by
Tim O'Reilly
274
Supermoney
0
terms
3
notes
274
[...] It is easy to blame the ability of technology to replace human labor for declining wages and increased wealth inequality. But technology is being used for cost reduction rather than to empower people and to reach for the stars not because that is what technology wants, but because it is what the legal and financial system we have built demands.
For all its talk of disruption, Silicon Valley too is often in thrall to that system. The ultimate fitness function for too many entrepreneurs is not the change they want to make in the world, but “the exit,” the sale or IPO that will make them and the venture capitalists who funded them a giant pile of money. It’s easy to point fingers at “Wall Street” without realizing our own complicity in the problem or in finding a way to bring it under control.
[...] It is easy to blame the ability of technology to replace human labor for declining wages and increased wealth inequality. But technology is being used for cost reduction rather than to empower people and to reach for the stars not because that is what technology wants, but because it is what the legal and financial system we have built demands.
For all its talk of disruption, Silicon Valley too is often in thrall to that system. The ultimate fitness function for too many entrepreneurs is not the change they want to make in the world, but “the exit,” the sale or IPO that will make them and the venture capitalists who funded them a giant pile of money. It’s easy to point fingers at “Wall Street” without realizing our own complicity in the problem or in finding a way to bring it under control.
283
Once companies take money from venture capitalists, they are committed to aiming for an exit. A typical venture fund is a partnership with a ten-year time horizon. Most of the investments are made within the first two to three years, with some money reserved for additional investment in the companies that are most promising. Once an entrepreneur takes money from a venture capitalist, he or she is promising to sell or go public within the lifetime of the fund. Yet VCs know that the vast majority of their deals will fail. Jon Oringer, the founder and CEO of Shutterstock, put it well in his advice to entrepreneurs: “What venture capital firms do is spread some number of millions of dollars to some number of companies. They’re not really rooting for every single one. All they need is for a few of them to succeed. It’s the way the model works. They have a totally different risk profile than you do. This is your only game in town. For the venture capital firm, it’s one of a hundred games in town.”
good explanation of VC funding. could be useful
Once companies take money from venture capitalists, they are committed to aiming for an exit. A typical venture fund is a partnership with a ten-year time horizon. Most of the investments are made within the first two to three years, with some money reserved for additional investment in the companies that are most promising. Once an entrepreneur takes money from a venture capitalist, he or she is promising to sell or go public within the lifetime of the fund. Yet VCs know that the vast majority of their deals will fail. Jon Oringer, the founder and CEO of Shutterstock, put it well in his advice to entrepreneurs: “What venture capital firms do is spread some number of millions of dollars to some number of companies. They’re not really rooting for every single one. All they need is for a few of them to succeed. It’s the way the model works. They have a totally different risk profile than you do. This is your only game in town. For the venture capital firm, it’s one of a hundred games in town.”
good explanation of VC funding. could be useful
290
Every year, Google chief economist Hal Varian and his team publish an economic impact report. In their 2016 report, they estimated that during the prior year, Google increased US economic activity for their customers by $165 billion. They base this figure primarily on a conservative estimate of the expected impact of Google advertising on the increased revenues of their advertisers. [...]
CHRIST, he literally spent most of the previous chapter talking about the failures of the economic system and the growth-addicted mindset it instills in us and now he wants to talk about "increasing economic activity" as if it's an obvious good???
Every year, Google chief economist Hal Varian and his team publish an economic impact report. In their 2016 report, they estimated that during the prior year, Google increased US economic activity for their customers by $165 billion. They base this figure primarily on a conservative estimate of the expected impact of Google advertising on the increased revenues of their advertisers. [...]
CHRIST, he literally spent most of the previous chapter talking about the failures of the economic system and the growth-addicted mindset it instills in us and now he wants to talk about "increasing economic activity" as if it's an obvious good???