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The article actually addresses that SV is building things. Wood mentions how 95 percent of start-ups fail. Presumably most of what is being built is crap, or de

• Redoubts 11y ago
  Is neither an option? Who is being ripped off when a startup fails?
• andrewingram 11y ago
  Depends what you consider to be failure. In a financial sense, going out of business is failure. But overall you can easily argue that's how things should be. It doesn't mean what was built was crap, just that it couldn't find a market fast enough (or at all).
• tolmasky 11y ago
  Not sure what point is being tried to be made here: 1. A startup that fails doesn't mean it has built crap. Sometimes things fail for unrelated reasons, whether ahead of their time or because the economy took a downturn, etc etc. SOMETIMES because they are "ripping us off". 2. 95% of scientific experiments "fail". Are scientists ripping us off? The whole idea of the market place IS failure. In fact, if our larger market was healthier, we'd see MORE failure (and in more established corporations, such as the "too big to fails"). The fact that 95% of startups fail is one of the healthiest indicators of SV. Experimentation necessarily means many failures in search of the one success. Maybe some day we'll have a magical simulation machine where we can run product ideas ahead of time and know "the right place" to put our money, but until then, the best system is one that invests in diverse companies with oftentimes mutually exclusive ideas.
  • Balgair 11y ago
    " 95% of scientific experiments "fail" Um, source? Also, source for 95% of startups fail?
  • angersock 11y ago
    There's a great deal of difference between science and markets--using failure rates in one to justify the other is sloppy thinking. The idea of the market place isn't to encourage failure, it is (arguably) to efficiently allocate resources. One can imagine that, at steady state some point in the future, we've gotten enough businesses providing enough reliable value that there is no great rate of failure. More bluntly: the average laundromat lasts longer than the average venture-backed startup. That should at least be worth some minor reflection.
    • tolmasky 11y ago
      > There's a great deal of difference between science and markets--using failure rates in one to justify the other is sloppy thinking. Its not sloppy thinking at all, it is very clear thinking: it shows that that fact ALONE is not sufficient in making a value judgement. As such, the argument must be "95% of startups fail, this is bad because in the specific case of markets ____". The idea of the market place isn't to encourage failure, it is (arguably) to efficiently allocate resources. One can imagine that, at steady state some point in the future, we've gotten enough businesses providing enough reliable value that there is no great rate of failure. This is an "end of history" mentality ( https://en.wikipedia.org/wiki/End_of_history https://en.wikipedia.org/wiki/End_of_history ). If you don't have sufficient failure, your system is either corrupt (see financial sector), or almost by definition people are not trying interesting enough ideas and taking enough risks. The personal computer was a HUGE bet that could have failed, in fact, many personal computer companies DID fail along the way (sometimes because they were only a few years ahead of their time). The only way we'll reach a 'steady state' is if you believe there will be a a 'steady state' of technology to underline it: as long as there are more revolutionary technologies to be invented and discovered, you will have incredible failures associated with them. More bluntly: the average laundromat lasts longer than the average venture-backed startup. That should at least be worth some minor reflection. It does: I hope we don't reach the point in our society where we have a bunch of laundromats instead of a bunch of super interesting crazy ideas being tried out. Areas that don't have a lot of failure usually don't have a lot of innovation. It is really unfortunate that we fear failure so much, corporate death is an important part of an economic system. Car companies should die when new modes of transportation are discovered, rental stores when internet video is delivered, and as the pace of technology picks up, we should expect failures to happen quicker. Block Buster didn't necessarily last as long as it did because of its "fundamentals", but rather a historical accident that at the time in our technological and economic development the window of time between vhs/dvd and internet video happened to be "long".
  • gooserock 11y ago
    > A startup that fails doesn't mean it has built crap. Sometimes things fail for unrelated reasons, whether ahead of their time or because the economy took a downturn, etc etc. Yeah, that's a generous reading. I'm in the startup world and let me tell you, there are a LOT of clowns running around right now with completely shit ideas, just trying to grab some of the sweet sweet VC money before the music stops. It's appalling.
    • cellularmitosis 11y ago
      That in no way contradicts what the parent claimed. You can both be right: Some startups fail for unrelated reasons, and some are full of clowns.
    • theworstshill 11y ago
      Have you ever considered they view you in the same light?
• fossuser 11y ago
  90% fail, but the winners win big - so big in fact that it makes up for all of the failures combined (or VC firms couldn't really exist). The big winners have huge economic impact and create things that change the world.
• ploxiln 11y ago
  Don't you want startups to fail and waste the money of wealthy investors in the process? That would reduce economic inequality, would it not?
• meanduck 11y ago
  Look at this way, Some non-zero % of startups make their investors wealthy by creating wealth. 0% of "non-startups" create money. And if they do make money, they do it by ripping people off. So yes only startups creates wealth.
• dasil003 11y ago
  The article is about wealth redistribution. That is completely orthogonal to the question of real value vs scam.