Earlier quoted context omitted.
Comcast's dominance is propped up by regulatory capture, not free market capitalism.
The difference is debatable.
Not really. Using the government to make your competition illegal is not free market.
The fundamental problem with Silicon Valley’s favorite growth strategy
51–60 of 65 posts
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#52I know a few people who became very wealthy by starting companies or businesses but entrepreneurship is not the only path to success. IMO, the world is better off with a good mix of long shot bets to build large scale businesses and also many people being very happy to run solo or small businesses providing services or selling products on a small scale. I am sometimes critical of Google, FB, Microsoft, and Amazon - s…
What kind of niche ai products do you work with? Curious to know if your ok to share
A natural language processing toolkit that I wrote in Common Lisp about 15 years ago and converted to Ruby about 10 years ago. A simplified version in Haskell is in my Haskell book and a simpler version is also in my Common Lisp book - all the book code is on github https://github.com/mark-watson?tab=repositories
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#53Earlier quoted context omitted.
I'm not convinced that access to capital is the sole, or even primary, reason the US tech industry is much stronger than elsewhere. There are many factors like entrepreneurial culture, low corruption, and established/concentrated support infrastructure that seem a lot more important.
It's one of the two or three biggest reasons, and definitely not the sole reason. The modern system of industrial-scale venture capital available in the US - going back widely four plus decades - is rivaled only by China in the last decade. More broadly that culture of risk capital spans every tier, from the smallest angels to the biggest VC firms. The comprehensive nature of it is exceedingly rare among nations. It'…
Nice list, I agree with it, but I don't think it can be the full story.
Why? None of the above are specific to software, if the above was the full story, why would the US not also dominate the world in e.g. Autos, Chemistry, Electronics, Batteries etc? There must be other factors. Maybe first-mover advantage, maybe software benefits more from centralisation, from economies of scale than other industries? Other suggestions?
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#54Earlier quoted context omitted.
> That says it all. Does it? Competition and survivorship have long been accepted as the premise of capitalism. What I find more disturbing is that we've been told competition will be to the benefit of the consumer, and this focus on network effects means that companies are looking for a way to stay on top WITHOUT the virtue of providing the best benefit. This leads to Comcast-like situations, with customers that hat…
Comcast's dominance is propped up by regulatory capture, not free market capitalism.
So substitute Amazon, Facebook, or any of the companies that people have many complaints with, yet continue to funnel their business to because competitors can't match the network effects.
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#55This is an absolutely incredible article. Possibly the best I've seen on HN in 6mo to a year.
Normally I wouldn't post a comment just to say that but the amount of true insight ORiley provides is impressive.
Understating of the web, of SV of business, of growth of IPOs and well reasoned analysis and predictions of what's coming next in funding.
It is long and absolutely worth the read.
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#56Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#57Earlier quoted context omitted.
Comcast's dominance is propped up by regulatory capture, not free market capitalism.
So substitute Amazon, Facebook, or any of the companies that people have many complaints with, yet continue to funnel their business to because competitors can't match the network effects.
The last I checked, using Google search is free. What do you think would happen if they started charging for it?
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#58Earlier quoted context omitted.
Not really. Using the government to make your competition illegal is not free market.
There is no free market mechanism that can prevent the sale of the market.
That's the government's job. The government fails at it now and then, which is why the citizens need to vigilant and careful in whom they elect.
Do you believe that if the government ran the economy (socialism) there would be no corruption?
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#59"blitzscaling isn’t really a recipe for success but rather survivorship bias masquerading as a strategy." That says it all. Really, that's how YC works - fail fast and cheap, profit from the survivors. Great for VCs, not so much for the cannon fodder. "We have reserves."
That's better than a tech landscape with no access to venture capital at all, and startups taking 10x longer to reach critical mass, if they even do. There's a reason why the US tech industry is orders of magnitude larger than the rest of the world, access to capital. Go try to grow a startup in Europe with its risk averse investors, and see how far you get. You'll start to see this effect even more in the biotech sp…
What "tech"? Most of what passes as "tech" now is a business model.
Up until about 2000, when you went to a Silicon Valley VC, you had to have a patent and a working prototype. Using that model, the VC industry as a whole was very profitable from the 1970s to the end of the century. In the 2000s, the VC industry became a net lose. Buying market share until everybody else goes broke is not a net win for investors.
Re: The fundamental problem with Silicon Valley’s favorite growth strategy
#60Earlier quoted context omitted.
So substitute Amazon, Facebook, or any of the companies that people have many complaints with, yet continue to funnel their business to because competitors can't match the network effects.
The last I checked, using Google search is free. What do you think would happen if they started charging for it?
I'm not sure how citing a single example counters my point, but I'll bite: Searchers aren't the customers of Google, and we have no shortage of stories on HN about Google abusing or potentially abusing their monopoly.
To return to my point: healthy market competition involves providing value for the consumer. In a healthy market there are low profit margins because high profit margins indicate a change for competition to enter and undercut. Companies competing and failing or falling to competition are not (necessarily) a sign of problem, as an above poster seemed to be saying.
However, companies seeking to find ways to prevent competition or deny it via network effects ARE a sign of an unhealthy market. And companies (as cited by the article and most of the tech-buzz-startup scene) are all about trying to grab that advantage and hold it. Logically the consumer is the one that ultimately suffers, per the very premise of healthy market competition.