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I know it will be as popluar as rabies around here ... but that is litterally the entire business model of Silicon Valley, including YC (https://www.ycombinator

I know it will be as popluar as rabies around here ... but that is litterally the entire business model of Silicon Valley, including YC (https://www.ycombinator.com/companies?batch=S05 https://www.ycombinator.com/companies?batch=S05).

ramijames 3y ago
Absolutely agree with this. Everything that is wrong with modern tech business models has to do with VCs and chasing funding or valuation.
eschaton 3y ago
No, it’s the business model of YC and “New Silicon Valley.” The original companies that caused people to start calling this entire region Silicon Valley were making—and, in a few cases, are still making—real things intended to make their users’ lives better. It was the dot-com bubble and its couple of resurgences that really fucked things up here and made everything off-kilter. The finance bros were drawn like vultures to “easy profit,” and brought with them attitudes like treating Google’s chef getting rich too as a “problem” to be “solved” rather than the system working as designed.
- rvense 3y ago
  Wait, I thought it was called Silly Con Valley because of this exact model?
  - TeMPOraL 3y ago
    Yes to both of you. Silicon Valley became Silly Con Valley after the dot-com bubble.
- BasedAnon 3y ago
  As usual the financial sector is responsible for basically all the financial problems.
  - phpisthebest 3y ago
    Well when everything is based on unsound money, and a literal ponzi scheme the entire financial sector is the largest con ever created I am not sure how civilization was dupped into the mass delusion of our current economic systems but I do believe we are seeing them unwind right now... the Fed and other controllers have been attempting to catch a falling knife for at least 15 years if not longer... at some point they will loose that battle
    - BasedAnon 3y ago
      It starts with interest on a loan, then slowly snowballs as everything is gradually cleaved away from reality.
marginalia_nu 3y ago
I think a traditional venture capital model makes sense for some businesses, but not others. There are many cases where you might need initial investment to reach escape velocity, and you probably won't be very profitable in the first few years. Something like Spotify is a good example of this working as intended. It's not without its problems, especially their blatant rent-seeking within the podcast sphere, but at the core it's VC working well. That's not what Reddit and indeed many other VC funded enterprises are doing. Reddit was never going to make a profit without upending its entire value proposition. They may or may not successfully cash out, but what's in store for them if they don't flame out immediate is essentially turning into Facebook. Not cool 2008 facebook, but lame minions memes and grandmas Facebook.
- lotsofpulp 3y ago
  > There are many cases where you might need initial investment to reach escape velocity, and you probably won't be very profitable in the first few years. >Something like Spotify is a good example of this working as intended. Spotify is a 26 year old business with zero moat. It’s most valuable to the 3 major record labels as a negotiating tool against Apple, Alphabet, and Amazon. That means the 3 record labels need to price their music just low enough to keep Spotify limping along, resulting in a cap on the profit margin Spotify can earn. Spotify’s only move is to try to become a record label themselves, but due to excessively long copyright terms and cultural longevity of music, they basically have to keep buying from the 3 major record labels.
  - rvense 3y ago
    I had to look that up - you probably just mistyped, it's 16 years old.
    - lotsofpulp 3y ago
      Yes, sorry, thanks for the correction.
  - marginalia_nu 3y ago
    Spotify's moat is the byzantine legal maze of negotiating music rights with the record labels which needs to happen in a by-country basis. Their profit cap is mostly the result of actual competition. That's a healthy market, which is fundamentally a good thing for the consumers since it means they need to innovate and provide a good service.

ramijames 3y ago

Absolutely agree with this. Everything that is wrong with modern tech business models has to do with VCs and chasing funding or valuation.

eschaton 3y ago

No, it’s the business model of YC and “New Silicon Valley.” The original companies that caused people to start calling this entire region Silicon Valley were making—and, in a few cases, are still making—real things intended to make their users’ lives better. It was the dot-com bubble and its couple of resurgences that really fucked things up here and made everything off-kilter. The finance bros were drawn like vultures to “easy profit,” and brought with them attitudes like treating Google’s chef getting rich too as a “problem” to be “solved” rather than the system working as designed.

rvense 3y ago
Wait, I thought it was called Silly Con Valley because of this exact model?
- TeMPOraL 3y ago
  Yes to both of you. Silicon Valley became Silly Con Valley after the dot-com bubble.
BasedAnon 3y ago
As usual the financial sector is responsible for basically all the financial problems.
- phpisthebest 3y ago
  Well when everything is based on unsound money, and a literal ponzi scheme the entire financial sector is the largest con ever created I am not sure how civilization was dupped into the mass delusion of our current economic systems but I do believe we are seeing them unwind right now... the Fed and other controllers have been attempting to catch a falling knife for at least 15 years if not longer... at some point they will loose that battle
  - BasedAnon 3y ago
    It starts with interest on a loan, then slowly snowballs as everything is gradually cleaved away from reality.

marginalia_nu 3y ago

I think a traditional venture capital model makes sense for some businesses, but not others. There are many cases where you might need initial investment to reach escape velocity, and you probably won't be very profitable in the first few years. Something like Spotify is a good example of this working as intended. It's not without its problems, especially their blatant rent-seeking within the podcast sphere, but at the core it's VC working well. That's not what Reddit and indeed many other VC funded enterprises are doing. Reddit was never going to make a profit without upending its entire value proposition. They may or may not successfully cash out, but what's in store for them if they don't flame out immediate is essentially turning into Facebook. Not cool 2008 facebook, but lame minions memes and grandmas Facebook.

lotsofpulp 3y ago
> There are many cases where you might need initial investment to reach escape velocity, and you probably won't be very profitable in the first few years. >Something like Spotify is a good example of this working as intended. Spotify is a 26 year old business with zero moat. It’s most valuable to the 3 major record labels as a negotiating tool against Apple, Alphabet, and Amazon. That means the 3 record labels need to price their music just low enough to keep Spotify limping along, resulting in a cap on the profit margin Spotify can earn. Spotify’s only move is to try to become a record label themselves, but due to excessively long copyright terms and cultural longevity of music, they basically have to keep buying from the 3 major record labels.
- rvense 3y ago
  I had to look that up - you probably just mistyped, it's 16 years old.
  - lotsofpulp 3y ago
    Yes, sorry, thanks for the correction.
- marginalia_nu 3y ago
  Spotify's moat is the byzantine legal maze of negotiating music rights with the record labels which needs to happen in a by-country basis. Their profit cap is mostly the result of actual competition. That's a healthy market, which is fundamentally a good thing for the consumers since it means they need to innovate and provide a good service.