3 ms·
Despite a bit of exaggeration and unnecessarily salty language, I found the OP to be a though-provoking piece, well worth the read. This passage, in particular
by cs702 7y ago
Despite a bit of exaggeration and unnecessarily salty language, I found the OP to be a though-provoking piece, well worth the read.
This passage, in particular, struck a chord with me -- it criticizes all the money-burning unicorns selling products and services below cost:
"What predatory pricing does is to enable competition purely based on access to capital. Someone like Neumann, and Son’s entire model with his Vision Fund, is to take inputs, combine them into products worth less than their cost, and plug up the deficit through the capital markets in hopes of acquiring market power later or of just self-dealing so the losses are placed onto someone else. This model has spread. Bird, the scooter company, is not making money. Uber and Lyft are similarly and systemically unprofitable. This model is catastrophic not just for individual companies, but for their competitors who have to MAKE money."
Highly recommended.
- empath75 7y agoEveryone in this thread is nodding sagely along with this while not thinking about how this insanity drives up their own tech salaries to insane levels which will collapse soon after the vision fund collapses.
- theflyinghorse 7y agoWould software salaries (in the US that is, we here in Canada get paid nowhere close to American levels) collapse though? There's practically unlimited amount of work that needs to be done and practically unlimited amount of good ideas left in the world to exploit. One fund going out won't do anything to change that.
- buboard 7y agoThey would. The actual value that developers make is only a fraction of what they re paid in US. Look at wages in Europe, eastern europe or china which dont have a bubbly market and get paid the market fair price. Its very difficult for internet companies to make actual profit value when everything is locked down by behemoths sucking all the revenues. Besides , VC subsidies is what attracts developers to SV
- braythwayt 7y agoI understand your concern, but the author’s conjecture is that if we drive this “counterfeit capitalism” out, then instead of a few companies being run by and for financiers, there will be more companies and more startups and more competition. I suggest that would lead to more tech jobs and higher salaries, because businesses would be based on creating value, not on using an ocean of cash to drive everybody else into bankruptcy. If you buy his argument, “counterfeit capitalism” is actually at odds with what YC is trying to accomplish.
- buboard 7y agoThey may even create value, but creating cash has become much more difficult in the 2010s.
- __MatrixMan__ 7y agoYou know, I'd stomach a helluva pay cut if it meant I didn't have to choose between: - tinker with cool tech all day - do something meaningful