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> It wasn't always this way.. you used to have to make solid product with a business model that clearly showed growth AND profitability. Its because there isn'

> It wasn't always this way.. you used to have to make solid product with a business model that clearly showed growth AND profitability. Its because there isn't anywhere to put cash. The market tolerance has expanded because the market was desperate for things to invest in. So whether it is non-voting shares, profitless companies and bigger issuance sizes, it is all a symptom where there is no predilection for a cure. The government's growth targets cannot be met without giving money to the credit worthy. Money is free for them and they have make more from that money. It doesn't "trickle down" very far, but it does still lack a place to go where a return beats inflation (the speed at which the government gives other organizations cheap money).

Apocryphon 6y ago
And yet, these investors still aren't putting a lot of money in companies working on the stereotypical moonshot "big problem" ideas that Silicon Valley is derided for not caring about- curing cancer, fixing climate change, fighting poverty, inventing fusion power, etc.
- tonygrue 6y ago
  As an engineer who loves the moonshots it breaks my heart. The core problem however is that from a dispassionate investor viewpoint, the uber for Y companies are more understandable and are perceived to deliver larger results more quickly in aggregate. Even accounting for these public failures. And since the dispassionate investor really only cares about return (regardless of what most say) they don’t invest in long term, capital intensive, unproven business. There seems to be an opportunity for entrepreneurs who can market the moonshots better to investors and hire the people to execute on them. But those two skills are very rarely in the same person.
- fivre 6y ago
  Turns out the 50+ years we'd need for fusion is a bit too long a position for a system that demands quarterly growth for growing retirement accounts, whodathunk. They take 50 years to mature anyway, what's the point? Granted, you probably want a bit less than <the time you expect to cash out the account> to figure out if your bets were correct or not and you actually have a retirement account, so it sorta makes sense, but we've gone off the deep end in the other direction, so it doesn't.
  - Apocryphon 6y ago
    Eternal never fusion is basically a public policy failure writ large: https://i.imgur.com/D6cDJ22.png https://i.imgur.com/D6cDJ22.png
- gumby 6y ago
  Actually there are a lot of investments in pharma, including oncology. The Vally put a lot of money to work on green tech / climate change back in the 2009-2012 time frame. Not much to show for it; investment has definitely slowed. social issues: I have to agree. Lots of B2C market-destroying investments in SF, less so down here in the valley. Sadly I don't see the flow of them stopping -- they're mostly pretty low tech and so easy for a non-tech investor to understand (or rather think they understand).
- adventured 6y ago
  What you're saying doesn't make sense. None of the things you list can be 'cured' by even a very well-funded start-up, not under any circumstances. Not even remotely close. Venture capitalists attempt to earn a return for their investors. How do you plan to do that by ... fighting poverty? Are you going to raise $4 or $5 trillion to spend on poverty over the next 10 years? Because that's what it'll take - at a minimum, and that's just for the US. That's a task for government, not a start-up with $4 million in capital. It's an almost hilariously absurd premise you're floating. Poverty isn't a moonshot problem to be tackled or solved, we already know how to solve it. What's lacking are the necessary, gigantic resources that can only be funded by tax revenue (epic income tax increases). Curing cancer? There is no cure for cancer. There never will be. What you actually mean is 4,972 cures for different types of cancer that require different approaches. Venture capitalists have been massively funding that effort for many decades. There will never be a cancer cure moonshot because it's impossible. Fixing climate change? Yeah one of those venture capital firms with a trillion dollars should really solve that one. VC firms have in fact been making a dent in that for decades by funding the progress of renewable energy. You don't solve climate change with a moonshot, you make slow, incremental progress. There are no alternatives, no other scenario is possible or will occur. The notion of a moonshot for climate change is a pipe dream. Inventing fusion power? You're lucky if you move the needle a fraction of an inch with hundreds of millions of dollars. The only entities that can make a meaningful difference in fusion are governments and people like Bill Gates that can throw a billion dollars at a problem and not sweat the losses.
  - Apocryphon 6y ago
    I'm not the first to make that critique, I'm merely repeating it. Even Peter Thiel said a variant of it: "We wanted flying cars, instead we got 140 characters." Everything you're saying makes sense. It's true that venture capital structurally cannot coexist with investing in these longshot/moonshot "big problems". So maybe the problem is that tech has become too reliant, even dominated, by VC funding? Perhaps more public investment in R&D and the sciences is in order? There should be alternative funding mechanisms that don't rely on the short-term focused, pour money on ten and hope that one survives, scattershot approach of VCs? The main point is that it is truly a shame that even though we live in an age of dumb money thanks to the Fed and ZIRP, and a lack of places to put that money into, the natural response is to invest in yet another food delivery/ridesharing app, rather than the stereotypical big problems. Perhaps the problem is that VCs have too much money to begin with?
- metalliqaz 6y ago
  how do you know?
rjtavares 6y ago
I really can't understand how some people see that but don't think capitalism is broken. I really hope we can fix it, because the alternative is worse, but I'm becoming more pessimistic as time goes on...
- bobbydroptables 6y ago
  Capitalism might be broken, but I don't see this as evidence. This might be evidence that some investors have more money than sense, which has always been true and will always be true. If you think a company or asset is overvalued, don't buy it. I don't understand why people seem to take personal offense to bad business models. If you think it's dumb that's fine. Every investor has a thesis and jumping on the "negative cash flow startups are dumb" bandwagon is within your rights (and might even pay out). But I don't see the point in getting worked up about it.
  - rjtavares 6y ago
    I don't have a problem with bad investments. My comment is a reply to: > Its because there isn't anywhere to put cash. > The market tolerance has expanded because the market was desperate for things to invest in. Rich societies can't figure out how to create wealth, yet a big proportion of its citizens live in poverty. That is a broken system.
  - achillesheels 6y ago
    It's more that this capital can be utilized to actually be feeding families through real job growth and not some hand-waving waving self-deception of building the future. In other words, this is not real productivity because it isn't sustainable without burning cash.
    - bobbydroptables 6y ago
      You and I have very different definitions of "sustainable". Absolutely nothing about the modern global economy is "sustainable" for the planet. Infinite growth is not a realistic goal. We need to start putting a sustainable planet above a sustainable income statement. Setting that aside, failing startups are actually great for the average Joe. You've basically sucked off an enormous amount of capital from naive but rich investors and transferred it to the employees and local businesses where the company is based. Even consumers can benefit if prices are subsidized like Uber, etc. They can also brutalize corrupt local industries like taxis and hotels. Failing businesses also teach lessons about dumb capital and dumb managers. Smart capital and smart managers usually take notes. It's basically win-win all around except for whichever rube is holding the shares when the house of cards collapses, which, as I said some people have more money than sense.
Proven 6y ago
> Its because there isn't anywhere to put cash. That's quite close. Maybe "there isn't anywhere to make a decent return on invested". There are plenty of places where one can invest, but the big central banks have destroyed investing - the cost of money is next to nothing so by investing in normal businesses you can't get a decent ROI (no shortage of money). You have to invest in whatever bubbles you can spot.

Apocryphon 6y ago

And yet, these investors still aren't putting a lot of money in companies working on the stereotypical moonshot "big problem" ideas that Silicon Valley is derided for not caring about- curing cancer, fixing climate change, fighting poverty, inventing fusion power, etc.

tonygrue 6y ago
As an engineer who loves the moonshots it breaks my heart. The core problem however is that from a dispassionate investor viewpoint, the uber for Y companies are more understandable and are perceived to deliver larger results more quickly in aggregate. Even accounting for these public failures. And since the dispassionate investor really only cares about return (regardless of what most say) they don’t invest in long term, capital intensive, unproven business. There seems to be an opportunity for entrepreneurs who can market the moonshots better to investors and hire the people to execute on them. But those two skills are very rarely in the same person.
fivre 6y ago
Turns out the 50+ years we'd need for fusion is a bit too long a position for a system that demands quarterly growth for growing retirement accounts, whodathunk. They take 50 years to mature anyway, what's the point? Granted, you probably want a bit less than <the time you expect to cash out the account> to figure out if your bets were correct or not and you actually have a retirement account, so it sorta makes sense, but we've gone off the deep end in the other direction, so it doesn't.
- Apocryphon 6y ago
  Eternal never fusion is basically a public policy failure writ large: https://i.imgur.com/D6cDJ22.png https://i.imgur.com/D6cDJ22.png
gumby 6y ago
Actually there are a lot of investments in pharma, including oncology. The Vally put a lot of money to work on green tech / climate change back in the 2009-2012 time frame. Not much to show for it; investment has definitely slowed. social issues: I have to agree. Lots of B2C market-destroying investments in SF, less so down here in the valley. Sadly I don't see the flow of them stopping -- they're mostly pretty low tech and so easy for a non-tech investor to understand (or rather think they understand).
adventured 6y ago
What you're saying doesn't make sense. None of the things you list can be 'cured' by even a very well-funded start-up, not under any circumstances. Not even remotely close. Venture capitalists attempt to earn a return for their investors. How do you plan to do that by ... fighting poverty? Are you going to raise $4 or $5 trillion to spend on poverty over the next 10 years? Because that's what it'll take - at a minimum, and that's just for the US. That's a task for government, not a start-up with $4 million in capital. It's an almost hilariously absurd premise you're floating. Poverty isn't a moonshot problem to be tackled or solved, we already know how to solve it. What's lacking are the necessary, gigantic resources that can only be funded by tax revenue (epic income tax increases). Curing cancer? There is no cure for cancer. There never will be. What you actually mean is 4,972 cures for different types of cancer that require different approaches. Venture capitalists have been massively funding that effort for many decades. There will never be a cancer cure moonshot because it's impossible. Fixing climate change? Yeah one of those venture capital firms with a trillion dollars should really solve that one. VC firms have in fact been making a dent in that for decades by funding the progress of renewable energy. You don't solve climate change with a moonshot, you make slow, incremental progress. There are no alternatives, no other scenario is possible or will occur. The notion of a moonshot for climate change is a pipe dream. Inventing fusion power? You're lucky if you move the needle a fraction of an inch with hundreds of millions of dollars. The only entities that can make a meaningful difference in fusion are governments and people like Bill Gates that can throw a billion dollars at a problem and not sweat the losses.
- Apocryphon 6y ago
  I'm not the first to make that critique, I'm merely repeating it. Even Peter Thiel said a variant of it: "We wanted flying cars, instead we got 140 characters." Everything you're saying makes sense. It's true that venture capital structurally cannot coexist with investing in these longshot/moonshot "big problems". So maybe the problem is that tech has become too reliant, even dominated, by VC funding? Perhaps more public investment in R&D and the sciences is in order? There should be alternative funding mechanisms that don't rely on the short-term focused, pour money on ten and hope that one survives, scattershot approach of VCs? The main point is that it is truly a shame that even though we live in an age of dumb money thanks to the Fed and ZIRP, and a lack of places to put that money into, the natural response is to invest in yet another food delivery/ridesharing app, rather than the stereotypical big problems. Perhaps the problem is that VCs have too much money to begin with?
metalliqaz 6y ago
how do you know?

rjtavares 6y ago

I really can't understand how some people see that but don't think capitalism is broken. I really hope we can fix it, because the alternative is worse, but I'm becoming more pessimistic as time goes on...

bobbydroptables 6y ago
Capitalism might be broken, but I don't see this as evidence. This might be evidence that some investors have more money than sense, which has always been true and will always be true. If you think a company or asset is overvalued, don't buy it. I don't understand why people seem to take personal offense to bad business models. If you think it's dumb that's fine. Every investor has a thesis and jumping on the "negative cash flow startups are dumb" bandwagon is within your rights (and might even pay out). But I don't see the point in getting worked up about it.
- rjtavares 6y ago
  I don't have a problem with bad investments. My comment is a reply to: > Its because there isn't anywhere to put cash. > The market tolerance has expanded because the market was desperate for things to invest in. Rich societies can't figure out how to create wealth, yet a big proportion of its citizens live in poverty. That is a broken system.
- achillesheels 6y ago
  It's more that this capital can be utilized to actually be feeding families through real job growth and not some hand-waving waving self-deception of building the future. In other words, this is not real productivity because it isn't sustainable without burning cash.
  - bobbydroptables 6y ago
    You and I have very different definitions of "sustainable". Absolutely nothing about the modern global economy is "sustainable" for the planet. Infinite growth is not a realistic goal. We need to start putting a sustainable planet above a sustainable income statement. Setting that aside, failing startups are actually great for the average Joe. You've basically sucked off an enormous amount of capital from naive but rich investors and transferred it to the employees and local businesses where the company is based. Even consumers can benefit if prices are subsidized like Uber, etc. They can also brutalize corrupt local industries like taxis and hotels. Failing businesses also teach lessons about dumb capital and dumb managers. Smart capital and smart managers usually take notes. It's basically win-win all around except for whichever rube is holding the shares when the house of cards collapses, which, as I said some people have more money than sense.

Proven 6y ago

> Its because there isn't anywhere to put cash. That's quite close. Maybe "there isn't anywhere to make a decent return on invested". There are plenty of places where one can invest, but the big central banks have destroyed investing - the cost of money is next to nothing so by investing in normal businesses you can't get a decent ROI (no shortage of money). You have to invest in whatever bubbles you can spot.