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Sean Parker: “Little Startups Are Ridiculously OverFunded”

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

#61

Post by cpeterso »

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…

> 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.

I wonder if there is an opportunity for matchmaker investors to scoop up like-minded startups and consolidate early companies to build those 100 10-person winners.

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

#62

Post by mdda »

biggitybones wrote: post #25

I was at an event in NYC several months back where a mid-stage VC said the same thing (blanking on his name) but specifically regarding the NYC community. It was an angle I hadn't thought about and initially had the same negative reaction to as someone in the midst of an early stage company. For later round investors it's undoubtedly in their interest to encourage these engineers to join larger firms rather than bein…

Or the market price of talent goes up : The value being created by engineers is recognized by the financial institutions, so why shouldn't tech companies pay up too?

[ And I'm thinking Facebook before people get on my case about financial companies creating value in the real world... ]

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

#63

Post by dirtyaura »

biggitybones wrote: post #43
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 ou…

Don't forget that the end of fragmentation can be the end of innovation. It's 2011 and browser standards don't support taking a photo. There's tons of other things that standards don't support and there will be more. And if or when browsers are the only platform, fragmentation will come there. It's already happening, Chrome supports native code, IE will not support the same format.

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

#64

Post by lansing »

nestlequ1k wrote: post #32
georgemcbay wrote: post #30

I don't think he is completely wrong but I think this is just another (higher-end) instance of the age-old tradition of companies saying it is too difficult to find engineers while being unwilling to pay fair value for said engineers. To be clear, I know that Facebook does pay quite well by industry standards (offset somewhat by the bay area cost of living) for top talent, but if this situation is causing them an iss…

There's a certain type of personality (very prevalent in the valley) who won't work for a big company like facebook, twitter, or google for any amount of money. I would imagine these types of people make up the majority of the YC class. Maybe they'll get bought via a talent acquisition but as soon as their golden handcuffs are off, they are out doing their own thing again. The reason they allow themselves to get boug…

You claim that this class of people won't work for a "big company" for "any amount of money," yet in the next breath you admit that they will work for those companies in the context of a "talent acquisition."

What is a "talent acquisition" if not an alternate mode of compensation to persuade individuals to "take a corporate job" who previously considered themselves above such positions? Yeah, it sounds more impressive to tell people "we got bought by X" instead of "I took a job with X," but either way they've "gone corporate." You're still dealing with the same endless HR meetings, PHBs, "culture," etc, as all the other "drones."

Yes, a good number of such "acquisition hires" leave after earn-out is complete, typically two to four years. This is actually a fairly lengthy of time for any high-value employee to hold any position in the valley these days, startup or not.

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

#65

Post by yummyfajitas »

justincormack wrote: post #38
yummyfajitas wrote: post #26

Earlier quoted context omitted.

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…

That is a bizarre argument though, you are saying that capitalism works fine so long as companies are run as soviet states? The Soviet Union showed basically no benefits to the command economy... And the great leaders of large businesses look rather more like command economy leaders than products of a free market. I think you need a better argument than that that large corporations are here to stay, not a passing fad…

That is a bizarre argument though, you are saying that capitalism works fine so long as companies are run as soviet states?

No, I'm saying that embedding command economies (structured as companies) in a capitalist economy allows us to gain the benefits of a well run command economy while mitigating their harms.

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

#66

Post by freemarketteddy »

What he is basically trying to say is that your chances of achieving "success" or "making an impact" is better if you work for Mark Zuckerberg than try to become (someone like)Mark Zuckerberg.

Wow what a narrow definition of success!For example by working for facebook how can I get every child in third world countries to get a decent education?How can I get every woman in rural india to break free from male dominance?

My respect for Parker just took a strong hit!

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

#67

Post by tomlin »

Having trouble hiring talented people seems to be a pretty good problem to have. The logic is flawed - from a guy who stuck his middle-finger at various large companies while working at the helm of Napster.

I think the new economy (eventually, hopefully) will be many small companies with a handful of people (read: democracy) calling their own shots, more creative freedom and an interconnectivity with other small companies that spits in the face of fear-based competitive angst and eventually creates a real revolution that more of us are proud of rather than this disgusting idea that we all should work for the Umbrella Corporation.

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

#69

Post by cookiecaper »

psychotik wrote: post #50

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 milli…

>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.

The costs in terms of equipment and developer talent may be smaller than they were in the mid-late 90s, but the market is much more crowded now. I don't know that those savings aren't offset by the required marketing and PR efforts necessary to differentiate your company from all of its other "social web 2.0 tweet-a-riffic" competitors.

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

#70

Post by teaspoon »

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…

There's a rich tradition of self-interested complaint in this industry. This reminds me of Fred Wilson's complaining about startup lawyer fees[1], Aaron Greenspan's complaining about the Money Transmission Act[2], and pg's Patent Pledge[3].

Not that people shouldn't speak for the causes of their choosing, but you do lose some rhetorical impact if you only do so once you have a horse in the race.

[1] http://www.avc.com/a_vc/2011/03/a-challenge-to-startup-lawye...

[2] http://www.quora.com/Aaron-Greenspan/In-Fifty-Days-Payments-...

[3] http://www.paulgraham.com/patentpledge.html

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