There appears to be a disconnect between "productivity" and "value" in the startup world, or maybe put another way, a lot of hard engineering work tackling "eas

There appears to be a disconnect between "productivity" and "value" in the startup world, or maybe put another way, a lot of hard engineering work tackling "easy" problems. It seems like everyone assumes that "scale" is the right approach, but there are probably a limited number of app-shaped problems that really scale. It seems that one of the core issues here is that SVB was in charge of getting "yield" from their deposits on top of the value that startups themselves were trying to generate. From a finance POV it make sense that you'd want to be earning interest, and trying to keep pace with inflation, but in an economic sense it also seems like double counting to expect VC capital to generate risk-free return while waiting around for the startup's businesses to pay off. I understand that every business looks like this to some extent, but in the VC funded startup world it is a unique amount of cash invested in a lot of businesses that need stability more than they need bank-balance interest. The risk profile of SVB turned out to be highly correlated to the risk profiles of the companies they banked.