We Need More (PayPal) Mafias

jasonlbaptiste.com

27 points·jasonlbaptiste··6 comments

There is so much ambiguity in evaluating startups, investors rely too heavily on evaluation crutches such as being a previously successful entrepreneur. Sure there is some signal present in that metric but also a lot of noise, and I think more noise than most people admit (taking a kind of "fooled by randomness" thesis here).

It seems to me that second time entrepreneurs end up being bad for first time entrepreneurs because of it, funneling money to established successes. At least, thats the way it seems to me. A bit nepotistic. What we need is more opportunities for first time entrepreneurs, like YC.

"If you're so smart why aren't you rich?" If you've got a metric with higher s/n than the VCs and seed firms have come up with, you have alpha, and that's always in demand. YC and its clones are a consequence of the history and development of the tech industry thus far. Without them, without the embedded cultural nous that's in the Valley, Boston the barriers would be even higher.

Summary: people who get rich from founding high-tech startups tend to found and fund more high-tech startups later on. Nothing new there. Article's author badly lacks historical perspective (HP; Shockley, Fairchild, Intel; Sun) and basic proofreading skills. Article not even worth skimming.

...and after I posted that, everything I'd commented in the last 24 hours got downvoted. I wonder who did that?

The use of the term "mafia" here is really distracting from the main point.

therefore, we need more IPOs.

Google has created tons of great companies since its IPO. Loads of its engineers now run awesome startups.

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