Comment by larrys | Hacker News Reader

Comment by larrys | Hacker News Reader

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"If your business can't succeed without VC and without eventual acquisition, you don't have a business, you have a gamble."

Yes but a gamble with benefits. Specifically if you play your cards right and get involved with the right group of people, you get your "ticket punched" which can and does lead to other future opportunities. As much as I would like to side with your belief (and myself use "gamble" many times to describe what people are doing) for a young person who can afford to take a chance (or an older person who doesn't have financial or family concerns) it might be a gamble worth taking.

Think of it as a person who marries a celebrity fully knowing that the relationship might not work out. They get to attend parties, they meet "important" people, they move in the right circles they get their picture in the press. The relationship breaks up. Are they better off than the same person who is living in the middle of nowhere and has the same experience? I'd say they are exposed to things that give them much more opportunity to land on their feet.

Or as another example someone who pursues a dream to win a gold medal at the Olympics and doesn't even get a bronze. I'd say it's an experience worth doing, in general of course.

I think you're overstating the importance of investors. With the exception of a few firms (Sequoia, Accel, Union Square and maybe 10 others) whose mere name probably brings you some advantage, most VCs are not all that special (look at the returns data for proof).

If you're partnered with a middle-of-the-road VC, the reality is that not all their children (portfolio companies) are equal in their own eyes. Investors are generally aiming for "return the fund exits" and of their own admission, of 10 investments, it might be 1 company that does this.

Given they are in it for a financial return and they have limited time to allocate to companies, they will as self-interest dictates spend more time with the winners in their portfolio vs. duds.

Your celebrity analogy is a good one except it breaks down because investors have to be promiscuous. You are not the only special snowflake in their world that they'll take to parties and if anything, they're going to want to show up at the party with their "trophy portfolio company" -- not some broken or even doing ok company.

There is immense survivorship bias in the ecosystem. Those doing well get even more attention while the others shrivel up and go away. The thing is those companies that die get little attention as founders and investors generally don't want to advertise failures.

By "right group of people" I'm referring to the people you work with, the parties you attend, and the people you meet - of which the investors are only one part.

People namedrop in this industry similar to what they do in the entertainment industry. Not everyone is clued in as far as how unimportant or ubiquitous that namedropping is. There is a halo that is created. And guess what if you get funded even by a firm that people in the know think is "b" list, local investors in your city or even non-clued in potential employees will still think it's a big deal. Many people are impressed when someone is a Physician. They don't always think between the degrees of impressiveness the "MD" degree gives you a certain cache.

This strikes me as a strategy to build an impressive sounding company vs. actually building an impressive company.

Namedropping, attending parties, hiring non-clued employees, etc all seem like very non-core activities that people trying to build real businesses would not engage in a whole lot (if at all). Those sound like activities that the increasing class of "wantrapreneurial" folks engage in.

If by namedropping you mean talking about actual customers you have then I definitely agree.

"Namedropping, attending parties, hiring non-clued employees, etc all seem like very non-core activities that people trying to build real businesses would not engage in a whole lot (if at all). "

Disagree. Who you know is important. It's not all about building a better mousetrap and having the world come to your door. Business is done many ways. People choose different ways to get to the same place.

Also, specifically regarding this: "hiring non-clued employees". There are many capable people out there who don't necessarily know the "lay of the land" but are quite capable. The fact that someone is impressed with something that they shouldn't be impressed with is no reflection on their value in an area of their expertise which you might hire them for.

Yes but a gamble with benefits.

A gamble with benefits is not a real business, and sounds like evidence that we're reaching the dangerous stages of a bubble.

Exactly. The product doesn't matter, the users are resources to advance the founder's personal fortunes. It IS all about the gamble. How is making hundreds of millions of dollars a failure? It's about you.

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