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Comment by fdgsdfogijq | Hacker News Reader

With all of the capital they have, you would think they would hire competent people from big tech. Instead they just find some stanford grad with a few years of experience to manage 50 people. It doesnt even make sense

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It does if you consider self-selection: the competent person from big tech (i) can see a disaster a mile off (ii) has more to risk

I’ve seen that in practice. A non-crypto fintech I was at was acquired by a traditional lender and a number of staff took off immediately after the acquisition. A bunch went to FAANG (or FAANGish) places and a bunch jumped to crypto shops. In general the ones who jumped to crypto were either pure promoters or were able developers who had no understanding of finance, economics or the payments system.

It's more (iii) the narrative.

Give us your money to invest in this new, fresh face that's going to change the world.

If you're an old face - why haven't you changed the world already?

The story isn't as catchy.

It has nothing to do with what makes sense. For a large subset of VC (obviously not all) - it's more about what you believe you can sell to others than what you believe is actually going to succeed.

Competent people will tell leadership what's wrong which leadership perceives as a threat to their egos/power. Incompetent people will tell them they're doing great while simply cashing their checks.

Incompetent people usually hire equally incompetent people as to not be found out. I have seen it done subconsciously and outright deliberately.

I've seen a couple startups with ~10 people and no market fit paying $500k/y to hire a FAANG VP. That's even more damaging than a fresh grad kid managing 50 people!

Thinking about it, market fit would be the latest point to hire an experienced adult. Preferably from one to two levels below the role a start-up is hiring for, e.g. director level for a VP position.

Maybe hire earlier, as soon as an adult is needed to set up proper structure, processes and operations. If a company screws this up, e.g. when inexperienced founders hire former COOs and senior VPs from big names for those big names only, things can turn south pretty well.

Getting the FAANG VP is usually critical to landing the next round of funding. If sending $500K/year [1] out the door brings in $50M for your next round of funding, it's well worth it. Particularly if you recognize that your enterprise is a Ponzi scheme [2] and that getting that next round of investors is how everyone gets paid.

[1] seems ridiculously low BTW, that's a line manager or extremely skilled software engineer at a FAANG, VPs make multiple millions per year.

[2] and anyone running a crypto startup should.

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