those pesky things, for

Plenty of paragraphs that are utter nonsense. Example: "First of all, over 95% of startups fail. Every venture capitalist knows this. Those pesky things, for the most part, just eat money and more often than not actually destroy wealth. But the second reason why you should not allow yourself to think that startups create wealth is because of how they are funded." This is nonsense that displays utter lack of understanding of startups, venture capital, economics, finance. To refute it, I would have to start with an Econ 101 lecture, followed by a lecture on basic statistics and probability distributions. In short, it's just incoherent nonsense

genericresponse 11y ago
I'd love to hear it, because it took me a quick Google search to find numbers for startup failure from 80%-95% cited. (Much higher than the 48.8% I found for small business failure rate.) Moreover, I'd be interested if anyone has actually done a comprehensive study on total value (long-term economic and short term investor profits) added/lost from startups. I wouldn't be surprised if we found something that looks net/net negative or even pretty small.[1] (That is startups globally, not just VC funded or SV startups.) If startups are engines of wealth re-allocations rather than drivers of long term economic benefit. Well, then silicon valley is just as bad as Wall Street. [1] We're quick to count the successes, but struggle to count the failures. More than that, many startups, as the author points out, are entertainment companies that don't add much economically. Finally, how much money is churned out of investable capital into acqui-hires? How much of that delivers a meaningful return vs. defending a market position?
- vasilipupkin 11y ago
  Well, the startups that don't fail generate financial returns that far outweigh lost capital from faulures. But value isn't just returns to investors, it's value for customers and employees which even failed startups generate But more importantly, you don't get to make claims that you can't substantiate and then ask others to prove to you they are false. Do you think Zeus is real? No? Well, prove to me he isn't. If you claim startups don't create value without actual evidence to back that statement up - that's a nonsensical way to converse
  - genericresponse 11y ago
    My evidence is not high quality, but it's evidence. Just because I don't have higher quality evidence at hand doesn't make it true. The sky is blue. You can disagree, but where I sit it looks blue. I claimed my point and my evidence centers on failure rate and personal observation. You can disagree or choose to maintain your own anecdotal/limited evidence. Neither hypothesis is proven invalid until clear high quality evidence is provided. I find your strawman distasteful bordering on offensive.
    - vasilipupkin 11y ago
      Failure rate is in no way any evidence of whether or not startups create value. Failure rate of drug discovery is also high, would you say drug discovery doesn't create value? I'm sorry if you feel offended but I'm not trying to offend you personally, I'm just pointing out that it is a nonsensical way to converse, to offer up claims that make no sense outside of personal observation
      - genericresponse 11y ago
        I'm not claiming that failure rate is the sole value destruction mechanism. Rather that it is one. The other, perhaps more pernicious, mechanism is solving problems with little to no long term social benefit. (i.e. much entertainment) Your point about drug discovery helps illustrate the second item. If most of the drugs being pursued were cosmetic in nature, we could challenge the long term benefit of drug discovery. I appreciate the apology, but that's part of my frustration. My claims do have some grounds for validity and consideration. They have a rational basis.
        vasilipupkin 11y ago
        I don't see the rational basis. You keep repeating it exists but at no point have you explained how it follows that a failure rate of startups in any way whatsoever to any degree at all leads to them not creating any value. You have simply assumed this link - that's nonsensical In fact, simple economics teaches us that a high failure rate is a good thing. Low failure rate would be consistent with very low risk projects that tend to be about some form of rent seeking or regulatory arbitrage. High failure rate means people are actually working on things that are hard to do. That's very valuable
- petra 11y ago
  There was a research .in 2010 measuring a decrease of 40% in empathy among college students since 2000[1]. And Israeli researcher who talks with teens everyday and deals with those subject recently did an interview in an Israeli newspaper , and he thinks that the cause is smartphones and social media. He frames this as "our children are becoming less human". If you add that into the calculation, it could be that the total value of all internet startups, Paul Graham's specialty , is greatly negative, and they're not just silly entertainment. [1]https://www.psychologytoday.com/blog/born-love/201005/shocker-empathy-dropped-40-in-college-students-2000 https://www.psychologytoday.com/blog/born-love/201005/shocke...
  - Natsu 11y ago
    How are startups responsible for empathy in college students?
    - petra 11y ago
      Teenagers have little face to face time , and a lot of social media time , due to the addictiveness of smartphones, and various social media apps and probably various games -mostly created in silicon valley. Face to face time is where you learn emotional intelligence and empathy. A simple example: usually in real life , when you hurt someone , you see him getting hurt and you might feel ashamed. Social media lacks that.
      - Natsu 11y ago
        That's an interesting theory. How would you test it to prove (or disprove) it? Would you predict that it would change as video chat becomes more commonplace? Why or why not?
        petra 11y ago
        There's this study : http://www.csudh.edu/psych/Virtual_empathy_-_Positive_and_negative_impacts_of_going_online_upon_empathy_in_young_adults.pdf http://www.csudh.edu/psych/Virtual_empathy_-_Positive_and_ne... It says "little negative effects for online usage, except for gaming both for males and females", but the other thing it says - "little decrease in face to face time" contradicts other research that talks about greatly decreased face-to-face time : http://www.studentpulse.com/articles/1137/the-effect-of-technology-on-face-to-face-communication http://www.studentpulse.com/articles/1137/the-effect-of-tech... So it does require more research. As for changing to video chat - i'm sure that would help(to some extent, and depending on video chat quality [things like eye contact]) but the weird question is - how do you make face to face chat as addictive as facebook/reddit/HN ?
acdha 11y ago
You might find your posts to be more persuasive if you started advancing an actual argument rather than trying to see how many times you can type “nonsense”. You might not agree with Holly Wood but she at least stated several ideas which can be debated, whereas your statement has nothing except an unsupported assertion that we should trust your authoritative judgement.
- vasilipupkin 11y ago
  95% of books are not good, therefore writing books creates no value. The article makes a similar claim, but there is no mechanism that connects the part before therefore with the part after - it's assumed to be self evident. But that's nonsense. If you make such a claim, the onus is on you to explain how is it that failure rate, whatever it is, leads to value being not X, not Y, but <= zero
  - acdha 11y ago
    That doesn't seem relevant to the discussion at hand in the absence of a publisher claiming that the entire world should run like a publishing house with poor quality standards and telling everyone that their only sure path to success comes from writing books. Your response does, however, nicely illustrate the problem: if someone went around telling kids that they should quit school, put everything into becoming NBA stars, hit musicians, etc. they'd rightly be mocked. When similar claims are made by Silicon Valley VCs, however, they're taken far more seriously despite not being much more realistic in practice. Similarly, there are the costs to others from startup-style churn: people losing jobs due to VC-mandated unsound business plans or replacing many jobs with automation. To be clear, that isn't automatically wrong but definitely has a real measurable cost to society which many people prefer not to take seriously. Holly Wood might not have captured every detail of that debate but she's doing a great job of reminding us that we shouldn't forget it exists.
    - vasilipupkin 11y ago
      I'm specifically questioning nonsensical claims that startups create no value made by Holly Wood. I'm not sure what you are even talking about. Who is telling everyone to quit school and what does that have to do with any of this ?
dinkumthinkum 11y ago
I don't know, I don't agree with the article but I don't think it is a stretch to say something like "95% of startups fail, everyone knows this;" I don't know what the actual percentage is but I think this comports generally with reality and what most people understand. Also, many people, even startup founders see VCs as somewhat predatory, even founders that are very fondly though in the HN community.

genericresponse 11y ago

I'd love to hear it, because it took me a quick Google search to find numbers for startup failure from 80%-95% cited. (Much higher than the 48.8% I found for small business failure rate.) Moreover, I'd be interested if anyone has actually done a comprehensive study on total value (long-term economic and short term investor profits) added/lost from startups. I wouldn't be surprised if we found something that looks net/net negative or even pretty small.[1] (That is startups globally, not just VC funded or SV startups.) If startups are engines of wealth re-allocations rather than drivers of long term economic benefit. Well, then silicon valley is just as bad as Wall Street. [1] We're quick to count the successes, but struggle to count the failures. More than that, many startups, as the author points out, are entertainment companies that don't add much economically. Finally, how much money is churned out of investable capital into acqui-hires? How much of that delivers a meaningful return vs. defending a market position?

vasilipupkin 11y ago
Well, the startups that don't fail generate financial returns that far outweigh lost capital from faulures. But value isn't just returns to investors, it's value for customers and employees which even failed startups generate But more importantly, you don't get to make claims that you can't substantiate and then ask others to prove to you they are false. Do you think Zeus is real? No? Well, prove to me he isn't. If you claim startups don't create value without actual evidence to back that statement up - that's a nonsensical way to converse
- genericresponse 11y ago
  My evidence is not high quality, but it's evidence. Just because I don't have higher quality evidence at hand doesn't make it true. The sky is blue. You can disagree, but where I sit it looks blue. I claimed my point and my evidence centers on failure rate and personal observation. You can disagree or choose to maintain your own anecdotal/limited evidence. Neither hypothesis is proven invalid until clear high quality evidence is provided. I find your strawman distasteful bordering on offensive.
  - vasilipupkin 11y ago
    Failure rate is in no way any evidence of whether or not startups create value. Failure rate of drug discovery is also high, would you say drug discovery doesn't create value? I'm sorry if you feel offended but I'm not trying to offend you personally, I'm just pointing out that it is a nonsensical way to converse, to offer up claims that make no sense outside of personal observation
    - genericresponse 11y ago
      I'm not claiming that failure rate is the sole value destruction mechanism. Rather that it is one. The other, perhaps more pernicious, mechanism is solving problems with little to no long term social benefit. (i.e. much entertainment) Your point about drug discovery helps illustrate the second item. If most of the drugs being pursued were cosmetic in nature, we could challenge the long term benefit of drug discovery. I appreciate the apology, but that's part of my frustration. My claims do have some grounds for validity and consideration. They have a rational basis.
      - vasilipupkin 11y ago
        I don't see the rational basis. You keep repeating it exists but at no point have you explained how it follows that a failure rate of startups in any way whatsoever to any degree at all leads to them not creating any value. You have simply assumed this link - that's nonsensical In fact, simple economics teaches us that a high failure rate is a good thing. Low failure rate would be consistent with very low risk projects that tend to be about some form of rent seeking or regulatory arbitrage. High failure rate means people are actually working on things that are hard to do. That's very valuable
petra 11y ago
There was a research .in 2010 measuring a decrease of 40% in empathy among college students since 2000[1]. And Israeli researcher who talks with teens everyday and deals with those subject recently did an interview in an Israeli newspaper , and he thinks that the cause is smartphones and social media. He frames this as "our children are becoming less human". If you add that into the calculation, it could be that the total value of all internet startups, Paul Graham's specialty , is greatly negative, and they're not just silly entertainment. [1]https://www.psychologytoday.com/blog/born-love/201005/shocker-empathy-dropped-40-in-college-students-2000 https://www.psychologytoday.com/blog/born-love/201005/shocke...
- Natsu 11y ago
  How are startups responsible for empathy in college students?
  - petra 11y ago
    Teenagers have little face to face time , and a lot of social media time , due to the addictiveness of smartphones, and various social media apps and probably various games -mostly created in silicon valley. Face to face time is where you learn emotional intelligence and empathy. A simple example: usually in real life , when you hurt someone , you see him getting hurt and you might feel ashamed. Social media lacks that.
    - Natsu 11y ago
      That's an interesting theory. How would you test it to prove (or disprove) it? Would you predict that it would change as video chat becomes more commonplace? Why or why not?
      - petra 11y ago
        There's this study : http://www.csudh.edu/psych/Virtual_empathy_-_Positive_and_negative_impacts_of_going_online_upon_empathy_in_young_adults.pdf http://www.csudh.edu/psych/Virtual_empathy_-_Positive_and_ne... It says "little negative effects for online usage, except for gaming both for males and females", but the other thing it says - "little decrease in face to face time" contradicts other research that talks about greatly decreased face-to-face time : http://www.studentpulse.com/articles/1137/the-effect-of-technology-on-face-to-face-communication http://www.studentpulse.com/articles/1137/the-effect-of-tech... So it does require more research. As for changing to video chat - i'm sure that would help(to some extent, and depending on video chat quality [things like eye contact]) but the weird question is - how do you make face to face chat as addictive as facebook/reddit/HN ?

acdha 11y ago

You might find your posts to be more persuasive if you started advancing an actual argument rather than trying to see how many times you can type “nonsense”. You might not agree with Holly Wood but she at least stated several ideas which can be debated, whereas your statement has nothing except an unsupported assertion that we should trust your authoritative judgement.

vasilipupkin 11y ago
95% of books are not good, therefore writing books creates no value. The article makes a similar claim, but there is no mechanism that connects the part before therefore with the part after - it's assumed to be self evident. But that's nonsense. If you make such a claim, the onus is on you to explain how is it that failure rate, whatever it is, leads to value being not X, not Y, but <= zero
- acdha 11y ago
  That doesn't seem relevant to the discussion at hand in the absence of a publisher claiming that the entire world should run like a publishing house with poor quality standards and telling everyone that their only sure path to success comes from writing books. Your response does, however, nicely illustrate the problem: if someone went around telling kids that they should quit school, put everything into becoming NBA stars, hit musicians, etc. they'd rightly be mocked. When similar claims are made by Silicon Valley VCs, however, they're taken far more seriously despite not being much more realistic in practice. Similarly, there are the costs to others from startup-style churn: people losing jobs due to VC-mandated unsound business plans or replacing many jobs with automation. To be clear, that isn't automatically wrong but definitely has a real measurable cost to society which many people prefer not to take seriously. Holly Wood might not have captured every detail of that debate but she's doing a great job of reminding us that we shouldn't forget it exists.
  - vasilipupkin 11y ago
    I'm specifically questioning nonsensical claims that startups create no value made by Holly Wood. I'm not sure what you are even talking about. Who is telling everyone to quit school and what does that have to do with any of this ?

dinkumthinkum 11y ago

I don't know, I don't agree with the article but I don't think it is a stretch to say something like "95% of startups fail, everyone knows this;" I don't know what the actual percentage is but I think this comports generally with reality and what most people understand. Also, many people, even startup founders see VCs as somewhat predatory, even founders that are very fondly though in the HN community.