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It’s still very clearly wasted though? That money could have gone to more profitable and genuinely innovative businesses that benefit society, instead of startu

It’s still very clearly wasted though? That money could have gone to more profitable and genuinely innovative businesses that benefit society, instead of startups that were meant to tank from the very beginning. And money isn’t the only resource being wasted here but time. There are also plenty of companies that fail so hard that employees, to whom you believe the wealth trickles down to, are left with nothing to show for what they have supposedly done there, and could even cost them reputation-wise in their careers. This arrangement is hardly anything that the working class should be thankful for.

bruce511 3y ago
We all know 90% of VC money will eventually generate no return. That's precisely the model. The problem us that it's hard to predict which 10% will win. The alternative to VC funding is either traditional bank finance, or boot-strapping. Incidentally neither is terribly more effective at picking winner's- its commonly reported (although I don't know how accurate) that 90% of businesses will fail within 5 years. It kinda makes sense, most ideas kinda suck. Selling equity to raise money is the worst kind of financing. Most businesses are better off getting bank loans, or bootstrapping. Learning how yo make do, how to build profit on a shoestring, how to be efficient is a good thing. VC money is useful for a different kind of business. One which needs significant capital, but has potential for massive returns. I find it hard to feel sympathy for employees who go to work for a startup, get significant salaries, know the risks, and squander their salaries well enough to have nothing to show from it. In an era of a pitiful minimum wage I don't think they're the "working class". While individual time is certainly wasted either thus model (and indeed all models) societal time is not. By trying lots of things simultaneously we save time overall. It has ever been thus. When airplanes were invented everyone and their friend started a plane company. Innovation exploded. There was consolidation and now we have a handful. There are startups in the aviation space, but nibbling at the fringes, not aiming to be "the Boeing killer". Cars are interesting because there's a disruptive transition coming (well, 2 actually). This opens the door to a Tesla (Not to mention a bunch of other EV startups that failed.) In the long run I expect Tesla to either get acquired into an existing manufacturer, die, or become a niche brand. The bulk of EVs will be made by VW , Toyota,GM,Ford etc . This doesn't mean Tesla money is wasted. It showed the makers there's a market for EVs. That changes the world.

bruce511 3y ago

We all know 90% of VC money will eventually generate no return. That's precisely the model. The problem us that it's hard to predict which 10% will win. The alternative to VC funding is either traditional bank finance, or boot-strapping. Incidentally neither is terribly more effective at picking winner's- its commonly reported (although I don't know how accurate) that 90% of businesses will fail within 5 years. It kinda makes sense, most ideas kinda suck. Selling equity to raise money is the worst kind of financing. Most businesses are better off getting bank loans, or bootstrapping. Learning how yo make do, how to build profit on a shoestring, how to be efficient is a good thing. VC money is useful for a different kind of business. One which needs significant capital, but has potential for massive returns. I find it hard to feel sympathy for employees who go to work for a startup, get significant salaries, know the risks, and squander their salaries well enough to have nothing to show from it. In an era of a pitiful minimum wage I don't think they're the "working class". While individual time is certainly wasted either thus model (and indeed all models) societal time is not. By trying lots of things simultaneously we save time overall. It has ever been thus. When airplanes were invented everyone and their friend started a plane company. Innovation exploded. There was consolidation and now we have a handful. There are startups in the aviation space, but nibbling at the fringes, not aiming to be "the Boeing killer". Cars are interesting because there's a disruptive transition coming (well, 2 actually). This opens the door to a Tesla (Not to mention a bunch of other EV startups that failed.) In the long run I expect Tesla to either get acquired into an existing manufacturer, die, or become a niche brand. The bulk of EVs will be made by VW , Toyota,GM,Ford etc . This doesn't mean Tesla money is wasted. It showed the makers there's a market for EVs. That changes the world.