Comment by monero-xmr | Hacker News Reader

Comment by monero-xmr | Hacker News Reader

VCs are salesmen. They are selling to public markets.

All of VC is trying to make a product that looks attractive to public markets. VCs are in sales and public relations.

The most obvious signal of this is how they continually select a college dropout or 20-something as a “genius founder”. There are rare examples of this happening but a much more logical play is someone who has worked in their industry for 10+ years and made a lot of connections. The invention of the “dropout genius” was because public market investors like that story to mimic Gates and Zuckerberg. In reality 99% of 20 year old CEOs that are handed millions of dollars are fucking idiots and nightmares to work for, lacking any professional and managerial experience, plus the “anointed one” marking giving them unearned authority.

While I loved the free-money era as an entrepreneur, honestly the mal-investment is absurd and we need a cleansing of the charlatans in the tech industry. VCs are an area that needs to massively contract.

> The most obvious signal of this is how they continually select a college dropout or 20-something as a “genius founder”.

I believe this has more to do with American fondness of exceptional individualism and American dream, as media likes these stories.

Indeed

Why the negative points?

Such people may also be more open to believing in magic.

Sure, it takes two to tango. VCs aren't going to push outlandishly unpalatable narratives.

Some other reasons to pick a 20 year old:

- They are willing to work long hours and sacrifice the life they mostly don't have yet for a 1% chance of success.

- They haven't figured out that the risk preference of someone diversified across 100 startups is incompatible with theirs, and they won't push back as much against moon-or-bust strategies.

- They have the highest fluid to crystalized intelligence ratios of their life, giving them an advantage competing in novel areas where there is no preexisting knowledge, like enterprise sales. ;)

i.e. 20 something genius founders are plentiful and fungible.

They also can be more easily convinced their idea will contribute to a more utopian future, rather than the mundane reality of the bait, switch and get rich tactics of those they’re indebted to.

Also, VCs are herd animals.

Most of them are driven by hype and market trends, leading them to overgeneralize and make inaccurate predictions.

They swayed by the latest buzz in the industry and invest in companies that may not have a sustainable business model.

They do this in the hopes of flipping to a bigger fish. They understand how bubbles work.

We'll see if they understand, when valuations need to start being adjusted on the books...

I'm skeptical if someone understands steamrollers if they choose to stand in front of one.

Time, will tell.

Being as how most of their analytical grunt-work is being done by fresh-faced graduates this should be expected.

It's the other way round most of the time - partners select / nudge based on social proof and "intuition" and the analysts provide ex-post analysis to justify it with "hard data"

As someone in mid-30s with a child, I absolutely could not imagine founding a startup based on hope. We do need the 20-somethings to go out on a limb

You would receive compensation from seed round?..

The youngest CEO I ever met who didn't give me WTF vibes was 29 years old. I know because I asked directly. He was raised by a successful CEO dad and I think absorbed a lot of wisdom.

I agree the idealistic 20-somethings are important. I don't think they should be handed tens of millions of dollars and trotted out like show ponies.

I think of the VC-unicorn sales pitch to young people as: "look, here are all these nobodys who made it hyper rich by going doing some crazy thing, you go spend your youth on 20hour days of inventing shit and if you are one of the 1000 that has an interesting idea, we fund it and take most of the profits".

The other 999 are doing free idea-invalidation.

The issue, I think, is that the 20yo are getting "crazier" and having more vapid ideas

And I mean, Wework is an ok business idea, the problem is the cult around the person (only to show it's not only a matter of age)

Not everyone in their 30s has kids. Many that do have plenty of money to start businesses. And lots of 20 somethings have kids.

Just because you’re not in a place to start a business doesn’t mean other people your age aren’t. So don’t make universal and ageist comments about how 20-somethings are better at starting companies than 30-somethings.

I don't see how providing a personal perspective is agism. Numerically there are more unattached 20 somethings than 30 somethings.

> because you’re not in a place to start a business doesn’t mean other people your age aren’t

There are more twentysomethings without families, able to burn the candle at both ends, and not take a salary while a vision comes together than thirtysomethings. That isn’t an ageist proposition because it doesn’t imply many people in their fifties don’t do it.

None of the above are necessary for a founder. But they’re selected for, explicitly and implicitly, which means a random pool of start-up founders will tend to bias young.

That's not at all how I have understood the parent comment. I think they meant that they would start a business in their 30s with a child, but not a hot air type of business with the hope to somehow make some money down the road.

If you’re in your thirties and don’t have a child, you should probably have a child instead of founding a startup. The startup can wait, your likelihood of having a child (and a fulfilling relationship with one) won’t.

The startup can't wait! How are you going to sell yourself as being a genius to VCs if you don't look like a 20 something!

newsflash - there are people who do not want children, please don't try to dictate your values onto others

Can relate to this.

I have a child and is going to have another one this year. I have this crazy idea that is big if true but 99.9% it would fail. I would totally do it if I was without a family. This idea is VC type idea.

Now I am working on some idea that is 99% going to feed my family but it is boring as hell and no VC would look at it.

what's the crazy idea? I don't have investor money but I might mention it to the right person.

There is a 0.1% chance they will tell you.

Heh, and sometimes that 0.1% does happen. ;)

I want to solve the problem that it's difficult for people to predict the future with skin in the game.

My idea is to create a prediction market where people bet on REAL world events under REAL name with FAKE money. All predictions are public and we can rank every user's prediction ability in each category by his ROI.

I have created a MVP where people bet on cryptos: https://rankvestor.com/. I wanted to start with finantial market.

Now I have to stop this project because I am moving my family to Japan because I don't believe in the future of China. I have to work for a Japan company to keep my visa. In my spare time, I work on a Japanese study app that gives me some money every month.

BTW, if anyone likes this idea, feel free to take it and implement it :)

Interesting. I got around this by just betting very small amounts of real money - here's a video from my channel where I document my activities on that front: https://vistacaretech.sharepoint.com/:w:/s/engineering/Ea-py...

That's the point, you are not supposed to start anything on "hope" - you have to actually believe and perceive a value in the market.

In some cases people are wrong or even crazy, but fundamentally I don't meet many 20 somethings with both the conviction that they are right, the organization skills to do the logistics, and the wisdom to not jump at pointless things.

I certainly didn't do it right when I tried to start a company at 19.

I think people taking shots at VC are misperceiving what all parties bring to the table.

VC provides capital and connections.

Young founders provide ideas and work.

VC can't / doesn't want to have ideas or do the work, but young founders can't access capital and connections.

To speak to up thread, most people who have been working in industry for 20+ years limit their aspirations to what they believe is possible, which is far shy of what's actually possible. Thus, it takes a young/dumb/crazy enough founder to even take the shot.

Furthermore, by scaling and making multiple bets, VC packages risk into more palatable ranges for investors.

We can point at and decry excesses and metastisized business models on both VC and founder sides (e.g. SoftBank Vision Fund and Theranos), but the underlying bargain is fair and effective.

Having done startups at 19, 39, and 45, I can say that the sh$t I pulled at 19 is a no go at 45 with kids, but I'm also a lot wiser now. That week of near death panic due to having had my backups fail as. 19 year old will never happen to me again (knock on wood, backblaze don't fail me now). Etc. You trade some hours for some efficiency.

(There's also the financial risk, which for me is easier to absorb now. At 19 I didn't care, at 30 something I did, and now I'm lucky enough to not have to care much).

If you’re worried about backblaze failing you, grab some local storage and do some manual physical offline backups you can take offsite.

Even monthlies have a value in the worst case scenario.

Your comment made me wonder if there's anyone out there with regularly-taken long-persistence (tape, optical media, etc.) backups in their personal basement.

It seems a very specific Venn intersection to utilize technology to a high degree, but also to imagine and prepare for its worst case failure.

Maybe the NZ tech-prepper crowd?

There are dozens of us! I make regular yearlies that go "basement" and never get overwritten. Has come in useful very rarely, maybe it was worth the cost?

What media? Curious!

I use RDX removable drives, actually, treat them as hard drives.

I keep an LTO tape robot around for just exactly that reason. I trust backblaze, but I don't trust them to the point of not writing off a weekly/monthly/yearly tape set.

A company I previously worked at (self-hosted) all production servers were RAID 5, plus continual cloud backups, with nightly backups that rotated weekly and monthly backups that were shipped out of state and stored in a disaster recovery facility in the event of a total catastrophe (earthquake, hurricane, etc).

The off-site backup storage was required by several of our largest customers due to the critical nature of our software.

I'm not really. We have onsite backups + off-site to backblaze. I'm comfortable with that for where we are. (We run on-prem for most things that involve a lot of data or GPUs.)

If you worry about backblaze, the solution isn't to have yet another backup, it's to test your backup recovery process regularly

The risk from not being able to recover your data because of something wrong with your process (like, you are not backing up all the data you need) dwarfs the risk from backblaze to lose your data

That's another type of risk, but if all your backups are in backblaze, you're exposed to "single provider" risk which can become very real very quickly (and not only by backblaze going bankrupt overnight).

Of course, that risk may be entirely acceptable; it's all about risk mitigation and trade-offs, not perfect security.

>If you worry about backblaze, the solution isn't to have yet another backup, it's to test your backup recovery process regularly

The solution is to do both, or all three (or n), where #3 is another backup process. And to test the backups of all processes by trying to read or restore them (onto empty disks) regularly.

I.e., somewhere on a continuum between zero or minimal and the above, depending on how critical your business is.

Because Murphy's Law.

Edited to add:

And how critical your job is (to you).

Of course there is much more to the whole issue, like funds, PHBs, etc.

- Bildert.

Sure, only people who can realistically do that outside of early 20s are people who have extremely soft landing such as rich parents.

You underestimate the risk-blindness that comes from having access to the bank of mom-and-dad.

As someone that helped build and sell a startup (for hundreds of MM) in my 20s+30s pre-family, and now having a family… I cannot possibly conceive of putting in the time and energy to another venture. Maybe after the kids leave?

Back then I would climb for a couple hours in the morning for fun and then work until 8pm or later. Get beers, go to bed, do it again. Every day, most weekends, most holidays. It didn’t feel hard because it’s what I was meant to be doing. So much fun.

Now I can’t string together 2 focused hours. I’d rather take the kids to the park, or have to take someone to the doctor, or a sport, or whatever. Even if I had to work a “regular” job, the idea that I would work any harder than absolutely necessary, at the expense of time with my family? Not a chance.

I’m not saying you must be 20s or 30s or whatever. You just must care more about the venture than other things.

(In my experience).

I started with: “How many unicorns were founded by people in their 30s? The biggest example I can think of is Larry Ellison” but it was easy to come up with so many more examples: Benioff, Reed Hastings, Bezos, Reid Hoffman.

Of course there are many examples of billionaires who founded companies in their 20s as well (Box, Dropbox, Airbnb, Stripe)… intuitively, I think there are a lot of factors (familial obligations being near the top, ahead of American “genius” bias) that tilt the scales towards younger founders.

Lots of smart people in their 30s and 40s with family obligations and also "it would be fun to" money.

I've heard that if you look at _successful_ startups, not necessarily unicorns but ones that grow into solid companies on a firm financial footing, the average age of the founders was in the middle 40s.

I would wager a guess that if you actually based success on revenue/employee, operating margins, and overall "healthy" business criteria, the number skews probably even higher.

As we were clearly made aware of in the last year, many unicorns of the last 5-10 years were little more than good marketing and a Tier 1 VC footing the bill.

I would bet the same way.

If you weight by market cap, Apple, Microsoft, and Google (Meta to a lesser extent) make it really hard to beat.

And if you’re a VC, weighing by market share makes sense.

...what do either of those have to do with anything?

They all had founders in their 20s (technically, Gates and Zuckerberg were 19).

None of them have anything to do with the kind of companies we're talking about.

"While I loved the free-money era as an entrepreneur, honestly the mal-investment is absurd and we need a cleansing of the charlatans in the tech industry. VCs are an area that needs to massively contract. "

This. 100% this.

Most founders are utterly ferrets having seizures and unfathomably out of their depth. The VCs are populated by former founders at the long tail of the Peter Principle.

> .. like that story to mimic Gates and Zuckerberg. In reality 99% of 20 year old CEOs that are handed millions of dollars are fucking idiots and nightmares to work for, lacking any professional and managerial experience ..

You forgot to include Steve Jobs in your examples. But were these guys not actual nightmares to work for? Apparently this is not a red flag at all.

It seems that VCs are primarily selling to LPs. They hire bankers to sell to public markets.

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