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Sean Parker: “Little Startups Are Ridiculously OverFunded”

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Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#71

Post by ericd »

cpeterso wrote: post #61
ericd wrote: post #23

This isn't just whining. My theory is that 500 2 person companies have a worse chance at making a real splash than if the 100 best ideas from that group had 10 good people working on them. That's part of what he's saying - it's harder now for good startups to grow when everyone wants to and is incentivized to make their own web startup. The other part he's saying is that people can have a larger marginal impact on th…

> My theory is that 500 2 person companies have a worse chance at making a real splash than if the 100 best ideas from that group had 10 good people working on them. I wonder if there is an opportunity for matchmaker investors to scoop up like-minded startups and consolidate early companies to build those 100 10-person winners.

That's an interesting idea. It might be fairly expensive to scoop them up, though, since they could reasonably expect to get a good amount of funding for their own idea.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#72

Post by allantyoung »

spitfire wrote: post #17

Each day, I thank god for all these useful idiots in SV. They're madly running a rat race to build the next social widget. Throwing off useful technology I can use to serve the vast wasteland ignored by them. Thank you Sean Parker.

Care to elaborate? I just found your comment interesting but I'd like to know what you're talking about.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#73

Post by robryan »

pitdesi wrote: post #27

I think he's right, for the most part. It's also interesting that a lot of these startups end up with "successful" exits where their technology isn't used at all (ie talent acquisition for FB/Goog, etc). I don't know if there should be a correction for that, but I sometimes feel that it leads to people building for the sake of building until they get acquired. Interestingly, we ( http://feefighters.com ) had 2 of our…

Even if the product isn't used on many occasions, the best aspects of it and the teachings from running it often are. I think the aquihires allow experimentation that would be hard to achieve within the acquiring company.

The aspect I dislike is when startups say that they are in for the long haul then sell a few months later. Makes it hard to trust a startup that the investment in time you spend to get up and running on their product will be worth it.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#74

Post by robryan »

allantyoung wrote: post #72
spitfire wrote: post #17

Each day, I thank god for all these useful idiots in SV. They're madly running a rat race to build the next social widget. Throwing off useful technology I can use to serve the vast wasteland ignored by them. Thank you Sean Parker.

Care to elaborate? I just found your comment interesting but I'd like to know what you're talking about.

Sounds like he means the open source tools startups are generating can be used to target areas they are ignoring.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#75

Post by davidhansen »

lbarrow wrote: post #41
earl wrote: post #5

"The problem in his view is that many of the talented engineers and product designers who are now starting their own companies could have a bigger impact at places like Facebook, and they in turn will have a hard time attracting the best talent because those people can get funded to start their own projects as well." Obviously I just read TC's article and didn't see what Parker said, but what's notably missing from t…

Exactly. I'm not in a position to comment on the amount of funding in the early-stage startup world, but this particular comment by Parker reads like another executive whining that engineers are too independent.

Not just the independence aspect, but the hubris with which he complains about the most brilliant minds choosing to not work on, well, a social network site.

It's 2011; we are traversing inflection points of development in solar energy, nanotechnology, bioinformatics, and seeing the early, dramatic fruits of stem cell research, and Parker is bitching that the best of the best aren't keen on improving software that shares drunk photos and your latest opinion of Kim Kardashian's divorce?

Wow. Just, wow.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#76

Post by mnutt »

lansing wrote: post #64
nestlequ1k wrote: post #32

Earlier quoted context omitted.

There's a certain type of personality (very prevalent in the valley) who won't work for a big company like facebook, twitter, or google for any amount of money. I would imagine these types of people make up the majority of the YC class. Maybe they'll get bought via a talent acquisition but as soon as their golden handcuffs are off, they are out doing their own thing again. The reason they allow themselves to get boug…

You claim that this class of people won't work for a "big company" for "any amount of money," yet in the next breath you admit that they will work for those companies in the context of a "talent acquisition." What is a "talent acquisition" if not an alternate mode of compensation to persuade individuals to "take a corporate job" who previously considered themselves above such positions? Yeah, it sounds more impressiv…

He gives a fairly reasonable explanation in the next sentence:

The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#77

Post by pjin »

teaspoon wrote: post #70
earl wrote: post #5

"The problem in his view is that many of the talented engineers and product designers who are now starting their own companies could have a bigger impact at places like Facebook, and they in turn will have a hard time attracting the best talent because those people can get funded to start their own projects as well." Obviously I just read TC's article and didn't see what Parker said, but what's notably missing from t…

There's a rich tradition of self-interested complaint in this industry. This reminds me of Fred Wilson's complaining about startup lawyer fees[1], Aaron Greenspan's complaining about the Money Transmission Act[2], and pg's Patent Pledge[3]. Not that people shouldn't speak for the causes of their choosing, but you do lose some rhetorical impact if you only do so once you have a horse in the race. [1] http://www.avc.co…

Don't forget the classic Open Letter to Hobbyists [4].

[4] http://www.blinkenlights.com/classiccmp/gateswhine.html

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#78

Post by jseliger »

georgemcbay wrote: post #30

I don't think he is completely wrong but I think this is just another (higher-end) instance of the age-old tradition of companies saying it is too difficult to find engineers while being unwilling to pay fair value for said engineers. To be clear, I know that Facebook does pay quite well by industry standards (offset somewhat by the bay area cost of living) for top talent, but if this situation is causing them an iss…

"offset somewhat by the bay area cost of living"

This is a much bigger problem than many people realize; Ryan Avent discusses it in his ebook The Gated City (http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005...) and on this Econtalk podcast: http://www.econtalk.org/archives/2011/10/avent_on_cities.htm... . Basically, housing costs in Silicon Valley are eating up all the salary increases tech companies are offering. Avent describes how, in the 1990s when the unemployment rate in the Valley was effectively zero and lots of people who'd read "Learn HTML in 24 Hours" were getting jobs, people still weren't flocking to the area because the cost of housing is so high.

Anyone who wants to address extremely high tech salaries needs to be very interested in housing and urban policy.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#79

Post by lansing »

mnutt wrote: post #76
lansing wrote: post #64

Earlier quoted context omitted.

You claim that this class of people won't work for a "big company" for "any amount of money," yet in the next breath you admit that they will work for those companies in the context of a "talent acquisition." What is a "talent acquisition" if not an alternate mode of compensation to persuade individuals to "take a corporate job" who previously considered themselves above such positions? Yeah, it sounds more impressiv…

He gives a fairly reasonable explanation in the next sentence: The reason they allow themselves to get bought via talent acquisition is to be able to easily raise money in the future.

That is still ignoring the fact that these individuals were in fact willing to take a corporate job, when their price was met. Maybe that price included the ego boost that comes with being part of an acquisition ("they really wanted me!"), or the "pedigree" that one plans to parlay into future opportunities.

Regarding the latter point, it seems that "key players" at "prominent companies" don't have too much trouble getting funding for startups when they move on, regardless of whether they were "talent acquisitions" or not.

Speaking from experience, when my previous employer got acquired by a megacorp, nobody was saying "I really don't want to work for megacorp, but maybe I will have an easier time getting funding later." No. It all came down to dollars and cents in the here and now, and the only people who turned down the earn-out offers (less than 10%) were those who had better options available.

Re: Sean Parker: “Little Startups Are Ridiculously OverFunded”

#80

Post by lsc »

jseliger wrote: post #78
georgemcbay wrote: post #30

I don't think he is completely wrong but I think this is just another (higher-end) instance of the age-old tradition of companies saying it is too difficult to find engineers while being unwilling to pay fair value for said engineers. To be clear, I know that Facebook does pay quite well by industry standards (offset somewhat by the bay area cost of living) for top talent, but if this situation is causing them an iss…

"offset somewhat by the bay area cost of living" This is a much bigger problem than many people realize; Ryan Avent discusses it in his ebook The Gated City ( http://www.amazon.com/Gated-City-Kindle-Single-ebook/dp/B005... ) and on this Econtalk podcast: http://www.econtalk.org/archives/2011/10/avent_on_cities.htm... . Basically, housing costs in Silicon Valley are eating up all the salary increases tech companies ar…

Hm. See, I don't think paying twice as much for a place to sleep is that big of a deal for a younger Engineer. I mean, if you are a young single person, so you pay a grand for a studio rather than $500 in some flyover state. or $600 for a room rather than $300. Not really a big deal when your salary starts at $80K/year.

As you get older and want to buy a house and have a family? Eh, during the bubble, it was a problem. Five hundred grand for a 1bdroom condo? crazy. But these days? rents might be high, but you can get a small 3bdroom house for $300-$350K in a very safe area. By that point in your life, an Engineer's salary is going to be at least 1/3rd of that, which seems like a pretty reasonable ratio of salary to house.

I mean, yeah, if you can take a 20% paycut to live in a flyover state where you can get something giant and nice for $100K, that might look like a good deal on the face of it, but the thing is, here in the valley? there is a multitude of employers to choose from. If you are in idaho and your employer shuts down or you want to quit? likely you are going to have to move. There's a huge advantage to the employee of having many potential employers within easy commute distance.

so yeah; personally? I don't think it's a big deal for Engineers.

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