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I hope society figures out how to make startups in general less capital-dependent. If there weren't investors trying to protect themselves, we'd find out if ru

I hope society figures out how to make startups in general less capital-dependent. If there weren't investors trying to protect themselves, we'd find out if running a company in Zhu's manner works or doesn't.

davidw 5y ago
The whole "microconf"/bootstrap crowd works in a growing space with fewer capital needs. I think they fly below the radar in a lot of ways, but that's probably not a bad thing for them.
anotha1 5y ago
> I hope society figures out how to make startups in general less capital-dependent. My 2¢: stop forcing companies to provide health insurance.
- alexilliamson 5y ago
  Does health insurance drive up the need for capital that much? I've never considered that. Would love to hear more.
  - anotha1 5y ago
    Anyone that's ever worked part-time knows the "we have to send you home because if you work anymore this week you might be considered full-time by Uncle Sam and that's bad." Another thought is throughput. If welfare wasn't so closely tied to employment, working relationships could then be more ephemeral until one found a best fit. This may also look like more cautious hiring, which directly leads to missed opportunities for all parties. Edit: Capital buys employees, but it also buys time. For every extra dollar an employee costs the amount of time it takes to make the decision to hire that employee also increases. An efficient job market would compensate based on contribution, which is a lot more possible if a significant amount wasn't mandated to be spent, and then guilted into continue spending because, you know, you don't want to take away someone's welfare.
    - nefitty 5y ago
      I stumbled on a really good job posting this weekend, which I’m 100% qualified for and am sure I would have a really good chance of getting, but the last sentence was “We currently don’t offer health insurance.” Based on that alone, I had to slunk away.
- CameronNemo 5y ago
  https://en.wikipedia.org/wiki/Healthy_Americans_Act https://en.wikipedia.org/wiki/Healthy_Americans_Act A proposal to do exactly that. Critically, it phased out incentives available to corporations that provide employee healthcare in favor of tax deductions for individuals that purchase their own healthcare. During the transition period, employers would subsidize private plans purchased by their employees.
  - anotha1 5y ago
    Too convoluted. The only answer is medicare for all. Stop wasting time.
    - nappy-doo 5y ago
      While I support medicare for all, there needs to be a transition. There are probably hundreds of thousands of people involved in insurance that need to find new work.
- bmicraft 5y ago
  That's basically the same as paying people less.
  - anotha1 5y ago
    Only if you live somewhere where healthcare is a privilege.
- vkou 5y ago
  We can take this another step further, and stop forcing companies to pay employees.
  - the_local_host 5y ago
    If there were an adequate social safety net, specifically a universal basic income, then employees could be paid in equity if the employer wanted to conserve or did not possess cash.
danhak 5y ago
But this notion is incompatible with capitalism itself. The idea of capitalism is that capital accumulates in the hands of those who figure out how best to deploy and protect it. Investors, not Zhu, are the ones with the track record and experience. Trusting them to be stewards of capital is a better bet than trusting an eccentric, unproven founder who decides to experiment with LSD for the very first time before a big pitch. If Zhu had managed a successful exit, he would have established that track record, accumulated some capital of his own and bought himself the leeway to be as eccentric as he wishes in the future. See: Elon Musk.
- the_local_host 5y ago
  I'm not suggesting that startups be given free capital; I'm suggesting that we find a way to make capital less necessary, i.e. lower the stakes. At the extreme, if starting a company only requires pocket change, then nobody (society, investors, or anyone else) has much to lose in letting an unproven founder do their thing.
  - danhak 5y ago
    There are many, many successful bootstrapped software businesses out there. It's not as though founders in this industry don't already have a choice about whether or not to seek outside investment, and to consider all the relevant tradeoffs. In what ways could capital be made less necessary?
    - the_local_host 5y ago
      > In what ways could capital be made less necessary? By reducing the cost of anything and everything that startups spend money on. (And for the largest item in many budgets, namely employee costs... in the presence of an adequate social safety net, cash-strapped startups could pay employees in equity rather than cash, and they could stick around for as long as they thought it might be worth something in the end). Somewhat separately, what struck me from the article is that Zhu's controversial moves generally didn't involve bad business decisions, but rather failing to impress investors at a moment when the company needed the money. It would be better if that need for money were reduced, and we could all see how this type of experimental style turns out.
ta1234567890 5y ago
> we'd find out if running a company in Zhu's manner works or doesn't. But we already know it does. He brought the company from 0 to $2b valuation, steadily growing for 8 years. I do agree though that it would be great for startup to not depend on VCs that much.

davidw 5y ago

The whole "microconf"/bootstrap crowd works in a growing space with fewer capital needs. I think they fly below the radar in a lot of ways, but that's probably not a bad thing for them.

anotha1 5y ago

> I hope society figures out how to make startups in general less capital-dependent. My 2¢: stop forcing companies to provide health insurance.

alexilliamson 5y ago
Does health insurance drive up the need for capital that much? I've never considered that. Would love to hear more.
- anotha1 5y ago
  Anyone that's ever worked part-time knows the "we have to send you home because if you work anymore this week you might be considered full-time by Uncle Sam and that's bad." Another thought is throughput. If welfare wasn't so closely tied to employment, working relationships could then be more ephemeral until one found a best fit. This may also look like more cautious hiring, which directly leads to missed opportunities for all parties. Edit: Capital buys employees, but it also buys time. For every extra dollar an employee costs the amount of time it takes to make the decision to hire that employee also increases. An efficient job market would compensate based on contribution, which is a lot more possible if a significant amount wasn't mandated to be spent, and then guilted into continue spending because, you know, you don't want to take away someone's welfare.
  - nefitty 5y ago
    I stumbled on a really good job posting this weekend, which I’m 100% qualified for and am sure I would have a really good chance of getting, but the last sentence was “We currently don’t offer health insurance.” Based on that alone, I had to slunk away.
CameronNemo 5y ago
https://en.wikipedia.org/wiki/Healthy_Americans_Act https://en.wikipedia.org/wiki/Healthy_Americans_Act A proposal to do exactly that. Critically, it phased out incentives available to corporations that provide employee healthcare in favor of tax deductions for individuals that purchase their own healthcare. During the transition period, employers would subsidize private plans purchased by their employees.
- anotha1 5y ago
  Too convoluted. The only answer is medicare for all. Stop wasting time.
  - nappy-doo 5y ago
    While I support medicare for all, there needs to be a transition. There are probably hundreds of thousands of people involved in insurance that need to find new work.
bmicraft 5y ago
That's basically the same as paying people less.
- anotha1 5y ago
  Only if you live somewhere where healthcare is a privilege.
vkou 5y ago
We can take this another step further, and stop forcing companies to pay employees.
- the_local_host 5y ago
  If there were an adequate social safety net, specifically a universal basic income, then employees could be paid in equity if the employer wanted to conserve or did not possess cash.

danhak 5y ago

But this notion is incompatible with capitalism itself. The idea of capitalism is that capital accumulates in the hands of those who figure out how best to deploy and protect it. Investors, not Zhu, are the ones with the track record and experience. Trusting them to be stewards of capital is a better bet than trusting an eccentric, unproven founder who decides to experiment with LSD for the very first time before a big pitch. If Zhu had managed a successful exit, he would have established that track record, accumulated some capital of his own and bought himself the leeway to be as eccentric as he wishes in the future. See: Elon Musk.

the_local_host 5y ago
I'm not suggesting that startups be given free capital; I'm suggesting that we find a way to make capital less necessary, i.e. lower the stakes. At the extreme, if starting a company only requires pocket change, then nobody (society, investors, or anyone else) has much to lose in letting an unproven founder do their thing.
- danhak 5y ago
  There are many, many successful bootstrapped software businesses out there. It's not as though founders in this industry don't already have a choice about whether or not to seek outside investment, and to consider all the relevant tradeoffs. In what ways could capital be made less necessary?
  - the_local_host 5y ago
    > In what ways could capital be made less necessary? By reducing the cost of anything and everything that startups spend money on. (And for the largest item in many budgets, namely employee costs... in the presence of an adequate social safety net, cash-strapped startups could pay employees in equity rather than cash, and they could stick around for as long as they thought it might be worth something in the end). Somewhat separately, what struck me from the article is that Zhu's controversial moves generally didn't involve bad business decisions, but rather failing to impress investors at a moment when the company needed the money. It would be better if that need for money were reduced, and we could all see how this type of experimental style turns out.

ta1234567890 5y ago

> we'd find out if running a company in Zhu's manner works or doesn't. But we already know it does. He brought the company from 0 to $2b valuation, steadily growing for 8 years. I do agree though that it would be great for startup to not depend on VCs that much.