Create a product, gather funding.
Attract customers.
Get acquired, founders make bank.
New owners trash the product, stranding customers.
Tell me again how this is good system not for only making money but actually providing value to customers.
I would argue that most new companies (at least started by and solely run by technical founders) fail exactly because of that.
Product-oriented people tend to think that the success of a business is due to its product(s), when the reality is businesses succeed due to their ability to sell their products. Hence, the most important thing is actually being able to properly find and target an audience, which should be the first step of starting a business.
The second step of starting a business should be to test marketing channels to make sure the selected audience can be effectively/efficiently reached. Only after this has been properly done should a product be ideated, based on the knowledge acquired about the target audience and the marketing channel(s) that work.
Just my 2 cents to the HN community after having learned this lesson the hard way, failing multiple times and starting several businesses.
What's more, you could be product focused and still produce bad products. I just left a startup that seemed to have really bad decision making in areas like "what feature should we build first/second/third", and major areas needing design and careful thought were instead treated as an afterthought. But the tech was solid and lots of work was getting done, so... good enough?
I'm a tech worker who doesn't live and work in the Sili Valley reality distortion field (SVRDF). From outside the SVRDF it's hard for most people to tell one company from another. They all look like SV. That means they all look a little untrustworthy and a little dangerous.
Now, sure, this Smyte had an insider's brand, sort of like "key gaffer" in the movie industry. But their shenanigans, and Twitter's, just made it harder for all the rest of us to sell to prospects outside the SVRDF.
Y Combinator, will you consider doing some time on basic business ethics with your incubator residents? (I'm talking about stuff like "don't screw your customers, suppliers, or shareholders: keep your promises and honor your contracts.")