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Esther Dyson vs Bill Campbell: 2002 − 2012

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Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#31

Post by natrius »

jberryman wrote: post #29
natrius wrote: post #23

Earlier quoted context omitted.

"I think it is opposed to the zero-sum thinking that characterizes much of Wall Street and political life right now." No, I think OWS is very pro -zero-sum thinking. Its core messaging pits "the 99%" against "the 1%". It's class warfare in its purest form. There are many smart people who are painting more reasoned critiques of our society onto OWS than the movement is actually articulating. Perhaps that's inherent to…

Historically invoking the term "class warfare" has been a way to scare liberals out of broaching issues of class and wealth disparity in America. Using it here makes you look like a shill. The Occupy movement is about finally having a discussion about these issues.

Allow me to restate my claim without the words of which you disapprove. The most common message of OWS reduces to "households that make more than $500,000 a year are against everyone else." This is problematic.

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#33

Post by vtail »

Since it's obvious that Dyson's statement is way too optimistic, I assume that for her it is (was) a good marketing - you bet a lot by investing in Russian startups, why not bet a little bit more to show to your future partners how confident you are?

Here is why the statement is way too optimistic:

- Resources always move to places where they can be used most effectively (econ 101) unless there is a significant friction

- For that type of resource (talented programmers/mathematicians) the friction is very small

- Russia has bad regulation and bad business environment in general

- Specifically, very hard to get investments[1], and investors interests are poorly protected[2]

- Silicon Valley utilizes these resource much more effectively, so that even other places in the US - NYC/Boston/Chicago - could not compete effectively

- Also, managerial talent in Russia is concentrated on more profitable business, like participating in natural resource explorations or working for state-run monopolies - very profitable and risk free if you have the right connections

Disclaimer: I'm Russian living in Silicon Valley. That may have affected my judgement.

[1] I can share the following anecdote: When I was helping some friends to find VC funding in 2008 in Russia, I learnt that most VCs in Russia require kick-backs(!) from startups that they're investing in - presumably as a way to steal from their limited partners (and even provide some advice on how these kick-backs could be recorded in accounting books).

[2] Khodorkovsky's and Chichvarkin's examples are probably the most well-known on the West.

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#34

Post by dredmorbius »

timiscool999 wrote: post #24
dredmorbius wrote: post #6

Earlier quoted context omitted.

Hrm ... interesting thought: is a market dependent on financial services analogous to one dependent on natural resources? Particularly if those financial services are extractive in nature?

Maybe, but they look like two separate problems to me. Russia's is a "resource curse": http://en.wikipedia.org/wiki/Resource_curse Our current financial system looks more like a twist on a "rent seekers": http://en.wikipedia.org/wiki/Rent_seeking They're kind of similar, but only because resource curse countries end up with a bunch of rent seekers and corrupt officials.

I've got to mull this one over a bit. After several decades of study, I'm just starting to really grok money and finance.

Notable WRT resources curse / Dutch disease is the Norwegian counterexample: http://ideas.repec.org/p/ssb/dispap/377.html

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#35

Post by WildUtah »

vtail wrote: post #33

Since it's obvious that Dyson's statement is way too optimistic, I assume that for her it is (was) a good marketing - you bet a lot by investing in Russian startups, why not bet a little bit more to show to your future partners how confident you are? Here is why the statement is way too optimistic: - Resources always move to places where they can be used most effectively (econ 101) unless there is a significant frict…

>> When I was helping some friends to find VC funding in 2008 in Russia, I learnt that most VCs in Russia require kick-backs(!) from startups that they're investing inThere are stories on HN all the time about US investors requiring the same. There are fancy meals on the company's tab, first class airplane tickets from all around the world for board meetings and various other abuses that HN founders complain about.

I guess straight-up cash would be a novelty, but that probably comes from the IRS scrutiny it would engender. Is an exacting tax authority part of the root of American exceptionalism?

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#36

Post by bdr »

nirvana wrote: post #19

I found this one on bit coins: http://longbets.org/611/ Nobody has taken the other side of it. I'm skeptical (but intrigued) by bit coins, but I wouldn't take the other side of this bet, simply because bit coins have just started out and aren't yet a "fully mature form of money". That is to say, its a lot easier for a penny stock, or any other cheap commodity, to double (or outperform by 2 orders of magnitude) a glob…

I tried to take the opposing side of this bet. My challenge was not accepted.

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#38

Post by vtail »

WildUtah wrote: post #35
vtail wrote: post #33

Since it's obvious that Dyson's statement is way too optimistic, I assume that for her it is (was) a good marketing - you bet a lot by investing in Russian startups, why not bet a little bit more to show to your future partners how confident you are? Here is why the statement is way too optimistic: - Resources always move to places where they can be used most effectively (econ 101) unless there is a significant frict…

>> When I was helping some friends to find VC funding in 2008 in Russia, I learnt that most VCs in Russia require kick-backs(!) from startups that they're investing in There are stories on HN all the time about US investors requiring the same. There are fancy meals on the company's tab, first class airplane tickets from all around the world for board meetings and various other abuses that HN founders complain about.…

In this case, they were requiring 10%(!) of the investment as a kick-back.

Another interesting feature: there are plenty of 'funding advisors' that can help connecting you to a right VC[1] for a fee, typically a few percent of the funding.

Kick-backs are also typical if you are a mid-size company a need to get a commercial loan.

[1] They all claim to have connections to some government-backed VC funds such as government-backed Rusnano or Russian Venture Company.

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#39

Post by pflats »

nirvana wrote: post #21
DevX101 wrote: post #17

Here's an interesting long bet: Warren Buffett has bet $1M that the S&P500 will outperform hedge funds over a 10 year period. http://longbets.org/362/

Unfortunately, the details are being kept confidential, so I'm not sure what is being counted as "hedge funds". There's "hedge funds" that engage in very risky investments, ones that engage in investments that wouldn't normally be risky except that they incur counterparty risk, and then there's hedge funds that could be fundamentally very conservative, even more conservative than Buffett. For instance, if you ran a f…

>Unfortunately, the details are being kept confidential, so I'm not sure what is being counted as "hedge funds".

I wouldn't be surprised if they had simply agreed on a subset of prominent hedge funds from '08 that the two agree represents whatever range of investments they think is important. I'd assume they're unwilling to disclose the methodology simply to avoid any accusations of outside manipulation or something.

Makes sense to me, at least.

Re: Esther Dyson vs Bill Campbell: 2002 − 2012

#40

Post by olefoo »

natrius wrote: post #31
jberryman wrote: post #29

Earlier quoted context omitted.

Historically invoking the term "class warfare" has been a way to scare liberals out of broaching issues of class and wealth disparity in America. Using it here makes you look like a shill. The Occupy movement is about finally having a discussion about these issues.

Allow me to restate my claim without the words of which you disapprove. The most common message of OWS reduces to "households that make more than $500,000 a year are against everyone else." This is problematic.

It is problematic; more so because it is true.

Households that make more than $500,000 a year pay less in taxes as a percentage of their earnings than households that make $50,000 a year. They also benefit disproportionately from the protections our society offers and suffer less from the economic uncertainty that has become the bane of middle-class existence in the last two decades.

Now I am certain you can find more than a few members of that group who are sympathetic to the plight of the middle class but how many can you find that would be in favor of rescinding the Bush tax cuts?

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