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Investing in undervalued human capital: the Y Combinator model
- mixmax 19y agoThe author talks about investors preferring to invest in a 35 year old MBA over a 25 year old hacker, which is most probably right. He then goes on to talk about how this is not necessarily rational in terms of classical economics. (maximising value) The funny thing about economics is that in the traditional macro economic models people are thought to be rational. This is obviously not true, as can seen in countless examples in everyday life. In the case of why Y combinator has found a hole in the market he has the answer himself - an investor feels better explaining to his peers why a 35 year old MBA failed than explaining why a 25 year old pimple-faced hacker failed. This is a part of behavioral economics, which tells us that markets are not rational at all - they are more based on psychology than rationality. This in turn gives a great advantage to people who have the guts and insight (or luck...) to see beyond it. I bet that there are many more niches just waiting to be exploited.
- ideas101 19y agoi’m delighted with this article … from last couple of years i’m suggesting YC model for India and Canada mainly because i’m an indo-canadain so I have first hand experience regarding huge talent pool in these two countries. It is just the matter of time, but its sad that YC model is not yet available in these countries. If i get little bit of support (mainly from VCs) then I would start on my own to tap these talents. Any help / any takers?