10 ms·

In Q2 2018, Global VC Scales Tipped In Favor Of Chinese Startups Over American

134 points by azewail 8y ago

nutcracker46 8y ago
Good luck and have fun with that. Double up on your due diligence there, as lies abound and there are no rules.
- noonespecial 8y ago
  The recent explosion in investment activity likely indicates this is no longer the case (although you may have to learn some different rules).
  - sk5t 8y ago
    The old poker adage applies--if you don't know who the fool is at the table, you're it.
itchyjunk 8y ago
>>>In early June, news broke that Ant Financial, an electronic payments service company affiliated with Alibaba, had raised a staggering $14 billion in what’s technically a Series C round. To date, it’s the largest venture funding round in history. Led by Temasek Holdings and GIC (a Singaporean sovereign wealth fund), the round reportedly values Ant Financial at $150 billion. For perspective, that’s roughly twice Uber’s valuation and within spitting distance of Amazon founder Jeff Bezos’s current net worth. Hmmmm, just shows how little I understand about evaluation and/or VC because this seems crazy to me.
- adventured 8y ago
  Ant Financial is handling ~$4 trillion in payment processing annually. They have about half of the Chinese mobile payments market in Alipay (WeChat has something like 35-40%). They've moved into numerous financial segments. They had about $9 billion in revenue in 2017, and are nearing a billion users. The $150b valuation is rich, however it's about 1/3 to 1/4 the PE ratio that Amazon and Netflix are being given currently. At $150b it's trading for ~85 times net profit. The business is wildly profitable as you might expect. In terms of size, consider how big Visa, Mastercard, PayPal, etc. are. Visa now has a $294 billion market cap. That's based on $18b in sales and extremely high margins. Mastercard is worth $204 billion. PayPal is worth $100 billion; Ant Financial will be larger than PayPal in terms of sales within 12-24 months (and is comparable now in profit). The big risk regarding Ant Financial, is that the Chinese authorities are afraid of it and have begun boxing it in with controls. As one might expect, they don't like the idea of a single corporation controlling so much of China's financial flow (unless it's very firmly under the boot of the government).
  - skohan 8y ago
    Why would a company with such massive revenue need to bring in so much external capital? Wouldn't the current stakeholders be better off keeping more of the pie?
    - adventured 8y ago
      Keep in mind $9 billion in sales is not quite massive revenue in the pool that Ant is now swimming. Their financial footing is not nearly so large as their scale of processing, they've only begun generating meaningful profit in the last year or two. Google is at $110 billion in sales, JP Morgan is at $94 billion, those are massive. The dilution of current stakeholders is intentional. I believe it was required by Chinese authorities (my speculation). I've been following Ant / Alipay with curiosity ever since Jack Ma stole it from Softbank and Yahoo (along with the rest of Alibaba shareholders). There have been a lot of bizarre things done with the company over time. Jack Ma for example gave himself the large majority share of ownership in the spun off entity, and then proceeded to voluntarily debase his ownership dramatically with no compensation. And now, having screwed Alibaba over with the Ant Financial spin out, Alibaba was recently forced by Jack Ma to buy a chunk of Ant again (33% of it). My guess on some of these choices, is that it's about nationalism (taking Ant away from foreign owners of Alibaba) and the requirement by Chinese authorities that Jack Ma not have too much power (and that Ant's ownership not be so concentrated in general). If he had held onto the stolen position in Ant Financial + his stake in Alibaba, he'd be closing in on the world's richest person title (~$100b in Ant, ~$30b in Alibaba + cash). That's a spotlight you do not want right now if you're under Xi. I'm certain the Chinese authorities do not want one person owning the majority control of something like Ant Financial, given its size and importance to the economy. There's no other rational reason for Ma to have voluntarily given up so much ownership in Ant, he's shrinking himself as a target (plausibly he was given no choice; I suspect it was always the plan from the moment Ant was taken from Alibaba). Or put it simply: Ant may end up being worth several hundred billion dollars. Imagine Jack Ma owning 2/3 of something worth $400 billion. Now picture the target on his back, that would go along with such power and control over the Chinese economy. It'd be Jack Ma vs Xi, and Jack Ma would lose; a very dangerous game to play if you're a simple civilian. Better to stay smaller and get to continue doing what you want to do (operate Alibaba and Ant), by giving up some power, ownership, and not being in any way perceived as a meaningful threat to the authorities and their absolute control.
- galuggus 8y ago
  China is going cashless -mobile payments are increasingly the norm. There are two main ways to pay with your phone wechat pay and Alipay(run by ant financial). It will potentially handle a huge percentage of ALL payments in a country as big as china.Maybe 150bn isn't such a crazy valuation
  - DanAndersen 8y ago
    How rapidly are cashless transactions spreading in China? When I was there back in 2011-2012 everything was exclusively cash-only. I'd be interested to learn the rate of change in recent years.
    - fekunde 8y ago
      https://www.wsj.com/articles/chinas-mobile-payment-boom-changes-how-people-shop-borrow-even-panhandle-1515000570 https://www.wsj.com/articles/chinas-mobile-payment-boom-chan... What surprised me was the proliferation of Alipay in premium outlets near touristy areas in SF.
    - dmoy 8y ago
      Extremely fast. I agree with ~2011 being cash only, but the last time we were back (last year?), there was tons of wechat pay usage in restaurants, convenience stores, etc.
    - baybal2 8y ago
      >How rapidly are cashless transactions spreading in China? Basically overnight. Reason? 1. Alibaba and Tencent basically paying cash for people using their system; 2. POS terminal charges for them are near nil in comparison to rapacious rents Visa/MC processing banks were demanding just a year ago.
      - Latteland 8y ago
        It seems reliance on electronic pay is a big vulnerability, whenever there's a hickup everything stops. You can make the systems work reasonably well but there will be an outage eventually. In any kind of cyber battle you'd think this would be a huge problem. In the US I noticed most young people also carry little cash, while I'm often paying with cash. I know in China they also like ubiquitous tracking of people, and maybe the us govt would like that too.
- azewail 8y ago
  One of the reasons US-based startups grow so quickly is that the ones with traction here tap into a (relatively) homogeneous 300+ million market. A Chinese company with similar market share potential has tapped into about 4X that market. Growth rate is much faster in such a market, as opposed to global growth that has to deal with diverse sources of friction (e.g. Uber's challenges in London, Paris, etc. vs in the US).
  - riku_iki 8y ago
    China is 4x larger users-wise, but what about revenue/gdp?
    - godzillabrennus 8y ago
      Still much lower but going up. American wages are overall flat for 40 years.
      - usaar333 8y ago
        Real average wages are up 25% since 1990. https://www.ssa.gov/oact/cola/central.html https://www.ssa.gov/oact/cola/central.html
    - coldtea 8y ago
      It's the momentum that matters not the absolute numbers.
  - dopamean 8y ago
    I'm curious about how much of the considerable Chinese population is actually available to market tech products to. Something tells me comparing the populations straight up is misleading.
    - killjoywashere 8y ago
      > Something tells me comparing the populations straight up is misleading. Totally agree: once chosen by the Communist Party, a company is likely to enjoy state-sanctioned monopoly status. Not only will they have access to the entire population, the population may have no access to any other service provider in the same sector.
dalbasal 8y ago
I was walking around my home town recently. It's more than doubled since I left in 2002. Most of the new housing was built as new, dense (10-20 stories) suburbs. Th urban architecture is not bad. Decent green spaces, so that buildings open into "garden paths" rather than streets. You can get between places using green pedestrian walkways. Conveniently located schools & creches. Most of the parking is underground. The "economic architecture" OTOH, is striking. There are 2 small malls, walking distance from eachother, where all the cafes, resteraunts and shops are. There are two big commercial/adminstrative buildings where the dentist, post offices and stuff is. There is no high street, no corner stores, or any place that a sidewalk pizza shop could exist. ..no place where an independent retail or service business could exist, not even a news stand. It occurred to me that not only is this related to "concentration of wealth" it is that concentration of wealth. Those Malls and commercial real estate can be owned by €bn funds. Street level real estate doesn't lend well to that. Now... A lot of this has to do with the structure of the financial system, how things are capitalized. A developer can approach a large real estate fund, to sell a mall "off the plan." They can then go and presell leases, to their client base.. chain stores and restaurants. There is no equivalent financial sector that could fund real estate suitable for sole traders. So, sole traders will decline. There is obviously a chicken-egg dynamic between the underlying economics (eg revenue per square meter, and hence rent) and the existence of a friendly capital market. But, I think causation runs the other way as well. In this case, it just seems very planned. The architecture and planning of a city assumes a certain economy, the urban architecture reflects that, and the underlying capital system reflects that. The three lock eachother into place. If there had been a vibrant market for financing small retailers, but not malls, then the whole city would have probably been built differently. Anyway China is unidealogical about such things, atm. They don't mind engineering a cityscape for a certain economy, engineering financial markets for a certain cityscape or cityscape or if the proverbial cat is black or white. My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Ive always been dubious about market liberalism when it comes to banks.
- marcell 8y ago
  Where is your home town?
calvinbhai 8y ago
Many thanks to the lopsided high skilled immigration rules, combined with China focused VCs, a lot of reverse brain drain to China has lead to this. Imagine if every Masters or a PhD grad was given a green card. US would still have been a leader in tech (at least wrt VC spending metric)
- twblalock 8y ago
  That's not the entire story. Many skilled Chinese people want to stay in China these days. It's a lot better there than it used to be.
- seanmcdirmid 8y ago
  The number of Chinese students staying in the US after graduation has been relatively steady for the last 10 years; the number of Chinese students coming to the US, in contrast, has exploded, pushing the stay percentage down.
  - hatred 8y ago
    Do you have any links to confirm the latter? From what I have been seeing, the number of both Indian/Chinese students coming to the US for studying has gone down post the Trump administration. Also, I am seeing more Indian/Chinese folks going back home due to increase in engineering wages/opportunities. Of course, it's still not comparable to US but plenty-enough to live a very good life-style back home.
    - seanmcdirmid 8y ago
      I’m not sure if it’s gone down during the last 1.5 years of the trump admin, but it has exploded in the last 10 years. Looking at the data. Looking at the change for any given year is a bit noisy. China has really great wages for programming (I should know), but lacks in many quality of life factors. For example, many Chinese won’t go back once they have kids because of educatio, hukou, and pollution factors. They would have to pay a lot to get around those.
  - calvinbhai 8y ago
neom 8y ago
As a side note: I'm very curious to see what softbank[1] does, they've made an impressive list of investment and Japan generally is in an interesting position[2]. [1] https://pitchbook.com/news/articles/vision-fund-101-inside-softbanks-93b-vehicle https://pitchbook.com/news/articles/vision-fund-101-inside-s... // [2] https://www.nature.com/articles/s41598-018-23948-5.pdf https://www.nature.com/articles/s41598-018-23948-5.pdf //
nicodjimenez 8y ago
Incredible. It does seem like innovation in US is in a slowdown, with the tech giants being the only ones thinking long terms, and the VCs trying to flip companies to the tech giants on 3-5 year time scales. But very hard to tell what's going on, for me at least.
- godzillabrennus 8y ago
  Early stage VC and founders can both do a lot better economically by obtaining earlier exists.
  - sk5t 8y ago
    You're both right!
hawski 8y ago
It just occurred to me that VC spending on the next big thing (usually a try at monopolization by appifization) in a way is a DDoS on the governmental oversight and by extension on the society. Governments may be too slow to react to properly enforce old laws or to create new ones to also cover new grounds. That gap allows companies to rise and profit, but many times at the expense of the society. Governments will probably adjust one way or the other, but I just hope that they will not throw the baby with the bathwater. They probably will, but that's just pendulum going to the other side.
- closeparen 8y ago
  The overwhelming majority of societal harm is inflicted by old, regulated industries like manufacturing, agriculture, healthcare, and retail. Tech-bashing has recently become fashionable as people realized it’s a cheap and easy route to feeling self-righteous, but from a harm-to-society perspective “appification” barely deserves a moment’s consideration.
  - hawski 8y ago
    You are right in where from the current harm is coming. However I think it's just a beginning. Give it a few decades and then we will really see. Whatever happens today will have long lasting consequences in decades to come. If we let it, we will just repeat out failures from the past, when harmful-today industries barely deserved a moment's consideration from a harm-to-society perspective. It just sounds like an appeal to worse problems. Also is it that strange to see tech-bashing on a tech news site?
pwaai 8y ago
yeah but how does China guarantee my IP? In the US I can sue at least. In China? Good luck. By the time you launch a product, a dozen imitation pops up. You, as a foreigner, are essentially tasked to upload your expertise and knowledge to a centralized communist power structure that will redestribute the wealth amongst the Chinese population. They don't have the hot clean air spots like Western Europe and North America offers to the elite. I guess ideology is a heavy price to pay. How about the fact that any number coming out of China can easily be manipulated?
- est 8y ago
  > By the time you launch a product, a dozen imitation pops up They don't. But that's why some Chinese companies are extremely competitive. They fought a way out of a bloodbath.
radicaldreamer 8y ago
Why is this a concern? The population of China is 3 times as large as the US. If anything, this should be celebrated because resources seem to be allocated more efficiently - Chinese innovation should outpace the United States in the coming years (we’re already seeing this in mobile phones and marginal low end technology like cheap IoT enabled gadgets).
- wpdev_63 8y ago
  It's not though because they don't respect ip law so there's no incentive.
- a13n 8y ago
  Who said it was a concern? It's news.
- marcell 8y ago
  > Chinese innovation should outpace the United States in the coming years This may be true but it’s not an inevitability, or at least it wasn’t always. Innovation is not just a function of population. Policy also makes a big difference. For the US in particular, immigration policy could make or break its success in tech. See Paul Graham’s famous article “Let in the Other 95%”.
- freewizard 8y ago
  It'll be a concern when many Chinese grads going back to China with knowledge and skills, but not with universal values of human-beings. Hence you see violation of IP and high tech being used to suppress minorities. This trend will continue to grow with current administration's authoritarian and isolationism.

134 points by azewail 8y ago

nutcracker46 8y ago

Good luck and have fun with that. Double up on your due diligence there, as lies abound and there are no rules.

noonespecial 8y ago
The recent explosion in investment activity likely indicates this is no longer the case (although you may have to learn some different rules).
- sk5t 8y ago
  The old poker adage applies--if you don't know who the fool is at the table, you're it.

itchyjunk 8y ago

>>>In early June, news broke that Ant Financial, an electronic payments service company affiliated with Alibaba, had raised a staggering $14 billion in what’s technically a Series C round. To date, it’s the largest venture funding round in history. Led by Temasek Holdings and GIC (a Singaporean sovereign wealth fund), the round reportedly values Ant Financial at $150 billion. For perspective, that’s roughly twice Uber’s valuation and within spitting distance of Amazon founder Jeff Bezos’s current net worth. Hmmmm, just shows how little I understand about evaluation and/or VC because this seems crazy to me.

adventured 8y ago
Ant Financial is handling ~$4 trillion in payment processing annually. They have about half of the Chinese mobile payments market in Alipay (WeChat has something like 35-40%). They've moved into numerous financial segments. They had about $9 billion in revenue in 2017, and are nearing a billion users. The $150b valuation is rich, however it's about 1/3 to 1/4 the PE ratio that Amazon and Netflix are being given currently. At $150b it's trading for ~85 times net profit. The business is wildly profitable as you might expect. In terms of size, consider how big Visa, Mastercard, PayPal, etc. are. Visa now has a $294 billion market cap. That's based on $18b in sales and extremely high margins. Mastercard is worth $204 billion. PayPal is worth $100 billion; Ant Financial will be larger than PayPal in terms of sales within 12-24 months (and is comparable now in profit). The big risk regarding Ant Financial, is that the Chinese authorities are afraid of it and have begun boxing it in with controls. As one might expect, they don't like the idea of a single corporation controlling so much of China's financial flow (unless it's very firmly under the boot of the government).
- skohan 8y ago
  Why would a company with such massive revenue need to bring in so much external capital? Wouldn't the current stakeholders be better off keeping more of the pie?
  - adventured 8y ago
    Keep in mind $9 billion in sales is not quite massive revenue in the pool that Ant is now swimming. Their financial footing is not nearly so large as their scale of processing, they've only begun generating meaningful profit in the last year or two. Google is at $110 billion in sales, JP Morgan is at $94 billion, those are massive. The dilution of current stakeholders is intentional. I believe it was required by Chinese authorities (my speculation). I've been following Ant / Alipay with curiosity ever since Jack Ma stole it from Softbank and Yahoo (along with the rest of Alibaba shareholders). There have been a lot of bizarre things done with the company over time. Jack Ma for example gave himself the large majority share of ownership in the spun off entity, and then proceeded to voluntarily debase his ownership dramatically with no compensation. And now, having screwed Alibaba over with the Ant Financial spin out, Alibaba was recently forced by Jack Ma to buy a chunk of Ant again (33% of it). My guess on some of these choices, is that it's about nationalism (taking Ant away from foreign owners of Alibaba) and the requirement by Chinese authorities that Jack Ma not have too much power (and that Ant's ownership not be so concentrated in general). If he had held onto the stolen position in Ant Financial + his stake in Alibaba, he'd be closing in on the world's richest person title (~$100b in Ant, ~$30b in Alibaba + cash). That's a spotlight you do not want right now if you're under Xi. I'm certain the Chinese authorities do not want one person owning the majority control of something like Ant Financial, given its size and importance to the economy. There's no other rational reason for Ma to have voluntarily given up so much ownership in Ant, he's shrinking himself as a target (plausibly he was given no choice; I suspect it was always the plan from the moment Ant was taken from Alibaba). Or put it simply: Ant may end up being worth several hundred billion dollars. Imagine Jack Ma owning 2/3 of something worth $400 billion. Now picture the target on his back, that would go along with such power and control over the Chinese economy. It'd be Jack Ma vs Xi, and Jack Ma would lose; a very dangerous game to play if you're a simple civilian. Better to stay smaller and get to continue doing what you want to do (operate Alibaba and Ant), by giving up some power, ownership, and not being in any way perceived as a meaningful threat to the authorities and their absolute control.
galuggus 8y ago
China is going cashless -mobile payments are increasingly the norm. There are two main ways to pay with your phone wechat pay and Alipay(run by ant financial). It will potentially handle a huge percentage of ALL payments in a country as big as china.Maybe 150bn isn't such a crazy valuation
- DanAndersen 8y ago
  How rapidly are cashless transactions spreading in China? When I was there back in 2011-2012 everything was exclusively cash-only. I'd be interested to learn the rate of change in recent years.
  - fekunde 8y ago
    https://www.wsj.com/articles/chinas-mobile-payment-boom-changes-how-people-shop-borrow-even-panhandle-1515000570 https://www.wsj.com/articles/chinas-mobile-payment-boom-chan... What surprised me was the proliferation of Alipay in premium outlets near touristy areas in SF.
  - dmoy 8y ago
    Extremely fast. I agree with ~2011 being cash only, but the last time we were back (last year?), there was tons of wechat pay usage in restaurants, convenience stores, etc.
  - baybal2 8y ago
    >How rapidly are cashless transactions spreading in China? Basically overnight. Reason? 1. Alibaba and Tencent basically paying cash for people using their system; 2. POS terminal charges for them are near nil in comparison to rapacious rents Visa/MC processing banks were demanding just a year ago.
    - Latteland 8y ago
      It seems reliance on electronic pay is a big vulnerability, whenever there's a hickup everything stops. You can make the systems work reasonably well but there will be an outage eventually. In any kind of cyber battle you'd think this would be a huge problem. In the US I noticed most young people also carry little cash, while I'm often paying with cash. I know in China they also like ubiquitous tracking of people, and maybe the us govt would like that too.
azewail 8y ago
One of the reasons US-based startups grow so quickly is that the ones with traction here tap into a (relatively) homogeneous 300+ million market. A Chinese company with similar market share potential has tapped into about 4X that market. Growth rate is much faster in such a market, as opposed to global growth that has to deal with diverse sources of friction (e.g. Uber's challenges in London, Paris, etc. vs in the US).
- riku_iki 8y ago
  China is 4x larger users-wise, but what about revenue/gdp?
  - godzillabrennus 8y ago
    Still much lower but going up. American wages are overall flat for 40 years.
    - usaar333 8y ago
      Real average wages are up 25% since 1990. https://www.ssa.gov/oact/cola/central.html https://www.ssa.gov/oact/cola/central.html
  - coldtea 8y ago
    It's the momentum that matters not the absolute numbers.
- dopamean 8y ago
  I'm curious about how much of the considerable Chinese population is actually available to market tech products to. Something tells me comparing the populations straight up is misleading.
  - killjoywashere 8y ago
    > Something tells me comparing the populations straight up is misleading. Totally agree: once chosen by the Communist Party, a company is likely to enjoy state-sanctioned monopoly status. Not only will they have access to the entire population, the population may have no access to any other service provider in the same sector.

dalbasal 8y ago

I was walking around my home town recently. It's more than doubled since I left in 2002. Most of the new housing was built as new, dense (10-20 stories) suburbs. Th urban architecture is not bad. Decent green spaces, so that buildings open into "garden paths" rather than streets. You can get between places using green pedestrian walkways. Conveniently located schools & creches. Most of the parking is underground. The "economic architecture" OTOH, is striking. There are 2 small malls, walking distance from eachother, where all the cafes, resteraunts and shops are. There are two big commercial/adminstrative buildings where the dentist, post offices and stuff is. There is no high street, no corner stores, or any place that a sidewalk pizza shop could exist. ..no place where an independent retail or service business could exist, not even a news stand. It occurred to me that not only is this related to "concentration of wealth" it is that concentration of wealth. Those Malls and commercial real estate can be owned by €bn funds. Street level real estate doesn't lend well to that. Now... A lot of this has to do with the structure of the financial system, how things are capitalized. A developer can approach a large real estate fund, to sell a mall "off the plan." They can then go and presell leases, to their client base.. chain stores and restaurants. There is no equivalent financial sector that could fund real estate suitable for sole traders. So, sole traders will decline. There is obviously a chicken-egg dynamic between the underlying economics (eg revenue per square meter, and hence rent) and the existence of a friendly capital market. But, I think causation runs the other way as well. In this case, it just seems very planned. The architecture and planning of a city assumes a certain economy, the urban architecture reflects that, and the underlying capital system reflects that. The three lock eachother into place. If there had been a vibrant market for financing small retailers, but not malls, then the whole city would have probably been built differently. Anyway China is unidealogical about such things, atm. They don't mind engineering a cityscape for a certain economy, engineering financial markets for a certain cityscape or cityscape or if the proverbial cat is black or white. My long winded point is that maybe it's time to "pick winners" in financial markets, subsidizing or penalising certain types of capital markets over others. Ive always been dubious about market liberalism when it comes to banks.

marcell 8y ago
Where is your home town?

calvinbhai 8y ago

Many thanks to the lopsided high skilled immigration rules, combined with China focused VCs, a lot of reverse brain drain to China has lead to this. Imagine if every Masters or a PhD grad was given a green card. US would still have been a leader in tech (at least wrt VC spending metric)

twblalock 8y ago
That's not the entire story. Many skilled Chinese people want to stay in China these days. It's a lot better there than it used to be.
seanmcdirmid 8y ago
The number of Chinese students staying in the US after graduation has been relatively steady for the last 10 years; the number of Chinese students coming to the US, in contrast, has exploded, pushing the stay percentage down.
- hatred 8y ago
  Do you have any links to confirm the latter? From what I have been seeing, the number of both Indian/Chinese students coming to the US for studying has gone down post the Trump administration. Also, I am seeing more Indian/Chinese folks going back home due to increase in engineering wages/opportunities. Of course, it's still not comparable to US but plenty-enough to live a very good life-style back home.
  - seanmcdirmid 8y ago
    I’m not sure if it’s gone down during the last 1.5 years of the trump admin, but it has exploded in the last 10 years. Looking at the data. Looking at the change for any given year is a bit noisy. China has really great wages for programming (I should know), but lacks in many quality of life factors. For example, many Chinese won’t go back once they have kids because of educatio, hukou, and pollution factors. They would have to pay a lot to get around those.
- calvinbhai 8y ago

neom 8y ago

As a side note: I'm very curious to see what softbank[1] does, they've made an impressive list of investment and Japan generally is in an interesting position[2]. [1] https://pitchbook.com/news/articles/vision-fund-101-inside-softbanks-93b-vehicle https://pitchbook.com/news/articles/vision-fund-101-inside-s... // [2] https://www.nature.com/articles/s41598-018-23948-5.pdf https://www.nature.com/articles/s41598-018-23948-5.pdf //

nicodjimenez 8y ago

Incredible. It does seem like innovation in US is in a slowdown, with the tech giants being the only ones thinking long terms, and the VCs trying to flip companies to the tech giants on 3-5 year time scales. But very hard to tell what's going on, for me at least.

godzillabrennus 8y ago
Early stage VC and founders can both do a lot better economically by obtaining earlier exists.
- sk5t 8y ago
  You're both right!

hawski 8y ago

It just occurred to me that VC spending on the next big thing (usually a try at monopolization by appifization) in a way is a DDoS on the governmental oversight and by extension on the society. Governments may be too slow to react to properly enforce old laws or to create new ones to also cover new grounds. That gap allows companies to rise and profit, but many times at the expense of the society. Governments will probably adjust one way or the other, but I just hope that they will not throw the baby with the bathwater. They probably will, but that's just pendulum going to the other side.

closeparen 8y ago
The overwhelming majority of societal harm is inflicted by old, regulated industries like manufacturing, agriculture, healthcare, and retail. Tech-bashing has recently become fashionable as people realized it’s a cheap and easy route to feeling self-righteous, but from a harm-to-society perspective “appification” barely deserves a moment’s consideration.
- hawski 8y ago
  You are right in where from the current harm is coming. However I think it's just a beginning. Give it a few decades and then we will really see. Whatever happens today will have long lasting consequences in decades to come. If we let it, we will just repeat out failures from the past, when harmful-today industries barely deserved a moment's consideration from a harm-to-society perspective. It just sounds like an appeal to worse problems. Also is it that strange to see tech-bashing on a tech news site?

pwaai 8y ago

yeah but how does China guarantee my IP? In the US I can sue at least. In China? Good luck. By the time you launch a product, a dozen imitation pops up. You, as a foreigner, are essentially tasked to upload your expertise and knowledge to a centralized communist power structure that will redestribute the wealth amongst the Chinese population. They don't have the hot clean air spots like Western Europe and North America offers to the elite. I guess ideology is a heavy price to pay. How about the fact that any number coming out of China can easily be manipulated?

est 8y ago
> By the time you launch a product, a dozen imitation pops up They don't. But that's why some Chinese companies are extremely competitive. They fought a way out of a bloodbath.

radicaldreamer 8y ago

Why is this a concern? The population of China is 3 times as large as the US. If anything, this should be celebrated because resources seem to be allocated more efficiently - Chinese innovation should outpace the United States in the coming years (we’re already seeing this in mobile phones and marginal low end technology like cheap IoT enabled gadgets).

wpdev_63 8y ago
It's not though because they don't respect ip law so there's no incentive.
a13n 8y ago
Who said it was a concern? It's news.
marcell 8y ago
> Chinese innovation should outpace the United States in the coming years This may be true but it’s not an inevitability, or at least it wasn’t always. Innovation is not just a function of population. Policy also makes a big difference. For the US in particular, immigration policy could make or break its success in tech. See Paul Graham’s famous article “Let in the Other 95%”.
freewizard 8y ago
It'll be a concern when many Chinese grads going back to China with knowledge and skills, but not with universal values of human-beings. Hence you see violation of IP and high tech being used to suppress minorities. This trend will continue to grow with current administration's authoritarian and isolationism.