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Comment by thatsenough | Hacker News Reader

Its not pessimism. People should just get to hear both sides, and know that VCs typically offer this advise because, first and foremost, it benefits the VCs.

The VC typically has enough money to be set for life, several times over. They bet on many companies simultaneously to diversify their own risk. Most companies will fail, and the employees will go down with the ship, but the VC only needs a handful of bets to pay out. None of this is the case for the employee, who bets all in on one company.

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I started in 2006, here, just like you, reading Hacker News. I spent most of my day writing code. I learned on this site how to build things for other people, ship and release them, and yes, eventually build a company. I learned I wasn't meant to have a boss.

The only reason I became a VC is that I want to be here to help people who really should be start companies actually figure out that they can! People helped me a lot, more than I deserved.

The world is full of capital, and it's not going to the right people who can solve problems. I would like that to get better, and trying to do that with my own hands.

> The world is full of capital, and it's not going to the right people who can solve problems.

Hmmmm, isn't being a VC kind of exacerbating this problem? The business model of being a VC is entirely based around moonshots, which means that you are pigeonholed into only making bets on certain types of founders that either (a) already have extremely high risk tolerance or (b) can be pushed by VCs to take risks beyond their personal risk tolerance.

Which makes your "right people" statement come off slightly disingenuous, since the VC strategy seems to disproportionately attract more Mark Zuckerbergs than Matt Mullenwegs (for category (a)) and often exploits founder naivety for the benefit of the VC (for category (b)). I'd argue that many if not most of the "right people" who can solve problems are in general not a good fit for seeking VC investment.

Do you have suggestions for other investments strategies that may be more compatible for potential founders that don't fall within these two categories? Have you thought about branching into those investment circles?

If you look at our portfolio we do try to find people who are not necessarily that classic "moonshot" type. Things that turn out to be moonshots often look like niche businesses.

We try to put what you say to practice, but it's an inexact art, far from a science.

I still look for two things: a/ great engineers/designers/product folks with deep empathy for problems people have, and b/ a real problem to solve.

From my experience as a YC partner it seemed clear to me most of VC-dom uses the wrong criteria: buzzwords (like Realtime or AI), and resumes (ex-Google ex-Facebook Stanford Stanford Stanford etc). Better to use first principles and try to find that which is signified, than just use of credentials that are just dumb signifiers.

But in order to do that, you kind of have to be an engineer/designer/product/marketer yourself, and that's why I think our approach can work. Ask me in another 10 years.

You're absolutely right that VC makes this problem worse. I'm sorry for the industry, but we are trying to do better.

> I still look for two things: a/ great engineers/designers/product folks with deep empathy for problems people have, and b/ a real problem to solve.

That... sounds like just regular investing. Rather than trying to save the VC brand (which is already pretty tainted in entrepreneur circles), why not come up with another name and scale that?

I’ve been active on HN almost as long as you. It’s not 2006 anymore. I would still follow the same career path based on what the world, HN and Silicon Valley were like in 2006. I wouldn’t based on 2020 world, HN and Silicon Valley. Would you?

Rents are astronomical. Startup math has worsened. FANG math has improved. In fact only the G in FANG even resembled the FANG of today. FANG has done a great job figuring out the innovator’s dilemma, making disruption in all their verticals much more challenging. The low-hanging fruit problems are gone so there aren’t really any two engineers in a garage problems that someone well capitalized can’t quickly copy. You now need generalist engineers, designers, AL/ML/DS engineers, hardware people, etc. on a founding team, meaning that you need to take on sizeable VC money before building IP equity and getting product market fit.

Startup risk is way way worse these days.

I’m not so sure that FANG companies have solved the innovators dilemma. Do you really see new and ground breaking tech come from them these days? I do agree that innovating is more expensive than the 2006 days of “we made a website”

Parent does not dispute this. You want what you want, i.e., selecting the people who are most capable to put the capital into good use.

But note that this game is not as much costly for you as the founder. Founder takes bigger risks in terms of their time and opportunity costs than you as a VC. You will probably find your successful pick in the other founder you fund and designate that other guy “the most capable”.

> The world is full of capital

This is one of the most entitled statements I've heard.

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