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You have fought the hydra bravely, and I commend you for that. May the road rise up to meet you. May the wind be always at your back. What do you suppose we do

You have fought the hydra bravely, and I commend you for that. May the road rise up to meet you. May the wind be always at your back. What do you suppose we do? For the long-term, here's the financial structure for the solution that I see: http://michaelochurch.wordpress.com/2013/03/26/gervais-macleod-17-building-the-future-and-financing-lifestyle-businesses/ http://michaelochurch.wordpress.com/2013/03/26/gervais-macle... . Essentially, I think VC-istan and MegaCorps are both dead ends when it comes to genuine technical excellence (which weird people like us care about). I think it's time to have a serious conversation about financing a fleet of mid-growth K-strategist startups instead of these red-ocean, r-strategist, get-big-or-die marketing gambits. Here's an insane thought that I had that just might work. Find a Midwestern city that has $25 million to blow on becoming a top technology hub and set up an Autonomy Fund. (I'll do the "grunt work" of screening for talent; if this idea has legs I'd drop everything to implement it.) 100 top-notch programmers, $125k per year (out of which their resource/AWS costs come, so no one's living high on the hog), and 2 years. First, these companies are designed to become profitable, not to exit, so compensation is profit-sharing, not the joke equity offered by VC-istan. The city that funds this takes a 37.5% profit-share of whatever they build (it's valuating their work at $333k per year, which is lower than a VC valuation, but the terms are better.) If it works, then add time to the schedule (i.e. more years of life and more startups) and possibly more engineers. This is like Y Combinator, but without the feeder-into-VC dynamic; it's to build real businesses that generating lasting value both to a geographical area and to technology itself. I seriously think that Autonomy Funds are going to be big in the next 10 years-- VC-istan is essentially a shitty implementation of an Autonomy Fund, except with selection based on connections rather than technical ability-- but there are some obvious problems (moral hazard, principal-agent issues) that need to be solved.

IsaacL 14y ago
When I saw this story, my first thought was to go to the comments and do a ctrl-F "michaelochurch". Was not disappointed. I think this story is essentially the Clueless -> Loser transition in Gervais principle terminology.
- michaelochurch 14y ago
  That might be his future, but Clueless -> Loser is "going completely sane". Technocrats are Clueless who go the other way and turn into "Sociopath with a heart of gold" types. We actually believe that there's something worth fighting for. Since we tend to disadvantage our own employability and, therefore, our incomes, I believe this puts us into the "insane" category. We are here to use technology and rationality to do what our Boomer forebears never did (they came too soon, and had a lack of insight into the real problem) which is end industrial authoritarianism. The '60s radicals are back, 45 years later, but we sling code and like markets (in a left-libertarian, hybridize-the-welfare-state-and-market-economy, sort of way).
  - Surio 14y ago
    >> Technocrats are Clueless who go the other way and turn into "Sociopath with a heart of gold" types. We actually believe that there's something worth fighting for. Thanks! So there's hope for me. Let me know when you are ready with the offices. I might pack my bags and book that ticket to join you. I hope the pay's sufficient ;-)
  - kyllo 14y ago
    So, you define technocrats as white-hat sociopaths, basically. But don't you think that almost every sociopath sees himself or herself as being white-hat? You've built this narrative about a cosmic struggle between good vs. evil, but do you think anyone self-identifies as being evil? I think your chaotic/lawful dichotomy is very real, but the good/evil dichotomy is really a matter of perspective, I don't think it exists in a concrete sense. Selfish/generous might be a closer representation of reality. What most of us perceive as "evil" is really just a person wielding power over others for selfish means. There's a growing contingent of people using technology for generous rather than selfish means (yeah that's what "open source" is) and their philosophy is extending into social activism, but the industrial authoritarians have a big head start on us. They've been using technology as an expedient to their selfish purposes for a very long time already. (What's worse than being a MacLeodian Loser? Not even being one anymore because your former employer figured out how to make a machine do your job and had no reason to keep paying you. That describes 11 million Americans.) I've always found it funny that generosity and sharing are "radical" and "activist" while greed and selfishness, even to the extreme, are now considered normal.
illsorted 14y ago
I submit Fargo, ND for your consideration. We have oil money, cheap cost of living, and a decent tech community.
- at-fates-hands 14y ago
  I second this notion. I have several friends who have stayed there after graduating from NDSU to work as developers and engineers. If you make $50K/year you can easily live high on the hog. It also continues to keep a "small town" feel even though its grown a ton over the past ten years.
- michaelochurch 14y ago
  Do you think that: (a) Fargo's local government would be supportive of a technology Autonomy Fund, and... (b) it would be possible to get a critical mass of engineers to live there? Also, what's the gender balance? I'm married so I don't care, but I think we'd have the best odds in a town where it's at least 53:47 women.
  - falcolas 14y ago
    RE: (b) For myself? Not a chance in hell. Sorry, I lived in Grand Forks for several years, and between the wind, extreme temperature differences, and flooding, you'd not be able to get me to live there. Sure, you could eventually offer enough money, but it wouldn't fit in this plan.
  - mahyarm 14y ago
    How about Las Vegas? I've never been there but: 1) Cheap airfare, international destination 2) A Party Town, probably helps the gender balance in one aspect, people would like to visit you. 3) No Income Tax 4) Still close to the SF Bay Area 5) Never cold, barely rains (good or bad depending on your preferences) 6) Really cheap real estate. Buy a townhouse for under $100k! 7) Many tech conventions are hosted there 8) Driving from one corner to another takes only 30 minutes according to google maps.
    - 14y ago
umsm 14y ago
I completely agree. If you look at the foundation of (in our case) America, it is comprised of a lot of hard work by small businesses and families. They don't dream of "making it big" but they're realistic, offer a product or service that is useful to the community, and try to serve it whole-souled.
eli_gottlieb 14y ago
Not to derail the thread, but nation-states are about as obsolete as operating systems.
- sebcat 14y ago
  This is so true. The country I live in has about the same number of inhabitants as NYC. Today I read an article in a business magazine local to this country saying something like "we [as a country] need to be able to compete with the world". I mean, if we're supposed to compete with the bio mass of India or China, we're gonna have a bad time...
  - eli_gottlieb 14y ago
    I live in a country with a similarly small population and much smaller land-area. Just because nation-states aren't the forefront of the most interesting stuff going on in the world today doesn't mean they don't perform a necessary function. The psychological problem with a functioning, well-done nation-state is that it fades into the background, and people just suddenly act surprised when they wake up one day after voting for neoliberals and find they've lost their rent subsidies, their child allowance, and half the coverage on their health insurance.
- freshhawk 14y ago
  So by obsolete you mean "not trendy to think about but still the single largest contributing factor to every aspect of day to day experience"?
  - eli_gottlieb 14y ago
    Not quite every aspect, but the lion's share, yes. Precisely so.
- crucialfelix 14y ago
  not to derail your derailing, but "nation state" has a specific definition that I think is different than what you are referring to. China, India and the US are not nation states. Neither is Belgium. Japan is the largest. > The state is a political and geopolitical entity; the nation is a cultural and/or ethnic entity. The term "nation state" implies that the two geographically coincide. http://en.wikipedia.org/wiki/Nation_state http://en.wikipedia.org/wiki/Nation_state
Surio 14y ago
>> First, these companies are designed to become profitable, not to exit, so compensation is profit-sharing, not the joke equity offered by VC-istan That really, really resonated! Now for a counterpoint. When I read that remark, I recalled reading a recent interview of Groupon's COO and I quote this para: In 2007, he started Global Scholar to “help teachers give differentiated education to kids using technology. It was a fantastic experience. I raised $50 (INR 2,698.63) million in the toughest economy since the Depression. In 30 months, I gave four times returns to my investors and then sold the company in 2010-11.” On why he did so, he quips, “The moment you start a company, it is for sale… at the right price. You can’t have emotions…” (emphasis mine) Now tell me, just how exactly are you even going to combat deeply entrenched mindsets like those, which also happen foster the usual confirmation and survivor bias dreams in most, if not all aspiring "wantapreneurs"? Michael, I really commend your insight into the problem, but "you have an uphill struggle ahead of you" might be the understatement of the year. EDIT: formatting and word rearrangements and deleted some line that might be misconstrued! EDIT 2: Sigh. I really wish, that when people downvote something they don't agree with, they take a moment to tell why.
- michaelochurch 14y ago
  Now tell me, just how exactly are you even going to combat deeply entrenched mindsets like those, which also happen foster the usual confirmation and survivor bias dreams in most, if not all aspiring "wantapreneurs"? I don't think selling a company is a bad thing. I think building a company with the idea in mind that one must sell (because one's backers will flip out if there isn't a sale) is bad.
  - kyllo 14y ago
    It sounds like a lot of what bothers you about VC startups is that they've become a way for megacorps to outsource risky marketing experiments (aka "convex work") and buy the winners while discarding the losers. But through the usual avenues of corruption it's become a rigged game where the sociopaths inside the megacorps are working with their sociopath friends in the VCs and actually picking winners instead of only buying truly viable startups. So they're closing the circle and turning it into a revolving door for an incestuous aristocracy where the amount of value you capture is a function of who you know and who owes you a favor instead of being a function of how much value you actually create. How do you stop any market from getting taken over by psychopaths who want to turn it into an incest-fest? This is also a problem in every other industry ever, and also in government. Is there a such thing as a corruption-repellent, paychopath-kryptonite system, and if so, what is it?
ww520 14y ago
I like the idea; however, don't like the relocation. Not that I have anything against a Midwestern town but artificially designating a city to build a "tech hub" has rarely work. Many places have tried but failed. I don't see how it would be different this time. You will get more takers and talents if location is not an issue.
- michaelochurch 14y ago
  Location is only an issue if we focus on local govts. Who else do you see investing in an Autonomy Fund? Once the concept is proven, everyone will want in (and then there will be saturation + a bunch of crappy ones that don't vet and underperform) but I think the first ones are going to be very hard sells. My thought was that local governments' desires to build tech hubs might be used to justify the first Autonomy Fund.
  - ww520 14y ago
    The Fed can invest. Federal government has a lot of development grants. The Fed had the stimulus money ready to spend. Lots of them probably had gone to the banks or infrastructure projects to hire bodies off the street but 25M is a rounding error in the scheme of things. It's time for the Fed to invest in hi-tech.

IsaacL 14y ago

When I saw this story, my first thought was to go to the comments and do a ctrl-F "michaelochurch". Was not disappointed. I think this story is essentially the Clueless -> Loser transition in Gervais principle terminology.

michaelochurch 14y ago
That might be his future, but Clueless -> Loser is "going completely sane". Technocrats are Clueless who go the other way and turn into "Sociopath with a heart of gold" types. We actually believe that there's something worth fighting for. Since we tend to disadvantage our own employability and, therefore, our incomes, I believe this puts us into the "insane" category. We are here to use technology and rationality to do what our Boomer forebears never did (they came too soon, and had a lack of insight into the real problem) which is end industrial authoritarianism. The '60s radicals are back, 45 years later, but we sling code and like markets (in a left-libertarian, hybridize-the-welfare-state-and-market-economy, sort of way).
- Surio 14y ago
  >> Technocrats are Clueless who go the other way and turn into "Sociopath with a heart of gold" types. We actually believe that there's something worth fighting for. Thanks! So there's hope for me. Let me know when you are ready with the offices. I might pack my bags and book that ticket to join you. I hope the pay's sufficient ;-)
- kyllo 14y ago
  So, you define technocrats as white-hat sociopaths, basically. But don't you think that almost every sociopath sees himself or herself as being white-hat? You've built this narrative about a cosmic struggle between good vs. evil, but do you think anyone self-identifies as being evil? I think your chaotic/lawful dichotomy is very real, but the good/evil dichotomy is really a matter of perspective, I don't think it exists in a concrete sense. Selfish/generous might be a closer representation of reality. What most of us perceive as "evil" is really just a person wielding power over others for selfish means. There's a growing contingent of people using technology for generous rather than selfish means (yeah that's what "open source" is) and their philosophy is extending into social activism, but the industrial authoritarians have a big head start on us. They've been using technology as an expedient to their selfish purposes for a very long time already. (What's worse than being a MacLeodian Loser? Not even being one anymore because your former employer figured out how to make a machine do your job and had no reason to keep paying you. That describes 11 million Americans.) I've always found it funny that generosity and sharing are "radical" and "activist" while greed and selfishness, even to the extreme, are now considered normal.

illsorted 14y ago

I submit Fargo, ND for your consideration. We have oil money, cheap cost of living, and a decent tech community.

at-fates-hands 14y ago
I second this notion. I have several friends who have stayed there after graduating from NDSU to work as developers and engineers. If you make $50K/year you can easily live high on the hog. It also continues to keep a "small town" feel even though its grown a ton over the past ten years.
michaelochurch 14y ago
Do you think that: (a) Fargo's local government would be supportive of a technology Autonomy Fund, and... (b) it would be possible to get a critical mass of engineers to live there? Also, what's the gender balance? I'm married so I don't care, but I think we'd have the best odds in a town where it's at least 53:47 women.
- falcolas 14y ago
  RE: (b) For myself? Not a chance in hell. Sorry, I lived in Grand Forks for several years, and between the wind, extreme temperature differences, and flooding, you'd not be able to get me to live there. Sure, you could eventually offer enough money, but it wouldn't fit in this plan.
- mahyarm 14y ago
  How about Las Vegas? I've never been there but: 1) Cheap airfare, international destination 2) A Party Town, probably helps the gender balance in one aspect, people would like to visit you. 3) No Income Tax 4) Still close to the SF Bay Area 5) Never cold, barely rains (good or bad depending on your preferences) 6) Really cheap real estate. Buy a townhouse for under $100k! 7) Many tech conventions are hosted there 8) Driving from one corner to another takes only 30 minutes according to google maps.
  - 14y ago

umsm 14y ago

I completely agree. If you look at the foundation of (in our case) America, it is comprised of a lot of hard work by small businesses and families. They don't dream of "making it big" but they're realistic, offer a product or service that is useful to the community, and try to serve it whole-souled.

eli_gottlieb 14y ago

Not to derail the thread, but nation-states are about as obsolete as operating systems.

sebcat 14y ago
This is so true. The country I live in has about the same number of inhabitants as NYC. Today I read an article in a business magazine local to this country saying something like "we [as a country] need to be able to compete with the world". I mean, if we're supposed to compete with the bio mass of India or China, we're gonna have a bad time...
- eli_gottlieb 14y ago
  I live in a country with a similarly small population and much smaller land-area. Just because nation-states aren't the forefront of the most interesting stuff going on in the world today doesn't mean they don't perform a necessary function. The psychological problem with a functioning, well-done nation-state is that it fades into the background, and people just suddenly act surprised when they wake up one day after voting for neoliberals and find they've lost their rent subsidies, their child allowance, and half the coverage on their health insurance.
freshhawk 14y ago
So by obsolete you mean "not trendy to think about but still the single largest contributing factor to every aspect of day to day experience"?
- eli_gottlieb 14y ago
  Not quite every aspect, but the lion's share, yes. Precisely so.
crucialfelix 14y ago
not to derail your derailing, but "nation state" has a specific definition that I think is different than what you are referring to. China, India and the US are not nation states. Neither is Belgium. Japan is the largest. > The state is a political and geopolitical entity; the nation is a cultural and/or ethnic entity. The term "nation state" implies that the two geographically coincide. http://en.wikipedia.org/wiki/Nation_state http://en.wikipedia.org/wiki/Nation_state

Surio 14y ago

>> First, these companies are designed to become profitable, not to exit, so compensation is profit-sharing, not the joke equity offered by VC-istan That really, really resonated! Now for a counterpoint. When I read that remark, I recalled reading a recent interview of Groupon's COO and I quote this para: In 2007, he started Global Scholar to “help teachers give differentiated education to kids using technology. It was a fantastic experience. I raised $50 (INR 2,698.63) million in the toughest economy since the Depression. In 30 months, I gave four times returns to my investors and then sold the company in 2010-11.” On why he did so, he quips, “The moment you start a company, it is for sale… at the right price. You can’t have emotions…” (emphasis mine) Now tell me, just how exactly are you even going to combat deeply entrenched mindsets like those, which also happen foster the usual confirmation and survivor bias dreams in most, if not all aspiring "wantapreneurs"? Michael, I really commend your insight into the problem, but "you have an uphill struggle ahead of you" might be the understatement of the year. EDIT: formatting and word rearrangements and deleted some line that might be misconstrued! EDIT 2: Sigh. I really wish, that when people downvote something they don't agree with, they take a moment to tell why.

michaelochurch 14y ago
Now tell me, just how exactly are you even going to combat deeply entrenched mindsets like those, which also happen foster the usual confirmation and survivor bias dreams in most, if not all aspiring "wantapreneurs"? I don't think selling a company is a bad thing. I think building a company with the idea in mind that one must sell (because one's backers will flip out if there isn't a sale) is bad.
- kyllo 14y ago
  It sounds like a lot of what bothers you about VC startups is that they've become a way for megacorps to outsource risky marketing experiments (aka "convex work") and buy the winners while discarding the losers. But through the usual avenues of corruption it's become a rigged game where the sociopaths inside the megacorps are working with their sociopath friends in the VCs and actually picking winners instead of only buying truly viable startups. So they're closing the circle and turning it into a revolving door for an incestuous aristocracy where the amount of value you capture is a function of who you know and who owes you a favor instead of being a function of how much value you actually create. How do you stop any market from getting taken over by psychopaths who want to turn it into an incest-fest? This is also a problem in every other industry ever, and also in government. Is there a such thing as a corruption-repellent, paychopath-kryptonite system, and if so, what is it?

ww520 14y ago

I like the idea; however, don't like the relocation. Not that I have anything against a Midwestern town but artificially designating a city to build a "tech hub" has rarely work. Many places have tried but failed. I don't see how it would be different this time. You will get more takers and talents if location is not an issue.

michaelochurch 14y ago
Location is only an issue if we focus on local govts. Who else do you see investing in an Autonomy Fund? Once the concept is proven, everyone will want in (and then there will be saturation + a bunch of crappy ones that don't vet and underperform) but I think the first ones are going to be very hard sells. My thought was that local governments' desires to build tech hubs might be used to justify the first Autonomy Fund.
- ww520 14y ago
  The Fed can invest. Federal government has a lot of development grants. The Fed had the stimulus money ready to spend. Lots of them probably had gone to the banks or infrastructure projects to hire bodies off the street but 25M is a rounding error in the scheme of things. It's time for the Fed to invest in hi-tech.