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A few problems with this view: 1) Big corporations continue to struggle with doing in house innovation. Hiring more people doesn't seem to work. Just look at t

A few problems with this view: 1) Big corporations continue to struggle with doing in house innovation. Hiring more people doesn't seem to work. Just look at the infamously long and ever growing list of failed Google stuff. They are spending billions on this stuff. And most of it fails. Most large companies struggle with doing big new things in house. 2) There continue to be successful startups challenging/disrupting those big companies and occasionally scaring them into action (like acquisitions). And some of these startups are well funded. 3) Most Big Tech companies have been downsizing over the last few years. Job security maybe isn't that amazing if layoff rounds are a regular thing. And bigger salaries also means more scrutiny when layoffs happen. Also see #1: if projects aren't working out, layoffs are quick way to cut the losses. Getting caught up in one of these doomed corporate innovation things is maybe not great as a job security plan. Also, post covid, the notion of physically locating development teams close to San Francisco is no longer that much of an automatic thing. I see a lot of startups here in Berlin that only have a token presence in the US (not necessarily Silicon Valley) and do all/most of their tech in Europe. It used to be that startups would physically move to the Valley after raising money. That seems to happen much less these days. Mostly, US presence for such companies is limited to sales and marketing. And there are also lots of US startups setting up teams abroad. Why pay a premium for commodity development teams? Especially if you just raised a few million, you are on the spot to deliver. Going on a spending spree in the Valley maybe isn't the best way to do that.

wslh 2y ago
I don't see your points contradicts the article in any way, it describes more variables in the scenario. The problem is the scale and the darwinist concepts. For example, while (1) is totally correct, you need ten of thousands of startups to have a few ones that are acquired by big companies. The need of big corps doesn't estimulate the creation of startups if incentives are not aligned.
- jillesvangurp 2y ago
  You assume all value creation happens in these big companies and that the only valid exit is being acquired by them. That's not really the case. A lot of value gets created outside these companies. And every time that happens, their default mode seems to panic, do a lot of hiring and ramp up some big R&D effort. Failure seems common for these projects. And typically more expensive than doing it via startups. Just look at all the spending on AI in big tech companies. Most of it seems rushed and not really that effective. And they are all responding to each other; and to some well funded startups that are succeeding where they are failing. > you need ten of thousands of startups Just do the math. That's a few tens of billions in funding. Well within range of the R&D budgets of these large companies (individually even). And of course a lot of the investment burden and risk is shared with a wider community of investors. Their main issue is absorbing this R&D and value back into their companies. Acquisitions and acquihires aren't that effective mostly. Employing a large ineffective workforce at premium rates also isn't free and hardly a guarantee for value creation. That's why layoffs are a thing.

wslh 2y ago

I don't see your points contradicts the article in any way, it describes more variables in the scenario. The problem is the scale and the darwinist concepts. For example, while (1) is totally correct, you need ten of thousands of startups to have a few ones that are acquired by big companies. The need of big corps doesn't estimulate the creation of startups if incentives are not aligned.

jillesvangurp 2y ago
You assume all value creation happens in these big companies and that the only valid exit is being acquired by them. That's not really the case. A lot of value gets created outside these companies. And every time that happens, their default mode seems to panic, do a lot of hiring and ramp up some big R&D effort. Failure seems common for these projects. And typically more expensive than doing it via startups. Just look at all the spending on AI in big tech companies. Most of it seems rushed and not really that effective. And they are all responding to each other; and to some well funded startups that are succeeding where they are failing. > you need ten of thousands of startups Just do the math. That's a few tens of billions in funding. Well within range of the R&D budgets of these large companies (individually even). And of course a lot of the investment burden and risk is shared with a wider community of investors. Their main issue is absorbing this R&D and value back into their companies. Acquisitions and acquihires aren't that effective mostly. Employing a large ineffective workforce at premium rates also isn't free and hardly a guarantee for value creation. That's why layoffs are a thing.