4 ms·

I meant "profitable" in the viable sense. Like either profitable now or could reasonably be so in the future, without requiring monopolistic pricing.

scarface74 7y ago
YC has been in existence for over 15 years. Not one viable self sustaining standalone company has come out of it. I’m not saying that as a criticism to YC, just a statement of fact. How many profitable VC backed tech companies were founded in the last ten years?
- Ozzie_osman 7y ago
  Oh I'm not defending YC or claiming anything about its companies (I didn't pull them into the conversation at all). I was just arguing that providing some rules around acquisition of smaller competitors by larger companies with monopolies could push startups towards more viable business models.
  - scarface74 7y ago
    I’m using YC as a stand in for “VC backed tech companies” because it’s the one that people on HN are probably the most familiar with. The same could be said about the other VCs.
    - Ozzie_osman 7y ago
      I think I'm missing something. Yes, the VC industry has massively funded many companies. Some of those are not profitable. Some of those are even not viable. That's not a good thing. Maybe we would all be better off if funding was generally better allocated towards viable companies.
      - scarface74 7y ago
        I’m using Apple as an example here because I am most familiar with their acquisitions and the products that came from them. Why is it important for the end users of the companies are viable and not the products? Would consumers have been better off if most of the companies that Apple acquired, integrated into billions of devices and sold to consumers didn’t exist because they couldn’t foresee a viable business model outside of an acquisition?
        Ozzie_osman 7y ago
        For Apple specifically, I'm not sure which products you're referring to, but Apple does wield a lot of monopolistic power. And maybe some acquisitions there made sense, but there could have been alternative paths (for instance, maybe if some of those companies had stayed independent, they would have been integrated into Apple as well as other manufacturers via a different business model, like licensing, being part of the supply chain, etc). In general, a viable product should lead to a viable business, since the company making the product should be able to capture the value it's delivering... but yes, there are some exceptions where you need products to be really tightly integrated and acquisitions make sense. In fact, I'd argue that with _less_ M&A we'd be more likely to live in a world where (viable product) == (viable company), because the market would be more efficient. Anyway, my argument for more regulatory oversight doesn't depend on ALL acquisitions being bad, so finding evidence that some were good for consumers doesn't necessarily negate it. I feel like what we would end up disagreeing on though is whether we can trust regulatory oversight to do a good job of making that decision. I don't trust regulation in general, but in this case specifically, I'd trust it more than giving large companies free reign.
        scarface74 7y ago
        Here is the list I was referring to. https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio... Just some examples Next, SoundJam (iTunes), PA Semi (processors), AuthenTec (finger print sensor), Apple Music (Beats), Siri, etc. Knowing Apple what is more likely, they would license tech or just create it in house? How do smaller companies prevent that? Patent trolling? What if the companies wanted to be acquired by Apple? Does the government step in and say you aren’t allowed to sell your business? Instead of acquiring the company what’s to stop Apple from doing an acqui-hire? Are you going to tell them they can’t work for Apple? Government intervention in businesses unless there is a severe negative externality is almost universally bad.
- yourcousinbilly 7y ago
  I get the sentiment for YC, but “not one” is pretty impossible. Airbnb reported a profit in 2017 and 2018. https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa... It did lose money in 2019, but because of preIPO marketing and advertising. Marketplaces have great network effects and profit margins, seems like a very viable self sustaining standalone company. https://www.fastcompany.com/90418766/report-not-even-airbnb-can-turn-a-profit https://www.fastcompany.com/90418766/report-not-even-airbnb-...
  - scarface74 7y ago
    “said it made money for a second straight year, based on a common measure that excludes some expenses” It’s like WeWork’s “Community Adjusted Ebitda” or Uber’s “we aren’t doing as bad as it looks as long as you exclude 13 different expenses.”

scarface74 7y ago

YC has been in existence for over 15 years. Not one viable self sustaining standalone company has come out of it. I’m not saying that as a criticism to YC, just a statement of fact. How many profitable VC backed tech companies were founded in the last ten years?

Ozzie_osman 7y ago
Oh I'm not defending YC or claiming anything about its companies (I didn't pull them into the conversation at all). I was just arguing that providing some rules around acquisition of smaller competitors by larger companies with monopolies could push startups towards more viable business models.
- scarface74 7y ago
  I’m using YC as a stand in for “VC backed tech companies” because it’s the one that people on HN are probably the most familiar with. The same could be said about the other VCs.
  - Ozzie_osman 7y ago
    I think I'm missing something. Yes, the VC industry has massively funded many companies. Some of those are not profitable. Some of those are even not viable. That's not a good thing. Maybe we would all be better off if funding was generally better allocated towards viable companies.
    - scarface74 7y ago
      I’m using Apple as an example here because I am most familiar with their acquisitions and the products that came from them. Why is it important for the end users of the companies are viable and not the products? Would consumers have been better off if most of the companies that Apple acquired, integrated into billions of devices and sold to consumers didn’t exist because they couldn’t foresee a viable business model outside of an acquisition?
      - Ozzie_osman 7y ago
        For Apple specifically, I'm not sure which products you're referring to, but Apple does wield a lot of monopolistic power. And maybe some acquisitions there made sense, but there could have been alternative paths (for instance, maybe if some of those companies had stayed independent, they would have been integrated into Apple as well as other manufacturers via a different business model, like licensing, being part of the supply chain, etc). In general, a viable product should lead to a viable business, since the company making the product should be able to capture the value it's delivering... but yes, there are some exceptions where you need products to be really tightly integrated and acquisitions make sense. In fact, I'd argue that with _less_ M&A we'd be more likely to live in a world where (viable product) == (viable company), because the market would be more efficient. Anyway, my argument for more regulatory oversight doesn't depend on ALL acquisitions being bad, so finding evidence that some were good for consumers doesn't necessarily negate it. I feel like what we would end up disagreeing on though is whether we can trust regulatory oversight to do a good job of making that decision. I don't trust regulation in general, but in this case specifically, I'd trust it more than giving large companies free reign.
        scarface74 7y ago
        Here is the list I was referring to. https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio... Just some examples Next, SoundJam (iTunes), PA Semi (processors), AuthenTec (finger print sensor), Apple Music (Beats), Siri, etc. Knowing Apple what is more likely, they would license tech or just create it in house? How do smaller companies prevent that? Patent trolling? What if the companies wanted to be acquired by Apple? Does the government step in and say you aren’t allowed to sell your business? Instead of acquiring the company what’s to stop Apple from doing an acqui-hire? Are you going to tell them they can’t work for Apple? Government intervention in businesses unless there is a severe negative externality is almost universally bad.
yourcousinbilly 7y ago
I get the sentiment for YC, but “not one” is pretty impossible. Airbnb reported a profit in 2017 and 2018. https://www.bloomberg.com/news/articles/2019-01-15/airbnb-says-it-made-a-profit-again-in-2018-as-ipo-looms-large https://www.bloomberg.com/news/articles/2019-01-15/airbnb-sa... It did lose money in 2019, but because of preIPO marketing and advertising. Marketplaces have great network effects and profit margins, seems like a very viable self sustaining standalone company. https://www.fastcompany.com/90418766/report-not-even-airbnb-can-turn-a-profit https://www.fastcompany.com/90418766/report-not-even-airbnb-...
- scarface74 7y ago
  “said it made money for a second straight year, based on a common measure that excludes some expenses” It’s like WeWork’s “Community Adjusted Ebitda” or Uber’s “we aren’t doing as bad as it looks as long as you exclude 13 different expenses.”