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Comment by scarface74 | Hacker News Reader

It’s also only two years old and venture backed. Any venture backed company is by definition looking to have an exit strategy and not just trying to be a “lifestyle business”. Statistically, it’s via an acquisition.

Look no further than YC - only two YC based companies have ever gone public.

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"It’s also only two years old and venture backed"

Ampere is 3 years old, though PE and not VC backed.

https://www.crunchbase.com/organization/ampere-computing

Private equity vs VC is a distinction without a difference as far as the investors motivations.

Don't be a hater, exits can be of multiple types including IPO and that could very swell make this company become a formidable competitor to the big 3 Chip Makers.

It’s not about being a “hater” in what world will this company be able to design better server chips than their much better financed competitors? Even Apple has a better chance of designing high performance desktop chips if they decide to move Macs to ARM and neither Amazon nor Google can be discounted. They both have a desire to produce better server chips in house for their own use. Come back in a year when this company is either acquired by one of the big tech companies or they go out of business.

Ok, so you're a pessimist.

I’m a realist. What is the percentage of startups that ever become public? Again, without doing too much research, just look at YC companies.

YC is not very successful in my measures of success.

Profitable, yes, but all companies together = less than bitcoin

Spawn companies, yes, but total number of public companies that IPOed = 2

This is an incredibly insightful post, YC companies are overhyped CRUD apps mostly. Meanwhile bitcoin and crypto has a a far larger market cap and is reshaping the entire economy. /s

Your measure of success would make a lot of good companies look like failures.

So what if we measure success by profitability? Neither Pagerduty nor Dropbox are profitable.

I'm not a capitalist. Profitability is helpful under capitalism for survival, but it's a poor measure of anything other than whether one number is higher than another.

YC funds a lot of companies who do cool things that aren't very profitable. I don't know what most of them do, and that's great. So many of them serve niches I haven't even heard of. If they break even making someone's life better, then they're a success.

Imagine a world without Stripe or something like it. The current boom in membership services might not have happened. Even VC-juiced Patreon, which I use, handles payments through Stripe. How many successful companies by your measure glue their business together with companies that got their initial funding and guidance from YC?

So exactly how do you run a business as an ongoing concern if you continuously lose more money than you make?

The answer is get bought by an ad-funded behemoth or a VC-funded behemoth or struggle to get by. I didn't say better measures of success were viable under this system.

There's a reason I'm not a capitalist. Profit as the only measure of success is how we ended up in this hell world. You're welcome to only care about that, but I prefer to imagine and work toward better futures.

So did you give up all worldly goods to live in a monastery and live on the charity of others or do you work for a company that seeks to make money?

Those are not the only choices.

Well what “choice” did you make to food on your table?

Many. Sometimes I manage to make interesting stuff that people are also willing to pay for. Those are the good ones.

So you’re providing stuff that people are willing to pay for - ie capitalism.

Sure, no one claimed otherwise.

Just that there are nuances between monastery and money-seeking-only business.

"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."

https://news.ycombinator.com/newsguidelines.html

Also, please don't cross into personal attack.

"Profit as the only measure of success is how we ended up in this hell world. You're welcome to only care about that, but I prefer to imagine and work toward better futures."

No, profit is not the cause of hell. Debt is, it's a modern-form of slavery.

When you accept VCs money, the reality (if you play by the rules), is that you agree to give your most precious ressource (time and energy) to pay back your debt.

It may pay off, or may not, but you have to be very aware of your choices.

VC funding is worse than debt if you care about your business. When you borrow money, the lender doesn’t own a stake in your business. You just have to pay them back at their agreed upon terms.

Theoretically you could “buy back” your equity but with the type of returns and want it’s almost impossible. Taking VC money is like taking a payday loan.

The thing is, YC is like a school for newbie entrepreneurs, it's not their role as a seed-fund, and you can't expect them to find you an exit. What they offer is to give you some money and tell you how to spend it. That's basically it, all the rest you are on your own, it's your company.

It is a bit like a social club - say the Lions club of SV. Socially it sounds important and people network and know the brand.

But if you ask a random person in the street, they will know what crypto is, they may know dropbox if they are computer litterate, but they won't know YC unless they are a geek.

And for those who want to be successful by creating their company, I have strong doubts. Profitable businesses are laughed at as "lifestyle business", and profitability itself is considered less important than network effects.

In the end, I'm not surprised companies like wework are happening, where no sane person should invest a dollar. It's like the dot com boom again.

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