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Your attempt to unnecessarily insult Silicon Valley in retort, badly falls flat. VC is a model that works that way intentionally and you're holding that intent

Your attempt to unnecessarily insult Silicon Valley in retort, badly falls flat. VC is a model that works that way intentionally and you're holding that intentional behavior up as though it's incompetence or stupidity. It is in fact an ideal approach to what it attempts to accomplish: high rate of experimentation and very large outcomes. There's nothing special about most businesses failing within eg five years: that's how it works everywhere, the majority of mainstreet businesses do not survive more than five years. The VC model seeks to dramatically increase the rate of early expansion, in pursuit of locking in market dominance, and trades a higher rate of failure vs the typical hotdog stand, convenience store or restaurant. Everything from eBay to Google to Apple to PayPal to Facebook to Cisco to nVidia were backed in that wildly successful model. The reason the US has dominated tech globally for half a century now, is thanks to the VC model - a model everyone else has sought to copy, including Europe and China. For good reason: it works very well at what it attempts to accomplish. There is no other scenario where the US builds the enormous tech ecosystem that it has minus the VC approach.

scarface74 7y ago
VC is a model that works that way intentionally and you're holding that intentional behavior up as though it's incompetence or stupidity. It No, I’m not saying that the VCs who backed Uber, Lyft, Dropbox, ElasticCo, Mongo and Tesla are “incompetent”. They did what they set out to do. They invested money, the companies went public and they made a killing. In the meantime, the investors who are buying these money losing companies on the public market are the ones getting duped. They didn’t have a chance to get in earlier on the pre IPO growth because they weren’t “accredited”. ElasticCo and Mongo for instance were one AWS/GCP/Azure announcement from becoming cannon fodder. Everything from eBay to Google to Apple to PayPal to Facebook to Cisco to nVidia were backed in that wildly successful model. As are the companies I named above as well as WeWork.... Google, Apple, and Facebook were all profitable before they went public. Let’s take an example that’s closer to home - YC. Only two YC companies have ever gone public - Dropbox and PagerDuty, neither is profitable, and Dropbox is being crushed by larger competitors like Microsoft and Google. The reason the US has dominated tech globally for half a century now, is thanks to the VC model - a model everyone else has sought to copy, including Europe and China. They also copied our financial system. How did that work out?

scarface74 7y ago

VC is a model that works that way intentionally and you're holding that intentional behavior up as though it's incompetence or stupidity. It No, I’m not saying that the VCs who backed Uber, Lyft, Dropbox, ElasticCo, Mongo and Tesla are “incompetent”. They did what they set out to do. They invested money, the companies went public and they made a killing. In the meantime, the investors who are buying these money losing companies on the public market are the ones getting duped. They didn’t have a chance to get in earlier on the pre IPO growth because they weren’t “accredited”. ElasticCo and Mongo for instance were one AWS/GCP/Azure announcement from becoming cannon fodder. Everything from eBay to Google to Apple to PayPal to Facebook to Cisco to nVidia were backed in that wildly successful model. As are the companies I named above as well as WeWork.... Google, Apple, and Facebook were all profitable before they went public. Let’s take an example that’s closer to home - YC. Only two YC companies have ever gone public - Dropbox and PagerDuty, neither is profitable, and Dropbox is being crushed by larger competitors like Microsoft and Google. The reason the US has dominated tech globally for half a century now, is thanks to the VC model - a model everyone else has sought to copy, including Europe and China. They also copied our financial system. How did that work out?