6 ms·

The phenomenon of showing up at Stanford and telling some 21-year-old that he's Jesus Christ and that you're going to give him millions of dollars is a wen on t

The phenomenon of showing up at Stanford and telling some 21-year-old that he's Jesus Christ and that you're going to give him millions of dollars is a wen on the American business culture matched only by corporate raiding. It's the nerd version of college football/basketball recruiting.

jongjong 3y ago
It's so weird. I started to think that maybe this is intentional. It looks as though investors want to invest only in over-optimistic people who believe that we're living in some kind of utopian paradise; at the same time they avoid investing in anyone who has had so much of a faint whiff of how the sausage gets made. It's like the entire system is desperate to keep optimists optimistic and pessimists pessimistic. Why is it that investors actively seek out starry-eyed individuals? It sounds like an economic bubble factory. If every new person who joins elite circles is optimistic to a delusional level, then that level of optimism may be contagious and propagate delusional beliefs among the elite. There are people in the tech sector who were very successful decades ago and are now in their 40s and still haven't come out of their highs. They have the same worldview as I had when I was 15.
- swatcoder 3y ago
  Not investors: venture capital investors in tech. It's a particular kind of investment in a particular industry. Tech VC's are in the business of selling business futures, not building mature businesses. The buyer they sell to can install a practical CEO and worry about actual operations when that time comes. In the meantime, enthusiastic kids provide a relatively cheap, manipulable, supply of powerpoints and pizazz -- whereas sober, mature professionals often need more personal income and tend to focus more on executing the business that they have experience in (mostly irrelevant to the VC's own business) instead of matching the investment pitch for upcoming rounds (all that matters).
- bongodongobob 3y ago
  I mean, VC exists because they need to diversify their investments and literally can't find anywhere to put their money? I got the impression from the outside that VC money is just gambling on March Madness for the elite.
  - Workaccount2 3y ago
    Deploy $5m to 20 companies and only one of them has to hit for it all to be worth it.
- notaustinpowers 3y ago
  Because those investors (rarely) ever lose if the company goes belly up. Is the company slowly declining into unprofitability? Sell it off and cash that big payout. Can't sell it off? Scrap it for parts and scavage the remains, cash that big payout. Did it implode in on itself in a spectacular fashion? Sue leadership to recoup your losses. As the saying goes, the house always wins.
- IggleSniggle 3y ago
  I think it's because you need a figure-head that truly has zero doubt that what they are doing is the best and most correct thing. Because it has to sell, and it can't sound like a car-salesman pitch. It might not be in the best interest of the company, it just needs to be a hype train long enough for the VC to get theirs. The Greater Fool meets real life. The VC doesn't care one way or another if the founder benefits in the end, as long as it doesn't affect their ability to make their next play.
  - __loam 3y ago
    Using smart children who have degrees from reputable institutions like Stanford is a value signal that VC uses to get more people involved with their plays. It's borrowing legitimacy and adding to the Jobsian mythology of the company, while also getting someone who has no idea what they're doing into a position where they will listen to a board who will tell them what to do.
    - ElevenLathe 3y ago
      I think it's just that privileged 20-year olds are the best material with which elites can build the next generation to replace themselves and thus the system in which they are embedded. Young Ivy Leaguers are also the basic building material of traditional business' executive corps, the CIA, the FBI, the military officer Corp, McKensie, and so on. In past centuries, these kids would be sent to manage imperial affairs in the Raj or something. There are good reasons for this: their parents were last season's elites and want to pass it on, their classmates will likely be good contacts in other elite institutions, and they've already been trained to please establishment figures enthusiastically (or they wouldn't be Stanford wiz kids). Not to sound like a crank, but information technology is now (and, really, has been since it's inception) an important theater in the class war, and elites are recruiting for it the same way they always have.
- dblohm7 3y ago
  It's because the emperor has no clothes. Most of the VCs I've met have been complete airheads.
  - ryandrake 3y ago
    All it really takes to be "an investor" is to have money or be able to get money. There is no prerequisite of intelligence, business sense, product taste, operations wisdom, or sound judgment. Although they all seem to act as if they magically have these, as if the Investor title suddenly imbued them with these traits. The only thing stopping me from being an angel investor is that I don't have $1M burning a hole in my pocket. But if I did, suddenly I could sit down in a conference room, put a polo shirt on, dangle the money from a fishhook, and people would take what I said about their business idea seriously. It's such a joke.
- hnfong 3y ago
  The VC investors don't need a startup that accurately predicts its odds, because most startups fail. So what they need are starry-eyed kids who have a distorted view of their chances of success, and in the small chance that they actually succeed beyond anyone else's wildest dreams (but within expectation of the distorted perspective -- which is the only way you can continue executing without being overwhelmed), the VC reaps the profits.
- jahewson 3y ago
  > they avoid investing in anyone who has had so much of a faint whiff of how the sausage gets made. Not actually the case. The average Silicon Valley founder is in their 40s. It’s just the young ones that get all the press (because they need it). Why is it that investors actively seek out starry-eyed individuals? > Apart from the fact that pessimists are not founding companies, the answer is: narrative. There’s a ready-made place in our society for the hero’s story - the lone individual who (like ourselves) is special and has a unique vision. We have multiple millennia-old religions based off this same narrative. It works. It gets press, it gets followers. Humans naturally take any boring story and fashion it into this shape if they can. It takes the large, confusing, abstract or confusing and makes it personal.
bongoman42 3y ago
In some ways it is similar to buying lottery tickets which a fairly large number of people indulge in. Though, in this case, there are modifiers to the base probability due to insider knowledge, knowing which fool to offload crap to before it implodes, and piling on the same startup because others are doing as well.
slily 3y ago
Are you serious? That culture is why America still has high innovation while other Western and "culturally Western" countries that do not are largely stagnant. I'm amazed at how often I see people (largely Americans I'm guessing) criticize the very things that make their country a world superpower.
- lelandbatey 3y ago
  I think there's too few 21 year olds being handed big investment dollars to form the majority of what causes "America to still have high innovation". The average age for founders starting successful businesses is somewhere between 35 - 45 years old: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wharton-podcast/age-of-successful-entrepreneurs/ https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...
- threetonesun 3y ago
  I'm still waiting for the USA to "innovate" on a way for everyone to get health care, although sometimes I suspect the lack of a solution there and general lack of regulation at large is part of why American has such "high innovation".
  - Clubber 3y ago
    We're pretty close. Obamacare covers a lot of people and employers are required to provide it if they have over 50 employees. Any hospital is required to treat anyone who comes in, regardless of ability to pay. It's sloppy and it's expensive if you don't qualify for ACA subsidies, but if you want healthcare/health insurance in the US, you can most likely get it if you try.
    - fwip 3y ago
      Conflating health insurance with health care is a common American mistake. Having the ability to pay every month for health insurance doesn't do much to protect you from losing everything to health-related bills. Unless, of course, you are rich enough to afford the 'Cadillac' health plans.
__loam 3y ago
That and Welchism are two big reasons why the business culture in the valley sucks.
- lenerdenator 3y ago
  I see Welchism (I assume we're talking about Jack of GE) as the opposite of lots of SV culture. They both suck, but for completely different reasons. GE actually had real business units. Energy, aerospace, consumer, industrial, healthcare, you name it, they had a presence. Welch couldn't squeeze enough money to meet Wall Street's expectations out of these units, and didn't innovate when microcomputers were coming onto the scene in the 90s, so he cannibalized the company to boost share price at the expense of the business being able to continue long-term. Of course, he would be dead by then. The guys in the valley are the opposite because many of them don't actually have a product, or even business, to sell - or they do, and the product itself is realizing it doesn't want to be sold. We've had social media and ad-based online services for 20+ years now and it's generally seen as a net negative for society. The subscription-based business model wouldn't work for most social media companies as it would limit the network effect and thus the TAM of the company's business. They're having to find more and more creative ways to monetize eyeballs when the eyeballs don't want to be monetized anymore. Then you have the people who are swapping out their FLOSS licenses for proprietary ones on software offerings (looking at you Redis) because they realize if you just give stuff away for free, there is no monetization route, and dammit, they want - nay, deserve - their massive payday like the Steves and Bill and Larry got. TL;DR Jack had a lot to sell at the expense of GE as a long-term going concern; SV has nothing to sell but wants to be a long-term going concern.
  - __loam 3y ago
    Yeah I do mean the same Jack Welch who looted GE and permanently sent American business culture into a seemingly unrecoverable decline. Maybe GE was just way too unfocused of a company to exist, but if you squint enough, you can see the trail of shit leading from his leadership at GE to places like Boeing and now Google, where employees are discarded even when you're making billions in profit every quarter and you have a near monopoly on your industry. Welch taught the American business elite to ride that horse hard until it collapses from exhaustion and you can move on to the next company to loot.

jongjong 3y ago

It's so weird. I started to think that maybe this is intentional. It looks as though investors want to invest only in over-optimistic people who believe that we're living in some kind of utopian paradise; at the same time they avoid investing in anyone who has had so much of a faint whiff of how the sausage gets made. It's like the entire system is desperate to keep optimists optimistic and pessimists pessimistic. Why is it that investors actively seek out starry-eyed individuals? It sounds like an economic bubble factory. If every new person who joins elite circles is optimistic to a delusional level, then that level of optimism may be contagious and propagate delusional beliefs among the elite. There are people in the tech sector who were very successful decades ago and are now in their 40s and still haven't come out of their highs. They have the same worldview as I had when I was 15.

swatcoder 3y ago
Not investors: venture capital investors in tech. It's a particular kind of investment in a particular industry. Tech VC's are in the business of selling business futures, not building mature businesses. The buyer they sell to can install a practical CEO and worry about actual operations when that time comes. In the meantime, enthusiastic kids provide a relatively cheap, manipulable, supply of powerpoints and pizazz -- whereas sober, mature professionals often need more personal income and tend to focus more on executing the business that they have experience in (mostly irrelevant to the VC's own business) instead of matching the investment pitch for upcoming rounds (all that matters).
bongodongobob 3y ago
I mean, VC exists because they need to diversify their investments and literally can't find anywhere to put their money? I got the impression from the outside that VC money is just gambling on March Madness for the elite.
- Workaccount2 3y ago
  Deploy $5m to 20 companies and only one of them has to hit for it all to be worth it.
notaustinpowers 3y ago
Because those investors (rarely) ever lose if the company goes belly up. Is the company slowly declining into unprofitability? Sell it off and cash that big payout. Can't sell it off? Scrap it for parts and scavage the remains, cash that big payout. Did it implode in on itself in a spectacular fashion? Sue leadership to recoup your losses. As the saying goes, the house always wins.
IggleSniggle 3y ago
I think it's because you need a figure-head that truly has zero doubt that what they are doing is the best and most correct thing. Because it has to sell, and it can't sound like a car-salesman pitch. It might not be in the best interest of the company, it just needs to be a hype train long enough for the VC to get theirs. The Greater Fool meets real life. The VC doesn't care one way or another if the founder benefits in the end, as long as it doesn't affect their ability to make their next play.
- __loam 3y ago
  Using smart children who have degrees from reputable institutions like Stanford is a value signal that VC uses to get more people involved with their plays. It's borrowing legitimacy and adding to the Jobsian mythology of the company, while also getting someone who has no idea what they're doing into a position where they will listen to a board who will tell them what to do.
  - ElevenLathe 3y ago
    I think it's just that privileged 20-year olds are the best material with which elites can build the next generation to replace themselves and thus the system in which they are embedded. Young Ivy Leaguers are also the basic building material of traditional business' executive corps, the CIA, the FBI, the military officer Corp, McKensie, and so on. In past centuries, these kids would be sent to manage imperial affairs in the Raj or something. There are good reasons for this: their parents were last season's elites and want to pass it on, their classmates will likely be good contacts in other elite institutions, and they've already been trained to please establishment figures enthusiastically (or they wouldn't be Stanford wiz kids). Not to sound like a crank, but information technology is now (and, really, has been since it's inception) an important theater in the class war, and elites are recruiting for it the same way they always have.
dblohm7 3y ago
It's because the emperor has no clothes. Most of the VCs I've met have been complete airheads.
- ryandrake 3y ago
  All it really takes to be "an investor" is to have money or be able to get money. There is no prerequisite of intelligence, business sense, product taste, operations wisdom, or sound judgment. Although they all seem to act as if they magically have these, as if the Investor title suddenly imbued them with these traits. The only thing stopping me from being an angel investor is that I don't have $1M burning a hole in my pocket. But if I did, suddenly I could sit down in a conference room, put a polo shirt on, dangle the money from a fishhook, and people would take what I said about their business idea seriously. It's such a joke.
hnfong 3y ago
The VC investors don't need a startup that accurately predicts its odds, because most startups fail. So what they need are starry-eyed kids who have a distorted view of their chances of success, and in the small chance that they actually succeed beyond anyone else's wildest dreams (but within expectation of the distorted perspective -- which is the only way you can continue executing without being overwhelmed), the VC reaps the profits.
jahewson 3y ago
> they avoid investing in anyone who has had so much of a faint whiff of how the sausage gets made. Not actually the case. The average Silicon Valley founder is in their 40s. It’s just the young ones that get all the press (because they need it). Why is it that investors actively seek out starry-eyed individuals? > Apart from the fact that pessimists are not founding companies, the answer is: narrative. There’s a ready-made place in our society for the hero’s story - the lone individual who (like ourselves) is special and has a unique vision. We have multiple millennia-old religions based off this same narrative. It works. It gets press, it gets followers. Humans naturally take any boring story and fashion it into this shape if they can. It takes the large, confusing, abstract or confusing and makes it personal.

bongoman42 3y ago

In some ways it is similar to buying lottery tickets which a fairly large number of people indulge in. Though, in this case, there are modifiers to the base probability due to insider knowledge, knowing which fool to offload crap to before it implodes, and piling on the same startup because others are doing as well.

slily 3y ago

Are you serious? That culture is why America still has high innovation while other Western and "culturally Western" countries that do not are largely stagnant. I'm amazed at how often I see people (largely Americans I'm guessing) criticize the very things that make their country a world superpower.

lelandbatey 3y ago
I think there's too few 21 year olds being handed big investment dollars to form the majority of what causes "America to still have high innovation". The average age for founders starting successful businesses is somewhere between 35 - 45 years old: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wharton-podcast/age-of-successful-entrepreneurs/ https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...
threetonesun 3y ago
I'm still waiting for the USA to "innovate" on a way for everyone to get health care, although sometimes I suspect the lack of a solution there and general lack of regulation at large is part of why American has such "high innovation".
- Clubber 3y ago
  We're pretty close. Obamacare covers a lot of people and employers are required to provide it if they have over 50 employees. Any hospital is required to treat anyone who comes in, regardless of ability to pay. It's sloppy and it's expensive if you don't qualify for ACA subsidies, but if you want healthcare/health insurance in the US, you can most likely get it if you try.
  - fwip 3y ago
    Conflating health insurance with health care is a common American mistake. Having the ability to pay every month for health insurance doesn't do much to protect you from losing everything to health-related bills. Unless, of course, you are rich enough to afford the 'Cadillac' health plans.

__loam 3y ago

That and Welchism are two big reasons why the business culture in the valley sucks.

lenerdenator 3y ago
I see Welchism (I assume we're talking about Jack of GE) as the opposite of lots of SV culture. They both suck, but for completely different reasons. GE actually had real business units. Energy, aerospace, consumer, industrial, healthcare, you name it, they had a presence. Welch couldn't squeeze enough money to meet Wall Street's expectations out of these units, and didn't innovate when microcomputers were coming onto the scene in the 90s, so he cannibalized the company to boost share price at the expense of the business being able to continue long-term. Of course, he would be dead by then. The guys in the valley are the opposite because many of them don't actually have a product, or even business, to sell - or they do, and the product itself is realizing it doesn't want to be sold. We've had social media and ad-based online services for 20+ years now and it's generally seen as a net negative for society. The subscription-based business model wouldn't work for most social media companies as it would limit the network effect and thus the TAM of the company's business. They're having to find more and more creative ways to monetize eyeballs when the eyeballs don't want to be monetized anymore. Then you have the people who are swapping out their FLOSS licenses for proprietary ones on software offerings (looking at you Redis) because they realize if you just give stuff away for free, there is no monetization route, and dammit, they want - nay, deserve - their massive payday like the Steves and Bill and Larry got. TL;DR Jack had a lot to sell at the expense of GE as a long-term going concern; SV has nothing to sell but wants to be a long-term going concern.
- __loam 3y ago
  Yeah I do mean the same Jack Welch who looted GE and permanently sent American business culture into a seemingly unrecoverable decline. Maybe GE was just way too unfocused of a company to exist, but if you squint enough, you can see the trail of shit leading from his leadership at GE to places like Boeing and now Google, where employees are discarded even when you're making billions in profit every quarter and you have a near monopoly on your industry. Welch taught the American business elite to ride that horse hard until it collapses from exhaustion and you can move on to the next company to loot.