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Comment by nimbius | Hacker News Reader

In the defense of YC by modern neoliberalist definition bob was a terrible businessman. The company's only worth 50 million, he ran up debts so large it required a partner to bail him out, the company never went public or sold to large agricultural interests to maximize shareholder value, and he committed the cardinal sin of making the employees owners instead of fully capturing the excess capital of his means of production and offshoring production entirely to focus on branding. he focused on an unprofitable cadre of niche markets.

Bob was a great guy though and a sterling example of a leader who really cared about his product and his customers.

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"to maximize shareholder value"

You know, philosophically speaking, not every company has to do that. And before someone steps in and quotes 'fiduciary responsibility for shareholder returns', I'm a VC and I run a VC fund so I'm acutely aware.

Now, if you take venture funding then that's a different story. But there are countless businesses - from small mom+pop to larger ones like Bob's Red Mills - which are operating for higher purposes than just shareholder returns. See B Corps generally. And the world is better place for it. I tuck into a bowl of Bob's oatmeal every morning and I'll be fucked if I'm buying Great Mills or PepsiCo (Quaker Oats) big company shit.

"he committed the cardinal sin of making the employees owners instead of fully capturing the excess capital of his means of production and offshoring production entirely to focus on branding"

Many would say this was anything but a cardinal sin. Try reading fewer Ayn Rand books.

It was pretty clear to me that the above poster was "defending YC" by explaining that YC is doing the right thing for their value system; Bob's Red Mill instead pushed against the capitalist narrative rather than seek to maximize profits and grow at all costs.

I think the implicit suggestion which you seem to have missed, in referring to valuing humans above profits as "the cardinal sin", is that it's only a sin from within this framework, which is usually at odds with the opposing framework which values human welfare above company health.

Perhaps my own bias is showing, but this specific application of irony (making light of the harms of capitalism by singing its praises while using highly sensationalized rhetoric) is something I do as well.

Not a fan of Ayn Rand, but it is a bit tiresome to see her name dropped to illustrate a caricature.

Value is subjective. Bob valued employee ownership. He realized profits within his own value framework. Nothing here violates the principles of private property or voluntary association. If anything, Bob's success is a testament to the validity of the core libertarian premises.

Perhaps careful reading of opposing viewpoints is the solution here?

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Value is not subjective. It is objective. A foodstuff is valuable as nourishment, because it has the objective potential to nourish a human person. The value of a strawberry may not be accessible to someone with a strawberry allergy, but it maintains that value.

Where the organization of labor and ownership are concerned, there may very well exist various legitimate ways to do so, conditioned by circumstance and constrained by basic objective moral principles (like justice). The value such arrangements provide to various parties may differ.

> The value of a strawberry may not be accessible to someone with a strawberry allergy, but it maintains that value.

> Value is not subjective. It is objective.

I'm having trouble reconciling these two statements. The value of a strawberry not being "accessible" may as well not be there for that person who is allergic to strawberries, and in that way it is subjective. One person may prefer to drink beer over wine and another vice versa; it would be strange to claim that beer and wine are objectively equally valuable to both of those people.

Charge, mass, velocity, and spin are objective. Value exists only in the eye of the beholder.

In all of Ayn Rands books her heroes refuse to compromise their integrity and product quality despite external pressures, and lose out on making a profit as a result. Randian heroes do what Bob did, not what modern wall street capitalists do.

Which makes Ayn Rand's heroes better than the douchebags we have IRL.

> Try reading fewer Ayn Rand books.

in ops's defense, he's specifically stating that his statement is from a neoliberal classical view. which would be entirely accurate. It not necessarily HIS personal opinion.

I guess I could read you a statement from Mein Kampf if you want. Not necessarily MY opinion... and it certainly wouldn't be.

But my point is, why would I do that? In both of these examples I can only assume one writes out an opinion because it's close to the one they hold themselves. I don't go around advocating opinions I don't actually hold myself.

> I guess I could read you a statement from Mein Kampf if you want. Not necessarily MY opinion... and it certainly wouldn't be.

with all due respect, being able to take a assertion or make a reasoned argument within the context of a logical framework outside your personal beliefs is a prerequisite to be a judge or lawyer or engineer.

beyond mere "devils argument", it is valuable to be able to evaluate an idea in its context. one could argue for all sorts of things from the context of Mein Kampf and not personally believe it. it could be used a rhetorical device for framing a narrative in a way that lets others view it objectively.

>being able to take a assertion or make a reasoned argument within the context of a logical framework outside your personal beliefs is a prerequisite to be a judge or lawyer or engineer.

Add analyzing the incentives and actions of 3rd parties generally. An important skill all-around.

> I guess I could read you a statement from Mein Kampf if you want. Not necessarily MY opinion... and it certainly wouldn't be.

the difference is that you use it knowingly as a threat, and have seemingly decided that anything you deem threatening must have been done on purpose to hurt you.

>But my point is, why would I do that?

Simple. You wouldn't read a statement from Mein Kampf, because no one in their right mind except for some neo-Nazis believes that trash. However, if you lived in a society full of and run by neo-Nazis, then yes, it would be entirely relevant to read a statement from that book even if you don't personally believe it.

In our case, our society really is full of and run by neoliberal classical believers, so it makes perfect sense to state that point of view, and then counter at the end. And it's not just modern society; I'd say that HN, in particular, has even more believers in that kind of philosophy than mainstream society (where it's mainly the people at the top who believe and practice it).

Dude, he’s being sarcastic

Other than running up too much debt and getting bailed out (is that functionally different from getting outside funding?), I don't see any reason why these things are bad business.

Even if you're a steely-eyed capitalist, you have to admit that these were wildly successful long-term investments in developing loyal lifelong customer base.

The only difference is that the time horizon on those investments are much longer than your typical VC or PE firm cares for.

I think you're making the same point, but just to make it more obvious - all of that is more an indictment of modern neoliberal business practices than it is of Bob's Red Mill. Sustainability, efficiency (in terms of doing things right, rather than doing them quickly) and overall most benefit for the most humans is better than the get-rich-quick schemes that most startups have become.

Where are you getting that the company is worth $50m? The article says it’s a “$100 million-a-year” business

To oversimplify a company with $100MM revenues annually and costs of $120MM annually is still losing money and has a real current value of $0.

That’s revenue, which is different from company value.

Oh boy, if his 100MM/year in revenue business is only worth 50 million, most startups are _really_ in trouble.

Why yes, company valuation is uncorrelated from revenue.

By the way, this is why VCs love software startups, and drive so hard for an IPO exit.

Most startups are growing faster than a literal grain mill, and they have good unit economics. Another customer costs little for a software company. Another customer can cost a lot for a grain mill.

These contribute to valuation.

Look up revenue multipliers:

https://www.bizbuysell.com/learning-center/industry-valuatio...

That’s pretty clearly what they’re talking about, yes.

Not really. They and others here seem clueless about multipliers less than 1.

They described a fractional multiplier. That’s their whole point.

They were posting in disbelief. You should read their comment again.

That is obviously incorrect, is English not your first language?

I guess this explains Nvidia's valuation.

Revenue and company value are completely disconnected.

Yes, see "P/E Ratio" aka "Price to Earnings Ratio", which is a basic measure of how overvalued a company is.

I believe the preferred Wall Street parlance now is the "price to innovation ratio" ;-)

> the company never went public or sold to large agricultural interests to maximize shareholder value

Wow, shame on Bob :eyeroll:

Yeah, I can't believe that loser only managed to found a single company worth $50,000,000.

> he committed the cardinal sin of making the employees owners instead of fully capturing the excess capital of his means of production and offshoring production

Ayn Rand is turning in her grave

> In the defense of YC by modern neoliberalist definition bob was a terrible businessman

This sentence doesn't read as a defense of YC or "modern neoliberalist definition" but as a criticism of it.

Gordon Gecko is that you?

Sounds like a parody but you should make it clear to avoid downvotes.

I think the clause starting with "cardinal sin" was the real tip-off.

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