The answer is right there in front of your face. Say it with me: VCs are morons. VCs are morons. VCs are morons. Just because someone is rich, you think that means they have any clue what they're doing?
and it's not just ZIRP. every recent IPO or liquidity event creates literally 500 more of these guys.
Hold up — one can be mature without any of those things, but cars are especially optional.
These people go to the extreme and feel they have to outdo each other in an arms race to win whatever category it is today.
You can have extreme ambitions without being a moron. It's possible for someone to be empathetic, but also really driven. The problem is that they are locked in a downward spiral and they can't possibly be vulnerable. It's only when they run out of money, or some other extreme event occurs that they change tack. That's moronic, especially when the outcomes are predictable.
There is a lot to be said about SV culture and the people that surround these VCs. A lot of people love these environments and more than tolerate the environment these VC folks create. It's hardly a new phenomenon.
Using things like github stars is clearly stupid, but not in the way you're suggesting. They're using the GH stars as a proxy metric for "someone else will come along and give money bags to this person later, so I should get in early so I can take that money eventually."
They're operating on metric of success which is about influence and charisma and connectedness, not revenue or technical excellence.
Again, VCs don't care if you'll make a profitable business some day. They're just interested in if someone else will come along and pay out giant bags of cash for it later in a liquidity event. If they get even one of those successes, all the stupid GH star watching pays off.
Here's another way of framing it: any harms from the false positives around "He has a lot of GH stars" or "He went to Stanford" or "I know his father at the country club" are more than mitigated by the one exit in 1000 that makes a bunch of people filthy rich.
We shouldn't expect VCs to be something they're not. But we are missing something inbetween VCs and "self financing" and "bootstrapping"
If you mentally say “well 90% fail so I’ll just throw in this dog shit to see what happens” then you increase the failure rate.
And if that's true, they should be slapped, hard. They're no longer performing a socially useful function, and and have degraded towards pure financialization. Some middleman between fools and their money.
As much as I don't like Altman, VC should be pumping money into startups like Helios--companies pursuing cutting-edge technology that could totally fail (yes, that's an organic em-dash).
I do think that ZiRP distorted things extremely badly. There's an entire generation in this software industry that lives around the business-culture expectations set during that time which as far as I could see basically amounted to "I build Uber but for X" (where X is some new business domain).
Perhaps after a bit of a painful interregnum things will be a bit different now that rates are higher and risk along with it.
Also anybody can throw a SaaS together in a few days now. Separating the wheat from the chaff in the next few years will be... interesting.
That's a extremely strong statement, and may only be true in libertarian-land, where pure capitalism is a god to be worshiped and "good" has been redefined to be "whatever the unregulated free market does."
But in the real world, capitalism is a tool to perform socially useful functions (see the marketing about how it was better able to do that than Soviet central planning). When it fails, it should be patched by regulation (and often is) to push participants into socially useful actions, or at least discourage socially harmful ones.
I didn't say I agree with it.
You said:
>>>> I don't think there's ever been an argument that anybody...
I just made a such an argument, and the fact that I'm not alone can be inferred from the actions of the government in regulating capitalism. Also, if you read the newspaper, it's fairly frequent to see an op-ed decrying some particular market entity, and advocating for something to stop what they're doing.
Also you'll note I wasn't arguing "everyone at all times needs to perform a socially-useful function," but rather "we've identified a particular important area where the social utility is too low, lets do something about that problem."
It's a bit like the old article about evaluating software companies on whether they have version control or not. Everyone has version control now.
The entire game of startup investing is to identify breakout companies early. Social proof (when valid, not faked) of interest is one of the strongest signals of product market fit.
If a product has a lot of attention (users, headlines, stars, downloads, DAU) that’s a signal that it could also have a lot of customers some day. This is also why all of those metrics are targets for manipulation.
> This would be like an NFL team drafting a quarterback based on how many instagram followers they have
Major sports team are about engaging fans. If a promising recruit had a huge social media presence then that could be a contributing factor toward trying to recruit that player.
This is actually easier to understand if you look at the inverse: Some times there are players with amazing stats but who have a cloud of controversy following them. Teams will skip over these problematic players despite their performance because having popular and engaging players is important for teams but having anti-popular players will drive away fans.
Over here the fans would be singing "You're getting sacked in the morning" halfway through that first season.
I guess not having relegation makes things slightly less ruthless for you.
The owner of the Cleveland Browns uses the team to generate more revenue. For NFL teams, performance has little to do with their value or ability to generate additional revenue.
There is no strong financial incentive to win in the NFL, aside from the owner's ego. The Browns' owner's ego is driven by money, and the result shows on the field.
Like an allegory for performative capitalism in America. Profit and quality completely decoupled in the wake of market capture (rent seeking).
I do find the model European Football (soccer) using promotion and relegation to be much more interesting, both from the standpoint of culling out perennially hopeless teams from top-tier competition, and for having a place for people to play who aren't absolute superstars.
I am so glad the proposed "European super league" was killed off so hard, so that we don't get a franchise model, it produces so many adverse incentives.
That would put a fire under some asses!
is there a tech equivalent? like you do a crappy job with your series A on purpose which helps you get a better series B. although there is the notion of a big round of layoffs to secure further investment
plus, what is an NFL fan going to do, stop watching football? hahahahahaha
The Haslams? Yeah, they should really sell the team, but I figure in about 10-15 years, they'll move it out of Cleveland.
Former Seahawks fan here, it's easier than you think. (It wasn't their record, I stuck with them through the 90s after all, it was realizing what CTE meant for the players).
Once surfaced, there’s other signals to filter if an initial conversation is even worth it.
Assuming everyone else is just stupid and it’s all luck is a good way to hold yourself back from your potential.
Nevertheless, VCs are in fact pretty dumb sometimes and it'd be stupid to invest soley based on stars.
And once it gets out that it’s a selection criteria it gets gamed to hell and back.
sounds like how the ufc does it
Not quite the same, but the New York Jets (one of the few NFL teams that can match the dysfunction of the Browns — they have the longest active playoff drought in big 4 North American sports) passed on a few successful players because the owner, Woody Johnson, reportedly didn't like their Madden (video game) ratings [0]:
> A few weeks later, Douglas and his Broncos counterpart, George Paton, were deep in negotiations for a trade that would have sent Jeudy to the Jets and given future Hall of Fame quarterback Aaron Rodgers another potential playmaker. The Broncos felt a deal was near. Then, abruptly, it all fell apart. In Denver’s executive offices, they couldn’t believe the reason why.
> Douglas told the Broncos that Johnson didn’t want to make the trade because the owner felt Jeudy’s player rating in “Madden NFL,” the popular video game, wasn’t high enough, according to multiple league sources. The Broncos ultimately traded the receiver to the Cleveland Browns. Last Sunday, Jeudy crossed the 1,000-yard receiving mark for the first time in his career.
...
> Johnson’s reference to Jeudy’s “Madden” rating was, to some in the Jets’ organization, a sign of Brick and Jack’s influence. Another example came when Johnson pushed back on signing free-agent guard John Simpson due to a lackluster “awareness” rating in Madden. The Jets signed Simpson anyway, and he has had a solid season: Pro Football Focus currently has him graded as the eighth-best guard in the NFL.
[0] https://www.nytimes.com/athletic/6005172/2024/12/19/woody-jo...
It's purely incentives. Heavy competition for early signal identification has pushed them to crappier and crappier indicators.
I believe that is how they made the final decision on Watson over Mayfield. Oh, wait, I don't think anything can explain that decision.
Also from Cleveland.
Go Guardians! Go Cavs!
Github stars used to really mean something. Having 1k+ was considered a stable, mature library being used in prod by thousands of people. At 10k+ you were a top level open source project. Now they've been gamed by the dead internet just like everything else, and it's depressing as hell.
Yes actually
Needless to say they didn’t like when I said this was a worthless metric and we needed to be using something like “working policies” or “time saved training”
I just wanted to build a good product but unfortunately good products are not relevant
There were no complementary workflows or infrastructure or anything.
It was explicitly a move to try to counter epic’s positioning and internally it was very obviously a JR versus Tim pissing contest (and JR was the only one in the contest because Tim didn’t give a fuck about Unity)
I have personally seen several company CEOs (that were billionaires!) do this in different ways. Sometimes hiring people because of it.