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The fundamental issue is building a large sustainable company is nearly impossible. You could come up with an amazing product only to have your margins reduced

The fundamental issue is building a large sustainable company is nearly impossible. You could come up with an amazing product only to have your margins reduced by those that control distribution (like app stores). Or be outright copied by bigger players who give away your product (see microsoft teams and slack). Or maybe a new tech kills what you spent years building (see chegg). And with investors wanting constant growth in a startup’s financial numbers, there isn’t room for long term innovation. The time from founding to going public is very long now. And VCs have a short term focus that is not helpful. Many of these companies are grown to a point only to be dumped on public markets because they know they can’t keep the growth going. All of this adds up to an asset class that has more risk than expected with less return than expected. VCs may have thrived in a world of easy capital and inflated valuations, but the “reality” is more apparent now. What founders need is an alternative source and model of capital entirely. And regulation to rein in megacorps so competition can thrive freely.

toomuchtodo 2y ago
Indeed, this is a call for government sponsored anti trust efforts (pruning and holding back the forest so saplings can take root and grow) and incubators (Solyndra failed, but Tesla paid back their loan in full, with interest, ahead of schedule). But, you'll have people claim "that isn't efficient! the private sector can do better!" while the evidence (here) is that the private sector cannot do better. It just creates a wasteful, capital inefficient ecosystem where everyone performs theater around the concept of venture. Sometimes you're lucky, most times you are not (as it relates to highly speculative investments of this kind).
- xhkkffbf 2y ago
  Venture driven tech is crazy and wasteful, but it's nothing compared to government. How many electric car chargers did the Biden administration build with billions of dollars? A handful. Look at another post today about the fact that Britain can't build a new rail line for a reasonable price. I would say compared to just these examples, the private sector is doing better.
  - kingkawn 2y ago
    They haven’t spent the charger building money yet, fella
  - 11101010001100 2y ago
    So we can say the government is doing a good job helping the private sector look better.
  - toomuchtodo 2y ago
    > I would say compared to just these examples, the private sector is doing better. I'm not going to argue subjective opinion, but simply point out that investors seeking venture exposure should familiarize themselves with the accredited investor test Matt Levine of Bloomberg's Money Stuff suggests: https://www.bloomberg.com/opinion/articles/2024-10-22/the-sophisticated-investor-test https://www.bloomberg.com/opinion/articles/2024-10-22/the-so... | https://archive.today/dytZs https://archive.today/dytZs > I have proposed my own solution, which I call the “Certificate of Dumb Investment.” The idea is that anyone can go to the SEC and ask for the certificate, which says: > I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money, and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing anyway. I agree that I will never, under any circumstances, complain to anyone when this investment inevitably goes wrong. I understand that violating this agreement is a felony. > And then the SEC will slap you in the face and say “really?” and if you say “yes really” then they give you the certificate and you can buy whatever private investment you want. Who am I to get in the way of unsophisticated money doing unsophisticated things? That's not government waste, that's freedom. If you think you can do better, and prefer venture over a DraftKings account, 0DTE options, or a lottery ticket, go for it. That mental model is sophisticated money opportunity. Tangential: https://longbets.org/362/ https://longbets.org/362/
  - ElevenLathe 2y ago
    It's a false dichotomy. Big business is finance is government is media. The trains are expensive and late and crowded because nobody with power cares if they are cheap or finished or usable -- they have private drivers, private jets, private everything. The oligarchy is responsible, and sure they are in the so-called public sector, but are also obviously outside it.
- randomdata 2y ago
  > But, you'll have people claim "that isn't efficient! the private sector can do better!" They might, but, if you are going to let the private sector do better, doesn't that also come with the implication that that the government will step down? We could, for example, have hundreds of businesses selling Windows, Office, etc., fixing the Microsoft problem spoken of earlier, but we can't do that right now because the government doesn't allow it. Try starting a business selling Windows and see how long before the full force of the law is bearing down on you. That certainly isn't efficient.
  - Apocryphon 2y ago
    Who wants to buy Windows nowadays? They’re practically giving it away.
stackedinserter 2y ago
Maybe the industry has just ran out of ideas and/or there's nothing to improve with products that can be built within a year.
- bediger4000 2y ago
  This does happen. A Boeing 787 isn't all that different from a 707 designed in the mid 1950s. Air transport tech maxed out early.
duxup 2y ago
The VC systems seems to be all or nothing. You race to dominate / found a market so fast that you fail fast... but likely fail. I've seen some VC funded orgs enter into the space where I have some visibility. The pattern of quickly eat up customers (or ... claiming to), and then fail. It always seems like leadership blowing through cash on a sort of "ignorant leadership learns about how the industry works" adventure. All while building up such a hugely resource intensive org with what is now a larger than needed / complex and unproven team ... VC successes always seem to be in "new" spaces where their inefficiency is not noticeable, but also you've no idea the lay of the land in that new space / if someone can walk in with less money and oust you, or if it is profitable at all.
spamizbad 2y ago
> Or be outright copied by bigger players who give away your product (see microsoft teams and slack). I think that era is over for companies. Budgets for all the tech giants are getting scrutinized and you can't just put together some tiger-team-of-teams to snuff out some startup.
sc68cal 2y ago
Absolutely, and the VC & Silicon Valley solution of firing of Kahn and gutting the FTC will just make the problems that you have identified worse, not better.
- thefaux 2y ago
  I suspect an underrated factor in this election was SV antipathy towards Lina Khan.
- blackeyeblitzar 2y ago
  Yes I am skeptical of the proposal to replace her. We need to go much further, not backwards. We need new legislation on competition and anti trust, which can enable people like her to do their job effectively.

toomuchtodo 2y ago

Indeed, this is a call for government sponsored anti trust efforts (pruning and holding back the forest so saplings can take root and grow) and incubators (Solyndra failed, but Tesla paid back their loan in full, with interest, ahead of schedule). But, you'll have people claim "that isn't efficient! the private sector can do better!" while the evidence (here) is that the private sector cannot do better. It just creates a wasteful, capital inefficient ecosystem where everyone performs theater around the concept of venture. Sometimes you're lucky, most times you are not (as it relates to highly speculative investments of this kind).

xhkkffbf 2y ago
Venture driven tech is crazy and wasteful, but it's nothing compared to government. How many electric car chargers did the Biden administration build with billions of dollars? A handful. Look at another post today about the fact that Britain can't build a new rail line for a reasonable price. I would say compared to just these examples, the private sector is doing better.
- kingkawn 2y ago
  They haven’t spent the charger building money yet, fella
- 11101010001100 2y ago
  So we can say the government is doing a good job helping the private sector look better.
- toomuchtodo 2y ago
  > I would say compared to just these examples, the private sector is doing better. I'm not going to argue subjective opinion, but simply point out that investors seeking venture exposure should familiarize themselves with the accredited investor test Matt Levine of Bloomberg's Money Stuff suggests: https://www.bloomberg.com/opinion/articles/2024-10-22/the-sophisticated-investor-test https://www.bloomberg.com/opinion/articles/2024-10-22/the-so... | https://archive.today/dytZs https://archive.today/dytZs > I have proposed my own solution, which I call the “Certificate of Dumb Investment.” The idea is that anyone can go to the SEC and ask for the certificate, which says: > I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money, and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing anyway. I agree that I will never, under any circumstances, complain to anyone when this investment inevitably goes wrong. I understand that violating this agreement is a felony. > And then the SEC will slap you in the face and say “really?” and if you say “yes really” then they give you the certificate and you can buy whatever private investment you want. Who am I to get in the way of unsophisticated money doing unsophisticated things? That's not government waste, that's freedom. If you think you can do better, and prefer venture over a DraftKings account, 0DTE options, or a lottery ticket, go for it. That mental model is sophisticated money opportunity. Tangential: https://longbets.org/362/ https://longbets.org/362/
- ElevenLathe 2y ago
  It's a false dichotomy. Big business is finance is government is media. The trains are expensive and late and crowded because nobody with power cares if they are cheap or finished or usable -- they have private drivers, private jets, private everything. The oligarchy is responsible, and sure they are in the so-called public sector, but are also obviously outside it.
randomdata 2y ago
> But, you'll have people claim "that isn't efficient! the private sector can do better!" They might, but, if you are going to let the private sector do better, doesn't that also come with the implication that that the government will step down? We could, for example, have hundreds of businesses selling Windows, Office, etc., fixing the Microsoft problem spoken of earlier, but we can't do that right now because the government doesn't allow it. Try starting a business selling Windows and see how long before the full force of the law is bearing down on you. That certainly isn't efficient.
- Apocryphon 2y ago
  Who wants to buy Windows nowadays? They’re practically giving it away.

stackedinserter 2y ago

Maybe the industry has just ran out of ideas and/or there's nothing to improve with products that can be built within a year.

bediger4000 2y ago
This does happen. A Boeing 787 isn't all that different from a 707 designed in the mid 1950s. Air transport tech maxed out early.

duxup 2y ago

The VC systems seems to be all or nothing. You race to dominate / found a market so fast that you fail fast... but likely fail. I've seen some VC funded orgs enter into the space where I have some visibility. The pattern of quickly eat up customers (or ... claiming to), and then fail. It always seems like leadership blowing through cash on a sort of "ignorant leadership learns about how the industry works" adventure. All while building up such a hugely resource intensive org with what is now a larger than needed / complex and unproven team ... VC successes always seem to be in "new" spaces where their inefficiency is not noticeable, but also you've no idea the lay of the land in that new space / if someone can walk in with less money and oust you, or if it is profitable at all.

spamizbad 2y ago

> Or be outright copied by bigger players who give away your product (see microsoft teams and slack). I think that era is over for companies. Budgets for all the tech giants are getting scrutinized and you can't just put together some tiger-team-of-teams to snuff out some startup.

sc68cal 2y ago

Absolutely, and the VC & Silicon Valley solution of firing of Kahn and gutting the FTC will just make the problems that you have identified worse, not better.

thefaux 2y ago
I suspect an underrated factor in this election was SV antipathy towards Lina Khan.
blackeyeblitzar 2y ago
Yes I am skeptical of the proposal to replace her. We need to go much further, not backwards. We need new legislation on competition and anti trust, which can enable people like her to do their job effectively.