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Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

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31–40 of 102 posts

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#31
Pre-SVB: SV was full of some really smart people, many of whom didn't realize their skills and experience don't translate to other areas (eg pretty much anything to do with crypto) combined with some salesmen, some of whom are snake oil salesmen. Together they are more and more resembling the rest of Corporate America with performative cultures, privatizing their own luck, often having unearned bravado and increasingly perverting government to rig the game.

Post-SVB: Not much has changed.

There is a ton of misunderstanding about SVB. Some think we're bailing out billionaires. We're not. There's a lot you can criticize the governemnt for. This isn't one of those situations. SVB didn't manage its risk and fell out of compliance with its debt ratios. The government stepped in, dissolved the bank, paid out the depositors and the shareholders are at the back of the line. And it cost the taxpayers nothing.

I've long been convinced Peter Thiel is awful in pretty much every way. I hope this gets investigated because there's a reasonable suspicion that Thiel created a run on SVB, either intentionally or just accidentally. Why? Who knows.

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#33

No, 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 panicke…

What shareholder bailout? If you’re referring to SVB, shareholders will be wiped out. Only depositors are being bailed out (/made whole).

typo, I meant account holder/depositor

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#35
post #27
post #23

Earlier quoted context omitted.

Washington set faulty rules in the first place. Since when was it logical to lend out money that wasn't yours?

I didn’t say that Washington setting the rules was a good thing — but who else will step in where there has been a complete vacuum of any leadership in Silicon Valley in the last few days?

What kind of leadership were you expecting?

The rules didn't change recently, the rules just got executed as planned, which prescribed the FDIC takeover.

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#36
post #30

Like the titans of Atlas Shrugged, they showed how willing they were to burn it all down for everyone else in order to win. Well played.

The "titans" you speak of are Jerome Powell, and Janet Yellen. Not the schmucks that put Taxis on the internet, or effectively stole billions of dollars from SoftBank to build a rental company. These types of extremely competent people are far and few between in important parts of our society. So idk what the fuck you're talking about Yosemite? (from NewsRoom Intro https://www.youtube.com/watch?v=wTjMqda19wk&ab_chann…

Good friends to have. It's a big club, and you ain't in it.

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#37
post #31

Pre-SVB: SV was full of some really smart people, many of whom didn't realize their skills and experience don't translate to other areas (eg pretty much anything to do with crypto) combined with some salesmen, some of whom are snake oil salesmen. Together they are more and more resembling the rest of Corporate America with performative cultures, privatizing their own luck, often having unearned bravado and increasing…

You're basically also describing HN but yeah lots of overlap for obvious reasons.

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#38
Yes. I learned that the VC industry, at the company management level and even at the venture capital management level, had a very poor understanding of banking. Some crazy percentage of VCs used one particular small regional bank for their funds, they told their portfolio companies to do the same, and everyone even banked their personal accounts with the same bank. Somehow, an entire industry was unaware that you need to manage and diversify counterparty credit risk - even when you are dealing with banks. It's amazing to me that this could happen. I can understand why startup founders might not be aware of banking risks, since banking is not expected to be their expertise and they might have been children the last time a major bank went under. But how did the VCs miss this? This would have been the equivalent of a nuclear detonation in their industry, had the government not bailed them out. I guess we could charitably think of this as part of the process of the VC industry maturing and become a larger part of the economy. Now they'll hopefully better diversify their banking relationships, and the banking industry and regulators also got a much needed shot in the arm regarding the obvious uselessness of the "250k FDIC insurance" backstop during even a minor banking crisis.

Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?

#39
post #23
post #21

The last 72 hours validate the view that Silicon Valley isn’t capable of taking leadership in fixing the problems it creates, and that we’ll have to rely on Washington to set the rules.

Washington set faulty rules in the first place. Since when was it logical to lend out money that wasn't yours?

> Since when was it logical to lend out money that wasn't yours?

Since the idea of banks began as long ago as 1,800 BC in Babylon.

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