
Root for the Uber IPO to Fail - xenophon
https://www.nytimes.com/2019/05/09/opinion/uber-ipo.html
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jakelazaroff
_> Finally, the venture capital world will become even more clubby. That
clubbiness has its virtues: strong networks of successful investors and
entrepreneurs help ensure that the best opportunities are funded._

Does it? I can't think of many things _less_ meritocratic than not being able
to fund your idea because you don't happen to know any millionaires. How
exactly do we know that these networks aren't letting the best opportunities
fall through the cracks?

~~~
malandrew
Having a good idea is only one piece of the puzzle. You need to be able to
recruit talented employees and advisors. If someone is unable to network so
that they can get access to these "millionaires" that's a pretty strong signal
that they will probably be bad at recruiting talented employees and advisors.

Basically, the lack of a network that includes millionaires that could fund
their idea is a signal telling me to be cautious about investing in someone
and their idea.

~~~
jakelazaroff
Are talented employees and advisors mostly people who have gotten rich from
IPOs and acquisitions? Or is it possible that there talented people entirely
shut off (or shut out) from the world of startups and venture capital?

This also predictably entrenches existing imbalances. Consider for example
that 70% of VCs are white [1], and that three quarters of white people don't
have any black friends [2]. That's over _half_ of VCs that are significantly
less accessible to black founders, simply because so much investment happens
via this "club".

[1] [https://www.statista.com/chart/14971/who-are-venture-
capital...](https://www.statista.com/chart/14971/who-are-venture-capitalist/)

[2]
[https://www.washingtonpost.com/news/wonk/wp/2014/08/25/three...](https://www.washingtonpost.com/news/wonk/wp/2014/08/25/three-
quarters-of-whites-dont-have-any-non-white-friends/)

~~~
malandrew
> three quarters of white people don't have any black friends

Kind of an irrelevant statistic in this context. Where do these 3/4 of white
people live? Do they live in places where there are few or no black people?

What's the statistic for white people who live in San Francisco, San Mateo and
Alameda? (These are the three counties where most software engineers in the SF
Bay Area live)

> That's over half of VCs that are significantly less accessible to black
> founders

Which black founders? All of them? Just the ones that live in these three
counties?

Being concerned that many VCs are white is like being concerned that many
producers in Hollywood are Jewish. There's nothing wrong with either. Both are
historical accidents and testaments that social networks matter in many
contexts. If I wanted to succeed in the movie industry, it would not be
unreasonable to expect me to move to Los Angeles, take acting classes, join
the Screen Actors Guild and network socially with producers or at least people
that can introduce me to producers. If I don't do all three, that's a pretty
strong signal that I'm probably a risky bet to invest in.

The percent of VCs that are white is actually less than the percent of
Americans that are white (77%) but more than the percent of SF, San Mateo and
Alameda county residents that are white (~50%). Likewise, most VCs in China
are Chinese. Most Chinese in China have no white friends.

You know what's a better predictor of getting VC funding in tech than race?
Living in the SF Bay Area and being an engineer. If you do those two things,
you're already far closer to being able to get VC funding that most people.
Doing those two things also put you in the position to network socially with
VCs or those that can introduce you to VCs.

I honestly don't understand why people always make things about race first and
foremost when there are tons of factors that have a far greater impact.

~~~
jakelazaroff
Because it's a particularly clear and egregious form of bias. We can keep
making our demographics more and more specific to explain away confounding
factors, but it won't result in this club being an overall good thing.

~~~
malandrew
So if the data doesn't support your conclusion, dismiss the data,
riiiiiight....

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jedberg
> _Winning requires one of the deep-pocketed players, so companies are
> competing on funding rather than through their products._

This is the crux of the article. The author suggests that a failed IPO would
break SoftBank and those trying to be like it and return us to a time where
VCs chase good products instead big deals and so the companies will need
better products.

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logifail
> the best opportunities [..]

"Best" for whom?

Would it be unfair to think of VCs as 'People who already have money, wanting
to make even more money'?

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seanplusplus
is there a rebuttal to this?

would be interested in reading something that addresses the authors points
directly.

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ipsum2
.

~~~
almost_usual
I don't see how this opinion piece is 'anit-big-tech', it's anti smoke and
mirrors.

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bobosha
tl;dr Cut off my nose to spite my face

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davidw
The NYT paywall seems to have gotten more stringent. Guess I'll pass: I
already subscribe to the local paper, the Washington Post and The Economist.

~~~
news_to_me
I usually just enable reader mode and refresh — seems to still work for this
article.

