Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Unicorns are setting up their own venture capital funds

bloomberg.com

Post reply on HN
Print view View original

71–80 of 86 posts

Re: Unicorns are setting up their own venture capital funds

#71

Post by reidjs »

wpietri wrote: post #66
atomical wrote: post #59

Earlier quoted context omitted.

And maybe you shouldn't lead with a generalization. Not all of them were scams.

Like perpetual motion machines, some are scams and some are just run by sincere fools. And it's entirely possible that there are some real businesses run by smart people who needed funding and the blockchain bits are just window dressing. So not scams, exactly, but more the kind of marketing fraud that, in the marketing world, barely counts as fraud at all. If you have proof that one of them is a) a real business, b)…

The only proven use of blockchain is to transfer value from one person to another over the internet without relying on a central bank account. Doesn’t that validate the tech to some degree?

Re: Unicorns are setting up their own venture capital funds

#72

Post by hitekker »

mattnewport wrote: post #30
AndrewKemendo wrote: post #25

Earlier quoted context omitted.

That most companies haven't learned these lessons but those that have will assimilate or destroy the ones that don't? Precisely What would that look like in the statistics? Something like this: https://www.investopedia.com/news/5-companies-amazon-killing... Are there particular companies that you think are doing this successfully? FAANG are the examples here. Look at the top 10 most used apps[1]. 5/10 are Google owne…

> At the end of the day it comes down to longevity. The longest lasting companies are ones which have bought themselves into relevancy. I think it's a little early to say whether Facebook or Google will have the kind of longevity of a GE, ExxonMobil or DuPont. Longevity on its own doesn't actually seem particularly interesting, what makes those three stand out is staying large and relevant for so long, not merely sur…

Agreed.

“Are the FAANGs the first perfect economic actors in human history?”

No. I remember people making the same arguments for mortgage back securities.

So much worship of so much snake oil.

Re: Unicorns are setting up their own venture capital funds

#73

Post by mattmg83 »

mcny wrote: post #49
JumpCrisscross wrote: post #43

Earlier quoted context omitted.

> They don't need 'a fund' to do that Having dealt with both, there is a difference. Corporate M&A is corporate finance. Their teams come from investment banking backgrounds and are not equipped to evaluate early-stage investments. They therefore don’t get pitched them. Corporate VCs, on the other hand, exist to evaluate young companies and write small checks. The market know that, and therefore shows them early-stag…

Do "corporate VC" people have the mindset of a VC in that they're aware that most investments will fail and that's ok as long as a few "moonshots" go really well? Was Yahoo! buying tumblr an example of corporate VC? How about Facebook buying Instagram?

In my fund we do, even our CEO reminds us that it’s ok some of our bets will fail, but the rest of the organization is a bit less in tune and thinks we just are a new stage to the M&A process

Re: Unicorns are setting up their own venture capital funds

#74

Post by AndrewKemendo »

hitekker wrote: post #72
mattnewport wrote: post #30

Earlier quoted context omitted.

> At the end of the day it comes down to longevity. The longest lasting companies are ones which have bought themselves into relevancy. I think it's a little early to say whether Facebook or Google will have the kind of longevity of a GE, ExxonMobil or DuPont. Longevity on its own doesn't actually seem particularly interesting, what makes those three stand out is staying large and relevant for so long, not merely sur…

Agreed. “Are the FAANGs the first perfect economic actors in human history?” No. I remember people making the same arguments for mortgage back securities. So much worship of so much snake oil.

“Are the FAANGs as the first perfect economic actors in human history?”

That's a great way to put it, and my answer would be: Of course not, but they are probably the closest we've ever seen and are on a vector that keeps them getting closer.

Re: Unicorns are setting up their own venture capital funds

#75

Post by Aloha »

beagle3 wrote: post #5
AndrewKemendo wrote: post #3

From an operations perspective, this is for Business Intelligence and creating a funnel for acquisitions. Venture is one of the best ways to spot trends in your own market(s), and lead run any future competition with an acquisition, new product or product changes. This is one of the major things that distinguishes major 21st century companies today from major companies in the past. If you know all of the up and comin…

Microsoft knew all about Google Yahoo knew everything about Google Google knew everything about Facebook Intel knew everything about ARM Yet disruption ensued. “Can’t be disrupted” is foolish.

Google (still) doesn't really compete with Microsoft - they're in related but different verticals, Google and Microsoft have different core businesses - while yes, they compete on the periphery, they're not in head to head competition, Microsofts successful business model soldiers on - no disruption really seen.

Facebook and Google don't really compete either - again, related, but different verticals, Googles existing business model wasnt really disrupted by Facebook appearing on the scene.

The majority of mobile processors prior to arm, wasn't Intel (it was 68k actually), again, no real disruption to the Intel Business Model.

In almost every case you've presented, you act as if a major player was displaced from a market within which they were the incumbent leader - but in every case but yahoo - it was a new line of business opening up, due to changes in the market place - where a major player in a related marketplace failed to achieve dominance - in the case of Intel, it was quite by choice - Intel saw early on that it couldn't make the margins needed to sustain itself in the mobile processor world - and while there keeps being talk about ARM coming to the non-mobile marketplace, there has been little to no actual incursion there.

The exception here is yahoo - Yahoo was pushed out of its core markets by the rise of google, where they competed head to head.

Re: Unicorns are setting up their own venture capital funds

#76

Post by mattnewport »

AndrewKemendo wrote: post #74
hitekker wrote: post #72

Earlier quoted context omitted.

Agreed. “Are the FAANGs the first perfect economic actors in human history?” No. I remember people making the same arguments for mortgage back securities. So much worship of so much snake oil.

“Are the FAANGs as the first perfect economic actors in human history?” That's a great way to put it, and my answer would be: Of course not, but they are probably the closest we've ever seen and are on a vector that keeps them getting closer.

It doesn't look that way to me, in fact they all look quite vulnerable in various ways, some common and some unique. Netflix and Facebook will be the first to stumble I suspect. I can't predict the future and I'm not an active investor but for my part my retirement savings are not going to be heavily weighted in FAANG stock. I guess we'll see how the landscape looks in a decade.

Re: Unicorns are setting up their own venture capital funds

#77

Post by AndrewKemendo »

mattnewport wrote: post #76
AndrewKemendo wrote: post #74

Earlier quoted context omitted.

“Are the FAANGs as the first perfect economic actors in human history?” That's a great way to put it, and my answer would be: Of course not, but they are probably the closest we've ever seen and are on a vector that keeps them getting closer.

It doesn't look that way to me, in fact they all look quite vulnerable in various ways, some common and some unique. Netflix and Facebook will be the first to stumble I suspect. I can't predict the future and I'm not an active investor but for my part my retirement savings are not going to be heavily weighted in FAANG stock. I guess we'll see how the landscape looks in a decade.

I don't really see how you could claim Facebook the company is stumbling.

Maybe Facebook the product is, but not the compliment of Facebook, Whatsapp, Instagram, Messenger, Oculus etc...

Re: Unicorns are setting up their own venture capital funds

#78

Post by mattnewport »

AndrewKemendo wrote: post #77
mattnewport wrote: post #76

Earlier quoted context omitted.

It doesn't look that way to me, in fact they all look quite vulnerable in various ways, some common and some unique. Netflix and Facebook will be the first to stumble I suspect. I can't predict the future and I'm not an active investor but for my part my retirement savings are not going to be heavily weighted in FAANG stock. I guess we'll see how the landscape looks in a decade.

I don't really see how you could claim Facebook the company is stumbling. Maybe Facebook the product is, but not the compliment of Facebook, Whatsapp, Instagram, Messenger, Oculus etc...

I don't really see how you could say they're not stumbling. Have you looked at the stock chart recently? Have you noticed the barrage of negative press from the NYT and other sources just in the past week? Have you followed the congressional hearings and increasing calls from both left and right both in the US and Europe to regulate them? Have you seen the increasing calls for Zuckerberg to step down as chairman? Have you seen the articles reporting both the steep decline in Facebook usage among teens and the increasing evidence of the connection between social media and teen depression? Have you noticed the increasing number of people who hate Facebook the product and the company and are abandoning it? The stream of executives leaving over disagreements?

Now Facebook has risen a long way and has a lot of buffer to recover from missteps and challenges. I'm not counting them out yet or saying they're facing an existential threat soon but the shine has very clearly come off in the last couple of years. There's certainly room for debate about the magnitude of the challenges they face and how well placed they are to overcome them but I don't see how anyone can question they are already stumbling.

Re: Unicorns are setting up their own venture capital funds

#79

Post by sonnyblarney »

JumpCrisscross wrote: post #43
sonnyblarney wrote: post #27

Earlier quoted context omitted.

Theoretically what you say makes sense, but I think in practice, it doesn't work as nicely. Corporate M&A can do many of those things already. They have cash. They don't need 'a fund' to do that ... and yet most corporate M&A is a disaster. I wouldn't believe it until I saw it at a large company and then it all clicked and it actually makes sense. M&A & VC teams are considerably more removed from the strategic impetu…

> They don't need 'a fund' to do that Having dealt with both, there is a difference. Corporate M&A is corporate finance. Their teams come from investment banking backgrounds and are not equipped to evaluate early-stage investments. They therefore don’t get pitched them. Corporate VCs, on the other hand, exist to evaluate young companies and write small checks. The market know that, and therefore shows them early-stag…

In my experience, M&A people are not often bankers, they're glorified biz dev types or lawyers.

Also 'corporate VCs' are generally terrible VCs.

But yes, investing in is different than buying in.

Anyone care to indicate a corporate VC model that has actually worked well strategically? As far as I remember - could be wrong - even Google's VC arm is there to 'make money first' less so strategic. Or I could be wrong.

Re: Unicorns are setting up their own venture capital funds

#80

Post by AndrewKemendo »

mattnewport wrote: post #78
AndrewKemendo wrote: post #77

Earlier quoted context omitted.

I don't really see how you could claim Facebook the company is stumbling. Maybe Facebook the product is, but not the compliment of Facebook, Whatsapp, Instagram, Messenger, Oculus etc...

I don't really see how you could say they're not stumbling. Have you looked at the stock chart recently? Have you noticed the barrage of negative press from the NYT and other sources just in the past week? Have you followed the congressional hearings and increasing calls from both left and right both in the US and Europe to regulate them? Have you seen the increasing calls for Zuckerberg to step down as chairman? Hav…

All of what you mention is effectively noise.

Look at the fundamentals [1]. Facebook (the product), Instagram, Whatsapp, and Messenger completely dominate the social web. Oh and in case you thought Snap was a competitor, realize that Snap pays Google $2B a year and Amazon $1B a year for Cloud Services. On Flat growth and relatively terrible network effects. FB doesn't have to pay anyone because it has it's own services.

No other collection of social networks or advertising networks are coming anywhere close to them. Nobody is seriously threatening their business model. The recent Frontline piece was really hard on them, but there's nothing there really tangibly. Here's the reality:

Facebook has the predominance of internet users across all platforms and still growing 11% annually.

Facebook still sells advertising that converts better than any other advertising platform.

Facebook has diversified and built information networks on par with Amazon and Google to prevent (as much as anyone has ever done) any competitor from surprising them.

The only possible thing that could happen is some government trying to shut them down. Honestly though without specific legislation against them and only them, it won't work. You can't kill the advertising model with legislation and you can't kill data collection (Like GDPR is trying to do) without it impacting all players - if anything it hurts small players more.

So no, I don't see them stumbling. In fact I don't see one example of Facebook, Amazon or Google being surprised by any challenging upstart in the last 5 years. They might have been rejected for buyouts, but they weren't surprised.

[1] https://investor.fb.com/investor-news/press-release-details/...

Post reply on HN