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The VC model for funding technology is the root cause of user hostile technology. The pressure of investments that expect high returns is a feature/bug that det

The VC model for funding technology is the root cause of user hostile technology. The pressure of investments that expect high returns is a feature/bug that determines the course these companies are likely to take. It creates the need to occasionally tade end-user freedoms for opportunities to "capture value". Venture Capital also imports theories of scarcity and under-production that our entire open-source ecosystem have shown don't apply in the same way to the digital world. The funding of end-user friendly software development clearly isn't a solved problem but the history of the internet clearly demonstrates that our existing models aren't sufficient. VC is ripe for disruption. I believe that the next leap forward to "make the world a better place" isn't new digital products but a new framework for how we build technology companies in the first place. We needn't accept this as a fundamental foundation that can't change - creative destruction is the name of the game after all.

nkingsy 6y ago
Disruption requires inefficiencies/skirtable regulations in the existing system. In this case the system is capitalism itself. As long as software development and user acquisition requires capital, software doesn’t seem all that different from other capital intensive activities. IMO this will change when 1. Regulations and/or cultural norms inhibit user-hostile behavior. Or 2. capitalism itself changes
- benjaminjosephw 6y ago
  Venture Captital is not the same as capitalism. In fact, you could argue that the hyper-growth pro-monopoly attitudes of VC firms is decidedly anti-capitalist in as much as they are anticompetitive behaviours. Arguing that the current system is the only one that will work, regardless of how broken it is, is a very dangerous position to advocate for and an anti-pattern that would eventually lead us away from a fair and equal marketplace. That's not capitalism.
  - jethro_tell 6y ago
    You're right on the money here. I'm old enough to remember when you could start a business by going down to the bank and borrowing money with a 5 year term. The problem is you can't play in a winner take all market with a slow steady growth model any longer. The multi national monopoly with a stake closest to your business model will just crush you for fun. This results in new ideas being go big or go home. May as well not play unless you're going to over borrow and try to grow so fast that you corner the market over night. Once you get the market cornered though, you gotta pay back that loan. It would be rad if there was enough pie for people to have a good idea and get some customers and pay all their people and go home without needing endless growth.
- harha 6y ago
  Regulation could go a long way, e.g. tax incentives for open source development or using open standard/platforms. Imagine giving developers or companies lower tax rates on profits from open source products, e.g. for resulting donation income. That way they could operate cheaper and could pass the savings in tax on to users or investors. For clients this would be nice too, they could reduce the risk of being locked in when choosing a provider and shouldn’t care as long as it’s not their core business. The challenge would be preventing misuse and how to get countries to give away tax income that other countries might use.
  - Nasrudith 6y ago
    The behemoths are already based upon open source tech and have contributed to it. But what they make on top of it neither has its "schema" (software sufficient to fork your own) open nor the instances accessible or communicatable. The same way that installing Linux doesn't mean I can access your files or configurations on top of them. The way I see it that is a price of open source software that you can't control how others use it in exchange for not being controlled. Open standards as positive externalities would be a rational reason for tax discounts even if the value of it varies greatly - although good for repairs few would care for a specific printer model's firmware as it is so specific in its domain.
jasode 6y ago
>The VC model for funding technology is the root cause of user hostile technology. The pressure of investments that expect high returns [...] VCs are not the root cause. You're not looking hard enough for counterexamples. Examples of software companies that didn't take VC money that many consider to be "user hostile" are: - Intuit -- see 1-star reviews on Amazon of annual Quicken releases and forced upgrades of buggy software that nobody wants - Autodesk -- expensive licensing and stagnant features and bug fixes in Revit, 3ds Max, etc - Microsoft -- list of various user complaints over decades are well known [pedantic alert: MS took a little bit of VC money from David F. Marquardt but they didn't need it because they were already profitable with cash in the bank; they just wanted DFM as an advisor for their upcoming IPO] The real root cause of "user hostility" is that companies are run by humans and humans are self-serving and want to make more money. E.g. Look at COVID causing some colleges/universities cancelling in-person classes and refuse to refund tuition fees claiming that "video instruction" is same quality of education. The money came from students and not VCs. You can't blame VCs for that. >VC is ripe for disruption. The issue is the company founders, not the VCs.
- EarthIsHome 6y ago
  > The real root cause of "user hostility" is that companies are run by humans and humans are self-serving and want to make more money. Let's take this further and ask What is the driving factor for humans to want to accumulate more money? I think the human founders are responding to external pressures that incentivize the accumulation of wealth.
  - asdfasgasdgasdg 6y ago
    R.e. "external" pressures. This explanation does not seem very efficient. There are tangible benefits to wealth accumulation. Wealth can afford its owner many kinds of different pleasures that are less available to the less wealthy. It also protects from many harms. All organisms in existence are avaricious to some extent or another, because the ancestral environment favors this trait.
    - 6y ago
troelsSteegin 6y ago
I interpret what you mean as "VC model" as investment bets that are essentially high risk / high return. A high return play would be one that envisions dominance in a $1B plus market, and high risk play is say a 5% chance that you see your money back. How does "high return" mess up UX? If I understand the "Lurking" review, it would be by focusing on skeevey attention/reward patterns to habituate interaction in online communities. That seems like a narrow case for your broad claim. I also don't understand the "scarcity and under-production" bits. That said, disrupting the "VC model" seems like an interesting question. The implication for me would be many more bets that are lower risk / more marginal returns. An IPO or buying stock would fit that profile, but that's small amount of opportunities overall and there's nothing disruptive about that. For me, an example of something different might be community-focused investing. Pick a region or town as a locus of investing, and invest in a number of existing business and infrastructure all across the broad, with the idea of moving that local instance of an economic system from a static phase to a growth phase. That has nothing to do with tech, per se. Maybe that's the disruption ...
Meandering 6y ago
I think you're scapegoating VC's for normal business practices. The consumer/producer relationship for internet services is distorted by the freemium model. The free access drives consolidation on the best early contender. Once companies have attained a significant amount of market share they can do pretty much anything that they want in regards to user experience. This is particularly important where the magnitude of the user network is directly correlated to the quality of the product. The reciprocity of the consumer/producer relationship dissolves and the network of users can be subjected to major changes without a feasible option for recourse. This is basically localized forms of market monopolization. The internet is always pro-producer because the user has very little influence in the relationship.
cryptica 6y ago
>> The VC model for funding technology is the root cause of user hostile technology It's not the root cause but it's along the right path and very close to the root. The root is the monetary system with banks being able to print trillions of dollars and decide who can get that money and who can't... And VCs get a lot of that newly printed money, so do corporations (who provide exits for VCs).
chongli 6y ago
No, the problem is centralization and consolidation. The same sad story of the Internet was mirrored in the film industry, without the VC model at all. Disney owns basically everything and they've largely killed off the broad spectrum of film genres in favour of Marvel / Star Wars tent-pole spectacle. Centralization of economic (as well as political) power is the true killer of consumer freedom. It occurs so regularly that it's difficult to imagine any possibility of escape.
- benjaminjosephw 6y ago
  Centralization and consolidation are problems created by a culture of building companies that need to have an exit.
  - wongarsu 6y ago
    Facebook (IPO 2012), Google(IPO 2004), Microsoft (IPO 1986) or Disney (IPO 1946) don't need an exit, yet they are prime examples of centralization and consolidation.
- topkai22 6y ago
  I was going to say this seems factually untrue, because the number of films released each year has been going up for a long time, but there are some interesting parallels on how films are distributed. Looking at https://stephenfollows.com/how-many-films-are-released-each-year/ https://stephenfollows.com/how-many-films-are-released-each-..., the number of films released has gone way up over time, but the number of films in wide-release has gone done. The internet has more content then ever, but the long tail of content there is consumed at a smaller rate relative to the big 3/5/100 web properties. The problem isn't that consumer freedom has been killed- after all, all those films and content exist and likely more accessible than ever, its that the large centralized firms have managed to largely satisfy the majority of consumer demand without it. If I have the time to see a movie (a rare occurrence sadly) and Disney has a Marvel or Star Wars movie out, I'll just go see that, even if there might be a limited showing of a comedy-western-crime genre film out that I'd enjoy even more. Note, I am concerned about media consolidation, but its more about distribution and IP ownership at this point than consumer choice.
nfc 6y ago
I also think there's a lot to be tried in the space of "how to build technology companies". I see many options available to technology companies that are not realistic for traditional companies. I think that we need to experiment with legal frameworks for technology companies the same way we experimented with licenses for software for this potential to be fulfilled.
jtolmar 6y ago
I think the worker co-op model has a lot of potential for tech startups. They're more stable than other ownership models, and the desires of the workers tend to be more aligned with consumers than the consumers are with investors (and obviously a worker co-op is far more aligned with the desires of the workers). The primary advantage of venture capital is access to capital for growth, which isn't a great fit for purely digital companies with low capital requirements and the ability to bootstrap. The ability to rapidly grow is handy, but primarily addresses the needs of investors, who make their money off of growth. Getting investors to satisfy the needs of investors is awfully circular. The big reason we don't see tech co-ops is simply tradition. Most big tech companies were VC funded. Most good startup advice comes out of VC companies like YC that naturally push people towards venture capital. On the flip side, worker owned co-ops are most common in the food industry of all things, even though that is quite capital intensive, because of the same sort of tradition-inertia.
- benjaminjosephw 6y ago
  This is exactly the kind of thinking we need. We've been blinded to possibilities like these because of dogma and tradition but maybe it's time to seriously explore alternatives. Does anyone know any tech ecosystems/communities promoting a worker co-op model?
  - take_a_breath 6y ago
    Always wish we talked more about Employee Stock Ownership Plans (ESOPs), in the US. Maybe there is a startup idea in making this type of program easier to implement, like Stripe Atlas for employee ownership. Imagine, further, if our tax law incentivized this type of ownership structure instead of incentivizing dividends and capital gains. https://en.m.wikipedia.org/wiki/List_of_employee-owned_companies https://en.m.wikipedia.org/wiki/List_of_employee-owned_compa...
- pabs3 6y ago
  Igalia is an example of a successful co-op in the Free Software & Open Source services space: https://www.igalia.com/ https://www.igalia.com/
Lammy 6y ago
This may not be the best forum for an unbiased discussion of the merits of venture capital =p
6gvONxR4sf7o 6y ago
Here's a perhaps weird take that I'm not convinced of myself, but it's interesting food for thought. Maybe the big companies pay so well the floor is just that high. Let's say you, a hopeful founder, could get $0.5M/yr at a BigCo. Instead you're going to start a company where you'll earn maybe $0.15M/yr for a decade then either get a payout (10%) or fail (90%). To make them even in expectation after that decade, you need $5M = $1.5M + 10% * payout, so payout = $35M. Maybe you and your cofounder each have 25% (?) of the company at that point , so the valuation needs to be 4x that $35M, so $140M. To take a paycut from a really good alternative, you need a giant incentive. Maybe that just means that if you would start a business that'll "only" make you $0.5-1M/year if you succeed, then in solely a financial perspective, you should just join a BigCo.
- iamthrowaway 6y ago
  Well, as someone who just left a 750k USD a year at a FAANG with a clear path to making 2MM+ in 5 years or so, I disagree. I am in my early 30s and have a wife and kids. At some point, your relationship with money changes. I am now more concerned about my own legacy and the example I’m giving my kids than whether my net worth in 10 years will be 2 or 20 million. I’m also more deliberate about how I use my time. So I’m perfectly content in doing something that will net me “only” 250k or so a year. The irony is that this might net me more if I decide to come back to a FAANG in the future.
  - iso1210 6y ago
    > I am in my early 30s and have a wife and kids. At some point, your relationship with money changes. I am now more concerned about my own legacy and the example I’m giving my kids than whether my net worth in 10 years will be 2 or 20 million. Narator: The median wealth of a 30-35 year old American is $30k.
skybrian 6y ago
The open source ecosystem, being primarily about source code, doesn't have any particular answer for how to charge for hardware or for services. Sometimes you get free hosting, but the organization will be making money another way.
rdiddly 6y ago
Can we not just say it's greed? "Some people are greedy" and leave it at that? In a sufficiently small and self-governing community, that kind of asshole would be sanctioned, exiled or killed. In a large industrialized society that can't reach any consensus whatsoever on any issue except that economic growth is essential, and that makes that growth its sole unassailable objective, you will get user-hostile software, not to mention user-hostile police, user-hostile employers, user-hostile government, medicine, education, you name it.
- tomcam 6y ago
  > Can we not just say it's greed? IMHO we can't just say that. Because nothing is stopping us users from paying for email, online document storage, blogs, etc. It would appear to me that greed is one cause, and an unrealistic expectation that infrastructure should be free, or at least an all-you-can-eat buffet, is another cause.
  - rdiddly 6y ago
    It's a good point; we can't really escape the fact that it costs "effort" to do things that create "benefit". Although if I still stubbornly try to view this through the prism of greed, I note that it doesn't necessarily fall apart. Like maybe a user's wanting something for free is a form of greed, and the company that bases its business model around that, is really just turning that greed to its own advantage kind of like an aikido master throwing you ass over tit using mostly your own energy! Mind you I don't want to imply or pretend I considered any of this ahead of time or intended it as part of my GP comment.
    - tomcam 6y ago
      I’ll allow it ;) TBH I was thinking along the same lines myself.
- afarrell 6y ago
  We can, but the people on this forum tend to like trying to solve problems. There's no solution to "some people are greedy" besides mass-murder or reframing the problem in ways that assume people will be greedy.
WalterBright 6y ago
> a new framework for how we build technology companies in the first place The great thing about the free market is anybody can create a company in whatever framework they like. For example, the D Language Foundation. We don't make money, it's pretty much all volunteers and support from industry. We don't "extract" any value from our users. This is hardly the only example.
heavenlyblue 6y ago
I don’t think your message contains anything material. It’s all vocal gymnastics.
solatic 6y ago
> Venture Capital also imports theories of scarcity and under-production that our entire open-source ecosystem have shown don't apply in the same way to the digital world. What's scarce isn't software, it's time. For certain classes of products (specifically, those with network effects), getting earlier to a larger market can be the difference between a company worth billions and a company that goes bankrupt. What 2005-2015 VC tries to do is to inject funding into companies specifically so that they can go on massive hiring sprees and try to capture the market before any of their competitors. > The VC model for funding technology... This is the root of your misconception. VC doesn't fund technology, it funds growth. It's not the same thing. Sometimes it correlates, where technology is what permits previously-impossible growth to happen, but it's not the same thing. > VC is ripe for disruption. No, what you're seeing is a classic bubble. The success of early Silicon Valley VC funds like Sequoia and A18Z came from understanding that VC funds growth, not technology. Today you look at the funding landscape and you see thousands of sources for "VC" funding by people who think that any technology will lend itself to massive scale and growth, and most of those efforts fail miserably, particularly the ones where there are no network effects or other barriers to entry and the businesses eventually commoditize. At which point, it's very clear - if you sell a commodity, and you're not yet a Fortune 500-sized enterprise, then from a VC expectations point of view, you failed. If you want to fund technology - really fund technology - then advocate for better public funding of research. Only state-level governments can afford to put funding into research projects that will have a 20+-year horizon from idea to commercially-ready product. There are well-established pipelines for taking academic research with commercial applications and turning them into profitable companies.

nkingsy 6y ago

Disruption requires inefficiencies/skirtable regulations in the existing system. In this case the system is capitalism itself. As long as software development and user acquisition requires capital, software doesn’t seem all that different from other capital intensive activities. IMO this will change when 1. Regulations and/or cultural norms inhibit user-hostile behavior. Or 2. capitalism itself changes

benjaminjosephw 6y ago
Venture Captital is not the same as capitalism. In fact, you could argue that the hyper-growth pro-monopoly attitudes of VC firms is decidedly anti-capitalist in as much as they are anticompetitive behaviours. Arguing that the current system is the only one that will work, regardless of how broken it is, is a very dangerous position to advocate for and an anti-pattern that would eventually lead us away from a fair and equal marketplace. That's not capitalism.
- jethro_tell 6y ago
  You're right on the money here. I'm old enough to remember when you could start a business by going down to the bank and borrowing money with a 5 year term. The problem is you can't play in a winner take all market with a slow steady growth model any longer. The multi national monopoly with a stake closest to your business model will just crush you for fun. This results in new ideas being go big or go home. May as well not play unless you're going to over borrow and try to grow so fast that you corner the market over night. Once you get the market cornered though, you gotta pay back that loan. It would be rad if there was enough pie for people to have a good idea and get some customers and pay all their people and go home without needing endless growth.
harha 6y ago
Regulation could go a long way, e.g. tax incentives for open source development or using open standard/platforms. Imagine giving developers or companies lower tax rates on profits from open source products, e.g. for resulting donation income. That way they could operate cheaper and could pass the savings in tax on to users or investors. For clients this would be nice too, they could reduce the risk of being locked in when choosing a provider and shouldn’t care as long as it’s not their core business. The challenge would be preventing misuse and how to get countries to give away tax income that other countries might use.
- Nasrudith 6y ago
  The behemoths are already based upon open source tech and have contributed to it. But what they make on top of it neither has its "schema" (software sufficient to fork your own) open nor the instances accessible or communicatable. The same way that installing Linux doesn't mean I can access your files or configurations on top of them. The way I see it that is a price of open source software that you can't control how others use it in exchange for not being controlled. Open standards as positive externalities would be a rational reason for tax discounts even if the value of it varies greatly - although good for repairs few would care for a specific printer model's firmware as it is so specific in its domain.

jasode 6y ago

>The VC model for funding technology is the root cause of user hostile technology. The pressure of investments that expect high returns [...] VCs are not the root cause. You're not looking hard enough for counterexamples. Examples of software companies that didn't take VC money that many consider to be "user hostile" are: - Intuit -- see 1-star reviews on Amazon of annual Quicken releases and forced upgrades of buggy software that nobody wants - Autodesk -- expensive licensing and stagnant features and bug fixes in Revit, 3ds Max, etc - Microsoft -- list of various user complaints over decades are well known [pedantic alert: MS took a little bit of VC money from David F. Marquardt but they didn't need it because they were already profitable with cash in the bank; they just wanted DFM as an advisor for their upcoming IPO] The real root cause of "user hostility" is that companies are run by humans and humans are self-serving and want to make more money. E.g. Look at COVID causing some colleges/universities cancelling in-person classes and refuse to refund tuition fees claiming that "video instruction" is same quality of education. The money came from students and not VCs. You can't blame VCs for that. >VC is ripe for disruption. The issue is the company founders, not the VCs.

EarthIsHome 6y ago
> The real root cause of "user hostility" is that companies are run by humans and humans are self-serving and want to make more money. Let's take this further and ask What is the driving factor for humans to want to accumulate more money? I think the human founders are responding to external pressures that incentivize the accumulation of wealth.
- asdfasgasdgasdg 6y ago
  R.e. "external" pressures. This explanation does not seem very efficient. There are tangible benefits to wealth accumulation. Wealth can afford its owner many kinds of different pleasures that are less available to the less wealthy. It also protects from many harms. All organisms in existence are avaricious to some extent or another, because the ancestral environment favors this trait.
  - 6y ago

troelsSteegin 6y ago

I interpret what you mean as "VC model" as investment bets that are essentially high risk / high return. A high return play would be one that envisions dominance in a $1B plus market, and high risk play is say a 5% chance that you see your money back. How does "high return" mess up UX? If I understand the "Lurking" review, it would be by focusing on skeevey attention/reward patterns to habituate interaction in online communities. That seems like a narrow case for your broad claim. I also don't understand the "scarcity and under-production" bits. That said, disrupting the "VC model" seems like an interesting question. The implication for me would be many more bets that are lower risk / more marginal returns. An IPO or buying stock would fit that profile, but that's small amount of opportunities overall and there's nothing disruptive about that. For me, an example of something different might be community-focused investing. Pick a region or town as a locus of investing, and invest in a number of existing business and infrastructure all across the broad, with the idea of moving that local instance of an economic system from a static phase to a growth phase. That has nothing to do with tech, per se. Maybe that's the disruption ...

Meandering 6y ago

I think you're scapegoating VC's for normal business practices. The consumer/producer relationship for internet services is distorted by the freemium model. The free access drives consolidation on the best early contender. Once companies have attained a significant amount of market share they can do pretty much anything that they want in regards to user experience. This is particularly important where the magnitude of the user network is directly correlated to the quality of the product. The reciprocity of the consumer/producer relationship dissolves and the network of users can be subjected to major changes without a feasible option for recourse. This is basically localized forms of market monopolization. The internet is always pro-producer because the user has very little influence in the relationship.

cryptica 6y ago

>> The VC model for funding technology is the root cause of user hostile technology It's not the root cause but it's along the right path and very close to the root. The root is the monetary system with banks being able to print trillions of dollars and decide who can get that money and who can't... And VCs get a lot of that newly printed money, so do corporations (who provide exits for VCs).

chongli 6y ago

No, the problem is centralization and consolidation. The same sad story of the Internet was mirrored in the film industry, without the VC model at all. Disney owns basically everything and they've largely killed off the broad spectrum of film genres in favour of Marvel / Star Wars tent-pole spectacle. Centralization of economic (as well as political) power is the true killer of consumer freedom. It occurs so regularly that it's difficult to imagine any possibility of escape.

benjaminjosephw 6y ago
Centralization and consolidation are problems created by a culture of building companies that need to have an exit.
- wongarsu 6y ago
  Facebook (IPO 2012), Google(IPO 2004), Microsoft (IPO 1986) or Disney (IPO 1946) don't need an exit, yet they are prime examples of centralization and consolidation.
topkai22 6y ago
I was going to say this seems factually untrue, because the number of films released each year has been going up for a long time, but there are some interesting parallels on how films are distributed. Looking at https://stephenfollows.com/how-many-films-are-released-each-year/ https://stephenfollows.com/how-many-films-are-released-each-..., the number of films released has gone way up over time, but the number of films in wide-release has gone done. The internet has more content then ever, but the long tail of content there is consumed at a smaller rate relative to the big 3/5/100 web properties. The problem isn't that consumer freedom has been killed- after all, all those films and content exist and likely more accessible than ever, its that the large centralized firms have managed to largely satisfy the majority of consumer demand without it. If I have the time to see a movie (a rare occurrence sadly) and Disney has a Marvel or Star Wars movie out, I'll just go see that, even if there might be a limited showing of a comedy-western-crime genre film out that I'd enjoy even more. Note, I am concerned about media consolidation, but its more about distribution and IP ownership at this point than consumer choice.

nfc 6y ago

I also think there's a lot to be tried in the space of "how to build technology companies". I see many options available to technology companies that are not realistic for traditional companies. I think that we need to experiment with legal frameworks for technology companies the same way we experimented with licenses for software for this potential to be fulfilled.

jtolmar 6y ago

I think the worker co-op model has a lot of potential for tech startups. They're more stable than other ownership models, and the desires of the workers tend to be more aligned with consumers than the consumers are with investors (and obviously a worker co-op is far more aligned with the desires of the workers). The primary advantage of venture capital is access to capital for growth, which isn't a great fit for purely digital companies with low capital requirements and the ability to bootstrap. The ability to rapidly grow is handy, but primarily addresses the needs of investors, who make their money off of growth. Getting investors to satisfy the needs of investors is awfully circular. The big reason we don't see tech co-ops is simply tradition. Most big tech companies were VC funded. Most good startup advice comes out of VC companies like YC that naturally push people towards venture capital. On the flip side, worker owned co-ops are most common in the food industry of all things, even though that is quite capital intensive, because of the same sort of tradition-inertia.

benjaminjosephw 6y ago
This is exactly the kind of thinking we need. We've been blinded to possibilities like these because of dogma and tradition but maybe it's time to seriously explore alternatives. Does anyone know any tech ecosystems/communities promoting a worker co-op model?
- take_a_breath 6y ago
  Always wish we talked more about Employee Stock Ownership Plans (ESOPs), in the US. Maybe there is a startup idea in making this type of program easier to implement, like Stripe Atlas for employee ownership. Imagine, further, if our tax law incentivized this type of ownership structure instead of incentivizing dividends and capital gains. https://en.m.wikipedia.org/wiki/List_of_employee-owned_companies https://en.m.wikipedia.org/wiki/List_of_employee-owned_compa...
pabs3 6y ago
Igalia is an example of a successful co-op in the Free Software & Open Source services space: https://www.igalia.com/ https://www.igalia.com/

Lammy 6y ago

This may not be the best forum for an unbiased discussion of the merits of venture capital =p

6gvONxR4sf7o 6y ago

Here's a perhaps weird take that I'm not convinced of myself, but it's interesting food for thought. Maybe the big companies pay so well the floor is just that high. Let's say you, a hopeful founder, could get $0.5M/yr at a BigCo. Instead you're going to start a company where you'll earn maybe $0.15M/yr for a decade then either get a payout (10%) or fail (90%). To make them even in expectation after that decade, you need $5M = $1.5M + 10% * payout, so payout = $35M. Maybe you and your cofounder each have 25% (?) of the company at that point , so the valuation needs to be 4x that $35M, so $140M. To take a paycut from a really good alternative, you need a giant incentive. Maybe that just means that if you would start a business that'll "only" make you $0.5-1M/year if you succeed, then in solely a financial perspective, you should just join a BigCo.

iamthrowaway 6y ago
Well, as someone who just left a 750k USD a year at a FAANG with a clear path to making 2MM+ in 5 years or so, I disagree. I am in my early 30s and have a wife and kids. At some point, your relationship with money changes. I am now more concerned about my own legacy and the example I’m giving my kids than whether my net worth in 10 years will be 2 or 20 million. I’m also more deliberate about how I use my time. So I’m perfectly content in doing something that will net me “only” 250k or so a year. The irony is that this might net me more if I decide to come back to a FAANG in the future.
- iso1210 6y ago
  > I am in my early 30s and have a wife and kids. At some point, your relationship with money changes. I am now more concerned about my own legacy and the example I’m giving my kids than whether my net worth in 10 years will be 2 or 20 million. Narator: The median wealth of a 30-35 year old American is $30k.

skybrian 6y ago

The open source ecosystem, being primarily about source code, doesn't have any particular answer for how to charge for hardware or for services. Sometimes you get free hosting, but the organization will be making money another way.

rdiddly 6y ago

Can we not just say it's greed? "Some people are greedy" and leave it at that? In a sufficiently small and self-governing community, that kind of asshole would be sanctioned, exiled or killed. In a large industrialized society that can't reach any consensus whatsoever on any issue except that economic growth is essential, and that makes that growth its sole unassailable objective, you will get user-hostile software, not to mention user-hostile police, user-hostile employers, user-hostile government, medicine, education, you name it.

tomcam 6y ago
> Can we not just say it's greed? IMHO we can't just say that. Because nothing is stopping us users from paying for email, online document storage, blogs, etc. It would appear to me that greed is one cause, and an unrealistic expectation that infrastructure should be free, or at least an all-you-can-eat buffet, is another cause.
- rdiddly 6y ago
  It's a good point; we can't really escape the fact that it costs "effort" to do things that create "benefit". Although if I still stubbornly try to view this through the prism of greed, I note that it doesn't necessarily fall apart. Like maybe a user's wanting something for free is a form of greed, and the company that bases its business model around that, is really just turning that greed to its own advantage kind of like an aikido master throwing you ass over tit using mostly your own energy! Mind you I don't want to imply or pretend I considered any of this ahead of time or intended it as part of my GP comment.
  - tomcam 6y ago
    I’ll allow it ;) TBH I was thinking along the same lines myself.
afarrell 6y ago
We can, but the people on this forum tend to like trying to solve problems. There's no solution to "some people are greedy" besides mass-murder or reframing the problem in ways that assume people will be greedy.

WalterBright 6y ago

> a new framework for how we build technology companies in the first place The great thing about the free market is anybody can create a company in whatever framework they like. For example, the D Language Foundation. We don't make money, it's pretty much all volunteers and support from industry. We don't "extract" any value from our users. This is hardly the only example.

heavenlyblue 6y ago

I don’t think your message contains anything material. It’s all vocal gymnastics.

solatic 6y ago

> Venture Capital also imports theories of scarcity and under-production that our entire open-source ecosystem have shown don't apply in the same way to the digital world. What's scarce isn't software, it's time. For certain classes of products (specifically, those with network effects), getting earlier to a larger market can be the difference between a company worth billions and a company that goes bankrupt. What 2005-2015 VC tries to do is to inject funding into companies specifically so that they can go on massive hiring sprees and try to capture the market before any of their competitors. > The VC model for funding technology... This is the root of your misconception. VC doesn't fund technology, it funds growth. It's not the same thing. Sometimes it correlates, where technology is what permits previously-impossible growth to happen, but it's not the same thing. > VC is ripe for disruption. No, what you're seeing is a classic bubble. The success of early Silicon Valley VC funds like Sequoia and A18Z came from understanding that VC funds growth, not technology. Today you look at the funding landscape and you see thousands of sources for "VC" funding by people who think that any technology will lend itself to massive scale and growth, and most of those efforts fail miserably, particularly the ones where there are no network effects or other barriers to entry and the businesses eventually commoditize. At which point, it's very clear - if you sell a commodity, and you're not yet a Fortune 500-sized enterprise, then from a VC expectations point of view, you failed. If you want to fund technology - really fund technology - then advocate for better public funding of research. Only state-level governments can afford to put funding into research projects that will have a 20+-year horizon from idea to commercially-ready product. There are well-established pipelines for taking academic research with commercial applications and turning them into profitable companies.