Tricky part here is what is evil? Is it evil to ask for money for something? Is open source / free the only good?
I honestly really respect companies that are just honest and don’t have an altruistic vision. I think that often works out better - keeps expectations in check. 😀
Ah, I don't think money is (necessarily) evil, or open source is good, or anything like that. My point wasn't really that companies need to be altruistic; it was just that what you want to do and what you're willing to do to survive are often pretty far apart. And if you run a company, you should recognize that, at some point, you're going face that choice, and you're probably going to do the thing necessary to survive.
That said, I do agree with you that companies should be more upfront about that. If I were to do it all over again, and take VC money to do it, I think you should have basically one universal mission: "To make something great that makes lots of money." Because everything else you write is secondary to that.
ya - that makes sense. I think the problem is when it is a bootstrapped opensource thing that raises VC money that pretends like priorities and goals haven't changed.
This all tracks exceptionally with my experience on the worker end of things - and I think part of why 1) outpaces 2) so much and so often is that 1) has managed to wield other levers of influence - primarily political - to make it that much harder for a company striving to retain 2) to compete.
And it is a scaling issue - if we started shattering more of the monopolistic companies into a dozen pieces, it would be far easier for the 1 in a million or even 1 in a thousand talent to compete.
A 1 in a thousand talent CAN run a successful grocery store /if/ Wal-Mart isnt in the picture. But as soon as Wal-Mart enters the picture, you need to be a 1 in 10,000 or 1 in 100,000 to survive - and that means 90%+ of those community businesses in the same market go away.
So I would say one way we can combat this is by more aggressive antitrust - if you don't have huge Drag and Drop products (because they werent allowed to buy all their rivals or future rivals) then the finance team has less influence and the analysts are more likely to actually get the CEO to listen.
Yeah, I think I agree with that? It's one place where (somewhat ironically) I think the Apple App Store has actually been a huge help, because you can build a small, 1-in-10,000 app with a few people, make plenty of money, and stay true to all of the things you want to be that aren't just "enormous monopolistic money machine."
That said, I do wonder how much of that is us - ie, the people running the companies. It's easy to blame the system, but I think some of it is just ambition, and not wanting to do something that feels like settling.
An earlier comment asked what it would be like if people were less greedy, and I think there's an interesting point in that. What if you could only make ~$10 million from a startup? That's a huge amount of money, but it's also an amount you could make by building a successful company that isn't Wal-Mart. Do we need the people trying to build the Wal-Marts and Googles and Facebooks? Or Would 1,000 midsized companies be better?
The way I think of it is the existing system is vulnerable to hacking by malicious sociopaths - which I will define as "Those who can never be satisfied with any level of wealth; if they have a million, they want 100 million; 100 million, they want 100 billion; and so on, and so on -"
The only way to keep racking the score up is to grow bigger. There's basically a limit on how fast you can do that with mergers and acquisitions, but add M&A into the game and no form of antitrust enforcement, which is what in the US we've effectively had since Reagan, and you create an environment where they can keep racking that number up. So you have companies in tech like MS and Google which haven't really made anything new/good in over a decade, yet profit margins keep going up, while they cause immense damage to the actual workers by massive layoffs (Also causing tons of psychological damage as people have to deal with job loss, or fear of job loss)
Which is to say : Yea, 1,000 midsized companies would be better - both because 999 competitors means that /someone/ is going to fiercely compete on price, another on quality, another on the best balance they can get between the two, because in a group of 1,000, enough will truly be playing to win that the others have to as well, or lose their customer base and die off.
Google doesn't have to play to win, not truly, because good luck trying to use the internet without touching Google's tech stack at all. And I'm old enough to remember the internet in the 90s, before the consolidation - it was way better, in part because if someone had a shitty service, it was viable to create a competing one and crush them.
But how do I compete against Gmail, when all Google has to do is tweak their spam filters to regard email from my service as spam at a high enough % to make it useless for enterprise, yet low enough they can claim 'Oops sorry our secret algo is false flagging you nothing we can do about it without revealing secret corporate data'.
The passive moats become far too wide to swim across the bigger they get.
"Sarah Guo, an investor and the founder of an AI-focused fund, said now is the time to chase the biggest ambition you can imagine..."
I am struck by how often VCs write lofty, ungrounded prose about what startups should do. Most of them have no idea. They got lucky once or have a wealthy network (that they themselves didn't necessarily even build) but I can hardly think of any who have *really* grinded through failures and successes and tested any of their lofty theories (and calling them theories is granting far too much credit). Even the celebrated Marc Andreessen is where he is based more on luck than anything else.
Yeah, I don't really have an issue with posts like that. It's just part of the system, and I suspect they do actually "work" reasonably well for some subset of the market, in that they get people fired up to do something. But I think that's what most of that is really about. They aren't theories as much as pump up speeches, and VCs mostly do it so that the pumped up people then want to pitch the VC.
This one was particularly interesting, thanks for writing!
Imagine how many great tools/apps/products we (as society) lose because the company that builds it cannot get tons of profit in the end of the day, cannot have a ROI of 3x for their investors, or at least cannot maintain a high and eternal growth pace. These companies would manage to make SOME profit and certainly would be sustainable (in simple terms of incomes/outcomes), while builds, maintain and improve an important product that may have a limited market, with limited demand, but so well done and customized that it becomes deeply important for its users.
This might be too naive from me, but I believe that the human greed for money (and only money, and more and more money) in the capitalism is detrimental to the society. It is not a criticism of the economic system, it is a criticism of the questionable motivations of the agents who operate it. I really believe that we could do so much better than that.
There is an interesting thought experiment in there, of what would happen to Silicon Valley (and the world) if people genuinely didn't care about making more than like $10 million. Would a lot more people build the small great things? Would we miss out on all the really big things because people wouldn't build Google unless they could make $100 billion? Would people still want to build Google but just do it for other reasons? I dunno. But kind of an interesting thought.
A brilliant post! Captures much of what I think should be conveyed to young people thinking about their careers. Very well said.
Tricky part here is what is evil? Is it evil to ask for money for something? Is open source / free the only good?
I honestly really respect companies that are just honest and don’t have an altruistic vision. I think that often works out better - keeps expectations in check. 😀
Ah, I don't think money is (necessarily) evil, or open source is good, or anything like that. My point wasn't really that companies need to be altruistic; it was just that what you want to do and what you're willing to do to survive are often pretty far apart. And if you run a company, you should recognize that, at some point, you're going face that choice, and you're probably going to do the thing necessary to survive.
That said, I do agree with you that companies should be more upfront about that. If I were to do it all over again, and take VC money to do it, I think you should have basically one universal mission: "To make something great that makes lots of money." Because everything else you write is secondary to that.
ya - that makes sense. I think the problem is when it is a bootstrapped opensource thing that raises VC money that pretends like priorities and goals haven't changed.
This all tracks exceptionally with my experience on the worker end of things - and I think part of why 1) outpaces 2) so much and so often is that 1) has managed to wield other levers of influence - primarily political - to make it that much harder for a company striving to retain 2) to compete.
And it is a scaling issue - if we started shattering more of the monopolistic companies into a dozen pieces, it would be far easier for the 1 in a million or even 1 in a thousand talent to compete.
A 1 in a thousand talent CAN run a successful grocery store /if/ Wal-Mart isnt in the picture. But as soon as Wal-Mart enters the picture, you need to be a 1 in 10,000 or 1 in 100,000 to survive - and that means 90%+ of those community businesses in the same market go away.
So I would say one way we can combat this is by more aggressive antitrust - if you don't have huge Drag and Drop products (because they werent allowed to buy all their rivals or future rivals) then the finance team has less influence and the analysts are more likely to actually get the CEO to listen.
Yeah, I think I agree with that? It's one place where (somewhat ironically) I think the Apple App Store has actually been a huge help, because you can build a small, 1-in-10,000 app with a few people, make plenty of money, and stay true to all of the things you want to be that aren't just "enormous monopolistic money machine."
That said, I do wonder how much of that is us - ie, the people running the companies. It's easy to blame the system, but I think some of it is just ambition, and not wanting to do something that feels like settling.
An earlier comment asked what it would be like if people were less greedy, and I think there's an interesting point in that. What if you could only make ~$10 million from a startup? That's a huge amount of money, but it's also an amount you could make by building a successful company that isn't Wal-Mart. Do we need the people trying to build the Wal-Marts and Googles and Facebooks? Or Would 1,000 midsized companies be better?
The way I think of it is the existing system is vulnerable to hacking by malicious sociopaths - which I will define as "Those who can never be satisfied with any level of wealth; if they have a million, they want 100 million; 100 million, they want 100 billion; and so on, and so on -"
The only way to keep racking the score up is to grow bigger. There's basically a limit on how fast you can do that with mergers and acquisitions, but add M&A into the game and no form of antitrust enforcement, which is what in the US we've effectively had since Reagan, and you create an environment where they can keep racking that number up. So you have companies in tech like MS and Google which haven't really made anything new/good in over a decade, yet profit margins keep going up, while they cause immense damage to the actual workers by massive layoffs (Also causing tons of psychological damage as people have to deal with job loss, or fear of job loss)
Which is to say : Yea, 1,000 midsized companies would be better - both because 999 competitors means that /someone/ is going to fiercely compete on price, another on quality, another on the best balance they can get between the two, because in a group of 1,000, enough will truly be playing to win that the others have to as well, or lose their customer base and die off.
Google doesn't have to play to win, not truly, because good luck trying to use the internet without touching Google's tech stack at all. And I'm old enough to remember the internet in the 90s, before the consolidation - it was way better, in part because if someone had a shitty service, it was viable to create a competing one and crush them.
But how do I compete against Gmail, when all Google has to do is tweak their spam filters to regard email from my service as spam at a high enough % to make it useless for enterprise, yet low enough they can claim 'Oops sorry our secret algo is false flagging you nothing we can do about it without revealing secret corporate data'.
The passive moats become far too wide to swim across the bigger they get.
I think this nicely captures what often happens when ideals meet markets.
"Sarah Guo, an investor and the founder of an AI-focused fund, said now is the time to chase the biggest ambition you can imagine..."
I am struck by how often VCs write lofty, ungrounded prose about what startups should do. Most of them have no idea. They got lucky once or have a wealthy network (that they themselves didn't necessarily even build) but I can hardly think of any who have *really* grinded through failures and successes and tested any of their lofty theories (and calling them theories is granting far too much credit). Even the celebrated Marc Andreessen is where he is based more on luck than anything else.
Absolutely right! And in their portfolio companies we have to listen to the once-lucky pontificate as though they have something valuable to impart!
Hell, she didn't even mention mobile as part of her retrospective. That's quite a miss.
PS. I know what I'm talking about is not what you're addressing in this article.
Yeah, I don't really have an issue with posts like that. It's just part of the system, and I suspect they do actually "work" reasonably well for some subset of the market, in that they get people fired up to do something. But I think that's what most of that is really about. They aren't theories as much as pump up speeches, and VCs mostly do it so that the pumped up people then want to pitch the VC.
Doesn't seem like a winning strategy.
This one was particularly interesting, thanks for writing!
Imagine how many great tools/apps/products we (as society) lose because the company that builds it cannot get tons of profit in the end of the day, cannot have a ROI of 3x for their investors, or at least cannot maintain a high and eternal growth pace. These companies would manage to make SOME profit and certainly would be sustainable (in simple terms of incomes/outcomes), while builds, maintain and improve an important product that may have a limited market, with limited demand, but so well done and customized that it becomes deeply important for its users.
This might be too naive from me, but I believe that the human greed for money (and only money, and more and more money) in the capitalism is detrimental to the society. It is not a criticism of the economic system, it is a criticism of the questionable motivations of the agents who operate it. I really believe that we could do so much better than that.
There is an interesting thought experiment in there, of what would happen to Silicon Valley (and the world) if people genuinely didn't care about making more than like $10 million. Would a lot more people build the small great things? Would we miss out on all the really big things because people wouldn't build Google unless they could make $100 billion? Would people still want to build Google but just do it for other reasons? I dunno. But kind of an interesting thought.
Great read, as always.