An Engineer's View of Venture Capitalists (2001)(spectrum.ieee.org)
spectrum.ieee.org
An Engineer's View of Venture Capitalists (2001)
https://spectrum.ieee.org/an-engineers-view-of-venture-capitalists
121 comments
Well this certainly hit a nerve with me:
> They told me: "We think you should resign." I left; the problems didn't.
When there is a conflict between the engineering and money talent, the money is going to win. It doesn’t matter if you’re right, if you’re not rich and connected.
I wish I’d understood this, and done more to nurture a direct relationship with my VC instead of letting the angel handle that side of things.
> They told me: "We think you should resign." I left; the problems didn't.
When there is a conflict between the engineering and money talent, the money is going to win. It doesn’t matter if you’re right, if you’re not rich and connected.
I wish I’d understood this, and done more to nurture a direct relationship with my VC instead of letting the angel handle that side of things.
> The engineers building the future deserve a fair equity share in the value they create; today they don't get one.
I understand that this is from 2001, but oh boy has this changed drastically.
For arguably the first time in history founders of businesses operate controlling interest of their stock on the public market. More billionaires have been minted from tech companies in the last 15 years. Not only have engineers gotten their fair share, their power is now being questioned (see Musk, Zuck, etc.).
I understand that this is from 2001, but oh boy has this changed drastically.
For arguably the first time in history founders of businesses operate controlling interest of their stock on the public market. More billionaires have been minted from tech companies in the last 15 years. Not only have engineers gotten their fair share, their power is now being questioned (see Musk, Zuck, etc.).
You're right: funding is extremely founder-friendly right now.
From my perspective, though, the original article is talking about everyday engineers (the "technical team"). If you're an early, senior engineer at a startup, you might be offered 1% of the company. Over the early years of the company, you're often critical to the success and velocity of product development - usually just as critical as the technical cofounder. After four years, your company is acquired for $1B! Your 1% has been diluted to 0.75%, so you walk away with $7.5M. After long-term capital gains, you pocket a bit more than $6M. Objectively, you're now very wealthy - if you're still relatively young, this is enough money to buy a nice house, fund your retirement, and do some angel investing, even in the most expensive cities in the US.
Meanwhile, the technical cofounder walks away from the same story with $200M tax-free. That's dynastic wealth. Does the founder's additional year of work justify this difference? What about the partner from your primary VC, who's likely to personally take home tens of millions despite doing nothing more than investing other people's money and sitting in the occasional meeting?
This is the rosiest scenario - the engineer, founder, and VC all earn life-altering amounts of money. Things get much worse if you're a less senior engineer, you're hired after the first large round of funding, or (especially) the company's exit isn't as good. In all those situations, the founder and VC still get a life-altering windfall, while the senior engineer might barely get enough to retroactively bring their salary up to market rate.
From my perspective, though, the original article is talking about everyday engineers (the "technical team"). If you're an early, senior engineer at a startup, you might be offered 1% of the company. Over the early years of the company, you're often critical to the success and velocity of product development - usually just as critical as the technical cofounder. After four years, your company is acquired for $1B! Your 1% has been diluted to 0.75%, so you walk away with $7.5M. After long-term capital gains, you pocket a bit more than $6M. Objectively, you're now very wealthy - if you're still relatively young, this is enough money to buy a nice house, fund your retirement, and do some angel investing, even in the most expensive cities in the US.
Meanwhile, the technical cofounder walks away from the same story with $200M tax-free. That's dynastic wealth. Does the founder's additional year of work justify this difference? What about the partner from your primary VC, who's likely to personally take home tens of millions despite doing nothing more than investing other people's money and sitting in the occasional meeting?
This is the rosiest scenario - the engineer, founder, and VC all earn life-altering amounts of money. Things get much worse if you're a less senior engineer, you're hired after the first large round of funding, or (especially) the company's exit isn't as good. In all those situations, the founder and VC still get a life-altering windfall, while the senior engineer might barely get enough to retroactively bring their salary up to market rate.
> If you're an early, senior engineer at a startup, you might be offered 1% of the company.
The alternative for the senior engineer is to start a clone competitor with 25% ownership.
The reason an engineer accepts 1% is because: 1. they would be starting their horse after the race has started, 2. they don’t have the skills to be a CTO or found a team, 3. they don’t want to take the risk. Those 3 things are worth the real money, not just being an engineer.
If an engineer wants to own 25% at founding, they need to become a founder rather than bitch about the reality that your employer will pay you as little as possible to acheive what they want. Oh, and mathematically a founder clearly can’t give 25% to more than 4 senior engineers that join subsequently ,and why should they?
The alternative for the senior engineer is to start a clone competitor with 25% ownership.
The reason an engineer accepts 1% is because: 1. they would be starting their horse after the race has started, 2. they don’t have the skills to be a CTO or found a team, 3. they don’t want to take the risk. Those 3 things are worth the real money, not just being an engineer.
If an engineer wants to own 25% at founding, they need to become a founder rather than bitch about the reality that your employer will pay you as little as possible to acheive what they want. Oh, and mathematically a founder clearly can’t give 25% to more than 4 senior engineers that join subsequently ,and why should they?
> The reason an engineer accepts 1% is because ...
In the case of most people I've spoken to, the reason they don't start companies is they don't have the savings to work on it for 6-12 months, and gamble on getting accepted into YC or another angel/accelerator. They don't have a safety net to fall back on if that fails.
> they don’t want to take the risk
As many many articles have discussed, this is more about having personal financial security than any difference in personality or character.
In the case of most people I've spoken to, the reason they don't start companies is they don't have the savings to work on it for 6-12 months, and gamble on getting accepted into YC or another angel/accelerator. They don't have a safety net to fall back on if that fails.
> they don’t want to take the risk
As many many articles have discussed, this is more about having personal financial security than any difference in personality or character.
> they don't have the savings to work on it for 6-12 months
A founder* is a hacker that never uses excuses.
Virtually any single person in the US can find a way to work for a year with low expenses, if they accept compromises. Appropriately enough for this thread, perhaps even by offering a very small percentage of equity to a friend to board.
Edit: How many founders have divorces, neglected children and ignored parents? How many founders avoid a relationship? Not a requirement to neglect family, since a successful founder is likely to be skilled at finding good compromises in business, and likely to use the same skill making reasonable compromises with their family life.
* think foresight combined with bricolage, jugaad, engineering compromise, ‘rubber band, bailing wire and bubblegum’ solutions. https://news.ycombinator.com/item?id=29164495
A founder* is a hacker that never uses excuses.
Virtually any single person in the US can find a way to work for a year with low expenses, if they accept compromises. Appropriately enough for this thread, perhaps even by offering a very small percentage of equity to a friend to board.
Edit: How many founders have divorces, neglected children and ignored parents? How many founders avoid a relationship? Not a requirement to neglect family, since a successful founder is likely to be skilled at finding good compromises in business, and likely to use the same skill making reasonable compromises with their family life.
* think foresight combined with bricolage, jugaad, engineering compromise, ‘rubber band, bailing wire and bubblegum’ solutions. https://news.ycombinator.com/item?id=29164495
> A founder* is a hacker that never uses excuses.
A founder* is a hacker that has at least a quarter million dollars of liquid money, or access to that from immediate family or close friends.
* based on the actual research around this
A founder* is a hacker that has at least a quarter million dollars of liquid money, or access to that from immediate family or close friends.
* based on the actual research around this
Hard to believe car repair shops or taxi businesses can ever get started, since they need a million more things than a desktop and a chair. And yet they do, and they don’t get millionaire in the end.
So, you don’t need a quarter million dollars to start a startup. I did it with $12000 that I had saved from my previous job, spent over a year, with a little consulting nightjob.
“What about if you have 3 kids, 2 dogs, 1 swimming pool and 7 secondary flats.”
Entrepreneurship is not owed to you. What we’re owed is renewing the elites if they are doing a bad job, using companies that start and replace the existing ones. Facebook, Whatsapp, Tesla and SpaceX didn’t exist 20 years ago, and 84% billionaires are first-generation billionaires, the rest are women and got rich by inheritance or marriages. So elites are ~96% renewed at my generation.
Job done.
So, you don’t need a quarter million dollars to start a startup. I did it with $12000 that I had saved from my previous job, spent over a year, with a little consulting nightjob.
“What about if you have 3 kids, 2 dogs, 1 swimming pool and 7 secondary flats.”
Entrepreneurship is not owed to you. What we’re owed is renewing the elites if they are doing a bad job, using companies that start and replace the existing ones. Facebook, Whatsapp, Tesla and SpaceX didn’t exist 20 years ago, and 84% billionaires are first-generation billionaires, the rest are women and got rich by inheritance or marriages. So elites are ~96% renewed at my generation.
Job done.
Needing money is the #1 excuse for avoiding founding a business.
I have helped found two businesses. The first I put in all I had (~10k), and the second was founded a year later because the first was failing and I was essentially broke. The 3 co-founders who all had small children drew down mortgages to fund themselves. Being hungry for money, we started doing some irrelevant consulting to pay ourselves some money: which was about minimum wage for the first year (not enough to pay all bills). I lived in a derelict building with opiate addicts (not my scene, but it was my friend’s addiction). As founders we were fortunate that we couldn’t get VC funding, since now we still own all of the business. The business hasn’t turned into a unicorn, but has been mildly successful, and now the founders have a better financial story than most first employees (@1%).
YC provides living expenses while you validate your idea and get funding.
There is usually a way to succeed but you must have the right thought patterns. If you are the sort of person who finds excuses, you are far better off being an employee. The amount of money a good engineer in the US can earn is astonishing.
On average, being a founder is a financially stupid decision. Most VC funds fail, and VC has seniority for any business sale, so founders have a much higher risk than VC. The chance of a 20% payout is nowhere near enough to cover the risks of failing. Be an employee, take your 1%, value it at $0, and enjoy banking your low risk salary and avoid screwing your health and have a social life and look after your family.
Please, try to avoid selection bias where you see a founder win $200M but you ignore the other majority of founders who failed and ended up with $0 and a broken life.
I have helped found two businesses. The first I put in all I had (~10k), and the second was founded a year later because the first was failing and I was essentially broke. The 3 co-founders who all had small children drew down mortgages to fund themselves. Being hungry for money, we started doing some irrelevant consulting to pay ourselves some money: which was about minimum wage for the first year (not enough to pay all bills). I lived in a derelict building with opiate addicts (not my scene, but it was my friend’s addiction). As founders we were fortunate that we couldn’t get VC funding, since now we still own all of the business. The business hasn’t turned into a unicorn, but has been mildly successful, and now the founders have a better financial story than most first employees (@1%).
YC provides living expenses while you validate your idea and get funding.
There is usually a way to succeed but you must have the right thought patterns. If you are the sort of person who finds excuses, you are far better off being an employee. The amount of money a good engineer in the US can earn is astonishing.
On average, being a founder is a financially stupid decision. Most VC funds fail, and VC has seniority for any business sale, so founders have a much higher risk than VC. The chance of a 20% payout is nowhere near enough to cover the risks of failing. Be an employee, take your 1%, value it at $0, and enjoy banking your low risk salary and avoid screwing your health and have a social life and look after your family.
Please, try to avoid selection bias where you see a founder win $200M but you ignore the other majority of founders who failed and ended up with $0 and a broken life.
I founded 4 startups after moving to SF with $600 (and without support from my family).
It's easy to make excuses for why you can't start a company and in fact there are a million great reasons why you should never do so. Starting a company is a terrible decision from a purely rational or financial perspective.
But don't act like it's not possible unless you're rich. That's just not true.
It's easy to make excuses for why you can't start a company and in fact there are a million great reasons why you should never do so. Starting a company is a terrible decision from a purely rational or financial perspective.
But don't act like it's not possible unless you're rich. That's just not true.
Can you share more details about your story? Maybe it will be helpful to others. Thanks!
Growing up poor and hungry tends to turn some people into hustlers. That's how it worked for me.
Then it was just "right place, right time."
First startup was acquired after Series A by a publicly traded company. Second startup was bootstrapped by the founding team of the first startup and was acquired by a publicly traded company. Third startup was acquired after the Series A by a competitor. Fourth startup was acquired after the Series B by a publicly traded company.
I had incredible co-founders and worked with some amazing teams. I only had one bad investor and was lucky enough to work with some incredible board members. But most of all, I had incredible timing and I embraced the grind.
Then it was just "right place, right time."
First startup was acquired after Series A by a publicly traded company. Second startup was bootstrapped by the founding team of the first startup and was acquired by a publicly traded company. Third startup was acquired after the Series A by a competitor. Fourth startup was acquired after the Series B by a publicly traded company.
I had incredible co-founders and worked with some amazing teams. I only had one bad investor and was lucky enough to work with some incredible board members. But most of all, I had incredible timing and I embraced the grind.
Can you share more about how you managed to get the first startup up and running, and especially the seed and series A fundraising process in your specific case?
We started working out of a coffee bar, using our pooled savings along with credit card debt (representing about 7 months runway). We were introduced to a great Angel investor by a former boss who gave us glowing recommendations. This Angel did the seed round along with a small syndicate they brought along with. We subleased a super crappy office in San Mateo. Our MVP was quite successful, and we decided to go out for our Series A (using intros from our lead investor). Over the course of 40 days we pitched pretty much every institutional VC in the Bay Area (and every single one passed on us). Just about when we were ready to give up, the very first VC we pitched called us and asked us to come back and re-pitch. They ended up leading the Series A, and our existing investors took the rest of the round.
A founder is a sociopath who steals from the workers.
Calling people sociopaths is against site guidelines - flagged.
Making nasty assumptions about any group of people is unhealthy - I hope you can learn to be more open minded.
I would like to see some figures for the average $ received by the founders of YC companies, for the first five years of YC. It wouldn’t surprise me if employees of those companies have a higher average $ return than founders.
Making nasty assumptions about any group of people is unhealthy - I hope you can learn to be more open minded.
I would like to see some figures for the average $ received by the founders of YC companies, for the first five years of YC. It wouldn’t surprise me if employees of those companies have a higher average $ return than founders.
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> the reason they don't start companies is they don't have the savings to work on it for 6-12 months, and gamble on getting accepted into YC or another angel/accelerator. They don't have a safety net to fall back on if that fails.
Which is part of the reason for their compensation.
Did the first few factory workers and car design people at Ford become millionaires (in their equivalent dollars)? Probably not, but if you're the first engineer of a Twitter, Google, etc. it's not unreasonable to see your net worth to reach 7 figures, if not 8 figures. Early engineers are compensated just fine IMO, they are just taking a big gamble relative to the market (i.e. $500k annual salary at Google).
Which is part of the reason for their compensation.
Did the first few factory workers and car design people at Ford become millionaires (in their equivalent dollars)? Probably not, but if you're the first engineer of a Twitter, Google, etc. it's not unreasonable to see your net worth to reach 7 figures, if not 8 figures. Early engineers are compensated just fine IMO, they are just taking a big gamble relative to the market (i.e. $500k annual salary at Google).
Access to capital is the underestimated aspect of the entire scenario.
Sheer amount of money available and accessible to you once you are rich is tremendous. From stimulus funds from US Fed to parent's trust fund.
Sheer amount of money available and accessible to you once you are rich is tremendous. From stimulus funds from US Fed to parent's trust fund.
> Which is part of the reason for their compensation.
Right, those without capital are always compensated poorly relative to the value they produce. They don’t have a better option, which is part of the problem. One of the people with access to capital but possibly far less skill will end up being their boss and also receive the vast majority of rewards for their combined efforts.
> Did the first few factory workers and car design people at Ford become millionaires
True, but not necessarily optimal.
Right, those without capital are always compensated poorly relative to the value they produce. They don’t have a better option, which is part of the problem. One of the people with access to capital but possibly far less skill will end up being their boss and also receive the vast majority of rewards for their combined efforts.
> Did the first few factory workers and car design people at Ford become millionaires
True, but not necessarily optimal.
> They don't have a safety net to fall back on if that fails.
However many people also start companies without safety nets. Some of them fail and they might have drastic life moments, but in tech you always find some job, in fact your failed startup might be seen even positive by some employers...
However many people also start companies without safety nets. Some of them fail and they might have drastic life moments, but in tech you always find some job, in fact your failed startup might be seen even positive by some employers...
When my startup failed I did contracting for a while. And the trauma probably kept me from pursuing startups for almost a decade. Our angel skipped off back to SV and I went back to the European job market with no professional references, no employer to verify my qualifications, and no real network. And I had a baby on the way.
> your failed startup might be seen even positive by some employers.
It's gotten much better since those days but having that startup is seen as an asset to the right company.
> your failed startup might be seen even positive by some employers.
It's gotten much better since those days but having that startup is seen as an asset to the right company.
You can continue that line of reasoning: there is surely an equally competent and hard working engineer in some large company, or Europe, that for the same 4 years got $0 extra on top of inflationary increases. You got $6M - how much should you redistribute among those competent developers to make it fair?
Maybe you took some risks, maybe you didn’t. Maybe the founders took more, maybe they didn’t. But at some level, if neither engineer showed up for work, the world would be largely the same. If the founders didn’t act as prime movers at a critical inflection point, there would’ve been one fewer IPO and a lot less value creation for everyone to try to split up.
Maybe you took some risks, maybe you didn’t. Maybe the founders took more, maybe they didn’t. But at some level, if neither engineer showed up for work, the world would be largely the same. If the founders didn’t act as prime movers at a critical inflection point, there would’ve been one fewer IPO and a lot less value creation for everyone to try to split up.
It's worse than that, the VC gets millions in management fees and a 20-30% carry on a diversified portfolio so they take on no risk. There's literally no downside for them and they push companies to take on a ton of risk because they're looking for 1% of their investments to return the whole fund, which makes no sense for an employee who only has a tiny fraction of shares in one of the companies.
You forgot that the engineer got paid from day 0, plus 1% equity. While the cofounder got the idea, filtered it among all bad ideas, pitched and mounted it, and was on 100% risk. I have the same discussion with my employees, they want 100k$ per year from day one with guarantees of permanent employment, then they want equity.
More likely you got options, and they are taxed as income at a liquidity event (acquisition, IPO)... unless you were confident enough in the startup to execute those options & immediately pay the resulting taxes out of pocket. And you have to have that confidence before the valuation is too high & the taxes are unaffordable to absorb.
For sure! I tried to paint the rosiest possible scenario for the early engineer.
How would the cofounder's share be tax free?
Virtually all founders use an 83b election to pre-pay taxes when the stock is nearly worthless.
It was too low in 2001 and has now swung too far the other way.
https://en.wikipedia.org/wiki/Mean_reversion_(finance)
Like most things, the gray area in the middle with checks and balances is probably best.
https://en.wikipedia.org/wiki/Mean_reversion_(finance)
Like most things, the gray area in the middle with checks and balances is probably best.
It's a good article but some parts of it don't ring true, or perhaps things have changed since it was written (in 2001).
For example, the investor director a VC appoints to a board does not generally get any stock options - just a fee for attending board meetings (generally paid to the VC firm, not the individual). It also feels unlikely that a VC today would appoint their own CEO - it does happen, but it is far more likely that they would either back the existing management team or not invest at all, such is their view of how critical the team's quality is to the company's prospects.
The author also describes the VC and its appointed CEO taking ~75% of the company. I've never seen anything like that happen - investors usually end up with about ~30% stake, regardless of what funding phase you are at.
The paragraph about the 'down round' scenario is bizarre. There would need to have been serious failures in the company's/founder's legal work to allow this type of retrospective revaluation to occur. I've never heard of anything like this.
I guess the reason for these oddities is because the landscape was very different in 2001, when we were just emerging from the dot com boom, but I'm not sure. Can anyone else comment?
Anyway, overall it's a really good article, and the final parts ('Fixing the problem') was pretty insightful, since things like this have actually happened since then.
For example, the investor director a VC appoints to a board does not generally get any stock options - just a fee for attending board meetings (generally paid to the VC firm, not the individual). It also feels unlikely that a VC today would appoint their own CEO - it does happen, but it is far more likely that they would either back the existing management team or not invest at all, such is their view of how critical the team's quality is to the company's prospects.
The author also describes the VC and its appointed CEO taking ~75% of the company. I've never seen anything like that happen - investors usually end up with about ~30% stake, regardless of what funding phase you are at.
The paragraph about the 'down round' scenario is bizarre. There would need to have been serious failures in the company's/founder's legal work to allow this type of retrospective revaluation to occur. I've never heard of anything like this.
I guess the reason for these oddities is because the landscape was very different in 2001, when we were just emerging from the dot com boom, but I'm not sure. Can anyone else comment?
Anyway, overall it's a really good article, and the final parts ('Fixing the problem') was pretty insightful, since things like this have actually happened since then.
The down round situation was probably the result of anti-dilution protection, meaning it was baked into the previous rounds documents, not something that was renegotiated. Anti-dilution protection basically says that if the company closes a Series B financing at a price lower than the price of the Series A, the Series A investors get an adjustment to their fully-diluted ownership (ie get additional ownership). In the worst case, the Series A shares are effectively repriced to the Series B price, but most often the adjustment is much less. These terms would be part of the Series A term sheet and deal documents, not something that is raised when the Series B occurs.
Exactly, so the legal team and the founders didn't do a good deal. They agreed to those terms. Nothing was "re-negotiated" as the article said.
Things were definitely different in the dot com era. I have stories...
I think things are a lot better now from what I see.
I think things are a lot better now from what I see.
> The VC connects wealthy investors to nerds. There are few alternatives. You can self-fund by consulting and by setting aside money for your venture. That doesn't work.
It would've been great if an explanation was given for this opinion. Why wouldn't this work? From my limited experience it works fairly well.
It would've been great if an explanation was given for this opinion. Why wouldn't this work? From my limited experience it works fairly well.
Time and misalignment. It's distracting and hard to scale.
Seed money buys time for small team to find product/market fit, and growth money for customer acquisition with a delayed payback period... and the ceiling is how reality-distorting your CEO is.
Consulting is limited by your hours, and likely takes away from your experimentation, product refinement, customer success, and marketing $ + hours. In addition, it biases the product/processes towards the service as consulting immediately makes serious money and saas takes months/years to make even $100/mo. The only exception we did was limited consulting around customer success and co-design of features already on our roadmap. Super painful decision, revenue-wise!
Despite strong interest, we resisted consulting services for our GPU visual graph intelligence platform for years to avoid the misalignment. Due to the recent demand for graph AI for analyzing problems like security /fraud / customer behavior / digital twins, and our interest in bundling those capabilities into our platform yet realizing we need to learn alongside our users, we flipped that decision. However, we have a base product, are being super picky on projects aligned with graph AI, and our clients also want that product goal realized long-term (vs more consulting.)
Seed money buys time for small team to find product/market fit, and growth money for customer acquisition with a delayed payback period... and the ceiling is how reality-distorting your CEO is.
Consulting is limited by your hours, and likely takes away from your experimentation, product refinement, customer success, and marketing $ + hours. In addition, it biases the product/processes towards the service as consulting immediately makes serious money and saas takes months/years to make even $100/mo. The only exception we did was limited consulting around customer success and co-design of features already on our roadmap. Super painful decision, revenue-wise!
Despite strong interest, we resisted consulting services for our GPU visual graph intelligence platform for years to avoid the misalignment. Due to the recent demand for graph AI for analyzing problems like security /fraud / customer behavior / digital twins, and our interest in bundling those capabilities into our platform yet realizing we need to learn alongside our users, we flipped that decision. However, we have a base product, are being super picky on projects aligned with graph AI, and our clients also want that product goal realized long-term (vs more consulting.)
hey sounds pretty interesting can you send me your website?
https://github.com/graphistry/pygraphistry + https://github.com/rapidsai/cudf if you're coming from the api / ds side, and GNNs side is more of a "let's chat!" thing for figuring out aligned collaborations (slack/email, all good!)
This is a bit circular, but...it doesn't work because others will use VC. Those using VC will make more progress because they wont be hindered by side gigs to bootstrap the company. If they have good metrics, they will also have access to growth capital which can either out-fund or flat out smother unfunded competitors.
How do I know? I raised some funding for our startup (3yrs full-time) but bootstrapping further was unsustainable vs competitors who were fundraising. VC funded competitors could hire more, sell more, compensate more. The market becomes skewed.
Is it good for the VC-backed competitors? Sort of. They survive. They have longer stories. But they get diluted. Many die as they try to swing for the fences (as VCs want, power law and all...) Some get fired by VC-dominated boards. Some are sent on wild goose chases by outsider funders. This probably happens less-so with better VCs.
How do I know? I raised some funding for our startup (3yrs full-time) but bootstrapping further was unsustainable vs competitors who were fundraising. VC funded competitors could hire more, sell more, compensate more. The market becomes skewed.
Is it good for the VC-backed competitors? Sort of. They survive. They have longer stories. But they get diluted. Many die as they try to swing for the fences (as VCs want, power law and all...) Some get fired by VC-dominated boards. Some are sent on wild goose chases by outsider funders. This probably happens less-so with better VCs.
You have to remember this article was written in 2001, when most "big" ventures were hardware and therefore very capital intensive. Google shattered that idea: Larry and Sergei retained an extraordinary percentage up through the IPO because they didn't "need" the VC money, and they were doing quite well without it. Many of us from the period looked at that result, took it to an extreme, and proceeded to self-bootstrap our next endeavors.
>Larry and Sergei retained an extraordinary percentage up through the IPO because they didn't "need" the VC money, and they were doing quite well without it.
Fyi... Google got VCs Sequoia Capital & KPCB $25 million around June 1999 which was about ~9 months after they started in Sept 1998. Before the VC funding, they also got a group of seed investments from Stanford professors and other individuals (Andy Bechtolsheim, Jeff Bezos, NBA star Shaq, etc.)
Fyi... Google got VCs Sequoia Capital & KPCB $25 million around June 1999 which was about ~9 months after they started in Sept 1998. Before the VC funding, they also got a group of seed investments from Stanford professors and other individuals (Andy Bechtolsheim, Jeff Bezos, NBA star Shaq, etc.)
Yes, they actually started well before Sept 4, 1998. Even their first angel round (August 1, 1998) predates that incorporation date. Various people told me that they didn't need the A round but wanted to get the angel notes off the books, but that might be a backsplanation.
https://www.crunchbase.com/organization/google/company_finan...
Stanford had functioned as an incubator, and the project had received government (NSF) funding. Indeed the Page Brin page-rank patent was assigned to Stanford. It was filed Jan 8, 1998 with priority to 1997-01-10. Stanford paid for that and Stanford legal was going to defend it.
https://patentimages.storage.googleapis.com/37/a9/18/d7c46ea...
To me the lesson of Google is early profitability gives you immense leverage with VCs. They had $220,000 of revenue in 1999. Revenue is good.
https://www.crunchbase.com/organization/google/company_finan...
Stanford had functioned as an incubator, and the project had received government (NSF) funding. Indeed the Page Brin page-rank patent was assigned to Stanford. It was filed Jan 8, 1998 with priority to 1997-01-10. Stanford paid for that and Stanford legal was going to defend it.
https://patentimages.storage.googleapis.com/37/a9/18/d7c46ea...
To me the lesson of Google is early profitability gives you immense leverage with VCs. They had $220,000 of revenue in 1999. Revenue is good.
>To me the lesson of Google is early profitability gives you immense leverage with VCs.
But Google didn't have profits in June 1999. They were hoping for VCs Mike Moritz @ Sequoia and John Doerr @ KPCB to bring them revenue because those 2 partners were on the boards of AOL and Yahoo. They wanted to try and sell their tech to those companies. (They eventually did do deals with both of them.)
Later interviews with angel Ron Conway and Sequoia said Larry's slidedeck for investment didn't have a revenue plan.
The "leverage" that Larry & Sergei had was that their search engine worked better than competitors such as AltaVista and Yahoo.
EDIT reply to: >But it's on record that Google had $220,000 in revenue in 1999.
But did they have that revenue before June 1999? Maybe everybody's memory is fuzzy but in the books and recollections from interviews of that time period, Google didn't have meaningful revenue so it wasn't a point of leverage. But another leverage they had besides the best-in-class search engine was that angel Ron Conway was willing to quickly assemble a consortium of investors in a few days to bypass Sequoia & KPCB. It was that threat of VCs losing the the deal was what finally got them to pull the trigger. Until then, those 2 VCs were sitting on their hands for weeks. Google's 1999 revenue was never brought up as leverage. Do you have insider information that contradicts that?
>Revenue and early profitability is good thing for founders but not VCs.
100% agree about the principle in general -- but I don't think Google situation in 1999 is a case study of that.
But Google didn't have profits in June 1999. They were hoping for VCs Mike Moritz @ Sequoia and John Doerr @ KPCB to bring them revenue because those 2 partners were on the boards of AOL and Yahoo. They wanted to try and sell their tech to those companies. (They eventually did do deals with both of them.)
Later interviews with angel Ron Conway and Sequoia said Larry's slidedeck for investment didn't have a revenue plan.
The "leverage" that Larry & Sergei had was that their search engine worked better than competitors such as AltaVista and Yahoo.
EDIT reply to: >But it's on record that Google had $220,000 in revenue in 1999.
But did they have that revenue before June 1999? Maybe everybody's memory is fuzzy but in the books and recollections from interviews of that time period, Google didn't have meaningful revenue so it wasn't a point of leverage. But another leverage they had besides the best-in-class search engine was that angel Ron Conway was willing to quickly assemble a consortium of investors in a few days to bypass Sequoia & KPCB. It was that threat of VCs losing the the deal was what finally got them to pull the trigger. Until then, those 2 VCs were sitting on their hands for weeks. Google's 1999 revenue was never brought up as leverage. Do you have insider information that contradicts that?
>Revenue and early profitability is good thing for founders but not VCs.
100% agree about the principle in general -- but I don't think Google situation in 1999 is a case study of that.
> It was that threat of VCs losing the the deal was what finally got them to pull the trigger.
It almost always is. The VC "industry" is all about FOMO.
It almost always is. The VC "industry" is all about FOMO.
No, I don't think Page + Brin needed Sand Hill Road to introduce them to fellow Stanford alums Jerry Yang and David Filo.
Profit isn't revenue and visa versa. But it's on record that Google had $220,000 in revenue in 1999.
Yahoo contracted out their search back then; they started as a directory and they believed in that. It's not clear exactly when the Yahoo search deal started. But it is clear when the Yahoo investment was made (which was after Series A).
Yahoo also used Inktomi and Google's leverage with Yahoo was that they were better than Inktomi or Altavista. But their leverage with VCs was that they had revenue and it was going up and to the right.
Sun was another company with early profitability, very early in Sun's case. That's my main point. Revenue and early profitability is good thing for founders but not VCs.
Profit isn't revenue and visa versa. But it's on record that Google had $220,000 in revenue in 1999.
Yahoo contracted out their search back then; they started as a directory and they believed in that. It's not clear exactly when the Yahoo search deal started. But it is clear when the Yahoo investment was made (which was after Series A).
Yahoo also used Inktomi and Google's leverage with Yahoo was that they were better than Inktomi or Altavista. But their leverage with VCs was that they had revenue and it was going up and to the right.
Sun was another company with early profitability, very early in Sun's case. That's my main point. Revenue and early profitability is good thing for founders but not VCs.
Again, the context is important: You need to look at the percentages retained in those funding rounds relative to what was happening at the time. Their low capital needs, which gained them leverage, and the following high return spawned a generation of bootstrapped software startups. And since the VC pot of money is finite, hardware startups (the domain of the article's author) became quite unfashionable by the standards of the 90s.
> Their low capital needs and following high return is what spawned a generation of bootstrapped software startups.
I don't see how "$25 million from a VC" would be interpreted by outsiders as inspiration for bootstrapping. Doesn't "bootstrapping" mean self-funding from revenue instead of investors? Google didn't have meaningful revenue & profits until 2002.
I think the best way to apply "bootstrapping" (the way most people think of that term) to Larry & Sergei would be the early phase of 1996 to 1998 where they used Stanford's computers & datacenter for $0 cost to build a MVP search engine "Backrub". But a lot of startup founders can't apply that to their situation because they are not in PhD programs with the university providing a "pseudo AWS" for $0. (Stanford did share credit in the pagerank patent so they got license $$$ from Google in return.)
EDIT reply to: >, and realized that Google did not actually need the money.
What do you mean by they "didn't need the money"? How would the early Google survive for 3+ years with no revenue?
Immediately after the June 1999 $25 million, they hired an ex-Grateful Dead celebrity chef to cook free meals for their employees and rent datacenter space. If Google didn't have any revenue, what money is there other than that $25 million to pay salaries of the chef, the employees, food, datacenters? That's the opposite of "bootstrapping". Are you using that word in a different way?
I don't see how "$25 million from a VC" would be interpreted by outsiders as inspiration for bootstrapping. Doesn't "bootstrapping" mean self-funding from revenue instead of investors? Google didn't have meaningful revenue & profits until 2002.
I think the best way to apply "bootstrapping" (the way most people think of that term) to Larry & Sergei would be the early phase of 1996 to 1998 where they used Stanford's computers & datacenter for $0 cost to build a MVP search engine "Backrub". But a lot of startup founders can't apply that to their situation because they are not in PhD programs with the university providing a "pseudo AWS" for $0. (Stanford did share credit in the pagerank patent so they got license $$$ from Google in return.)
EDIT reply to: >, and realized that Google did not actually need the money.
What do you mean by they "didn't need the money"? How would the early Google survive for 3+ years with no revenue?
Immediately after the June 1999 $25 million, they hired an ex-Grateful Dead celebrity chef to cook free meals for their employees and rent datacenter space. If Google didn't have any revenue, what money is there other than that $25 million to pay salaries of the chef, the employees, food, datacenters? That's the opposite of "bootstrapping". Are you using that word in a different way?
> I don't see how "$25 million from a VC" will be interpreted by outsiders as inspiration for bootstrapping.
Yes, outsiders might not see it. At the time, insiders saw the percentage the company retained, and realized that Google did not actually need the money. It opened quite a few eyes.
Reply to your edit:
> How would the early Google survive for 3+ years with no revenue?
That was the point: They had revenue, and at a level that they did not need the VCs, which enabled them to negotiate the A round of $25M as well as they did. It would be difficult to pull that off with hardware.
Yes, outsiders might not see it. At the time, insiders saw the percentage the company retained, and realized that Google did not actually need the money. It opened quite a few eyes.
Reply to your edit:
> How would the early Google survive for 3+ years with no revenue?
That was the point: They had revenue, and at a level that they did not need the VCs, which enabled them to negotiate the A round of $25M as well as they did. It would be difficult to pull that off with hardware.
[deleted]
Not impossible but not always efficient.
Hard to focus on two things. Get cash today usually outweighs the long term building. On a macro level this is why so little software innovation comes from Accenture. All their focus is on billable hours.
It’s possible, just hard.
Hard to focus on two things. Get cash today usually outweighs the long term building. On a macro level this is why so little software innovation comes from Accenture. All their focus is on billable hours.
It’s possible, just hard.
This was written in a pre-SAAS era. The writer was talking about capital intensive startups. It would and it it does work now. Competition with a VC funded adversary is done by developing in stealth.
It's in the context of startups that need to grow quickly to make it. It works perfectly fine for startups that aren't like that. There are plenty.
Wasn't it Reid Hoffman who wrote a long article or a book about this?
Wasn't it Reid Hoffman who wrote a long article or a book about this?
This is basically how Microsoft was founded and how Gates got to retain so much of the company.
For founders, a lot has changed about VC funding since this article was written - much of the VC criticism still rings true, but founders often end up with much larger ownership shares and better funding terms.
IMO, YC catalyzed a lot of that change. I don't always agree with every partner's latest think piece, but I appreciate the changes they've brought to startup funding.
IMO, YC catalyzed a lot of that change. I don't always agree with every partner's latest think piece, but I appreciate the changes they've brought to startup funding.
At least two of my friends have had their ideas stolen and funded separately.
Variation: The "VC pet" (love that term) steals an idea. That's how care.com started:
http://archive.boston.com/business/technology/articles/2009/...
http://archive.boston.com/business/technology/articles/2009/...
"Venture funds are big:
... The VCs running a $1 billion fund don't have the time to manage one thousand $1 million investments.
VCs collude:
...
I attended a recent talk by a VC luminary, who gloated over the state of the venture industry, after money for technology start-ups was scarce. Here's my summary of the VC's view:
"A year ago there was too much money available, so there was too much competition to fund good ideas. ... Valuations are reasonable and, with few rivals in each sector, new markets will develop--as they might not have with many rivals."
This is nonsense. ... I'm not talking about market size or market opportunity...; I'm talking about rates of innovation."
--
What's this called? What do economists call it?
Why isn't it obvious?
--
Attempt to restate problem:
Large investors prefer fewer, larger deals. Because of attention scarcity and transaction costs.
Today, we have excess idle capital under performing AND zillions of unfunded ideas, unending needful work not being done.
This applies to all investors. VCs, governments, megacorps, etc.
The genius of Y Combinator is reducing transaction costs, enabling more ideas to get funded efficiently.
How do we (society) do A LOT more of that? How do we make broad portfolios the norm?
--
Policy platform statement:
Lacking other ideas for how to connect capital with small to modest investments, I support wealth redistribution.
Radical repeated cashectomies and stifling regulations for the current 0.1%.
Radical laissez faire and near free capital (zero interest loans, grants, government largess) to seed small, young business development.
Ridiculous, audacious, ambitious moon shot programs. X-Prizes, stipulate that all funds must allocate some fraction to high risk high reward efforts, genius grants, a firehose of funding for academia, arts, culture, community building, whatever. Basically recreate the New Deal's CCC. Set some benchmark, like target funding of say 1% of GDP.
Naturally, I support UBI, universal health care, free childcare, jubilee style bankruptcy protections, and so forth. For the very pragmatic reason of unlocking human potential by reducing (removing) individual risk.
... The VCs running a $1 billion fund don't have the time to manage one thousand $1 million investments.
VCs collude:
...
I attended a recent talk by a VC luminary, who gloated over the state of the venture industry, after money for technology start-ups was scarce. Here's my summary of the VC's view:
"A year ago there was too much money available, so there was too much competition to fund good ideas. ... Valuations are reasonable and, with few rivals in each sector, new markets will develop--as they might not have with many rivals."
This is nonsense. ... I'm not talking about market size or market opportunity...; I'm talking about rates of innovation."
--
What's this called? What do economists call it?
Why isn't it obvious?
--
Attempt to restate problem:
Large investors prefer fewer, larger deals. Because of attention scarcity and transaction costs.
Today, we have excess idle capital under performing AND zillions of unfunded ideas, unending needful work not being done.
This applies to all investors. VCs, governments, megacorps, etc.
The genius of Y Combinator is reducing transaction costs, enabling more ideas to get funded efficiently.
How do we (society) do A LOT more of that? How do we make broad portfolios the norm?
--
Policy platform statement:
Lacking other ideas for how to connect capital with small to modest investments, I support wealth redistribution.
Radical repeated cashectomies and stifling regulations for the current 0.1%.
Radical laissez faire and near free capital (zero interest loans, grants, government largess) to seed small, young business development.
Ridiculous, audacious, ambitious moon shot programs. X-Prizes, stipulate that all funds must allocate some fraction to high risk high reward efforts, genius grants, a firehose of funding for academia, arts, culture, community building, whatever. Basically recreate the New Deal's CCC. Set some benchmark, like target funding of say 1% of GDP.
Naturally, I support UBI, universal health care, free childcare, jubilee style bankruptcy protections, and so forth. For the very pragmatic reason of unlocking human potential by reducing (removing) individual risk.
>> Large investors prefer fewer, larger deals. Because of attention scarcity and transaction costs.
>> Today, we have excess idle capital under performing AND zillions of unfunded ideas, unending needful work not being done.
That might be a consequence of the concentration of wealth that's been happening. Not only does a VC have limited attention, but there aren't many ideas that need billions of dollars to fund. It might be better for startups to have twice as many rich guys with half as much money. OTOH maybe there's a way for them to spread it around more with a layer of oversite? But they'd need trusted oversite, and I'm guessing that's hard for them to find.
>> Today, we have excess idle capital under performing AND zillions of unfunded ideas, unending needful work not being done.
That might be a consequence of the concentration of wealth that's been happening. Not only does a VC have limited attention, but there aren't many ideas that need billions of dollars to fund. It might be better for startups to have twice as many rich guys with half as much money. OTOH maybe there's a way for them to spread it around more with a layer of oversite? But they'd need trusted oversite, and I'm guessing that's hard for them to find.
Related:
- https://spectrum.ieee.org/u/nick-tredennick
- https://en.wikipedia.org/wiki/Nick_Tredennick
- https://www.researchgate.net/profile/Nick-Tredennick
- Dropbox: https://news.ycombinator.com/item?id=29175816
- Amplitude IPO AMA: https://news.ycombinator.com/item?id=28696641
- Understanding Startup Offers: https://news.ycombinator.com/item?id=28644653
- Early Employee: https://news.ycombinator.com/item?id=29176216
- Unicorn Startup Equity: https://news.ycombinator.com/item?id=13426494
- Michael Seibel, Twitch: https://news.ycombinator.com/item?id=29175453
- https://spectrum.ieee.org/u/nick-tredennick
- https://en.wikipedia.org/wiki/Nick_Tredennick
- https://www.researchgate.net/profile/Nick-Tredennick
- Dropbox: https://news.ycombinator.com/item?id=29175816
- Amplitude IPO AMA: https://news.ycombinator.com/item?id=28696641
- Understanding Startup Offers: https://news.ycombinator.com/item?id=28644653
- Early Employee: https://news.ycombinator.com/item?id=29176216
- Unicorn Startup Equity: https://news.ycombinator.com/item?id=13426494
- Michael Seibel, Twitch: https://news.ycombinator.com/item?id=29175453
The problem that VC has become a new normal is the asymmetry between how big corporations and wealthy people are taxed versus employees. It's not uncommon that a millionaires effective tax rate will be in single digits, whereas an engineer may be paying even as much as 55% of tax and that even before local taxes and bills.
The taxation needs to be rebalanced otherwise you create those new gods who gatekeep who can run with their business idea and who cannot.
I'd say VC is a result of improper regulation of capitalism and the fact that corporations and wealthy individuals through lobbying and corruption were able to amass wealth that is anomalous.
The solutions for this won't be pretty.
Awesome take. I've recently come to understand that the same problematic exists in the cryptosphere too. Here, the token holders act recklessly towards the engineers creating the value: https://timdaub.github.io/2021/10/21/on-chain-the-emperor-we...
Or less charitably, the engineers are not in on the grift.
[deleted]
The glut of capital (too many investor dollars chasing too few opportunities) has changed the balance of power quite a bit since.
Parts that I enjoyed particularly:
> "It's too bad someone is building a resort hotel so close to your house," I said. "That's my new house," he said.
> I wanted to publicly thank more than a dozen people for help on this essay, but they all said "NO!"
> "It's too bad someone is building a resort hotel so close to your house," I said. "That's my new house," he said.
> I wanted to publicly thank more than a dozen people for help on this essay, but they all said "NO!"
The world is so different now and a lot of that change was spurred on or created directly by YC. super thankful, raising money still sucks, but it really sucked back then.
why submit again after yesterday?
Other old, previous discussion:
14 years ago https://news.ycombinator.com/item?id=113655
8 years ago https://news.ycombinator.com/item?id=6369357
Other old, previous discussion:
14 years ago https://news.ycombinator.com/item?id=113655
8 years ago https://news.ycombinator.com/item?id=6369357
Most of it is still relevant and most people on here are not old enough to have browsed HN 14 years ago.
not saying it's not relevant, not expecting ppl to have seen it, but there's discussion there in those threads and it doesn't really need to be re-upped/repeated convos.
Can enjoy it without commenting/upvoting it.
Wasn't Rubrik started as a stolen idea from a VC pitch by Cohesity? I have heard this rumor but I am asking, not claiming.
Past threads:
An Engineer's View of Venture Capitalists (2001) - https://news.ycombinator.com/item?id=6369357 - Sept 2013 (54 comments)
An Engineer's View of Venture Capitalists - https://news.ycombinator.com/item?id=113655 - Feb 2008 (26 comments)
An Engineer's View of Venture Capitalists (2001) - https://news.ycombinator.com/item?id=6369357 - Sept 2013 (54 comments)
An Engineer's View of Venture Capitalists - https://news.ycombinator.com/item?id=113655 - Feb 2008 (26 comments)
Capitalism often avoids real innovation and sticks to the safe path. I suspect we’d be technologically a lot farther along in important ways without it.
I wouldn't be so sure. How do you allocate resources and pick the best prospects in your alternative, presumably centrally directed, economy?
The alternative to capitalists picking who gets funded doesn't have to be central planning. You could have a consumer driven model where citizens get to allocate money to new research and development, similar to the democracy dollar idea that Andrew Yang was pushing. This would allow money to trickle up to the best companies instead of "trickling down" and getting captured by the rich.
If each American got to distribute 5 thousand a year to businesses, researchers or infrastructure the world would be a much better place. I'm sure none of them would allocate it to advertisers or tools that spy on them.
If each American got to distribute 5 thousand a year to businesses, researchers or infrastructure the world would be a much better place. I'm sure none of them would allocate it to advertisers or tools that spy on them.
That’s a very interesting idea. That would be a very fair and grassroots driven mechanism.
I don’t think that’s something the government would ever allow though.
Then again, in some ways the recent NFT craze is kind of precisely the case. The government printed a _lot_ of money last year and paid out a lot of money during covid. This stimulus is almost like a stipend to go spend/“invest” on all these meme and non meme stocks and crypto related projects, because thats where I feel most of this money is going lol.
I don’t think that was intentional by the government though.
And by government, I guess I mean the Federal Reserve?
I don’t think that’s something the government would ever allow though.
Then again, in some ways the recent NFT craze is kind of precisely the case. The government printed a _lot_ of money last year and paid out a lot of money during covid. This stimulus is almost like a stipend to go spend/“invest” on all these meme and non meme stocks and crypto related projects, because thats where I feel most of this money is going lol.
I don’t think that was intentional by the government though.
And by government, I guess I mean the Federal Reserve?
Do you think Google could make a good pitch to consumers about how much great stuff they produce and how critical they are to modern life so the consumer should give them at least 30% of their 5,000? I bet they could, and words like 'advert' wouldn't be a consideration. Asking the average person to decide what gets funded is probably just as bad as asking VCs.
Could you expand on your point about the distributing?
I had a crowdfunding like model for government grants in mind where projects are pitched with funding goals that everyone can chose to allocate a portion of their fixed budget to. This could also work for businesses or whole industries, so as an example software engineers could decide to allocate funds to open source projects that would make them more productive.
Another example would be diabetics funding research and development of more affordable insulin.
In general I'm in favor of more direct democracy and empowering citizens/consumers over politicians and bankers.
Another example would be diabetics funding research and development of more affordable insulin.
In general I'm in favor of more direct democracy and empowering citizens/consumers over politicians and bankers.
This whole argument (it isn't yet really, but it's developing into a very familiar one) is a huge waste of breath IMHO, suitable more for heat than light.
For one thing, "Capitalism" vs. "Central Planning" are strawmen abstracted from competing families of concrete approaches that, while similar in very broad strokes enough to justify the strawmen abstractions, are wildly different in specifics. The "Capitalism" of Singapore, Switzerland, and USA are so wildly different underneath the superficial names and slogans that any discussion of them that views them as basically the same is necessarily going nowhere. Sometimes humans' amazing ability to recognize very loose patterns just turns out to be a foot gun like that.
For another, Innovation (or risk-taking ventures or whatever you want to call it really) is an institution thing, a culture if you will, the challenge of building an institution goes way far beyond what type of managment you choose for it.
DARPA and NASA are both bureaucratic bodies that produced amazing innovations and took incredibly risky ventures, Nokia and Xerox were once risk-taking cowboys that got averse and stagnated.
The canned response to this is always 'Yes but you can always found your own company and eat their lunch, that's why capitalism is superior', this is wildly wrong on a lot of things, but the most jarring blindspot is that it assumes all innovations have the capacity to carve out a market from the established. This isn't true in general, it just so happened that digital cameras, personal computers or smartphones are so amazing they can jumpstart a new market out of thin air and take on existing companies head-on, but what if you have a search engine innovation that can make search 50% better (less spam and SEO trash, more discoverability, etc..), a 50% better search is an amazing innovation, but good luck going against Google with that and that alone. If nothing else, they will just buy you and put you in the drawer if you make too much of a fuss.
This problem is standard in evolutionary approaches to optimization. Despite the wildly different specifics of things that humans call 'Capitalism', they all share a very broad faith in the power of competition as an optimization process and a constraint-driven solution discovery algorithm. Well, that's called Evolution, and it heckin sucks sometimes. There are probably millions upon millions of good biological designs that got extinct because they weren't lucky enough to carve out a niche out of the chaos.
Evolution is basically saying 'If you don't like how it is, make your own species and eat their lunch' to the beings playing it, but sometimes, a lot of times, insanely good mutations aren't enough to build a new species, or they can build a new species but it will be eaten in a heartbeat by the established ones for reasons unrelated to its efficiency. Just look at the human eye, there is an incredibly dumb design flaw where fibers connecting it to the brain warp around in a funny way and cause a blind spot in its midst, the brain corrects it automatically by simply lying to itself (I mean, uhh, 'Interpolating'). This wasn't enough to drive humans extinct, you might object that this is okay because Evolution is actually optimizing for survivability, not the best eye, so a species that manages to survive despite a dumb flaw in its sensor suite is just par for the course. But this a huge problem for competition-driven innovation, because we actually want to optimize for the best eye, a dumb design flaw in the eyes of a stagnant behemoth that refuses to die like Google is a very bad thing for us.
Innovation is just an insanely hard problem no matter how you look at it, and it's always solved in real life by ad-hoc competition-planning hybrids that is always fragile to stagnation, to which it eventually (almost always) falls prey. The Capitalism-CentralPlanning debate, if it's to be productive at all, should just stick to standard boring economic issues (ideally by discussing concrete approaches, not vague semantic clouds), because innovation is just a red herring that supports neither party of the debate.
For one thing, "Capitalism" vs. "Central Planning" are strawmen abstracted from competing families of concrete approaches that, while similar in very broad strokes enough to justify the strawmen abstractions, are wildly different in specifics. The "Capitalism" of Singapore, Switzerland, and USA are so wildly different underneath the superficial names and slogans that any discussion of them that views them as basically the same is necessarily going nowhere. Sometimes humans' amazing ability to recognize very loose patterns just turns out to be a foot gun like that.
For another, Innovation (or risk-taking ventures or whatever you want to call it really) is an institution thing, a culture if you will, the challenge of building an institution goes way far beyond what type of managment you choose for it.
DARPA and NASA are both bureaucratic bodies that produced amazing innovations and took incredibly risky ventures, Nokia and Xerox were once risk-taking cowboys that got averse and stagnated.
The canned response to this is always 'Yes but you can always found your own company and eat their lunch, that's why capitalism is superior', this is wildly wrong on a lot of things, but the most jarring blindspot is that it assumes all innovations have the capacity to carve out a market from the established. This isn't true in general, it just so happened that digital cameras, personal computers or smartphones are so amazing they can jumpstart a new market out of thin air and take on existing companies head-on, but what if you have a search engine innovation that can make search 50% better (less spam and SEO trash, more discoverability, etc..), a 50% better search is an amazing innovation, but good luck going against Google with that and that alone. If nothing else, they will just buy you and put you in the drawer if you make too much of a fuss.
This problem is standard in evolutionary approaches to optimization. Despite the wildly different specifics of things that humans call 'Capitalism', they all share a very broad faith in the power of competition as an optimization process and a constraint-driven solution discovery algorithm. Well, that's called Evolution, and it heckin sucks sometimes. There are probably millions upon millions of good biological designs that got extinct because they weren't lucky enough to carve out a niche out of the chaos.
Evolution is basically saying 'If you don't like how it is, make your own species and eat their lunch' to the beings playing it, but sometimes, a lot of times, insanely good mutations aren't enough to build a new species, or they can build a new species but it will be eaten in a heartbeat by the established ones for reasons unrelated to its efficiency. Just look at the human eye, there is an incredibly dumb design flaw where fibers connecting it to the brain warp around in a funny way and cause a blind spot in its midst, the brain corrects it automatically by simply lying to itself (I mean, uhh, 'Interpolating'). This wasn't enough to drive humans extinct, you might object that this is okay because Evolution is actually optimizing for survivability, not the best eye, so a species that manages to survive despite a dumb flaw in its sensor suite is just par for the course. But this a huge problem for competition-driven innovation, because we actually want to optimize for the best eye, a dumb design flaw in the eyes of a stagnant behemoth that refuses to die like Google is a very bad thing for us.
Innovation is just an insanely hard problem no matter how you look at it, and it's always solved in real life by ad-hoc competition-planning hybrids that is always fragile to stagnation, to which it eventually (almost always) falls prey. The Capitalism-CentralPlanning debate, if it's to be productive at all, should just stick to standard boring economic issues (ideally by discussing concrete approaches, not vague semantic clouds), because innovation is just a red herring that supports neither party of the debate.
Summary of above: Survival is sometimes chance and is not always optimized. Best to avoid too much generalization when thinking. Some things are very different even though they are called the same name.
I believe that is daydreaming almost by definition though... you should also consider the fact that a number of technicians have become insanely rich from their technological innovation as well.
bucheit for example?
these people are interested in investing in technology further leveraging technology to spread wealth (i guess)
bucheit for example?
these people are interested in investing in technology further leveraging technology to spread wealth (i guess)
I'd just like to relate my experience with VC's and startups.
I worked at a non-silicon-valley startup in the 1990's. After a couple of years of growth and success, a new investor came in, and bought the company; supposedly to "prepare" us for an IPO. (we all had stock options). I think this was around 1995.
The new investment group removed the team of founders, (all engineers), to a role running the engineering team, and they hired "A professional" CEO to replace them, in the role of business management. He was actually a pretty good guy and seemed to really be dedicated to helping our team grow and succeed.
Lo and behold, about 3 months later, they announced a "merger". Lots of "synergy" with the new company; which was smaller, but wanting to build a major player in our market. They were based in Scotts Valley; so now, we were a Silicon Valley startup. Our CEO was then sort of "demoted" to being the site-manager.
The next thing that happened, was that our "parent" company bought our largest competitor. There was more gung-ho pep talk about how our products had no overlap, and that it would be a vertical integration, and we had so much work to do that there would be no layoffs.
Business deals, changes, rebranding initiatives flew hot and heavy for the next few months. Our CEO was sent on a 2 week trip to China, to work on a reseller agreement. He left on a Friday.
On Monday morning, we were all just reading our emails, and getting our coffee, preparing to start the day. Outside the window, looking at the parking lot, there was a row of 6 men, walking out of their rental cars, towards our building. They were recognized by some of our team, as high-level managers from the "parent" company. They strode across the parking lot looking like gangsters on their way to a hit.
Shortly after they came in, the email was sent. It said that there would be a meeting, and if your name was on list A, to go to one conference room, and if your name was on list B, to go to a different conference room.
I was in the "lucky" group: There was a stack of 2" thick manila envelopes on the table. Basically, our buy-out offers, which included a deal to agree to stay-on for 6 months, and wind-down operations at this site. That was about 10% of us. The rest were laid off and told to go home. Additionally, the key staff who were asked to stay, were offered relocation packages. I took mine. Which turned out really nice for me: because the new location ended up being a much better job market, and a boost to my career (eventually), and also, I got to hold on to my options until they were actually worth something, compared to the "unlucky" ones who were just offered a pittance for their shares. I wasn't happy or proud to have had to keep working with these people, but it did actually work out for me.
Probably the worst part was how arrogant and dismissive this group of men were, to our team. Frankly, they were dicks, as they laid off tech workers, in a region where there really wasn't a strong tech industry.
Later, we found that the CEO had been sent on a completely bogus trip. There was no deal. They just wanted him out of the way, so that the deal could be done while he was on a 14 hour flight.
He could have objected, but by the time that would have had any effect, the damage (to our engineering team) had been done. Some of the key players were on the phone and had new jobs by the end of the day on Monday. The ones who were laid off, had signed agreements. There was just no way the deal could have been reversed had the executive staff at our site objected, and the ones who could have objected, were bought-off.
And that's my account of how VC's work.
The product we had made was, indeed, continued, under management of our competitor. They never went public; they were later bought by another company, and our options were converted to their stock. A few years later, they were bought by another company, in a similarly stinky deal, involving blackmail of a board member. (he had some skeletons in his closet, and when they outed him, they really fucked him over HARD).
That's when I left. And decided I hated working in the private sector.
I worked at a non-silicon-valley startup in the 1990's. After a couple of years of growth and success, a new investor came in, and bought the company; supposedly to "prepare" us for an IPO. (we all had stock options). I think this was around 1995.
The new investment group removed the team of founders, (all engineers), to a role running the engineering team, and they hired "A professional" CEO to replace them, in the role of business management. He was actually a pretty good guy and seemed to really be dedicated to helping our team grow and succeed.
Lo and behold, about 3 months later, they announced a "merger". Lots of "synergy" with the new company; which was smaller, but wanting to build a major player in our market. They were based in Scotts Valley; so now, we were a Silicon Valley startup. Our CEO was then sort of "demoted" to being the site-manager.
The next thing that happened, was that our "parent" company bought our largest competitor. There was more gung-ho pep talk about how our products had no overlap, and that it would be a vertical integration, and we had so much work to do that there would be no layoffs.
Business deals, changes, rebranding initiatives flew hot and heavy for the next few months. Our CEO was sent on a 2 week trip to China, to work on a reseller agreement. He left on a Friday.
On Monday morning, we were all just reading our emails, and getting our coffee, preparing to start the day. Outside the window, looking at the parking lot, there was a row of 6 men, walking out of their rental cars, towards our building. They were recognized by some of our team, as high-level managers from the "parent" company. They strode across the parking lot looking like gangsters on their way to a hit.
Shortly after they came in, the email was sent. It said that there would be a meeting, and if your name was on list A, to go to one conference room, and if your name was on list B, to go to a different conference room.
I was in the "lucky" group: There was a stack of 2" thick manila envelopes on the table. Basically, our buy-out offers, which included a deal to agree to stay-on for 6 months, and wind-down operations at this site. That was about 10% of us. The rest were laid off and told to go home. Additionally, the key staff who were asked to stay, were offered relocation packages. I took mine. Which turned out really nice for me: because the new location ended up being a much better job market, and a boost to my career (eventually), and also, I got to hold on to my options until they were actually worth something, compared to the "unlucky" ones who were just offered a pittance for their shares. I wasn't happy or proud to have had to keep working with these people, but it did actually work out for me.
Probably the worst part was how arrogant and dismissive this group of men were, to our team. Frankly, they were dicks, as they laid off tech workers, in a region where there really wasn't a strong tech industry.
Later, we found that the CEO had been sent on a completely bogus trip. There was no deal. They just wanted him out of the way, so that the deal could be done while he was on a 14 hour flight.
He could have objected, but by the time that would have had any effect, the damage (to our engineering team) had been done. Some of the key players were on the phone and had new jobs by the end of the day on Monday. The ones who were laid off, had signed agreements. There was just no way the deal could have been reversed had the executive staff at our site objected, and the ones who could have objected, were bought-off.
And that's my account of how VC's work.
The product we had made was, indeed, continued, under management of our competitor. They never went public; they were later bought by another company, and our options were converted to their stock. A few years later, they were bought by another company, in a similarly stinky deal, involving blackmail of a board member. (he had some skeletons in his closet, and when they outed him, they really fucked him over HARD).
That's when I left. And decided I hated working in the private sector.
Vulture Capitalists.
The part on VCs being risk averse when it comes to innovation is quite common:
One company I worked with had an innovative idea for a firewall: build it with programmable logic and it works at wire speed. Wire speed meant no buffering, no data storage, and therefore no need for a microprocessor or for an IP (Internet Protocol) address. Simple installation, simple management, but so different that experts--even those from programmable logic companies--didn't understand it. To them, proposing a firewall without a microprocessor and an IP address was like proposing a car without an engine. No funding. Back to work at a big company. Worse for them; worse for us. The industry loses. Progress is delayed.
One company I worked with had an innovative idea for a firewall: build it with programmable logic and it works at wire speed. Wire speed meant no buffering, no data storage, and therefore no need for a microprocessor or for an IP (Internet Protocol) address. Simple installation, simple management, but so different that experts--even those from programmable logic companies--didn't understand it. To them, proposing a firewall without a microprocessor and an IP address was like proposing a car without an engine. No funding. Back to work at a big company. Worse for them; worse for us. The industry loses. Progress is delayed.
> One company I worked with had an innovative idea for a firewall: build it with programmable logic and it works at wire speed
Ah, that's the idea I had at Cloudflare and we then built it as Firewall Rules. Externally it looks like it's a HTTP feature only and just a WAF type tool, but internally it's an extremely fast matcher that can work on any traffic and at different OSI layers so it forms part of the DDoS protection, bot protection, magic transit, etc. It's also in things like the URI rewrite... because fundamentally it's all just "match things" and associate actions with the matched things, usually the actions are deny, rate limit, allow, challenge... but no reason the actions can't be to transform, duplicate, log, etc too.
Just wireshark like matching at the equivalent of wire speed (for what that means at whatever layer you're working on) without having to have buffering or that pcap phase normally associated with firewalls or wireshark.
The same wireshark-like rules can also be translated into SQL easily enough, so it's possible to run a firewall rule over the logs and see what would've matched (it isn't perfect, logging isn't that complete... but for the most common scenarios it works well enough).
This work is OSS, the language syntax and a table matcher (used for the HTTP part) is all here https://github.com/cloudflare/wirefilter/tree/cloudflare and it's in Rust. For other systems the rule may be translated to eBPF for the matching part, etc. A blog post with an overview is here https://blog.cloudflare.com/how-we-made-firewall-rules/ .
Ah, that's the idea I had at Cloudflare and we then built it as Firewall Rules. Externally it looks like it's a HTTP feature only and just a WAF type tool, but internally it's an extremely fast matcher that can work on any traffic and at different OSI layers so it forms part of the DDoS protection, bot protection, magic transit, etc. It's also in things like the URI rewrite... because fundamentally it's all just "match things" and associate actions with the matched things, usually the actions are deny, rate limit, allow, challenge... but no reason the actions can't be to transform, duplicate, log, etc too.
Just wireshark like matching at the equivalent of wire speed (for what that means at whatever layer you're working on) without having to have buffering or that pcap phase normally associated with firewalls or wireshark.
The same wireshark-like rules can also be translated into SQL easily enough, so it's possible to run a firewall rule over the logs and see what would've matched (it isn't perfect, logging isn't that complete... but for the most common scenarios it works well enough).
This work is OSS, the language syntax and a table matcher (used for the HTTP part) is all here https://github.com/cloudflare/wirefilter/tree/cloudflare and it's in Rust. For other systems the rule may be translated to eBPF for the matching part, etc. A blog post with an overview is here https://blog.cloudflare.com/how-we-made-firewall-rules/ .
I'm pretty sure they're suggesting doing it all in hardware, not more clever software
Microsoft and many other big data centers are now doing exactly this via FPGA NICs.
Having dealt with VCs, I'm kind of confused by this comment. In my experience, they do not delve deeply into the tech. I'm guessing this is because most of their portfolio companies fail for non-technical reasons. They mostly assume that if you're pitching it, you can build it.
To me it sounds like they were not convinced that the product would have any selling points over existing tech. Would this type of device save any money? Another thing that may have happened is that perhaps the pitch was heavily focused on the tech and it made their eyes glaze over.
To me it sounds like they were not convinced that the product would have any selling points over existing tech. Would this type of device save any money? Another thing that may have happened is that perhaps the pitch was heavily focused on the tech and it made their eyes glaze over.
VCs tend to have an easier time funding already-validated ideas: having an established competitor, or seeing other VCs fund similar companies. It's lazy, but they can afford to be lazy - if they miss their chance on your revolutionary tech and you somehow succeed, they'll fund the next startup that copies you.
The other day I saw a commenter who worked at a wind power startup that failed to get subsequent funding because Alphabet shutdown Makani, and their take away was the idea no longer seemed viable.
The other day I saw a commenter who worked at a wind power startup that failed to get subsequent funding because Alphabet shutdown Makani, and their take away was the idea no longer seemed viable.
> In my experience, they do not delve deeply into the tech.
I suppose it depends on how deep the technology is. If you’re building a site using react, fine. If you’re developing a new semiconductor process or new pharmaceutical agent, they’ll want more info.
My companies have all been of the latter sort, and so had serious technical DD. I’ve also done deep dive like that on behalf of investors.
I suppose it depends on how deep the technology is. If you’re building a site using react, fine. If you’re developing a new semiconductor process or new pharmaceutical agent, they’ll want more info.
My companies have all been of the latter sort, and so had serious technical DD. I’ve also done deep dive like that on behalf of investors.
It sounds like their tech was somewhere in between these two extremes. I would expect that some engineers with relevant experience in networking and programmable logic could get it done. It's also not particularly novel- lots of networking stuff is offloaded to custom chips. My guess is that they didn't make a good business case for it, in which case I would have to dispute OP's idea that "progress was delayed".
Didn't Netscreen (acquired by Juniper) do basically that? I think they had an ASIC but I definitely remember their claim to fame was doing packet filtering in hardware.
For a while there some folks (cant recall the name) had a IPv4 firewall system based on DOS, with a similar idea of being an "out of band" filter that was not part of the network being filtered.
Fact is, it's simple enough to do that with any OS and equally as hard to certify that the separations are actual and have no leaks.
Now they're writing whole server/response chains in eBPF and stuff same idea but inverted, perhaps.
Fact is, it's simple enough to do that with any OS and equally as hard to certify that the separations are actual and have no leaks.
Now they're writing whole server/response chains in eBPF and stuff same idea but inverted, perhaps.
Reminds me of the Sunscreen SPF-200 Firewall from the mid 90s. Interfaces has no IP address nor even an IP stack on them. It was effectively a secure bridge when operating in “stealth” mode.
https://docs.oracle.com/cd/E19047-01/sunscreen31.sec/806-412...
The fact that VC's didn't invest in that single idea doesn't tell anything about them being risk averse or not.
This is a great essay. And I have kept more than one employee working with me at BigCo by explaining the odds of success of the expected return for being an engineer vs a TLA at startups. It actually used to be work to make this case but now the case makes itself. And bonus you're just being honest.
In one case where the person was offered a CTO spot I encouraged him to leave. The company failed and that's okay but at least it was an interesting opportunity as opposed to indentured servitude.
The real dilemma is that when your ideas are revolutionary you really have to bootstrap them yourself because VC has no interest in them despite all the platitudes and happy talk. And this essay nails that very thing.
In one case where the person was offered a CTO spot I encouraged him to leave. The company failed and that's okay but at least it was an interesting opportunity as opposed to indentured servitude.
The real dilemma is that when your ideas are revolutionary you really have to bootstrap them yourself because VC has no interest in them despite all the platitudes and happy talk. And this essay nails that very thing.
they have to have comments to hn-count as hn-dupes
Our culture likes to believe workers are free of state intervention, quotas like Soviet Russia.
But here we have yet another story of how the rich, protected by government, guide our agency.
America is a subtle con like that. The rich are protected by government, and then dictate economic agency and priority.
Effectively government has granted others the power to do what it cannot officially.
But here we have yet another story of how the rich, protected by government, guide our agency.
America is a subtle con like that. The rich are protected by government, and then dictate economic agency and priority.
Effectively government has granted others the power to do what it cannot officially.
Please don't take HN threads on generic ideological tangents. That's in the site guidelines: https://news.ycombinator.com/newsguidelines.html.
More generally, please don't use HN for ideological battle. That's also in the site guidelines. The reason we ask people this is not because we're against your ideology, but because in the big Venn diagram of internet conversation, there's almost no overlap between the "ideological battle" bubble and the "curious conversation" bubble. We want curious conversation here.
We detached this subthread from https://news.ycombinator.com/item?id=29187971.
More generally, please don't use HN for ideological battle. That's also in the site guidelines. The reason we ask people this is not because we're against your ideology, but because in the big Venn diagram of internet conversation, there's almost no overlap between the "ideological battle" bubble and the "curious conversation" bubble. We want curious conversation here.
We detached this subthread from https://news.ycombinator.com/item?id=29187971.
Relative experience dictates what is curious conversation to others; one might think a curious science minded person would understand that intuitively.
I do not acknowledge your authority to define that term specifically. You have authority over your property not others agency. Delete it from the DB after the fact.
I’m curious about a new political narrative aside from “coddle industrialists and landlords who won before you were born.” How do we get there without studying the system as is? Without comparing and contrasting it with others.
If it’s so banal why pressure myself into restraint? I understand a government that actively protects servicing the sick and needy before do-nothings whose names appear on deeds is a threat to your routine but it seems to me moral relativism is fine for you and the VC cottage industry. Why should society as a whole concern itself with your preferences?
You spend your time cleaning a database of trite commentary that, by your own language, is boring. What a deeply curious application of agency.
I do not acknowledge your authority to define that term specifically. You have authority over your property not others agency. Delete it from the DB after the fact.
I’m curious about a new political narrative aside from “coddle industrialists and landlords who won before you were born.” How do we get there without studying the system as is? Without comparing and contrasting it with others.
If it’s so banal why pressure myself into restraint? I understand a government that actively protects servicing the sick and needy before do-nothings whose names appear on deeds is a threat to your routine but it seems to me moral relativism is fine for you and the VC cottage industry. Why should society as a whole concern itself with your preferences?
You spend your time cleaning a database of trite commentary that, by your own language, is boring. What a deeply curious application of agency.
[deleted]
I think you’re exaggerating the level of agency the government has here or actual intent versus unintended consequence, but I think you’re right about the effects. One reason I think elon has been wildly successful is not that he’s way smarter than everyone else but just that he’s a physicist/engineer-type that actually managed to become rich enough to control his businesses and dictate priority. A rich guy who is actually technically smart (as well as relatively competent business-wise) and at least in the early days did a very good job of identifying/listening to/empowering people smarter than him on some task (in part because he had the broad physics background to grok what they were talking about).
There are doubtless a lot of other Elons out there, but we just haven’t empowered them. Maybe also some that are a bit more emotionally stable.
There are doubtless a lot of other Elons out there, but we just haven’t empowered them. Maybe also some that are a bit more emotionally stable.
I’m saying the government purposely puts no agency into the issue of inequality.
That, rather than allow the story government could, we require people to cater to unelected elders who judge and manage our agency even though none of us signed a contract at birth recognizing our agreement with the arrangement. We’re talked into after the fact; or we can die. It’s legalized shakedowns for lunch money.
You’re getting hung up on technicals. I’m challenging the story that the US is free of oppressive behavior because it’s not government performing the behavior. I don’t have a contract requiring me to believe Zuckerberg is a billionaire, his forces can assign net worth to me though?
Take PGs four quadrants of conformity. Why stop at 4? Did he run out of numbers? There are billions of people on the planet; why not an essay that suggests then a billion quadrants of conformity? The effort means little to PG, just a few different letters. Why does his boundary matter?
If we’re allowed to filter as we choose why not filter you all out?
Is that the political narrative we want to foster on Main Street? 5% of the population hunts; this contemporary logistics system provides for everyone. Following billionaires who filter out those who don’t conform to their preferred of their 4 categories … why not filter out a minority of billionaires through hefty taxation to empower all the Elons we aren’t. Pre-Reagan taxation empowered a lot of these guys families, then they changed the rules.
Change them back.
That, rather than allow the story government could, we require people to cater to unelected elders who judge and manage our agency even though none of us signed a contract at birth recognizing our agreement with the arrangement. We’re talked into after the fact; or we can die. It’s legalized shakedowns for lunch money.
You’re getting hung up on technicals. I’m challenging the story that the US is free of oppressive behavior because it’s not government performing the behavior. I don’t have a contract requiring me to believe Zuckerberg is a billionaire, his forces can assign net worth to me though?
Take PGs four quadrants of conformity. Why stop at 4? Did he run out of numbers? There are billions of people on the planet; why not an essay that suggests then a billion quadrants of conformity? The effort means little to PG, just a few different letters. Why does his boundary matter?
If we’re allowed to filter as we choose why not filter you all out?
Is that the political narrative we want to foster on Main Street? 5% of the population hunts; this contemporary logistics system provides for everyone. Following billionaires who filter out those who don’t conform to their preferred of their 4 categories … why not filter out a minority of billionaires through hefty taxation to empower all the Elons we aren’t. Pre-Reagan taxation empowered a lot of these guys families, then they changed the rules.
Change them back.
> Take PGs four quadrants of conformity. Why stop at 4? Did he run out of numbers? There are billions of people on the planet; why not an essay that suggests then a billion quadrants of conformity?
At one level: because the root word of quadrant means four/one-fourth, so once he got to 4, he did run out of numbers [of quadrants].
He probably picked to use quadrants in large part because categorizing people’s broad behavioral tendencies into a billion groups isn’t that helpful of a mental model simplification. “People in group 24,825,726; those are the tattletales who like Brussel Sprouts, are left-handed, allergic to oak pollen, love dogs, hate cats, taste quinine, can roll their tongue, are AB+, and prefer sleeping in cool rooms.” How does that make for a readable essay?
At one level: because the root word of quadrant means four/one-fourth, so once he got to 4, he did run out of numbers [of quadrants].
He probably picked to use quadrants in large part because categorizing people’s broad behavioral tendencies into a billion groups isn’t that helpful of a mental model simplification. “People in group 24,825,726; those are the tattletales who like Brussel Sprouts, are left-handed, allergic to oak pollen, love dogs, hate cats, taste quinine, can roll their tongue, are AB+, and prefer sleeping in cool rooms.” How does that make for a readable essay?
Why groups? Why not 7 billion points.
Everyone is their own political agenda, their own emotional timeline of experience.
Why does an arbitrary 1 of 7 billions semantic view of the gradients mean more than anyone else’s except for his politically protected privilege?
And of course we’re not supposed to discuss that here. This forum has an obligation to high mindedness first. Questioning the assigned figurative value of someone who is a random non-contributor to millions of others, and open discussion about how they may be actively harming them, is not allowed to launch.
Stick to the rules of bounding everyone else into quadrants. Oh wait, though; you all are everyone else to me. I only see points bounded by quadrants. I’ll just stick to thinking of you as a point on a Cartesian plane … what a novel math object he discovered.
The whole thing was elementary math object and biased, insulated, white guy political opinion. I’m banal?
Everyone is their own political agenda, their own emotional timeline of experience.
Why does an arbitrary 1 of 7 billions semantic view of the gradients mean more than anyone else’s except for his politically protected privilege?
And of course we’re not supposed to discuss that here. This forum has an obligation to high mindedness first. Questioning the assigned figurative value of someone who is a random non-contributor to millions of others, and open discussion about how they may be actively harming them, is not allowed to launch.
Stick to the rules of bounding everyone else into quadrants. Oh wait, though; you all are everyone else to me. I only see points bounded by quadrants. I’ll just stick to thinking of you as a point on a Cartesian plane … what a novel math object he discovered.
The whole thing was elementary math object and biased, insulated, white guy political opinion. I’m banal?
> Why does an arbitrary 1 of 7 billions semantic view of the gradients mean more than anyone else’s except for his politically protected privilege?
I read his essays long before YC was founded. (Online first and then in dead tree reprint format.) I chose to read them because they were interesting and thought-provoking not because of some claimed politically protected privilege.
If other authors resonate more with you, I think it’s reasonable for you to read their opinions instead.
I read his essays long before YC was founded. (Online first and then in dead tree reprint format.) I chose to read them because they were interesting and thought-provoking not because of some claimed politically protected privilege.
If other authors resonate more with you, I think it’s reasonable for you to read their opinions instead.
Well, maybe it’s me but it all translates to “here’s a Cartesian plane and how one random dude would describe a bunch of points on it.”
My value store is not old school business networks, but the network available to everyone. It’s all electron flow in machines, with boundaries ingrained by history.
I see value in novel information design. The history of overloaded human languages and my age related overload on them makes me question what they really offer except traditional attempts at political persuasion.
Meh.
My value store is not old school business networks, but the network available to everyone. It’s all electron flow in machines, with boundaries ingrained by history.
I see value in novel information design. The history of overloaded human languages and my age related overload on them makes me question what they really offer except traditional attempts at political persuasion.
Meh.
1. VCs don't sign nondisclosure agreements: yes you will be laughed out the door if you demand one.
2. VCs are sheep: yes, make sure your startup hits one of the hot buzzwords (metaverse, ai, etc) to maximize interest.
3. VCs aren't technical: diligence these days is even more of a joke than it was back then.
4. VCs don't take risks: second time founders can get funding just off their name, yes.
5. Venture funds are big: IMO, there's way too much capital chasing too little talent these days.
6. VCs collude: absolutely, make sure you don't tell VCs other firms you're talking to before the term sheet.
7. VCs don't say no: very annoying, they'll string you along forever.
8. Your idea, your work, their company: biggest change since 20 years ago. Founders have way way more leverage these days. You can negotiate insane valuations (and therefore tiny dilution) compared to even 5 years ago. You can also fight harder for provisions that maintain board control in favor of the founders. The risk of a VC being seen as "founder unfriendly" is way higher than fighting you, a single company out of 100s in their portfolio.