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I recently read Factfulness, by Hans Rosling, and it really changed how I read articles like this. Here's where this article goes totally off the rails... It's

by beat 8y ago

I recently read Factfulness, by Hans Rosling, and it really changed how I read articles like this. Here's where this article goes totally off the rails... It's only showing American startup activity as a proportion of global startup activity. I might have missed it in a quick read, but nowhere did I see total numbers by nation, or by startup city. Let's shift perspective slightly. Is American investment in startups decreasing? Not compared to China or whatever, but compared to itself? Or is it staying the same, or growing? Looking at Pitchbook data, the biggest year for US venture capital was 2015 ($82.2B), with 2017 close behind at $81.9B, and 2018 looking to be about on par. So stable, basically. What this tells us is not that the US startup activity is in any way unhealthy, but rather that the rest of the world is figuring out how to do it, too. And what's wrong with that? How is that a negative? We don't get that from the article, because it's stuck in this misleading mode of lost competitiveness from is comparison model. This is why everyone should read Factfulness. No other book I've ever read has helped tune my bullshit detector so well.

mooreds 8y ago
I read "How to lie with statistics" and had the exact same experience.
- extragood 8y ago
  "There are lies, damned lies, and statistics"
leepowers 8y ago
> While it is true that venture-capital investment in the U.S. continues to rise, having reached more than $90 billion in 2017, such investment is growing even faster in other parts of the world, expanding by nearly 375 percent—more than twice the 160-percent increase here. Looks like the story here isn't the U.S. falling behind, but the rest of the world catching up.
- beat 8y ago
  Yep. But it's not presented that way, because bullshit. Same numbers, completely different conclusion - but important data that would reveal the bias left out of the article.
adventured 8y ago
Further to that point, the article pretends it's a global phenomenon that's occuring. It's not. Venture capital has barely budged in the developed world. That growth is almost exclusively isolated to two countries: China and India. The growth in the rest of the world is very modest as a share of the global total VC. Just look at the expansion in China since 2005, as one would expect, it represents the extreme majority of all VC expansion globally. The story should have actually been framing the premise as: China's dramatic economic expansion since the late 1990s, in which it added ~$80 trillion in cumulative economic activity over 20 years, has resulted in a lot of venture capital activity. They went from 1% of global VC activity, to 25%, in roughly 20 years (12x that of France now) - that's the primary story. Or put another way, since ~2006, the US has bled only three to four points of its global share of all VC to 190 some countries, and roughly 24 or 25 points to just China and India. That wouldn't make for nearly as attention-getting of a headline though.
- beat 8y ago
  Are there any other countries that are seriously in the software industry besides the US, China, and India?
jernfrost 8y ago
Without reading your comment I had already read from the article just by skimming it that the US was not declining it absolute terms, but rather the rest of the world was catching up. So I think you may have jumped the gun there.
zxcvvcxz 8y ago
The title: "America Is Losing Its Edge for Startups" Based on the data they presented, this is true in a relative sense. Actually, based on your quote as well: >Is American investment in startups decreasing? Not compared to China or whatever, but compared to itself? Or is it staying the same, or growing? Looking at Pitchbook data, the biggest year for US venture capital was 2015 ($82.2B), with 2017 close behind at $81.9B, and 2018 looking to be about on par. So stable, basically. You've just shown that recent VC growth in the US is zero. That, I would say, is 'losing an edge', when everyone else around you is growing. Yes of course, others are playing catch up and realizing that the institution of venture capital can have big pay offs. But for the #1 contender to stop growing, does mean that they're becoming less dominant in a relative sense. And if trends continue, they will cease to be number 1.

by beat 8y ago

mooreds 8y ago

I read "How to lie with statistics" and had the exact same experience.

extragood 8y ago
"There are lies, damned lies, and statistics"

leepowers 8y ago

> While it is true that venture-capital investment in the U.S. continues to rise, having reached more than $90 billion in 2017, such investment is growing even faster in other parts of the world, expanding by nearly 375 percent—more than twice the 160-percent increase here. Looks like the story here isn't the U.S. falling behind, but the rest of the world catching up.

beat 8y ago
Yep. But it's not presented that way, because bullshit. Same numbers, completely different conclusion - but important data that would reveal the bias left out of the article.

adventured 8y ago

Further to that point, the article pretends it's a global phenomenon that's occuring. It's not. Venture capital has barely budged in the developed world. That growth is almost exclusively isolated to two countries: China and India. The growth in the rest of the world is very modest as a share of the global total VC. Just look at the expansion in China since 2005, as one would expect, it represents the extreme majority of all VC expansion globally. The story should have actually been framing the premise as: China's dramatic economic expansion since the late 1990s, in which it added ~$80 trillion in cumulative economic activity over 20 years, has resulted in a lot of venture capital activity. They went from 1% of global VC activity, to 25%, in roughly 20 years (12x that of France now) - that's the primary story. Or put another way, since ~2006, the US has bled only three to four points of its global share of all VC to 190 some countries, and roughly 24 or 25 points to just China and India. That wouldn't make for nearly as attention-getting of a headline though.

beat 8y ago
Are there any other countries that are seriously in the software industry besides the US, China, and India?

jernfrost 8y ago

Without reading your comment I had already read from the article just by skimming it that the US was not declining it absolute terms, but rather the rest of the world was catching up. So I think you may have jumped the gun there.

zxcvvcxz 8y ago

The title: "America Is Losing Its Edge for Startups" Based on the data they presented, this is true in a relative sense. Actually, based on your quote as well: >Is American investment in startups decreasing? Not compared to China or whatever, but compared to itself? Or is it staying the same, or growing? Looking at Pitchbook data, the biggest year for US venture capital was 2015 ($82.2B), with 2017 close behind at $81.9B, and 2018 looking to be about on par. So stable, basically. You've just shown that recent VC growth in the US is zero. That, I would say, is 'losing an edge', when everyone else around you is growing. Yes of course, others are playing catch up and realizing that the institution of venture capital can have big pay offs. But for the #1 contender to stop growing, does mean that they're becoming less dominant in a relative sense. And if trends continue, they will cease to be number 1.