No. I already thought SV has a greater than average concentration of irresponsible “move fast and break things” types. Eventually the adults adults will always have to take over to avoid a disaster.
Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
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Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#12only in the sense that they were incrementally confirmed/validated
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#13Silicon Valley has always been boom/bust like Florida Real Estate. Remote working is the bigger threat this time, why come back in SV?
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#14No. I already thought SV has a greater than average concentration of irresponsible “move fast and break things” types. Eventually the adults adults will always have to take over to avoid a disaster.
We're talking about a 40 year old bank that bankrupted itself with a 1.5% 10-year mortgage backed security. I don't think "moving fast and breaking stuff" is what got us here.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#15Pre-SVB Peter Thiel: True example of the best of the hacker mindset!
Post-SVB Peter Thiel: Dark and selfish example of the worst of the hacker mindset.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#16I may not be fully informed (please comment if that's the case), but it seems like there were really only a couple of instigating factors:
1) SVB invested too heavily in long-term bonds, which reduced their ability to maintain liquidity. In particular, with the inverted yield curve, the recent increase in interest rates seems to me to have made it more likely that these long-term bonds were going to be underwater either way
2) Peter Thiel (allegedly?) instigated a run on the bank by advising people to pull money, partially(?) due to reports that they lacked sufficient liquidity
I don't see the depositors being at fault here. In so far as the depositors had accounts in excess of the FDIC insured limits, first, it seems really difficult for companies to have a sufficient pool of liquid cash in an account somewhere such that they can pay payroll from it. Second, I have read accounts of startups being lent funds from SVB, but with the requirement that the funds be kept in SVB as well. SVB was the de facto choice, from how it sounds, so I don't blame the startups for going with what was a proven good solution... even if it was later proven not so good.
Also, it seems like the FDIC is doing the right thing. All of the insured funds are covered, and it seems like they're also covering all of the deposits in excess by liquidating the assets at a loss, which the bank's shareholders will eat.
Overall, it doesn't seem like a good situation, but we seem to have avoided a train wreck, at least from where I'm sitting. I may be missing things, and I don't have much experience in finance.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#17Pre-SVB Peter Thiel: True example of the best of the hacker mindset! Post-SVB Peter Thiel: Dark and selfish example of the worst of the hacker mindset.
He's been doing his best to make this clear for 20+ years.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#18I have more confidence than ever that silicon valley won't destroy humanity :)
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#19Ben Thompson has a great take on this: https://stratechery.com/2023/the-death-of-silicon-valley-ban... He makes the case that one factor of many in the success of SV was people played iterated games with the same people, which effectively built trust. Now the companies and stakes are so huge that it can be worth it to break that trust sometimes because the benefits of a single win (billions of dollars) can dwarf the…
Sadly enough, this makes a lot of sense to me and seems to be exactly what's happening.
How is the breakdown of trust a bad thing in this case? All that incestuous, unwarranted mutual trust and people helping each other only serves to shield the lazy and incompetent. What is that trust based on? It's based on nothing. For the most part, people in SV have no shared values aside from a desire to get rich at all costs (which is common, though maybe not universally shared). Such forms of trust should not exist. That kind of goal-oriented trust is the kind of trust you see in criminal organizations, not the kind of trust which drives a functioning society.
Relationships should be founded on shared values, not shared goals. Because once most members of the group have reached their goals, what's left to bind them to the rest of the group? Nothing. Of course they will (and should) throw the rest of the group under the bus as soon as they are able. It's not the same group which initially signed up for anyway, it changed.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#20No, and Im not sure why it would unless you are willing to paint broad swaths of people with the same brush. IMHO, there are still a bunch of ambitious and talented people. Most of them with good intentions, many of them smart, but all human.
To be honest, I didn't even see that many examples of bad behavior. Some bank managers took some big risks and an unlikely event blew up in their face. Some CEOs and VCs panicked, but I would too.
I dont particularly care for the account holder bailout, but I get it. Whisper "contagion" and people panic after 2008.
If anything, what I learned over the last 72 hours is how much resentment and bitterness has been brewing. It is a pretty amazing level of outrage for something with so little relevance for most people.