5 ms·

This take seems to be predicated on the idea that VCs are out there funding teams just because of the technical complexity of their codebase? This just doesn't

This take seems to be predicated on the idea that VCs are out there funding teams just because of the technical complexity of their codebase? This just doesn't seem like the reality to me. If it can be done better for cheaper, VCs will tend to fund that team.

vinyl7 5y ago
I guess the question is then, would VCs give money to startups who say "We're using JQuery and PHP" or to startups who say something like "We're leveraging AI and machine learning to deliver product via MERN stack ontop of AWS to give us web scale architecture"
- bcrosby95 5y ago
  Do VCs care or even know about tech stack a startup uses/intends to use? AI and ML is one thing - it can mean a product that couldn't exist without it. There's nothing about MERN vs PHP that indicates that though.
  - mst 5y ago
    I remember quite some years (somewhere between a decade and a decade and a half) ago having to do some truly horrific things to make things work on AWS that would've been trivial and far cheaper at the time if we'd just bought a decent server and stuck it in a colo somewhere - specifically because my customer's investors were all-in on AWS as the only possible way to do things. I'd note that today putting that workload on AWS would probably be a pretty pleasant experience - but yeah, sometimes investors absolutely -do- care in ways that you'd really rather they didn't and you just have to suck it up.
- Spivak 5y ago
  I think this is a really warped view of VC funding who sorta kinda in a passing sense care about the tech stack but where the focus is almost entirely on the business side. I was at a company that bought a tiny little (originally) VC funded shop that actually was maybe 1K lines of PHP total. The secret sauce was they found a desperately underserved market that just needed something to collect and organize data between unconnected parties that took hours to do manually. Damn thing sold itself because it cost nothing to run, had essentially no maintenance costs, and made their users about 10k/user/mo from the hours it bought them back.
  - Nextgrid 5y ago
    Businesses like the ones you speak of are gems in a sea of crap. They exist, and in that case tech stack definitely isn't important. But for the rest of the "crap", AI- & blockchain-powered crap is more shiny than other, more boring crap, at which point the tech stack might be more important.
- lumost 5y ago
  VCs care that an early stage team will be able to execute, and to a lesser extent be able to innovate. Telling them that you use a 20 year old tech stack that few junior (aka cheap) engineer's know or want to know doesn't inspire this confidence. You would get a similar read from VCs if you said that you use Haskell, Erlang, or up until quite recently - Rust. There is something pretty comforting to an early stage investor of "We use Java microservices on mainstream cloud provider". Says that the team isn't ancient, isn't avant guard, and that they will be able to hire people. Worst case, an acquirer won't mind buying the leftovers or acquisition hiring the team.
- mbesto 5y ago
  >"We're using JQuery and PHP" If their MRR/ARR/MAU/DAU or whatever are strong then absolute-f'n-lutely.
rwmj 5y ago
> If it can be done better for cheaper, VCs will tend to fund that team. That might be true if there was a shortage of VC money so they had to choose their investments very carefully. The reality is there's a huge amount of money sloshing around with few good investment opportunities.
Ekaros 5y ago
Do they pick up cheaper solutions, or the faster and bigger aiming with more marketable pitch?
- Nextgrid 5y ago
  More marketability definitely helps with passing it on to the next sucker, so it's a valuable feature that shouldn't be overlooked. The next VC is likely to be more interested in the first AI- & blockchain-powered application running on AWS InfiniDash than boring Rails on Heroku & Postgres. Cheaper solutions would be a good pick for something that has a very good chance of success and thus doesn't need a "next sucker" nor media attention, but those are very rare as typically it would be bootstrapped and not involve VC to begin with.
- mst 5y ago
  My mental model: The VC model is about making a spread of bets where at least one of them will produce a huge return, so the average investment will be in a company that's irrationally overambitious.
hsn915 5y ago
If it sounds easy VCs will not fund it, even if it's actually hard. If it seems hard and has buzzwords then VCs will fund it; they use difficulty and buzzwordiness as proxies for being on the bleeding edge of technology because they think that's how companies succeed. The only reason blockchain and ML for example are trending is because VCs will pump money into companies that use these buzzwords. One of my previous employers really wanted to use AI for a mundane problem that the engineering side provided simple solutions for, but the "founder" kept trying to push for AI from any angle he could imagine. He didn't tell us this directly, but to me it was obvious that for him AI was a gimmick to get VCs to pump money into his company.
- datavirtue 5y ago
  "He didn't tell us this directly, but to me it was obvious that for him AI was a gimmick to get VCs to pump money into his company." This is exactly the kind of thing you should tell the engineers. Get them on board, straight up.
- hinkley 5y ago
  Do you suppose it's a sort of impostor syndrome? They're afraid they aren't smart enough to understand what they're paying for and so they just keep pushing the doubts down and writing the checks? Or is it full Dunning Kruger?
  - hsn915 5y ago
    It's what Peter Thiel calls indefinite optimism. They have no idea what's going on but they believe there's money to be made in tech. They follow tech news to try and figure out what type of tech companies make for good invesetments. It's a mimetic society. https://www.luca-dellanna.com/mimetic-societies/ https://www.luca-dellanna.com/mimetic-societies/
ratww 5y ago
It's not that VCs want complexity per se. VCs and CEOs, a lot of times, want more developers working at companies, because they believe that's how they're get velocity to experiment, ability to grow and ability to change course quick enough. Up to some point that's true! The issue arises when having lots of developers requires having too many isolated teams. That's when Conway's Law kicks in: a company with lots of isolated teams will probably have complex architectures to make the teams work, most probably using (micro-)services. Hence, complexity.
- hinkley 5y ago
  To this day I can't quite fathom how 300 developers work on the same thing. Just about the time I accept that I am alone in this opinion, someone like Discord shows up proving the sorts of crazy force multipliers you can get from The Right Tool for the Right Job.
  - ratww 5y ago
    > To this day I can't quite fathom how 300 developers work on the same thing. Yep... As someone who's been in this situation a few times: after a certain number, very badly. Things get done, but in slower and messier pace than at a smaller company. The diminishing returns law kicks in together with sunken cost fallacy. With 10 people you're slow, with 50 you're fast, but then there and you're forever "chasing that high" of velocity increasing with headcount. There's no way to escape what Brooks wrote in Mythical Man Month. Unless there is a very clear-cut division of labour, like 20 teams working in 20 different libraries that don't talk to each other, there is no free lunch when it comes to team communication.
    - hinkley 5y ago
      Even with four teams, I've found a lot of instances of people building the same thing. That wouldn't necessarily be bad, except often those 'things' fall into a space of errors that almost everyone makes until they learn/are taught to stop doing it. So you notice that there are 2.5 implementations of a bit of logic because there are bugs, maybe security bugs, that cross 2 of them or are different on each. I have found that once the code exceeds the size of one brain, it accelerates because if I don't know code exists, I will write it again. Like driving down a mountain side with the brakes on the whole way, eventually the sanity leaves the system and you go careening down the mountain.
hinkley 5y ago
Before we invented terms like "microservices" and "service meshes" and even SaaS and PaaS, the phenomenon was just called, "Dazzling them with bullshit." Tony Hoare used his Turing Award speech to state the following: There are two ways of constructing a software design: One way is to make it so simple that there are obviously no deficiencies, and the other way is to make it so complicated that there are no obvious deficiencies. The first method is far more difficult. Microservices were meant to be simple encapsulation but if you create enough crosslinks in a network of very simple services then rather than removing the weight you've just pushed it out of the nodes and into the edges. And since those edges don't exist when the system is at rest, they are dead awful to analyze and reason about. There are no obvious deficiencies.

vinyl7 5y ago

I guess the question is then, would VCs give money to startups who say "We're using JQuery and PHP" or to startups who say something like "We're leveraging AI and machine learning to deliver product via MERN stack ontop of AWS to give us web scale architecture"

bcrosby95 5y ago
Do VCs care or even know about tech stack a startup uses/intends to use? AI and ML is one thing - it can mean a product that couldn't exist without it. There's nothing about MERN vs PHP that indicates that though.
- mst 5y ago
  I remember quite some years (somewhere between a decade and a decade and a half) ago having to do some truly horrific things to make things work on AWS that would've been trivial and far cheaper at the time if we'd just bought a decent server and stuck it in a colo somewhere - specifically because my customer's investors were all-in on AWS as the only possible way to do things. I'd note that today putting that workload on AWS would probably be a pretty pleasant experience - but yeah, sometimes investors absolutely -do- care in ways that you'd really rather they didn't and you just have to suck it up.
Spivak 5y ago
I think this is a really warped view of VC funding who sorta kinda in a passing sense care about the tech stack but where the focus is almost entirely on the business side. I was at a company that bought a tiny little (originally) VC funded shop that actually was maybe 1K lines of PHP total. The secret sauce was they found a desperately underserved market that just needed something to collect and organize data between unconnected parties that took hours to do manually. Damn thing sold itself because it cost nothing to run, had essentially no maintenance costs, and made their users about 10k/user/mo from the hours it bought them back.
- Nextgrid 5y ago
  Businesses like the ones you speak of are gems in a sea of crap. They exist, and in that case tech stack definitely isn't important. But for the rest of the "crap", AI- & blockchain-powered crap is more shiny than other, more boring crap, at which point the tech stack might be more important.
lumost 5y ago
VCs care that an early stage team will be able to execute, and to a lesser extent be able to innovate. Telling them that you use a 20 year old tech stack that few junior (aka cheap) engineer's know or want to know doesn't inspire this confidence. You would get a similar read from VCs if you said that you use Haskell, Erlang, or up until quite recently - Rust. There is something pretty comforting to an early stage investor of "We use Java microservices on mainstream cloud provider". Says that the team isn't ancient, isn't avant guard, and that they will be able to hire people. Worst case, an acquirer won't mind buying the leftovers or acquisition hiring the team.
mbesto 5y ago
>"We're using JQuery and PHP" If their MRR/ARR/MAU/DAU or whatever are strong then absolute-f'n-lutely.

rwmj 5y ago

> If it can be done better for cheaper, VCs will tend to fund that team. That might be true if there was a shortage of VC money so they had to choose their investments very carefully. The reality is there's a huge amount of money sloshing around with few good investment opportunities.

Ekaros 5y ago

Do they pick up cheaper solutions, or the faster and bigger aiming with more marketable pitch?

Nextgrid 5y ago
More marketability definitely helps with passing it on to the next sucker, so it's a valuable feature that shouldn't be overlooked. The next VC is likely to be more interested in the first AI- & blockchain-powered application running on AWS InfiniDash than boring Rails on Heroku & Postgres. Cheaper solutions would be a good pick for something that has a very good chance of success and thus doesn't need a "next sucker" nor media attention, but those are very rare as typically it would be bootstrapped and not involve VC to begin with.
mst 5y ago
My mental model: The VC model is about making a spread of bets where at least one of them will produce a huge return, so the average investment will be in a company that's irrationally overambitious.

hsn915 5y ago

If it sounds easy VCs will not fund it, even if it's actually hard. If it seems hard and has buzzwords then VCs will fund it; they use difficulty and buzzwordiness as proxies for being on the bleeding edge of technology because they think that's how companies succeed. The only reason blockchain and ML for example are trending is because VCs will pump money into companies that use these buzzwords. One of my previous employers really wanted to use AI for a mundane problem that the engineering side provided simple solutions for, but the "founder" kept trying to push for AI from any angle he could imagine. He didn't tell us this directly, but to me it was obvious that for him AI was a gimmick to get VCs to pump money into his company.

datavirtue 5y ago
"He didn't tell us this directly, but to me it was obvious that for him AI was a gimmick to get VCs to pump money into his company." This is exactly the kind of thing you should tell the engineers. Get them on board, straight up.
hinkley 5y ago
Do you suppose it's a sort of impostor syndrome? They're afraid they aren't smart enough to understand what they're paying for and so they just keep pushing the doubts down and writing the checks? Or is it full Dunning Kruger?
- hsn915 5y ago
  It's what Peter Thiel calls indefinite optimism. They have no idea what's going on but they believe there's money to be made in tech. They follow tech news to try and figure out what type of tech companies make for good invesetments. It's a mimetic society. https://www.luca-dellanna.com/mimetic-societies/ https://www.luca-dellanna.com/mimetic-societies/

ratww 5y ago

It's not that VCs want complexity per se. VCs and CEOs, a lot of times, want more developers working at companies, because they believe that's how they're get velocity to experiment, ability to grow and ability to change course quick enough. Up to some point that's true! The issue arises when having lots of developers requires having too many isolated teams. That's when Conway's Law kicks in: a company with lots of isolated teams will probably have complex architectures to make the teams work, most probably using (micro-)services. Hence, complexity.

hinkley 5y ago
To this day I can't quite fathom how 300 developers work on the same thing. Just about the time I accept that I am alone in this opinion, someone like Discord shows up proving the sorts of crazy force multipliers you can get from The Right Tool for the Right Job.
- ratww 5y ago
  > To this day I can't quite fathom how 300 developers work on the same thing. Yep... As someone who's been in this situation a few times: after a certain number, very badly. Things get done, but in slower and messier pace than at a smaller company. The diminishing returns law kicks in together with sunken cost fallacy. With 10 people you're slow, with 50 you're fast, but then there and you're forever "chasing that high" of velocity increasing with headcount. There's no way to escape what Brooks wrote in Mythical Man Month. Unless there is a very clear-cut division of labour, like 20 teams working in 20 different libraries that don't talk to each other, there is no free lunch when it comes to team communication.
  - hinkley 5y ago
    Even with four teams, I've found a lot of instances of people building the same thing. That wouldn't necessarily be bad, except often those 'things' fall into a space of errors that almost everyone makes until they learn/are taught to stop doing it. So you notice that there are 2.5 implementations of a bit of logic because there are bugs, maybe security bugs, that cross 2 of them or are different on each. I have found that once the code exceeds the size of one brain, it accelerates because if I don't know code exists, I will write it again. Like driving down a mountain side with the brakes on the whole way, eventually the sanity leaves the system and you go careening down the mountain.

hinkley 5y ago

Before we invented terms like "microservices" and "service meshes" and even SaaS and PaaS, the phenomenon was just called, "Dazzling them with bullshit." Tony Hoare used his Turing Award speech to state the following: There are two ways of constructing a software design: One way is to make it so simple that there are obviously no deficiencies, and the other way is to make it so complicated that there are no obvious deficiencies. The first method is far more difficult. Microservices were meant to be simple encapsulation but if you create enough crosslinks in a network of very simple services then rather than removing the weight you've just pushed it out of the nodes and into the edges. And since those edges don't exist when the system is at rest, they are dead awful to analyze and reason about. There are no obvious deficiencies.