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Spray and pray has another name... venture capital. I think a lot of founders are waking up to the misalignment of interests between founders (growing a sustain

Spray and pray has another name... venture capital. I think a lot of founders are waking up to the misalignment of interests between founders (growing a sustainable business) and VCs (dilution)

vram22 6y ago
That has been happening for quite a while now, and has even been a topic on HN for some years now. PG started YC partly because of that, in fact. See his early essays, including one called something like "A theory of VC suckage". Edit: Found it: A Unified Theory of VC Suckage March 2005 http://www.paulgraham.com/venturecapital.html http://www.paulgraham.com/venturecapital.html Got to love the title, like the grand unified theory of everything that is physics's holy grail.
- rorykoehler 6y ago
  It’s interesting that natural organisational entropy made them become who they replaced. Arguably it’s just the nature of capital itself.
  - vram22 6y ago
    Yes. Although I would label it a bit differently, not plain "capital": human nature and group / organizational dynamics. That's the reason why many smart companies try to stay small, the reason for spinoffs, skunkworks, for creative destruction or reinvention a la HP (see the HP Way and other articles about them - of the time when they were in their prime decades ago, not now or recent). And that is also the point of my comment in this other subthread, about the IBM, HP and Toyota Ways, Sam Walton / Walmart, Tom Peters, etc.: https://news.ycombinator.com/item?id=26558308 https://news.ycombinator.com/item?id=26558308
    - rorykoehler 6y ago
      Capital creates a power dynamic when it starts to consolidate. The newcomers then change from innovation to defence as to maintain their wealth.
      - vram22 6y ago
        Yes, but I was saying earlier that I didn't prefer the use of the word "capital", because it is abstract - a thing (money), not an actor. And I mentioned human nature i.e. people, who are real actors. Your use of the word "newcomers" (who are people, not money) says the same. Maybe just a matter of wording or interpretation.
      - dang 6y ago
        That doesn't match what YC is doing at all. YC is trying to be a force multiplier to literally anyone in the world with an opportunity to create a great startup. Part of that involves expanding as rapidly as is feasible without breaking the system or diluting the effect. It is about creating wealth, not defending or maintaining it.
        rorykoehler 6y ago
        Sure it does. Successful YC companies have become the gatekeepers of the internet.
        dang 6y ago
        Sorry, you lost me. I don't see what that has to do with the topic. I also don't see that it's true, but that's probably not the high-order bit.
        rorykoehler 6y ago
        It has less to do with YC and more to do with the nature of success, network and accumulation of resources. What it has to do with the topic is that it has created an inequality where YC companies have an advantage through access to the network. You just have to look at OpenAI access model to understand how this creates a two tier environment. YC alum can pick up the phone and have access them same day just to fuck around and potentially make a new unicorn business. People on the outside? Good luck. Yes I understand that OpenAI isn’t a YC company but the same will apply to YC companies... OpenAI was just my personal most recent experience.
  - vram22 6y ago
    >natural organisational entropy Bon mot, considering the title of PG's essay :)
vram22 6y ago
>misalignment of interests between founders (growing a sustainable business) and VCs (dilution) Not all foundrrs are interested in growing a successful business. In fact, what with all the brainwashing that has been going on for years by VCs ("go big or go home", "10-bagger" - old, now it is "unicorn", or is there another more current mot du jour, ha ha?, "lifestyle business" passive-aggressive shaming, etc.), it's a wonder that anyone exposed to that shit still has the balls for doing a traditional business that relies on, you know, just honest sales, customers and profits. But there are still many who do (have the balls for it). Who do you think bags the 10(x their investment)? VCs, not founders or emps.
- vram22 6y ago
  >foundrrs Meant founders, and I messed up the HN asterisk formatting stuff.
- vram22 6y ago
  >lifestyle business" passive-aggressive shaming I should have added: by VCs, to founders or prospective founders, for their own selfish vested interests, of course. The more dupes join the startup lottery, the more the "house"[1] (a.k.a. VCs) stands to gain, because it is a numbers game. [1] Think Las Vegas. In fact, top VC Fred Wilson wrote a blog post about this "lifestyle business" passive-aggressive shaming business a few years ago, and it had a ton of discussion in the comments. You can find it by a Google or blog search.
  - vram22 6y ago
    And this does not mean that I am advocating that no one should start or join a startup. I just mean, for your own sake, do your due diligence. It's not only companies or VCs who need to do that.

Spray and pray has another name... venture capital. I think a lot of founders are waking up to the misalignment of interests between founders (growing a sustainable business) and VCs (dilution)

vram22 6y ago

That has been happening for quite a while now, and has even been a topic on HN for some years now. PG started YC partly because of that, in fact. See his early essays, including one called something like "A theory of VC suckage". Edit: Found it: A Unified Theory of VC Suckage March 2005 http://www.paulgraham.com/venturecapital.html http://www.paulgraham.com/venturecapital.html Got to love the title, like the grand unified theory of everything that is physics's holy grail.

rorykoehler 6y ago
It’s interesting that natural organisational entropy made them become who they replaced. Arguably it’s just the nature of capital itself.
- vram22 6y ago
  Yes. Although I would label it a bit differently, not plain "capital": human nature and group / organizational dynamics. That's the reason why many smart companies try to stay small, the reason for spinoffs, skunkworks, for creative destruction or reinvention a la HP (see the HP Way and other articles about them - of the time when they were in their prime decades ago, not now or recent). And that is also the point of my comment in this other subthread, about the IBM, HP and Toyota Ways, Sam Walton / Walmart, Tom Peters, etc.: https://news.ycombinator.com/item?id=26558308 https://news.ycombinator.com/item?id=26558308
  - rorykoehler 6y ago
    Capital creates a power dynamic when it starts to consolidate. The newcomers then change from innovation to defence as to maintain their wealth.
    - vram22 6y ago
      Yes, but I was saying earlier that I didn't prefer the use of the word "capital", because it is abstract - a thing (money), not an actor. And I mentioned human nature i.e. people, who are real actors. Your use of the word "newcomers" (who are people, not money) says the same. Maybe just a matter of wording or interpretation.
    - dang 6y ago
      That doesn't match what YC is doing at all. YC is trying to be a force multiplier to literally anyone in the world with an opportunity to create a great startup. Part of that involves expanding as rapidly as is feasible without breaking the system or diluting the effect. It is about creating wealth, not defending or maintaining it.
      - rorykoehler 6y ago
        Sure it does. Successful YC companies have become the gatekeepers of the internet.
        dang 6y ago
        Sorry, you lost me. I don't see what that has to do with the topic. I also don't see that it's true, but that's probably not the high-order bit.
        rorykoehler 6y ago
        It has less to do with YC and more to do with the nature of success, network and accumulation of resources. What it has to do with the topic is that it has created an inequality where YC companies have an advantage through access to the network. You just have to look at OpenAI access model to understand how this creates a two tier environment. YC alum can pick up the phone and have access them same day just to fuck around and potentially make a new unicorn business. People on the outside? Good luck. Yes I understand that OpenAI isn’t a YC company but the same will apply to YC companies... OpenAI was just my personal most recent experience.
- vram22 6y ago
  >natural organisational entropy Bon mot, considering the title of PG's essay :)

vram22 6y ago

>misalignment of interests between founders (growing a sustainable business) and VCs (dilution) Not all foundrrs are interested in growing a successful business. In fact, what with all the brainwashing that has been going on for years by VCs ("go big or go home", "10-bagger" - old, now it is "unicorn", or is there another more current mot du jour, ha ha?, "lifestyle business" passive-aggressive shaming, etc.), it's a wonder that anyone exposed to that shit still has the balls for doing a traditional business that relies on, you know, just honest sales, customers and profits. But there are still many who do (have the balls for it). Who do you think bags the 10(x their investment)? VCs, not founders or emps.

vram22 6y ago
>foundrrs Meant founders, and I messed up the HN asterisk formatting stuff.
vram22 6y ago
>lifestyle business" passive-aggressive shaming I should have added: by VCs, to founders or prospective founders, for their own selfish vested interests, of course. The more dupes join the startup lottery, the more the "house"[1] (a.k.a. VCs) stands to gain, because it is a numbers game. [1] Think Las Vegas. In fact, top VC Fred Wilson wrote a blog post about this "lifestyle business" passive-aggressive shaming business a few years ago, and it had a ton of discussion in the comments. You can find it by a Google or blog search.
- vram22 6y ago
  And this does not mean that I am advocating that no one should start or join a startup. I just mean, for your own sake, do your due diligence. It's not only companies or VCs who need to do that.