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

Entrepreneurs are redesigning the basic building block of capitalism

economist.com

Post reply on HN
Print view View original

11–20 of 31 posts

Re: Entrepreneurs are redesigning the basic building block of capitalism

#11

Post by malchow »

demian wrote: post #8
malchow wrote: post #6

Not a great article, and I think it misses the one big thing that is genuinely revolutionary about the Silicon Valley form of entrepreneurship. And that's that venture-backed entrepreneurial companies are, by and large, the new Research & Development Departments. Acquihires can in fact be great deals for VCs, founders, employees, and acquirers. Many companies are curtailing their own research agendas and relying upon…

By which metric would you measure this "efficiency"? The difference between VC-backed-startups vs traditional R&D departments is that the first one seems more short sighted, and with a tendency towards a narrow subset of IT problems with high scalability and disruptive potential, while the second one works on a wide array of industries and applications where the parent company already has the benefits of economies of…

"By which metric would you measure this "efficiency"?"

Good question. A few ideas:

-- ROIC -- Competitive advantage versus peers (hard to measure, but one attempt: http://web.mit.edu/is08/pdf/Parrish.pdf) -- Share of market -- Enlargement of market -- Quality of hiring versus peers

These are the things that can make a company last for centuries. The hunch I was stating -- though admittedly without a clear way to prove it yea or nay -- is that enterprises that invest in small nimble VC-backed technology companies will begin to outperform, on these measures, traditional in-house R&D departments.

Re: Entrepreneurs are redesigning the basic building block of capitalism

#12

Post by malchow »

TTPrograms wrote: post #10
malchow wrote: post #6

Not a great article, and I think it misses the one big thing that is genuinely revolutionary about the Silicon Valley form of entrepreneurship. And that's that venture-backed entrepreneurial companies are, by and large, the new Research & Development Departments. Acquihires can in fact be great deals for VCs, founders, employees, and acquirers. Many companies are curtailing their own research agendas and relying upon…

Which Silicon Valley companies are pursuing the high risk R&D these days? I can only think of a few that are building high risk hardware (Theranos, some of the small photonics shops), and even many of those have proof-of-concepts already built in academia. Many of the medtech startups I've seen revolve around algorithms, which is kind of hard to compare in terms of risk profile to Bell Labs putting a bunch of researc…

Others here can better answer this than me. All I would say is that "5%-better-marketing-dashboard-optmization-platform" type companies get far more attention from the tech press than they probably merit. There is a lot of high risk R&D going on here: medicine, medical devices, transport, semis, crypto, and insurance, to name a few disparate areas.

Re: Entrepreneurs are redesigning the basic building block of capitalism

#15

Post by TTPrograms »

dismal2 wrote: post #14

Maybe the current set of unicorn startups are just very clever financial inventions to get returns in todays crazy financial world of ZIRP and never ending QE.

I'm more concerned that they're financial consequences rather than inventions...

Re: Entrepreneurs are redesigning the basic building block of capitalism

#19

Post by roymurdock »

Someone commented this but deleted it because they were getting downvoted:

Land ownership, intellectual property and limited liability ownership of companies by individuals are the basic building blocks of capitalism. I.e., property forms guaranteed by the government. Which one of these are being challenged by unicorn startups, again?

I think this is spot on and deserves repeating.

Unicorn startups are changing the way we utilize capital (Uber=cars and labor, Airbnb=property) but they are not changing the fundamental fabric of capitalism. Our legal framework forms the backbone of our society, and regulation/policy is the tool we use to adjust that foundation. Entrepreneurs and investors respond accordingly.

Uber and AirBNB might hire some lobbyists to change a few minor rules in the hoteling/taxi industry, but the really important variables are the distribution of government spending, scope of and resources committed to regulatory oversight, and the tax code.

The article lacks a comprehensive review of the data and its arguments come across as surface level speculation.

Re: Entrepreneurs are redesigning the basic building block of capitalism

#20

Post by demian »

roymurdock wrote: post #19

Someone commented this but deleted it because they were getting downvoted: Land ownership, intellectual property and limited liability ownership of companies by individuals are the basic building blocks of capitalism. I.e., property forms guaranteed by the government. Which one of these are being challenged by unicorn startups, again? I think this is spot on and deserves repeating. Unicorn startups are changing the w…

Some people argue that Uber and AirBNB are not actually changing the way we use capital on a fundamental economic level, but are instead using new channels in a way, and with a magnitude, never used before.

IMHO I tend not to agree with the hole "Sharing Economy is The Next Capitalist Revolution" thesis.

Post reply on HN