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

Sean Parker: “Little Startups Are Ridiculously OverFunded”

techcrunch.com

Post reply on HN
Print view View original

41–50 of 133 posts

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

#41

Post by lbarrow »

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.

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

#42

Post by brc »

wavephorm wrote: post #33

Parker suggests that one reason it will end badly is because the Internet industry will ultimately consolidate just like the PC industry did in the 1980s and 1990s. Why? Why does the future have to be like the past? As rich and well connected Sean Parker is, he cannot predict the future. Coincidently given his stature it makes him probably the least qualified to predict what will ultimately happen in the computing in…

People tend to forget the big got big in those days partly because of control over distribution channels. It was incredibly difficult for a small software company to break into large amounts of sales if they didn't have both retail and enterprise reach.

I wouldn't be surprised to see a smaller set of niche hardware companies pop up going against that trend, and I certainly see the state of software at the moment fragmenting further, not consolidating more. While Facebook and Google theoretically are dominating the distribution channels again, in reality those channels can be leveraged by smaller players easily. As if every boxed windows copy in 1995 had an empty slot where you could put your own company at low cost.

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

#43

Post by biggitybones »

wavephorm wrote: post #33

Parker suggests that one reason it will end badly is because the Internet industry will ultimately consolidate just like the PC industry did in the 1980s and 1990s. Why? Why does the future have to be like the past? As rich and well connected Sean Parker is, he cannot predict the future. Coincidently given his stature it makes him probably the least qualified to predict what will ultimately happen in the computing in…

The issue with fragmentation that ultimately leads to consolidation is the cost incurred by companies and developers to support all of these platforms.

I can't tell you how much it pains me as an android user to see an app only available for the iPhone. As a developer, it's magnitudes worse to have to send messages to my users saying "we'll be getting to an [x] platform app soon!" when realistically it just stunts our growth to develop the same thing 3 times.

I can't wait for the end of this native app nonsense.

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

#44

Post by firefoxman1 »

wavephorm wrote: post #33

Parker suggests that one reason it will end badly is because the Internet industry will ultimately consolidate just like the PC industry did in the 1980s and 1990s. Why? Why does the future have to be like the past? As rich and well connected Sean Parker is, he cannot predict the future. Coincidently given his stature it makes him probably the least qualified to predict what will ultimately happen in the computing in…

"Why does the future have to be like the past?"

That's what everyone says in a bubble: "History won't repeat itself this time!" Unfortunately, while industries and companies change and evolve, human nature (specifically fear, greed, and hype) doesn't change. The wise learn from history while the rest keep repeating the mistakes from 15-20 years before.

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

#45

Post by kalvin_ridejoy »

Pretty sure it's not a coincidence that Mark Zuckerberg emphasized a related message at Startup School ("don't start a company unless you're really, really passionate about it"). Facebook, like every other tech company in the valley, is having trouble hiring enough engineers, and this is a campaign to make would-be founders think twice.

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

#47

Post by byrneseyeview »

yummyfajitas wrote: post #26
PabloOsinaga wrote: post #12

I don't see what's wrong with larger companies having a hard time attracting talent. A good read: http://en.wikipedia.org/wiki/Theory_of_the_firm As transaction costs go down (in general), it makes less sense for us as a society to have production/value creation organized in larger organizations (firms, companies, etc) - instead in a bunch of independent smaller groups. Companies only exist to minimize transaction co…

Companies only exist to minimize transaction costs. I think this is a bit of an overstatement. Another purpose of companies is to provide the benefits of a command economy (e.g., the ability of a great leader to jump from a local to global maxima) with less of the dangers of a command economy (great leader robs/kills you, poor planning screws everyone over). E.g., central planning in the food supply can work reasonab…

The command economy argument is a subset of the transaction cost argument. Lots of people have long-term plans, and some of those plans involve extensive cooperation from third parties. Companies are a smart abstraction for coordinating this behavior, but that's not all they do.

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

#48

Post by ericd »

a3camero wrote: post #35
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…

Facebook was once one of those startups.

The funding environment has changed quite a lot since then. YC didn't even exist when FB started.

And FB would clearly be in that 100, given the massive growth it had. For every potential FB, there are lots of borderline useless apps that get funding, and wouldn't have when FB was first funded. Those people could have instead been working on FB.

He's not complaining that startups are getting funding, he's saying that the overavailability of funding is acting as a repulsive force, keeping engineers from grouping up.

Whether that's a bad thing on the balance, I'm not sure, but it's not an unmitigated good.

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

#49

Post by tlogan »

His comment about "go work at Facebook" is just talking his book.

However, he is right about that the internet will consolidate as it matures. However, we should not forget as soon as consolidation happens in a certain industry the very next thing what happen is disruption. So yes PC industry is consolidated, but whoever got of the PC train and jump on iPhone/iPad/Android did good.

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

#50

Post by psychotik »

At Startup School, the Sequoia guy showed a bunch of slides which had two main points highlighted:

- Companies like Microsoft, Google, Yahoo, LinkedIn raised very modest amounts of funding and has multi-billion dollar IPOs

- Cost of creating a company (and associated technology) is down over 90% from what it was back when a lot of these companies were started.

Given these two, it's amazing to see VCs pouring in millions into startups that have nowhere near the valuation they invest at. Color is the most famous example, but there are tons of other startups raising $2-5M at pretty ridiculous valuations. If you consider that in light what Sean Parker says, regardless of his vested interest in engineering talent going to companies he's backed, it feel like what he's saying makes sense. Companies are ridiculously over funded, and VCs are doing a disservice to their investors as well as to their portfolio companies by giving more money than they need.

Post reply on HN