

How Government Hurts Tech Innovators (Including YC) - brianlash
http://www.brianlash.com/2008/04/priciples-pragm.html

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brianlash
In the article I argue that Y Combinator is a victim of an unfair
(inefficient) economic advantage that's being exercised more and more by
incubators funded with state money.

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rms
Y Combination isn't a victim here. State funded incubators don't make it on
YCs radar at all, because the state funded incubators/early stage funds are
terrible at picking winners.

Until Y Combinator came around and revitalized the incubator model by doing it
with micro-investments (and not being an incubator, something the clones have
mostly failed to understand), private incubators were money losing failures.

As far as I am aware, AlphaLab in Pittsburgh is the only government funded
incubator investing with the same magnitude as YC. They are no threat to YC,
because they are only targeting people that live in Pittsburgh.

It does mess the Pittsburgh entrepreneurial scene up with Innovation Works and
the Pittsburgh Life Sciences Greenhouse being the gateway to angel investment.
But I believe strongly that we are much better off with them than without
them. If they were gone, millions of dollars of additional capital wouldn't
come to Pittsburgh to replace them. Investors don't avoid Pittsburgh because
they have to compete with the PA government; the PA government isn't very good
at investment. Investors stay away because no rich people want to live here.
PG accurately describes this in <http://www.paulgraham.com/siliconvalley.html>

How do you think a government should encourage innovation?

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lolb
My lolbertarian sense is tingling.

