That's kind of how VC works nowadays. I was reading an article about Softbank's Vision Fund; the article mentioned that Masayoshi Son, the CEO of Softbank advised his companies to give each other discounts and special deals. I guess this is something which YC has also been doing for a while.

It definitely sounds like it's going to create bubbles. If companies help each other too much, then their success becomes increasingly artificial; all these companies become less efficient as a group and it's only a matter of time before companies outside of that cushy ecosystem catch up.

I think that eventually we'll get to a point when we collectively realize that the software development practices that we've adopted over the past decade are actually much less efficient than many other alternative approaches. For the past decade, the most efficient approaches and tools have been overlooked almost completely because they were developed outside of any VC ecosystems; so they didn't get any exposure or chance to prove themselves.