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My experience with the startup scene in another country agrees with your description. When tech is funded by government incubators, it tends to become a fake im

My experience with the startup scene in another country agrees with your description. When tech is funded by government incubators, it tends to become a fake imitation of the VC funded industry that we know from Silicon Valley. Which often is itself a fake imitation of actual innovation, so (fake imitation)^2.

burkaman 6y ago
> When tech is funded by government incubators, it tends to become a fake imitation of the VC funded industry that we know from Silicon Valley. Seems a little strong? https://www.iqt.org/portfolio/ https://www.iqt.org/portfolio/ (Cockroach Labs, GitLab, DataRobot, databricks, Cloudera, mongoDB (I know), probably more you've heard of) https://www.energy.gov/lpo/portfolio/portfolio-projects https://www.energy.gov/lpo/portfolio/portfolio-projects (Tesla) https://www.sbir.gov/news/success-stories https://www.sbir.gov/news/success-stories (Qualcomm, iRobot, 23andMe, Orbital ATK, countless others) https://sbir.nih.gov/statistics/success-stories https://sbir.nih.gov/statistics/success-stories https://sbir.nasa.gov/success-stories https://sbir.nasa.gov/success-stories https://sbir.<any https://sbir.<any agency here>.gov/ https://www.darpa.mil/Timeline/index.html https://www.darpa.mil/Timeline/index.html (the internet, voice recognition, virtual reality, GPS, onion routing, the computer mouse, touchscreens, etc.) Also, the many startups that were spun out of public universities and government-funded research.
- snowwrestler 6y ago
  Sure there have been hits, but there have been a lot of failures too. The problem with "government VC" is not the low hit rate--private VC has a low hit rate too. The problem is also not that government funds get gamed--private VC gets gamed too. See WeWork for an absolutely enormous example. The problem is really with the different cultural expectations for government vs private capital. If a private VC firm loses 95% of their investments to failure and fraud, but has huge hits with the remaining 5%, well, that's just how VC works. The only thing that really matters is their net. If they end up with a big return, they are geniuses. But if the government loses 95% of their investments, that's a ton of wasted taxpayer money. That's a lot of fodder for press, politicians, and activists to make hay out of. And if the remaining 5% are hits, well, the government does not exist to turn a profit. So the credit does not work out the same, even if the hit rate is similar.
  - burkaman 6y ago
    I agree there is an issue with credit and public anger over "wasted" money, but clearly innovation is still happening, that was my point. The occasional Solyndra media frenzy hasn't stopped the government from investing in startups. And one point in favor of government VC: it often isn't primarily profit-driven. Look for example at the energy.gov portfolio. While they obviously want their money back, they aren't trying to pick unicorns; they're trying to improving Americans' lives by improving the environment and the economy. > LPO can provide first-of-a-kind projects and other high-impact energy-related ventures with access to debt capital that private lenders cannot or will not provide. This is true of a lot of government investment. It's a good thing, on balance, that the people choosing government investments are not paid based on how much profit they generate or how many users they amass.

burkaman 6y ago

> When tech is funded by government incubators, it tends to become a fake imitation of the VC funded industry that we know from Silicon Valley. Seems a little strong? https://www.iqt.org/portfolio/ https://www.iqt.org/portfolio/ (Cockroach Labs, GitLab, DataRobot, databricks, Cloudera, mongoDB (I know), probably more you've heard of) https://www.energy.gov/lpo/portfolio/portfolio-projects https://www.energy.gov/lpo/portfolio/portfolio-projects (Tesla) https://www.sbir.gov/news/success-stories https://www.sbir.gov/news/success-stories (Qualcomm, iRobot, 23andMe, Orbital ATK, countless others) https://sbir.nih.gov/statistics/success-stories https://sbir.nih.gov/statistics/success-stories https://sbir.nasa.gov/success-stories https://sbir.nasa.gov/success-stories https://sbir.<any https://sbir.<any agency here>.gov/ https://www.darpa.mil/Timeline/index.html https://www.darpa.mil/Timeline/index.html (the internet, voice recognition, virtual reality, GPS, onion routing, the computer mouse, touchscreens, etc.) Also, the many startups that were spun out of public universities and government-funded research.

snowwrestler 6y ago
Sure there have been hits, but there have been a lot of failures too. The problem with "government VC" is not the low hit rate--private VC has a low hit rate too. The problem is also not that government funds get gamed--private VC gets gamed too. See WeWork for an absolutely enormous example. The problem is really with the different cultural expectations for government vs private capital. If a private VC firm loses 95% of their investments to failure and fraud, but has huge hits with the remaining 5%, well, that's just how VC works. The only thing that really matters is their net. If they end up with a big return, they are geniuses. But if the government loses 95% of their investments, that's a ton of wasted taxpayer money. That's a lot of fodder for press, politicians, and activists to make hay out of. And if the remaining 5% are hits, well, the government does not exist to turn a profit. So the credit does not work out the same, even if the hit rate is similar.
- burkaman 6y ago
  I agree there is an issue with credit and public anger over "wasted" money, but clearly innovation is still happening, that was my point. The occasional Solyndra media frenzy hasn't stopped the government from investing in startups. And one point in favor of government VC: it often isn't primarily profit-driven. Look for example at the energy.gov portfolio. While they obviously want their money back, they aren't trying to pick unicorns; they're trying to improving Americans' lives by improving the environment and the economy. > LPO can provide first-of-a-kind projects and other high-impact energy-related ventures with access to debt capital that private lenders cannot or will not provide. This is true of a lot of government investment. It's a good thing, on balance, that the people choosing government investments are not paid based on how much profit they generate or how many users they amass.