There's plenty of room for both models. Lifestyle businesses are awesome. 100% great. But we wouldn't have society-level upgrades like Uber, Twitter or Apple without venture capital. They just don't work any other way.
VC businesses like Twitter and Uber create centralized points of stagnation that seem great at first, but can't innovate the way open systems can. If Twitter was open we wouldn't be wondering if they'll improve their product or who will be CEO, because there'd be a dozen people innovating on it. Instead, because the network is owned by one group of people, that basically doesn't happen.
We still get that sort of amazing, eco-system creating innovation when a rare innovator declines VC (wikipedia, bitcoin). But when a VC steps in, the only innovations that flourish are those that benefit the capitalist.
Venture capital is, ironically, the enemy of innovation. It doesn't support it; it captures it and restrains it, tying it down with the bonds of capital.
What I find funny is that if you make an analogy to music you find exactly where these platitudes lead to. "Great team" like One Direction or Britney Spears. "Make something that people want," such as Hit Me Baby One More Time.
Innovation is more like this: "The Velvet Underground's first album only sold a few thousand copies, but everyone who bought one formed a band." [Brian Eno]
When I see VC's like Peter Thiel who openly (and correctly) complain about the lack of innovation, I have to scratch my head and think, "Well, then, get out of the way."
Perhaps, but how successful would TBL's creation be without the Kleiner-Perkins investment in Netscape. The paid web browser probably wouldn't have taken off and the VC funding allowed Netscape to invest in building a quality browser while not charging end users to download.
VC has it's place and we shouldn't write it off entirely. But we should also realize that there are other ways for important changes to develop and VC isn't the panacea as it's often presented as here.
> Joy was prompted to state this observation through his dislike of Bill Gates’ view of “Microsoft as an IQ monopolist.” He argued that, instead, “It’s better to create an ecology that gets all the world’s smartest people toiling in your garden for your goals. If you rely solely on your own employees, you’ll never solve all your customers’ needs.”
Maybe it's not VCs, but you can't bootstrap everything. Or maybe you can, but it will probably take a lot longer.
To name 4: Google, Docker, Tesla, Apple. I'm happy that they were able to raise enough VC that they've innovated and created stuff that I happily use. (Well, I don't own a Tesla. But I've driven one.)
"If Twitter was open... a dozen people innovating on it..."
Though not 100% independent of their funding model (loss-aversion bias might lead us to conclude that big companies take less risk), presumably Twitter has at least a dozen people trying to innovate on it?
They may not be doing what [parts of] the community wants, but that's not quite the same thing as not innovating.
Things like GPS are society-level upgrades. Uber is just one application of GPS.
Twitter is flowing in the sea of red and as far as I know never had a dime of profit. Who gives money to twitter by this point? Twitter has a lot of users, but it does not monetise the platform well. Also IMHO, Twitter has waaaay too many employees and I imagine that it's internal processes are very inefficient.
Uber is great example of unicorn startup. Though we'll see how it will turn out.