Startups are a great start, but not the goal | Hacker News Reader

Startups are a great start, but not the goal

economist.com

50 pointstim3338 comments

If you cash out early, as many vc would like you to be able to do, startups are definitively the goal. Unfortunately this is a quite established path for many successful startups and the VC system is naturally inclined towards this scenario. That's not bad per se, but it's certainly not the way to be innovative on the long term -- do something cool enough to be gobbled up by a bigger fish.

VC's generally hate when people "cash out" early.

Most VC's only make a decent return when at least one of their companies has a large (>$100m) exit. So VC's will generally be pushing their companies not to exit early, and to try riskier tactics to grow more.

Sometimes having your own cash to spend as you want lets you do something bigger and better. There would be no YC without Yahoo and Viaweb.

Well, some people don't want to do something big. They want to do their own thing and sell it when it starts getting to big for their taste :)

Growth does not happen in the lab, it happens in the markets over long period [sic] of time in a slow process of diffusion, improvement, and recombination.

This is an interesting observation, but doesn't square with my experience (and I expect that of many HN readers), because he is obviously talking about two different types of growth (incubation vs evolution? blossoming vs mature development?) but doesn't specify what they are either within the biological metaphor, or the business paradigm.

This article is written from a public policy point of view. It's growth for society they're talking about. The benefits to the startup and its customers are offset by the decline of competitors or old solutions and overhead as workers go into unemployment and have to look for new jobs.

That it's possible to be so individualistic that you can't even grasp the idea of the growth The Economist is talking about being not growth for the startups... That's truly flabbergasting.

He tries to answer the question, why startup doesn't bring economic growth.

The apparent answer is globalization and the downstream production being offshored.

The real reason is far more than national policy but much simpler that he alluded to. It is the natural drive of capital. Where it bleeds it leads, capital flows to where ever it can generate the profit with the most efficiency, which has driven the production system globalization, as the labor in developed countries no longer produce the best ROI, except for startup.

"It is time that our policy and business leaders wake up to the fact that America’s flowers now bloom oversees"

It sounds more like the dandelion theory. Where the initial see might be in one location, and a flower might grow only to be geographically dispersed in the next generation of mature plant (not flowering bits). So the next generatoin will be "rooted" somwhere far away...If this was the metaphor, your plot of land might not have any growth in period T+1, because the "winds of change" or whatever. Of course the problem with this...it may be more or less dispersion...you're predicting the weather...etc. So, as analogies go maybe its not perfect.

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