I hope society figures out how to make startups in general less capital-dependent. If there weren't investors trying to protect themselves, we'd find out if running a company in Zhu's manner works or doesn't.
But we already know it does. He brought the company from 0 to $2b valuation, steadily growing for 8 years.
I do agree though that it would be great for startup to not depend on VCs that much.
My 2¢: stop forcing companies to provide health insurance.
A proposal to do exactly that. Critically, it phased out incentives available to corporations that provide employee healthcare in favor of tax deductions for individuals that purchase their own healthcare. During the transition period, employers would subsidize private plans purchased by their employees.
Another thought is throughput. If welfare wasn't so closely tied to employment, working relationships could then be more ephemeral until one found a best fit. This may also look like more cautious hiring, which directly leads to missed opportunities for all parties.
Edit:
Capital buys employees, but it also buys time. For every extra dollar an employee costs the amount of time it takes to make the decision to hire that employee also increases. An efficient job market would compensate based on contribution, which is a lot more possible if a significant amount wasn't mandated to be spent, and then guilted into continue spending because, you know, you don't want to take away someone's welfare.
The idea of capitalism is that capital accumulates in the hands of those who figure out how best to deploy and protect it. Investors, not Zhu, are the ones with the track record and experience.
Trusting them to be stewards of capital is a better bet than trusting an eccentric, unproven founder who decides to experiment with LSD for the very first time before a big pitch.
If Zhu had managed a successful exit, he would have established that track record, accumulated some capital of his own and bought himself the leeway to be as eccentric as he wishes in the future. See: Elon Musk.
At the extreme, if starting a company only requires pocket change, then nobody (society, investors, or anyone else) has much to lose in letting an unproven founder do their thing.
In what ways could capital be made less necessary?
By reducing the cost of anything and everything that startups spend money on.
(And for the largest item in many budgets, namely employee costs... in the presence of an adequate social safety net, cash-strapped startups could pay employees in equity rather than cash, and they could stick around for as long as they thought it might be worth something in the end).
Somewhat separately, what struck me from the article is that Zhu's controversial moves generally didn't involve bad business decisions, but rather failing to impress investors at a moment when the company needed the money. It would be better if that need for money were reduced, and we could all see how this type of experimental style turns out.
Did he really not have _any_ sense of a proper dose? Seems unlikely.
I will say that hiring people who are risk averse is great for middle managers who will say NO to most opportunities because they're more afraid of failure than they are interested in opportunity.
Hire risk takers and you get risk takers.
1. Unlike income, there is little relationship between capital and most measures of intelligence.
2. Most private capital in America is inherited.