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Given the net number of massive companies that emerged from VCs, this is obviously not true.

by koheripbal 6y ago

regularfry 6y ago
It doesn't tell us anything one way or the other. That's survivorship bias talking.
- koheripbal 6y ago
  Your sample is wrong. We are comparing the number of successful new companies that came out of VC vs the number of successful new companies that came without VC. ...and it's easily obvious that almost all of the new large tech companies emerged from VC.
  - regularfry 6y ago
    No, that's what you are doing. What I'm doing is comparing the number of successful companies that came out given that the VC system exists versus a situation where it doesn't. We don't know how many potentially successful companies haven't been started, or got strangled in the crib, because of the dynamics of the VC ecosystem and the fact that it exists. Also it's an error of remarkable proportions to assume that "massive company" is synonymous with "net positive to humanity", particularly in tech.
enumjorge 6y ago
A company reaching a massive size does not mean it’s been a net positive on society. In fact I’d argue that many previously beneficial companies have become net negatives once they got massive.
mleonhard 6y ago
Robotics technology is in the research phase. No big companies can be built from it yet. Researchers must do many more years of work before anyone can make useful robotics products. How can we get that work done faster? Compare two cases: 1. Founders spend 6 months setting up a company and selling it to VCs. Then they develop for 2 years. The VCs want an early exit so they shop the company around and Google decides to buy. The founders and all employees must sign a 4-year contract or walk away with nothing. They sign. They waste 6 months on the acquisition process. Google mismanages the new teams. Google's CEO fails to put someone with customer focus in a position with power. There is no SVP of Robotics Products. Morale dives and then productivity dives. After 4 years, they all leave and spend a year recovering from burnout and setting up a new company to finally get back focusing on research. In 8 years, they have spent 2 years on high-productivity robotics research, 4 years on low-productivity research, and 2 years on logistics. 2. Founders spend 6 months setting up a company and securing grants. Then they develop for 7.5 years. In those 8 years, they have spent 7.5 years on high-productivity robotics research. I believe there are other good ways to fund companies that have not yet been developed. VC does not fit all situations. Grants and bootstrapping have limitations. There are spaces for new funding models. What might they be?

Given the net number of massive companies that emerged from VCs, this is obviously not true.

regularfry 6y ago

It doesn't tell us anything one way or the other. That's survivorship bias talking.

koheripbal 6y ago
Your sample is wrong. We are comparing the number of successful new companies that came out of VC vs the number of successful new companies that came without VC. ...and it's easily obvious that almost all of the new large tech companies emerged from VC.
- regularfry 6y ago
  No, that's what you are doing. What I'm doing is comparing the number of successful companies that came out given that the VC system exists versus a situation where it doesn't. We don't know how many potentially successful companies haven't been started, or got strangled in the crib, because of the dynamics of the VC ecosystem and the fact that it exists. Also it's an error of remarkable proportions to assume that "massive company" is synonymous with "net positive to humanity", particularly in tech.

enumjorge 6y ago

A company reaching a massive size does not mean it’s been a net positive on society. In fact I’d argue that many previously beneficial companies have become net negatives once they got massive.

mleonhard 6y ago

Robotics technology is in the research phase. No big companies can be built from it yet. Researchers must do many more years of work before anyone can make useful robotics products. How can we get that work done faster? Compare two cases: 1. Founders spend 6 months setting up a company and selling it to VCs. Then they develop for 2 years. The VCs want an early exit so they shop the company around and Google decides to buy. The founders and all employees must sign a 4-year contract or walk away with nothing. They sign. They waste 6 months on the acquisition process. Google mismanages the new teams. Google's CEO fails to put someone with customer focus in a position with power. There is no SVP of Robotics Products. Morale dives and then productivity dives. After 4 years, they all leave and spend a year recovering from burnout and setting up a new company to finally get back focusing on research. In 8 years, they have spent 2 years on high-productivity robotics research, 4 years on low-productivity research, and 2 years on logistics. 2. Founders spend 6 months setting up a company and securing grants. Then they develop for 7.5 years. In those 8 years, they have spent 7.5 years on high-productivity robotics research. I believe there are other good ways to fund companies that have not yet been developed. VC does not fit all situations. Grants and bootstrapping have limitations. There are spaces for new funding models. What might they be?