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a16z's investment thesis completely centers around finding the next bagholder for their investments. They don't care about building enduring businesses that ma

a16z's investment thesis completely centers around finding the next bagholder for their investments. They don't care about building enduring businesses that make them a lot of money because the businesses are actually driving that much value creation. They care about creating a hype cycle and dumping before the tide goes out and their investments crash on someone else's balance sheet. None of them could get on a podcast and say anything remotely rational or intelligent about their crypto investments: it was all pump and dump. In one interview, their head of crypto investments main value claim was "monetizing the sharing of your home wifi," and after some pushback resorted to deference to authority by saying the founders they invest in went to the right schools and nobody else could understand because "they weren't in the room." These are smart people who couldn't articulate a clear value. They obviously didn't believe any of it and just saw an opportunity to promote a Dutch tulip mania. Good fund for con artist "entrepreneurs" though. Same deal for Chamath and his SPACs. There's increasing hesitation among builders to take money from funds that have strayed this far from long-term value creation, because once they get addicted to short-term pump and dump profits and chasing the latest thing, it's hard to go back to supporting actual builders.

jjoonathan 3y ago
> None of them could get on a podcast and say anything remotely rational or intelligent > main value claim was "monetizing the sharing of your home wifi," Let's see, we have a big stagnant incumbent monopoly, a last-mile moat that allows them the monopoly, and a proposed strategy for attacking the moat. Most ISPs have a "no-sharing" clause, but it isn't difficult to brainstorm potential workarounds: seeding connections into high-density locations, netflix boxes, even possibly a legislative play in a sympathetic area. Of course, the crux is in the execution of the workaround, but I'd expect this to have some complexity to it and I wouldn't expect a random a16z podcast host to necessarily have details at that resolution. I certainly wouldn't call them an idiot for not having all the details handy. You seem pretty darn sure that it's a prima-facie idiotic idea, however. Can you back that up and explain your reasoning? Or are you just not remotely rational or intelligent enough to imagine a business that doesn't already exist? (See, I can be an asshole too!)
- blairbeckwith 3y ago
  Crypto has done absolutely nothing to warrant anything beyond the most cursory dismissal.
  - jjoonathan 3y ago
    With that attitude, nothing ever would. I'm glad VC exists. Without people taking long odds, our world would be much poorer.
    - kristianc 3y ago
      People don’t owe crypto a ‘good attitude’. The only justifiable attitude toward it is a healthy scepticism until it proves to be anything more than a glorified pump and dump scheme. So far, it hasn’t cleared that bar in over a decade of trying.
      - deleted 3y ago
        [deleted]
      - jjoonathan 3y ago
        It's an ISP. They provide internet service and bill people for it.
      - mensetmanusman 3y ago
        Bitcoin is used by people in unstable countries.
        kristianc 3y ago
        How’s that going? https://amp.theguardian.com/technology/2022/nov/15/china-el-salvador-economy-cryptocurrency-fall https://amp.theguardian.com/technology/2022/nov/15/china-el-...
  - sneak 3y ago
    This is simply objectively inaccurate, and reflects very poorly on the speaker's levels of bias when such false claims are parroted. It's fine to not like cryptocurrency, but don't lie about it. Ransomware would not exist without cryptocurrency: it was a major innovation (that subsequently enabled tons of new use cases, many of them criminal, some of them not).
popcorncowboy 3y ago
> a16z's investment thesis completely centers around finding the next bagholder for their investments. Boom, yes, this. I think a big part of the (for lack of a better phrase) butt-hurt the best of HN feels towards a16z is summed up by the Obi-wan scene where he's screaming at Anakin about how he was supposed to be the chosen one blah blah you've hurt my feelings because I truly believed you could have been something you are clearly not etc. In reality, a16z are shrewd, smart operators, and it's a valid, scary effective investment thesis to be able to push waves higher due to your own gravitas. If you had the Buffet/Elon effect (genuine ability to move markets) and could, why wouldn't you trade on it? The "they were the best of us and now look at them" is a sad, hard reality lesson for anyone feeling it, and utterly irrelevant to a16z.
- CPLX 3y ago
  > If you had the Buffet/Elon effect (genuine ability to move markets) and could, why wouldn't you trade on it? Because trading on it to extract other people’s money as part of fraudulent schemes will destroy your reputation. The only reason to do it is if you feel your reputation is unearned and worthless and this is the best thing you can do with it. There are definitely other ways to make a living.
  - jonathankoren 3y ago
    The only reputation that matters is the reputation of making money. That's the only business investment firms have ever been in. To believe otherwise is naïveté.
    - moron4hire 3y ago
      "Here lies Jonathan Koren. He made a lot of money." No, this Gordon Gecko philosophy is why the 2010s were a cultural wasteland.
      - jonathankoren 3y ago
        Dude. This philosophy has been driving everything since the 1980s. Either as a rejection, and embracing of it.
SkyMarshal 3y ago
> a16z's investment thesis completely centers around finding the next bagholder for their investments. To be fair, that's all of VC investment thesis, not just a16z. VC is by definition early stage investing, the objective being to build up a project enough that it can be either IPO'd or sold to a bigger company, providing the returns for the next round of early stage investments. a16z is nothing unusual there.
- kristianc 3y ago
  No, the objective is to add value by making it a better business. Not to pump it up full of hype so you can palm it off on a greater fool.
- bcrosby95 3y ago
  The phrase "the next bagholder" means that it isn't worth it. If, for example, you buy a house with a fucked up foundation, fixing and selling it isn't finding the next bagholder. Covering it up and selling it ASAP without disclosing it is finding the next bagholder.
EFreethought 3y ago
> resorted to deference to authority by saying the founders they invest in went to the right schools and nobody else could understand because "they weren't in the room." Marc Andreeson tried to defend Groupon's use of a non-standard accounting metric by saying all the critics didn't know what they were talking about because he was "in the room" when the decision was made, and the critics were not. Given how things worked out for Groupon, I think it's fair to say that non-standard accounting metrics are non-standard for a reason. That was one of many things that made me skeptical of pmarca and a16z.
misiti3780 3y ago
> In one interview, their head of crypto investments main value claim was "monetizing the sharing of your home wifi," and after some pushback resorted to deference to authority by saying the founders they invest in went to the right schools and nobody else could understand because "they weren't in the room." Chris Dixon ?

jjoonathan 3y ago

> None of them could get on a podcast and say anything remotely rational or intelligent > main value claim was "monetizing the sharing of your home wifi," Let's see, we have a big stagnant incumbent monopoly, a last-mile moat that allows them the monopoly, and a proposed strategy for attacking the moat. Most ISPs have a "no-sharing" clause, but it isn't difficult to brainstorm potential workarounds: seeding connections into high-density locations, netflix boxes, even possibly a legislative play in a sympathetic area. Of course, the crux is in the execution of the workaround, but I'd expect this to have some complexity to it and I wouldn't expect a random a16z podcast host to necessarily have details at that resolution. I certainly wouldn't call them an idiot for not having all the details handy. You seem pretty darn sure that it's a prima-facie idiotic idea, however. Can you back that up and explain your reasoning? Or are you just not remotely rational or intelligent enough to imagine a business that doesn't already exist? (See, I can be an asshole too!)

blairbeckwith 3y ago
Crypto has done absolutely nothing to warrant anything beyond the most cursory dismissal.
- jjoonathan 3y ago
  With that attitude, nothing ever would. I'm glad VC exists. Without people taking long odds, our world would be much poorer.
  - kristianc 3y ago
    People don’t owe crypto a ‘good attitude’. The only justifiable attitude toward it is a healthy scepticism until it proves to be anything more than a glorified pump and dump scheme. So far, it hasn’t cleared that bar in over a decade of trying.
    - deleted 3y ago
      [deleted]
    - jjoonathan 3y ago
      It's an ISP. They provide internet service and bill people for it.
    - mensetmanusman 3y ago
      Bitcoin is used by people in unstable countries.
      - kristianc 3y ago
        How’s that going? https://amp.theguardian.com/technology/2022/nov/15/china-el-salvador-economy-cryptocurrency-fall https://amp.theguardian.com/technology/2022/nov/15/china-el-...
- sneak 3y ago
  This is simply objectively inaccurate, and reflects very poorly on the speaker's levels of bias when such false claims are parroted. It's fine to not like cryptocurrency, but don't lie about it. Ransomware would not exist without cryptocurrency: it was a major innovation (that subsequently enabled tons of new use cases, many of them criminal, some of them not).

popcorncowboy 3y ago

> a16z's investment thesis completely centers around finding the next bagholder for their investments. Boom, yes, this. I think a big part of the (for lack of a better phrase) butt-hurt the best of HN feels towards a16z is summed up by the Obi-wan scene where he's screaming at Anakin about how he was supposed to be the chosen one blah blah you've hurt my feelings because I truly believed you could have been something you are clearly not etc. In reality, a16z are shrewd, smart operators, and it's a valid, scary effective investment thesis to be able to push waves higher due to your own gravitas. If you had the Buffet/Elon effect (genuine ability to move markets) and could, why wouldn't you trade on it? The "they were the best of us and now look at them" is a sad, hard reality lesson for anyone feeling it, and utterly irrelevant to a16z.

CPLX 3y ago
> If you had the Buffet/Elon effect (genuine ability to move markets) and could, why wouldn't you trade on it? Because trading on it to extract other people’s money as part of fraudulent schemes will destroy your reputation. The only reason to do it is if you feel your reputation is unearned and worthless and this is the best thing you can do with it. There are definitely other ways to make a living.
- jonathankoren 3y ago
  The only reputation that matters is the reputation of making money. That's the only business investment firms have ever been in. To believe otherwise is naïveté.
  - moron4hire 3y ago
    "Here lies Jonathan Koren. He made a lot of money." No, this Gordon Gecko philosophy is why the 2010s were a cultural wasteland.
    - jonathankoren 3y ago
      Dude. This philosophy has been driving everything since the 1980s. Either as a rejection, and embracing of it.

SkyMarshal 3y ago

> a16z's investment thesis completely centers around finding the next bagholder for their investments. To be fair, that's all of VC investment thesis, not just a16z. VC is by definition early stage investing, the objective being to build up a project enough that it can be either IPO'd or sold to a bigger company, providing the returns for the next round of early stage investments. a16z is nothing unusual there.

kristianc 3y ago
No, the objective is to add value by making it a better business. Not to pump it up full of hype so you can palm it off on a greater fool.
bcrosby95 3y ago
The phrase "the next bagholder" means that it isn't worth it. If, for example, you buy a house with a fucked up foundation, fixing and selling it isn't finding the next bagholder. Covering it up and selling it ASAP without disclosing it is finding the next bagholder.

EFreethought 3y ago

> resorted to deference to authority by saying the founders they invest in went to the right schools and nobody else could understand because "they weren't in the room." Marc Andreeson tried to defend Groupon's use of a non-standard accounting metric by saying all the critics didn't know what they were talking about because he was "in the room" when the decision was made, and the critics were not. Given how things worked out for Groupon, I think it's fair to say that non-standard accounting metrics are non-standard for a reason. That was one of many things that made me skeptical of pmarca and a16z.

misiti3780 3y ago

> In one interview, their head of crypto investments main value claim was "monetizing the sharing of your home wifi," and after some pushback resorted to deference to authority by saying the founders they invest in went to the right schools and nobody else could understand because "they weren't in the room." Chris Dixon ?