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Y Combinator and Power in Silicon Valley
- OccamsMirror 2y agoThis is a really interesting story. I wonder if this YC power dynamic still exists today.
- ec109685 2y agoThe way YC closed ranks was my favorite anecdote from Chaos Monkey’s. I always find it interesting though YC leaders are extremely against cancel culture, but when it comes to business, its okay to threaten that someone will never work in the valley again if they don’t accede to their demands.
- 0xDEAFBEAD 2y agoStanding against cancel culture is not the same as standing against social sanctions in any way, shape, or form. The problem with cancel culture is not that it's a social sanction. The problem is it's a particularly dysfunctional sort. "They're against cancel culture... so why didn't they invite me to their house party? What hypocrites!"
- downWidOutaFite 2y agoI disagree. There's no principle involved. It's all polarized partisan politics. Your "particularly dysfunctional" is extremely in the eye of the beholder. The rich and powerful silicon valley CEO/VC guys tearing the country apart over their woke crusade are just as ideologically irrational as the next twitter blue check.
- shafyy 2y agoThis. If you believe for one second that money and power hungry people have any kind of principles, you have not been paying attention. Cancel culture, woke, left, right, center, free speech – they will say whatever to get what they want on these topics, and change their opinion the next day without any real consequences. Welcome to late-stage capitalism.
- wslh 2y ago> Welcome to late-stage capitalism. Good reads/resources about this? I started reading "What's Our Problem" [1] but find it difficult to find "non-partisan" resources nowadays. [1] https://www.goodreads.com/book/show/102146148-what-s-our-problem https://www.goodreads.com/book/show/102146148-what-s-our-pro...
- 0xDEAFBEAD 2y agoI don't think there is any scholarly basis for the term "late-stage capitalism". It's just a meme that kids started using. Power-hungry, unprincipled people will exist regardless of a country's economic system. But people are very imaginative in attributing various social ills to capitalism in particular.
- wslh 2y agoBeyond the specific term, there is a "sign of the times" we are living. Nowadays the issue with political sciences and philosophy is the partisan, left-right spectrum view that it is difficult to break in in discussions (including HN).
- skulk 2y agoquick Google search shows that the term has been in scholarly use for at least 50 years now and means pretty much exactly what "the kids" are talking about.
- 0xDEAFBEAD 2y agoSo we've been in the "late stages" for at least 50 years? Is there any sort of falsifiable hypothesis there? https://books.google.com/ngrams/graph?content=late-stage+capitalism&year_start=1800&year_end=2022&corpus=en&smoothing=3 https://books.google.com/ngrams/graph?content=late-stage+cap... You can see from Google Ngram Viewer that there's almost no usage before the year 2000, and the vast majority of usage is post-2015. My guess would be that recent usage has only a tenuous connection, at best, to scholarly usage from 50+ years ago.
- specialist 2y agoYup. It's just another moral panic.
- LittleTimothy 2y agoI think the difference between cancel culture and just freedom of association is the difference between "I don't want to work with you because of X" and "I'm going to influence others not to work with you because of X". Whether that be anons on twitter calling up your employer to get you fired, or PG having a quiet work with his friends over at some VC firm, they're both the same strain of toxic.
- 0xDEAFBEAD 2y agoI think there may be a few other differences. For example, are people ever given the opportunity to change their behavior before the sanction gets applied? Does the punishment fit the crime? Is there public shaming involved? Do we default to public shaming anyone who says a word in defense of the person who is being sanctioned? (I would say that's the single most pathological feature of cancel culture, actually.) Are the rules constantly shifting in line with social media fashions? Are our judgments carefully considered, or are they based on shallow pattern matching? Cancel culture applies to discussions of policy in the public square. The idea is that certain views should be silenced. You can be a believer in free speech, and disagree that those views should be silenced. And then you can work to punish malicious actors in Silicon Valley who violate important investing norms. I just don't think there's a contradiction!
- uoaei 2y ago> Do we default to public shaming anyone who says a word in defense of the person who is being sanctioned? Defaulting to public debate on the matter isn't as stark a difference from this behavior as we want to believe, especially when the community in which you engage these points is so heavily biased in one direction. Discussions around "cancel culture" rarely take into account that the conversations being had are happening within a particular cultural context, one that depends on the venue in which it takes place. Too often I see public shaming framed as reasoned debate on this forum when the intention is otherwise abundantly clear. An amusing corrollary to this is that cancel culture as normally defined is implied to be the majority opinion. I don't think that's true, though, the nature of news media definitely amplifies certain voices over others, getting back to the point about venues above.
- nabla9 2y ago> I always find it interesting That's not interesting. That's not understanding capitalism. It's all about Incentives. The idea that business leaders can be ever considered genuine political or cultural voice or actor is the problem. Silicon Valley and hacker culture has created an atmosphere of business politicians and for some reason hackers take them seriously and don't laugh at their faces. The talk is just empty PR. Somehow smart people working for OpenAI, Google, keep eating it. Traditionally business people don't get into discussions of culture or politics directly. They might work in the background, but never directly. There is a good reason for that.
- fallingknife 2y agoIf I have the choice of people from my industry or people not from my industry why would I ever choose the latter?
- kevingadd 2y agoBecause you know the people from your industry well enough to hate their guts? :)
- fallingknife 2y agoIt doesn't matter who I like. I am not in any type of personal relationship with these people, so it makes no sense to "like" or "hate" them anyway. It matters whose incentives are aligned with mine. It's also not smart to assume you would like someone else better just because you don't know them.
- layer8 2y agoPeople can easily disagree even when their incentives align. Hopefully we aren’t beings who have to blindly submit to whatever incentives are out there, or assume the same of other people.
- nabla9 2y agoYou can choose people AND understand that they care only about money and not take their political talk seriously.
- immibis 2y ago"Cancel culture" is one of those buzzwords that can take on whatever meaning it needs to in a given situation. Related: https://rationalwiki.org/wiki/If-by-whiskey https://rationalwiki.org/wiki/If-by-whiskey > If by [noun], you mean [negative descriptors of noun], then of course [statement of lack of support/belief]. If, however, by [noun], you mean [positive descriptors of noun], then [statement of support/belief].
- elktown 2y agoThe only consistency you'll find in business and politics is self-interest - perceived or real.
- tim333 2y agoI think that's a bit of an oversimplification. A lot of people are well meaning.
- skeeter2020 2y agoVery few extend this to their own livelihood or survival. It's easy to do when you're not playing with your own resources, or they're just crumbs.
- tim333 2y agoIt's hard to disentangle motivations as treating people well is also usually good business too but in my experience a lot of people are motivated by doing good as well as making an income. If you look at the history of YC, Paul and Jessica started it primarily to help out the young would be founders without much expectation of making money. And in the story here it seems his main motivation was to stop the founders being screwed over rather than to enrich himself. The attitude that all business / political people are no good can be counterproductive as it can lead to not differentiating between the helpful and iffy ones.
- maest 2y agoHagiographies should be viewed with suspicion, particularity those that make claims about people's motivation (which is notoriously difficult to pin down/prove)
- fragmede 2y agoOnly insofar as having a positive opinion is material. The chances on HN are drastically higher than elsewhere on the Internet, but most here will never have the chance to interact with pg, so having a positive or negative view of his motivations is immaterial. Most opinions are immaterial. Unless we're on a ship in the ocean, and we're using the stars for navigation, and you're the navigator, whether or not you believe the Earth is flat, what you believe doesn't affect me. So then it really comes down to world view - are you an optimists or a pessimist? Is that neat little story about pg a carefully coldly calculated PR piece, or just a neat little story that has no effect on anything other than some people feeling good, like chicken soup for the entrepreneureal spirit. Why not both!
- lr4444lr 2y agoA cartel protecting its interests is not cancel culture.
- aguaviva 2y agoIts okay to threaten that someone will never work in the valley again if they don’t accede to their demands. Wouldn't surprise me in the slightest, but care to cite some examples of them literally doing that?
- ta67961138 2y ago> Wouldn't surprise me in the slightest, but care to cite some examples of them literally doing that? That would probably result in *never working in the valley again...*, so I wouldn't be surprised if GP would skip citing.
- throwup238 2y ago> This changed in the early 2010s, in part due to the emergence of the tech bubble of that decade (propped up, no doubt, by low interest rates). But it was also changed by the emergence of a new generation of rich ex-founders and early-employees — the result of the Google IPO, and also a smattering of startup acquisitions over the course of the late 1990s and 2000s. These newly rich individuals became investors, and some of these folks — such as ex-Googler and prominent angel Chris Sacca — raised small funds in the $20 million to $40 million range. This meant that the angels now had enough firepower to invest $200,000 checks instead of $20,000 checks — and early stage startups could go longer without talking to VC firms. I feel like this timeline is off. I lived in San Francisco in the first half of the 2010s and the big turning point wasn't Google's IPO but Facebook's. Cost of living was already inflated by then ($2-3k/mo for a SoMa studio) but after end of the lockout period, the property prices started to really grow out of control and the number of luxury cars driving around SF exploded. Angel groups that invested collectively as a mini-VC firm also became much more popular at that point. Googlers were plenty involved at the time but the FB IPO is when the character of the whole Bay Area seemed to change.
- eitally 2y agoI agree with this. And once that kinda tailed off a bit, it was time for the cloud firms (plus Nvidia, and for a time, Zoom, Tesla & Netflix) to create renewed demand.
- neilv 2y ago> > Y Combinator was the sort of unforgiving power player that remembered the names of investors who had crossed portfolio companies in the past, or who had disseminated unflattering portraits of YC, and blacklisted them from any YC dealings, or from the minds of YC founders. Do we have to be careful what we say on HN?
- jf 2y agoNot any more than you need to in any public forum
- adastra22 2y agoNot the point. One should be allowed to be critical of the institutions of the valley without getting their name written down in a secret blacklist.
- tomhoward 2y agoYC will fund anyone who is building a company that looks like it could be highly successful. There's one case I'm thinking of now where someone was as critical of YC (both the org and individual leaders) as anyone could possibly be, in a highly public and sustained way, and their startup later got funded by YC.
- adastra22 2y agoWell that is contrary to what is stated in the article/book.
- tomhoward 2y agoWhat in the article (sentence or paragraph) contradicts what I wrote? The article is about how YC defended one of its funded companies against a legal attack. It doesn’t say anything about YC refusing to fund someone who criticized it.
- cj 2y agoIf you’re wondering what to take away from this article: the simple take away is that YC has the power to get what it wants, for the companies it wants. If you happen to be in YC’s good graces, they will reward you in ways described in the article. If you’re not, they won’t take the time. I was in YC in 2012 (2 yrs after the founder writing this article, and one of the last years PG was directly involved). By that time it was clear that YC had turned into a “spray and pray” accelerator, meaning they started favoring volume of investments over everything else. When they did that, it also required that they split their attention between more companies, which inevitably meant that the sort of anecdotes described in the article still happen, but only for companies YC likes and believes in post-accelerator. YC definitely discriminates from that perspective- they choose which startups they think have the most promise during any given batch, and they give those founders preferential treatment. Which is to be expected. How else can you scale an accelerator?
- michaelt 2y ago> How else can you scale an accelerator? I mean, you could delegate the scaling to the startups you're investing in. If I'm gambling at the horse races, should I bet $100 on every horse to make my gambling scalable and diversified, because I don't feel I can pick winners with any reliability?
- fragmede 2y agoThat is the game though. If I bet $100k on each of 10 contestants. That’s $1m total. With odds of 1000:1, a single win pays $100m enough to cover all bets and leave a huge profit.
- alexashka 2y agoHow long until we find out the people doing the threatening and the ones offering 'protection' dine together and have a mutually beneficial relationship?
- anshulbhide 2y agoI particularly love the following quotes from "Chaos Monkeys." This is "The Social Network" level of commentary: The harsh reality is this: to have influence in the world, you need to be willing and able to reward your friends and punish your enemies. But in the passive-aggressive popularity contest that is Silicon Valley, someone actually going to bat for you—really going to bat, like telling important people to go fuck themselves—that’s rarer and more short-lived than a snowflake in a bonfire.
- worksonmymach 2y agoCommoncog hits a home run again. This is fascinating. It is more Suits than Suits. Showing how strategy > law when fighting a case. But also the interesting fraternity (not all boys of course) that YC is. Feels like the only other place you would see it is organized crime or corrupt politics where you then owe a favour. But that isn't what it is here. I guess it is about honour.
- erikerikson 2y agoPerhaps and it makes both excellent marketing as well as fantastic word of mouth.
- worksonmymach 2y agoIt is legendary. Trying to think is anything else like it? Freemasons? Hells angels? Donald Trump's cabinet?! Does YC do this consistently though. Even they have to choose battles.
- intended 2y agoInitially I thought, “Hey now, That’s not fair to the law.”, but I got what you meant - yes. There’s norms, case history, and the actual written law. This reads like a violation of social norms where a smaller startup faced retaliation ( repercussions? ), and then had the ability to counter the pressure.
- fallingknife 2y agoIt's not particularly interesting. YC relies on people who leave their employers to found startups. Companies tend not to like employees leaving to start their own companies and often sue them over it, which is 99% of the time meritless and nothing more than bullying. It is in YC's interest to use its resources to prevent this bullying because it both sends the signal to other companies that they would be unwise to try to bully a YC startup and to potential founders that if they join YC they will be protected.
- worksonmymach 2y ago
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- smashah 2y agoThe open source ecosystem needs this kind of "wasta". AI solutions nowadays are working to automate all sorts of services, partly using adversarial interoperability tools built by open source developers to extract functionality from services that have insanely worded TOS/T&Cs. Some of these megacorps are going after the maintainers and not the (potentially funded/protected) consumers with legal threats. In this case the two parties are within 10's of millions of dollars of net worth, yet still it's not a fair fight when an incumbent tries to strangle a newborn in it's cott. Now think about the insane situation of megacorp vs maintainer with a delta of a few trillion dollars of net worth. I don't know if even a few phone calls would save a yc startup in that case.
- fallingknife 2y agoSo 3 employees of a company (with "Ad" in the name) decided to leave and found a startup (also with "Ad" in the name). The (failing by all accounts) company they left got butt hurt over this and decided to bully them by using their larger size to sue them out of existence. Their plan was to win by exhausting the funds of the smaller company, not to win on the merits of the case (which was obviously dead in the water in California). But the smaller company was able to prevail because its investor was larger than the company suing them and decided to in turn bully them into dropping the lawsuit. Both startups, to nobody's surprise, ended up failing and the founders of both companies, also to no one's surprise, felt bitter about the whole episode. Sounds to me like the good guys won here (to the extent that a company with "Ad" in the name can be considered a good guy). Not really sure what I'm supposed to take away from this. Just a typical ego driven business spat where the only winners are the lawyers.
- ZeroGravitas 2y agoMeritocracy in action. Hopefully they never used this power to ruin people's businesses with a phone call for anything less noble than * checks notes * protecting their investment in a rival business.
- bongodongobob 2y agoY'all YCs live in a bubble, on multiple levels, and it's funny to watch the temperature go up.
- pjmorris 2y agoI recently read 'The Power Broker', Robert Caro, which describes how Robert Moses came to acquire power over park, road, bridge, and tunnel construction in New York City and State for over 40 years. There are strong parallels with the story here.
- jonstewart 2y agoThe Power Broker is supposed to be a story of moral failure and how power corrupts, and it is, but it’s also the absolute best how-to guide.
- pjmorris 2y agoIn an interview, Michael Lewis has said that he wrote 'Liar's Poker' as a cautionary tale, but it was taken as a 'How To' manual. Robert Caro has said (e.g. in 'Working') that he writes to expose how power is acquired and used in the US... which, as you say, also cuts both ways.
- throw4847285 2y agoOh man, glad I'm not the only person who won't shut up about the Power Broker. I think the best takeaway is that a bubble forms around the powerful where they cease to have to engage with the world as it is.
- pjmorris 2y agoHear, hear. It's interesting to me how Moses, per Caro, moved from being idealistic to being pragmatic in ways that look like corruption to those outside the 'bubble' but look like appropriate means and measures for accomplishing one's goals if you're inside the bubble. He came to be in possession of a great many opportunities to build, and so, to spend money, and he, using these opportunities and the money flow, over time, built a political machine for doing so in a way that benefited those who helped him, and punished those who didn't.
- throw4847285 2y ago
- rsp1984 2y ago> Adchemy named each of AdGrok’s co-founders personally in the suit, meaning that if they lost, the founders would be personally liable. The amounts involved in the suit effectively meant that all three co-founders would have been financially ruined. I've been there too. Named personally. I think most people don't realize how stressful and damaging this is. In most cases it's because there's some kind of well-intentioned but vaguely formulated law or act that, if real events are twisted by just the right amounts, would apply and imply personal liability. From that point on the game that the litigators play is to try and shoehorn each and every of your past statements or actions to fit the law in question and your job is to find as much evidence to the contrary, which might go many years back. In records that you almost certainly no longer have. While running a company. This practice of putting founders personally in a lawsuit is an absolute disgrace and it needs to stop. The damage done by vague laws and litigators who ruthlessly exploit them are a very large multiple higher than any of the benefits that could possibly be derived from them. The only winners in this game are the law firms.
- jonstewart 2y agoEarly in my career I was named personally in a lawsuit against my employer (filed by a customer who’d been promised features that hadn’t been delivered) and it was a powerful lesson to me to be circumspect in my email and careful of my reputation. Fortunately the lawsuit went away and didn’t cause me much stress after that initial shock.
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- 7e 2y agoThis kind of extra-judicial tampering cuts short the process, which exists for a reason. There are two sides to every story--I have every reason to expect there was a valid reason for a lawsuit here. Such mafia-like behavior is unsettling.
- fallingknife 2y agoAn ex employer suing employees who left to found a startup and you actually think it's a legit suit? I have every reason to expect it's nothing but bullying / a tactic to scare other employees who have the same idea. I see no evidence that it was legit.
- drdrek 2y agoIt funny because both companies went to shit and the whole thing was mostly a pissing contest
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- sirspacey 2y agoA stunningly powerful lesson that one never really win a lawsuit. The best you can do is survive.