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Uber and Airbnb Alumni Fuel Tech’s Next Wave (nytimes.com)
135 points by mdev 69 days ago | hide | past | web | favorite | 158 comments

> The start-up world projects a meritocratic image, but in reality, it is a small, tightknit club where success typically hinges on whom you know.

This is...so not true. My co-founder and I had hardly any network in SV. We applied to YC through the website, raised seed money after demo day. We ran on seed + revenue up to about 60 employees and we recently did a series A.

If you don’t have a network, don’t be dissuaded. Silicon Valley is the least credentialist, most open community I’ve ever been a part of.

People like to traffic in hyperbole, because nuance burns calories and doesn't attract as many eyeballs.

Some describe tech as a perfect meritocracy, which of course it is not. The overreaction to that is to claim startup success merely comes down to who you know. Of course that's not true either. As far as industries go -- especially industries capable of producing millionaires, billionaires, and world-changing phenomena -- tech is absurdly high on the meritocratic scale.

> tech is absurdly high on the meritocratic scale.

While I generally agree with this, I think the reason is that success is mainly determined by how much customers like something. It's certainly not due to a lack of folks waiting around to try to take advantage of founders at every conceivable opportunity.

And with respect to VC firms, most don't even list their email addresses on their websites, and of the ones who do a lot of them openly brag about deleting every single email that doesn't come with an introduction. Many won't even tell you what industries or stage they focus on.

If venture capitalists are tired of getting shit on in the media in a way that dentists or accountants or whatever aren't, then maybe they should exhibit the same baseline professionalism as is expected in every other industry.

> tech is absurdly high on the meritocratic scale.

Actually I would make the distinction that tech is ridiculously far ahead of most other industries- but still very low on the scale. (if by scale we mean zero to perfect meritocracy)

Networks matter a huge amount and are dominated by a certain class and racial demographic.

At least we've begun the conversation and I believe truly meritocratic success is very possible, but those on the inside are definitely more likely to be successful that those outside. (really specifically raising a certain kind of seed or early venture funding, where some normal business metrics may be missing- (investing in the founders) )

It absolutely is a network. You just got lucky enough to join one. Without that connection is pretty hard to get started without going to Stanford or knowing someone.

Having being on the other side of this, it is infuriating to see how people take luck for granted. Even against impossible odds.

I can list every luck/event in my career over the past 10 years but I would trade them all for the luck of receiving single seed round of funding to work on my own project. It's not for lack of trying.

> I can list every luck/event in my career over the past 10 years but I would trade them all for the luck of receiving single seed round of funding to work on my own project.

Luck plays an important part in making a successful business, but I wouldn't say it's all that important at the seed round.

According to crunchbase the parent attended Carnegie-Mellon University, which definitely would have helped getting into the SV fold.

New York Times has had a consistently anti-tech slant the last few years. I don’t know the reason for it, but I find it very annoying

The media has a lot to lose in a tech-dominated world.

They used to have a monopoly on reach. Readers came to directly to them. Today that role belongs largely to tech companies. Media companies are heavily dependent on the algorithms and whims of the likes of Google, Twitter, Facebook, Apple, and Amazon. And it's not just distribution: it's their business models, too. Apple taking a cut of NYC subscription revenue, Amazon doing similar things through its Kindle devices, Facebook and Google ads, etc.

This would be an existentially terrifying position for any business to be in. And as much as the media likes to portray itself as putting truth-seeking and objectivity first, it's still very much a collection of self-interested profit-seeking businesses.

When you're the media and you're faced with this situation, what do you do? What weapon do you have? Your content of course.

It doesn't need to amount to full-scale propaganda or anything obvious. You simply hire writers and editors who are themselves anti-tech, and results will follow. Even if you don't hire that way as a media organization, your employees' incentives are aligned such that they should naturally lean anti-tech, given the realities of the business situation and its effect on their jobs.

> The media has a lot to lose in a tech-dominated world.

True, but the NYT was actually one of the first to try and move past their print origins and try a new business model.


They also employed Mike Bostocks (author of d3.js) for a while, and they had a highly regarded interactive section.


Tech has been a public boogeyman for a long time. Tech causes everything from global warming to cancer.

"the NYT was actually one of the first to try and move past their print origins and try a new business model..."

One of the first?

Actually, the San Jose Mercury News had its Mercury Center up and running in 1992[0]. For a time, only the Mercury and WSJ were serious players.

[0] https://archives.cjr.org/feature/the_newspaper_that_almost_s...

Maybe... but I’ve noticed this far more at NYT than other newspapers

Which doubly counters csallen's claims because the NYT is doing just fine (they're publicly traded).

If anything, the majors (NYT, Guardian, The Economist, WSJ) have a lot to gain when local journalism dies because of technology.

The fact that Google was doing just fine didn't stop it from pouring everything it had into Google+ when Facebook looked unstoppable. Which is to say, the health of the current stock price doesn't preclude a business from being paranoid about the future.

Most newspapers have a clear division between the editorial and money-making parts.

Journalists look down on the advertising and classifieds departments. The consider it beneath their worthiness. If you think they're hiring because they give a shit about the lowlies who pay to keep the lights on, you haven't worked in the trade.

True, you don't need to go out hiring journalists who have an anti-tech stance.

But does anyone think print journalists haven't noticed their industry is fucked and loads of people are getting laid off? No need to break the firewall between editorial and ad sales to know that Gannett cut 400 jobs in January, McClatchy cut 450 jobs in February, BuzzFeed cut 200 jobs in January, and so on.

> True, you don't need to go out hiring journalists who have an anti-tech stance.

Reporting on shitty behaviour by tech companies isn't an anti-tech stance. It's reporting. If what you want is PR puff pieces and sloppy butt-kissing, Wired has the pro-tech angle well covered.

I mean do you actually think it's an interview question at the Times? "Tell me how much you hate Google, in words of three syllables or less". This is a literal conspiracy theory, and it's embarrassing.

Everyone hates journalists, who aren't used to dealing with them. Everyone feels victimised when it's their turn. I've seen it more than once. Hell, I've been on the receiving end of shitty coverage. But it wasn't an agenda any more complex than "does this make a good story?"

I'm confused how you quoted my post saying you don't need to hire journalists with an anti-tech stance; and that lead you to ask if I think hating Google is an interview question at the Times?

I merely find it plausible that a critical view on the tech giants is more popular among people whose jobs are threatened by tech than among the likes of us, whose jobs are created by tech. No conspiracy required for what I'm saying.

So you think their business being endangered because of changes caused by tech makes them incapable of reporting about it. And that makes it totally fine to sweep their critical reporting about tech under the rug and ignore it, because there cannot be a strong bias of those criticized to live in a reality where they're not in the wrong?

Yeah, I see a much stronger/more direct incentive for the second one. And this makes blanket statements in the spirit of "media cannot be unbiased about tech" on this site kinda worthless.

Media does screw up and can be bias. Criticizing that on an individual case by case basis is fine. Spinning a general they-vs-us narrative less so.

  So you think their business being endangered because of
  changes caused by tech makes them incapable of reporting
  about it.
No, I didn't say that.

I think we actually agree more than you think: I believe that both the press and HN posters have biases; and that opinion on HN will pay relatively less attention to criticisms of tech, while the press will be relatively more critical.

For example, HN popular opinion would broadly say "self-service/user-generated content can be automatically filtered, but some things will inevitably get through because there's just so much stuff, dealing with that stuff after it's been posted is the only option" whereas the press would broadly say "we can't ignore this problem, and if a working solution means self-service/user-generated content isn't scalable, that's just too bad"

I see this division on deceptive ads, and satirical news being repeated as true, and I suspect we'll see it on self-radicalisation and livestreamed shootings too.

The idea that a for-profit business "doesn't give a shit" about the money-making parts of its business is… interesting. It smells to me just as reasonable as taking Google's "Do no evil" at face value.

First, journalists don't run the organization and aren't in control of business decisions. If their disdain of the advertising arm of the business amounted to anything, there wouldn't be an advertising arm of the business. There are ads injected into the middle of their articles because higher powers than the journalists are making business decisions.

Second, journalists don't need to like the media's business model to become subservient to it. Both ad and subscription revenue are fueled by pageviews. To align incentives, you simply reward journalists who write popular articles, and reward editors for doing what they can to make articles more popular. It's not some mysterious coincidence that media tends to produce sensationalist articles and headlines. (And as I mentioned initially, it's quite effective to simply bend toward hiring journalists who already care about this.)

Who is controlling what articles end up on the front page? Are the programmers at Google and Facebook who don't like ads the ones in control of either of these two companies' business models? This just isn't how businesses work.

Businesses are incentive chains crafted by top-down decision-makers who aim to get sales-and-programmers, ads-and-journalists, and other business units who don't like each other to nonetheless work together to achieve a singular goal.


The front-page story on Vox right now is a take-down of tech in light of the NZ shootings: https://imgur.com/a/Li9zcAC

I think that they are trying to ride a wave of sentiment. You can see a similar strategy in their political coverage that causes them to do some weird things, like dismissing the accusations against Justin Fairfax. They have good writers on staff but I have found that more incisively factual coverage of major stories can always be found in The Washington Post.

Tech is - inadvertently, as a side effect, but still - murdering the traditional media world that NYT rules/ruled.

When your whole world is being destroyed around you, it's not that strange if you develop a hostile attitude to the people doing the destroying, even if your job description is to be an "objective journalist".

But, corporately, NYT wants the journalism world around it destroyed. They're the best situated to benefit from it. Their stock price shows that there's no concern for their future.

While the NYT might, their employees don’t.

I've come to the conclusion that traditional media has a fundamental conflict of interest when it comes to reporting on tech. Established media players see tech as a fundamental competitor to people's attention. Tech is also eroding these media outlets' ability to steer public opinion. When readers can find primary sources easily, then there's a lot less room for editorializing.

I regularly read NYT's technology section. It seems like most things have a negative slant towards them, especially when it pertains to Google, Facebook, YouTube, or other social media sites. Most of the positive pieces they run about tech serve to emphasize how different the subject is compared to the big bad tech giants.

It's anti-centralization and pro-meritocracy. If anything, it's pro-tech. There are a lot of people right now who have built great tech and real innovation which is being ignored completely because some financially successful firms with massive network effects are attracting all the talent and focusing it towards their lesser technical goals, slow processes and inferior tech.

For example, AirBnB has thousands of employees and yet barely anything changed in their service in the past few years. The engineers who work there are not productive. Their main skill is in creating highly complex solutions whilst taking minimal risks; that's not what engineering is about. The same goes for almost all major software companies. Each engineer does very little work and contributes very little towards real innovation. These big network effects are holding tech back. They are draining cash away from pure tech and focusing it on social networks.

> New York Times has had a consistently anti-tech slant the last few years.

Let's be real. Tech has had a consistently anti-tech slant the last few years.

YC is not typical. It provides you a pre-built network, so if you're not going this route, who you know already makes a huge difference.

But anyone can apply to YC, and I believe the application process is almost entirely meritocratic.

Can you elaborate?

Most companies I’ve seen go through YC do not have any sort of revenue stream, nor a business plan or any other baselines metrics you could evaluate on a merit basis.

The only factors I can see them evaluating on are subjective in nature, not objective merit based items.

Nothing wrong with that, YC has produced some fantastic companies but just doesn’t seem to be a meritocratic process.

I'm surprised to hear people think there is some conflict between being subjective and being meritocratic.

By that standard there is no meritocratic way choose the best musician, actor, chef.

And maybe that's how some people use the word. But to me it just means that you choose people based on their work, not on who they are or who they know.

Whether you evaluate the work subjectively or objectively is a whole separate matter to me.

I have to digress a bit initially to answer this...

I think one of the most frustrating things for inexperienced founders is not understanding why investors say no, because founders believe so strongly in their vision it is hard for them to understand why someone might not be persuaded by their pitch and investors just want to make more money, right?

But ultimately the decision to invest, at least at the seed stage, is largely emotional. It's a question of feeling good about the team, the idea, and believing it will gain traction. Nobody has product-market fit at this point, so you have to use incredibly limited information to make a decision.

YC excels at this stage. They only have 10 minutes of face time to make a decision, so they're using that time to try to evaluate you and your company as quickly as possible. There is no magic rubrik for this decision, they just try to assess the founders and their idea and whether or not they think it will work.

When I say they're meritocratic, I don't mean there is some single metric you can use to compare all companies to make a perfectly rational decision. What I mean is they evaluate everyone based on that 10 minute conversation, not on their pedigree.

FWIW, I applied to YC and was accepted without knowing anybody. Maybe I just like to believe the process is meritocratic and I'm special.

Isn't YC the perfect example of that network and that it comes down to connections? That's why there is high demand for people applying as it opens the gates to that network.

> it is a small, tightknit club where success typically hinges on whom you know.

This is such a weird point to make given it seems like almost none of the Uber and Airbnb Alumni seem to have been in any kind of tight knit club before. This wasn't something like PayPal mafia members starting yet another company, they seem to have been started by relative outsiders and most of the employees seem to be as well.

Maybe there's an argument to be made that some of the people who strike it rich as early employees of tech unicorns end up investing in other companies or founding other companies. But these companies seem to be proof that you don't need to have come from a tight knit club to become a successful startup.

If it’s “so not true” that it’s “who you know” then you have to use a better anecdotal example.

You literally just said YC took you in and gave you a demo day where they invited everyone. You didn’t do that, YC did. YC takes very few people out of those who apply. So instead of being a counterexample, you just provided a great example. They are a well regarded network and gave you an in to the rest of the networks! Could someone who DIDN’T get into YC achieve the same thing just as easily, getting all those employees and Series A, or would they limp along on angel funding?

Second this comment, similar experience.

OTOH, it is true that outside YC there are subclusters that are a lot less meritocratic and more network based.

You know YC. Would you have done as well without that network? How well do non-YC startups fare?

OTOH, YC entry is meritocratic.

This is a fluke anomaly and so it doesn't count. Most people/projects keep getting rejected from YC. Getting any kind of funding without social connections is nearly impossible.

Cool anecdote. You busted in. Congrats.

Getting into YC is itself a credential

The sentence you quote says "typically hinges", but your evidence is a single anecdote.

You would need more data before concluding it is not true.

I have a hard time verbalizing it but something about Uber creating all these millionaires sickens me.

In no order:

* The business is fundamentally based on ignoring the law.

* They've done nothing but lose money, more than any private company ever.

* The money keeping them afloat is very dirty (mostly from Saudi Arabia)

* The culture is well-known to be awful.

* The drivers are completely exploited, working long days with no security and taking huge financial and physical risk.

* Their headquarters is at one of the most awful corners in the city, which they've done nothing to improve.

And in the end they'll have to start making money. Which means either increasing their prices or increasing their cut. When that day comes we'll realize what we've lost.

But yet, all the people who signed up and coded the app will be millionaires.

Smells like society misallocating value.

> They've done nothing but lose money, more than any private company ever.

This is a weird take for me. I don't mean to single you out but I see it everywhere. If I went and bought $100 worth of stocks, not many people would say I lost that money. Most people would agree that we have to wait and see how that investment works out. In every other context we call it "investing" (some investments work out and some lose money) but here it's just called "losing money" without even looking to see if it's a good or bad investment.

That's a rather poor analogy. If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time. That's... not what startups do. A better analogy would be taking out a loan for $100 with fuzzy repayment terms. If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

> If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time.

It depends on the stock. But there are lots of types of investments. None of the rest are referred to as "losing money" until it's clear they lost money. The act of investing is investing.

> If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

My point is that it's too soon to say what the ROI is for Uber's investments. I remember lots of people lamenting the "losses" that Amazon had year-over-year, before they realized that it was actually a wildly profitable set of investments that the company had made, creating one of the largest companies in the world.

No one is playing an investment term semantic game here. I'm simply expressing how silly (and misleading) it is when people refer to businesses investing in things as "losses" before they ever know how those investments play out. You only know how an investment turns out when you know how the investment turns out, not when the investment first starts.

You and I must have had different Investments professors. If you invest in a stock and it decreases in value, you lost money. You might get that money back if it goes up, but it is absolutely referred to as losing money. People just like to play mental games and say things like "it's only a paper loss" or use the "unrealized loss" term which is for accounting purposes, but it's a loss regardless. If you don't believe me, take your rent payment and put it in a stock, then if it drops tell your landlord that you're not short the money - they just have to wait a while because it's an investment. Or put another way, had you not bought the stock before it went down, you could have used the same amount of money to buy more of it at the lower price point - i.e. you lost potential money even if it goes back up.

I believe the point of the parent post is that the entire business model of Uber is based on losing money on a unit basis to sustain the market. This is very different than companies like Amazon that lost money due to OpEx on growing the business in a sustainable way. The Amazon equivalent of Uber would be if Amazon paid for 20% of every item ordered out of its own cash balance. I agree that it might still turn out great for Uber in the end if various market forces align, but 1) I'm having a hard time thinking of a company outside of the VC-funded tech scene that could run Uber's financial games without going bankrupt, and 2) I personally think it's important to ask if the money going to keep Uber afloat is really best allocated there.

If Uber wanted to be profitable, they could be tomorrow. Their growth would slow down, and they wouldn't be able to invest in next generation technology, but they could be a very profitable business.

Given the insanely high price elasticity of demand on rideshare, i severely doubt this. Show me anyone who does not have both uber and lyft apps, and does not immediately go to Lyft when uber prices seem a tad high (or vice-versa).

I’m in that situation. I know Lyft exists, of course, and will switch if Uber gets too aggressive on pricing, so your point has merit, but I literally don’t have the app nor account there yet.

OTOH, I believe Uber is already quite profitable in my city (Boston metro), so I don’t think a future of Uber as profitable overall is unachievable.

* They created a transportation network that enables a huge chunk of the world to get from point A to point B quickly, safely, and cheaply.

> something about Uber creating all these millionaires sickens me

This feeling is called envy.

It's hard to explain to people without a strong sense of morality and fairness, but many of us were taught to do the right thing, that "ends don't always justify the means", and that people who cheat or lie or steal or engage in other dubious activities will eventually be punished. If you read the parent post, there's a strong sense that the author doesn't believe the ends justify the means. Your comment suggests that it's ok to do morally reprehensible things in the favor of profits, which is why it's difficult to empathize with the parent.

When you're taught to always do the right thing and not to engage in the profit-maximizing morality-disregarding behavior we see from companies like Uber, when you make the decision not to become employees of those companies, seeing that others did decide to work with those companies really forces you to re-evaluate how the world works. The first step in that process involves disgust reflecting on the bad actors.

I have a strong sense of morality and fairness and want to do the right thing, which is why I love Uber (and Lyft, et al).

A single entity managed to smash apart the corrupt, racist and unaccountable taxi cartels in thousands of cities. No more taxis refusing to pick up dark skinned riders, no more taxis refusing to drive to neighborhoods where those same people live. No more apathetic dispatchers who don't care that the taxi driver was drunk or the car was being driven by someone other than the license holder. No more exploitative cartels bidding up taxi medallions and forcing low-skilled immigrants to work 14 hour days while preventing competition.

Ride sharing apps have fundamentally made the world a better place, especially for women and people of color. I feel far safer taking an Uber in an unfamiliar city than I ever did with the luck of a taxi, both in terms of physical safety and in terms of getting scammed.

Isn’t the point made that it’s “cheap-ness” is based on VC subsidization of each ride? People can critique things without being envious, no need for the snark.

It's not envy he's correct. When Uber left Austin there was a ride hailing app up in about a month. It's a bunch of people that got bailed out in 08 with zero percent money thinking they are smart looking to be part of the next big thing. Uber will never be profitable. But all early investors will treat ipo as an ATM, complete opposite of what stock market is for

He has a fair point though. Uber make a lot of money and do not pay their fair share of taxes in the countries in which they operate. That’s not envy.


This is just one interpretation. Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride. There's no question they have created value and the folks who showed up to work to make it happen aren't necessarily evil, scofflaws, or toxic.

> Let's not forget the model is innovative, and a vast improvement on the old way of getting a ride.

I am genuinely not trying to be play dumb but what is the innovation or vast improvement? Apps like mytaxi were pretty much showing up before/after uber came to light, without violating laws or exploiting folks. Also, how does such a claim get balanced to the vast financial loss they seem to be accumulating?

> created value

For whom?

As someone who uses Uber and Lyft on a daily basis, and has done so for the past three years, their existence has measurably made my life better. Taxis were never an option due to a combination of cost, time, and inconvenience.

While I agree, it's important to note that the reason for all three of those improvements is billions in subsidies + exploited drivers. If Uber rides were not subsidized, they actually followed employment and licensing laws, and drivers actually accounted for their total expenses properly, the cost we be pretty close to what taxis charge, number of available drivers would decrease, and wait times would increase. The things you and I like about Uber a direct result of unsustainable economics.

I talk to most of my Uber drivers and almost always ask about the economics. Most of them seem to have a good grasp on the fundamentals and fall into one of two categories: subsidizing the car they already have and supplementing income or driving full-time in a car dedicated to ride-sharing. In the first case, they’re pretty obviously easily covering the marginal costs. In the second case, I can’t know, but they should able to evaluate it on their own pretty easily, just like the local snowplow operator.

I don’t buy the narrative that the company is built on the backs of a bunch of exploited drivers (assuming you believe taxi drivers are not exploited; if you believe they are as well, that’s probably a different argument than the one I’m refuting).

> it's important to note that the reason for all three of those improvements is billions in subsidies + exploited drivers

First, they're not exploited drivers. You could claim any worker is exploited at any and all times. It's not a statement with any grounding to it in this case. They are not being held hostage by Uber, this is the best labor market in two decades. You could claim all workers at every big and small company are all universally exploited. The person making $15 / hour should be making $30; the person making $30 / hour should be making $60.

Second, almost every major tech company you can name exists due to initial venture capital or investor subsidies (including Apple, Amazon, Google, Salesforce, Workday, etc). Amazon bled a lot of red ink before they turned seriously profitable (not nearly so much as Uber granted), because they were investing massively to achieve scale. It was venture capital and investor money broadly that subsidized that build out and enabled them to have low prices. So what? It was widely claimed for 20 years that they couldn't generate a substantial profit, and now they are thanks to opportunities they grabbed hold of (perhaps Uber Eats will be that for Uber, or any number of other things).

I'll second that - it was literally life changing for me.

Plus, drunk driving deaths are down like 30% nationwide. Tens of thousands of lives saved.

How is this possibly downvoted? I suspect only a political agenda could be the cause but I'm willing to hear otherwise.

Here’s your political agenda.

In the entire Anglophone and Francophone world the taxi industry was awful. In the US they were and continue to be racist. They lied about availability and scheduling and they did it for decades. Many people on this website are familiar with the area that used to have the worst taxi service anywhere in the US, San Francisco. Taxi service in NYC existed in large parts of the city in theory but good luck getting a taxi driver to follow the law and actually take you there. And everywhere, absolutely everywhere, the taxi regulator was useless, completely captured by the taxi companies. These awful taxi companies lobbied to keep supply artificially low and prices high, for decades. In France the taxi drivers attacked Uber drivers. Uber’s civil disobedience was completely justified if it broke taxi monopolies.

In countries where taxi service was good and regulators not completely captured Uber has not done much. I’m aware of only one country, Japan.

Fuck the entire taxi industry, with their exploitation of tourists, four hours of saying someone will pick you up in half an hour, racism, tax evasion and broken credit card machines.

That’s the political agenda that supports Uber.

> I’m aware of only one country, Japan.

Germany is one of those, too. We have fairly good taxi services in any larger city, at least as far as I've seen as a user in the last 15 years. They usually have clean cars, are there on time (or waiting in taxi queues in front of public spots) and take you to your destination without major detours. I've never encountered any case (visible to me as the customer) of tax evasion or trickery with manipulated meters, so I guess correct metering is properly enforced by the regulators. And, very important: they also had apps for summoning them spontaneously and tracking their approach and optionally paying them relatively quickly after smartphones became ubiquitous and had those in widespread use by drivers, either provided by private non-taxi-related corporations (like MyTaxi) or by conglomerates of taxi companies that bound together to develop an app.

But I had multiple opportunities to "enjoy" taxi services of the classic kind in the US, specifically San Francisco and Miami, before and after Uber was a thing. And I definitely see quite a difference to the level of service I enjoyed back home, especially in the "before" time. I even think that this difference wasn't present in the minds of the Uber management - they probably thought that any taxi service in the world was generally as bad as the one in San Francisco and was thus in need of "disruption", and it seemed as if it took a while for them to notice that this wasn't the case, and to realize that people in places of the world with fairly well-working taxi networks might have much less understanding for their "civil disobedience", as you call it.

Traditional taxis are no less exploitive than Uber. The death of protections for rent seeking medallion holders is a net win for both consumers and drivers.

As an employee, I do not find the culture awful. I has improved considerably. As for the headquarters, Twitter, Square and Microsoft also have offices there. Do you also blame them? What do you expect these companies to do about homelessness?

What’s the source of the claims, ie Saudi Arabia being a major source of equity? Not trying to be difficult but it’s a set of pretty bold statements and could benefit from some of evidence.

Uber very famously took $3.5B from the Saudi government: https://www.bloomberg.com/news/articles/2018-11-03/the-insid...

This is the cycle of Silicon Valley at play, and an example why despite the Exodus of many entrepreneurs and engineers SV is still the leader in software based start ups.

Take the "PayPal mafia" for instance, out of one successful company spawned others -- SpaceX, LinkedIn, Facebook (via investment cash). These companies will spawn others, so on and so forth.

It's a cycle that feeds upon itself and has been a successful model, but it does have major flaws due to "hardcoded" pattern recognition.

One thing I'd like to highlight is that this cycle is most definitely impossible in any locale with enforceable non-competes and non-solicits.

For example, Texas loves to tout its "business friendly" atmosphere, but I have personally seen people get sued over non-competes and, much worse, non-solicits. Meanwhile, see what's happening in California: https://www.shrm.org/resourcesandtools/legal-and-compliance/...

It’s worth mentioning there’s a selection effect that takes place where the companies mentioned are successful, so the employees have more cash on hand usually to make the jump to their own venture without the normal risk attached. (E.g. - most should be able to float their own finances for 12-24 months without needing to take money out of cash flow)

I have a couple buddies who have started their own thing out of Uber and they’re doing well. The issue I see is it’s going to be pockets of companies around the gig sharing economy for Uber and similar items in rental/real estate for AirBnB.

Employees of both companies have solved some really tricky problems, and they know they can use their experience to solve another set of problems + make it easier to raise money for their venture.

Also - I do appreciate you qualified your post with SV being the lead in software companies. I think that’s still true and SV will be the lead for a long time but other cities will be cheaper + you don’t need to be in SV to find great talent anymore and you don’t need to be there to raise good capital. If you have an idea that’s solid and a decent team you’ll be able to find fundraising but it’ll be interesting to see if software stays in SV and we see the software related but more physical goods startups relocate out of SV.

SaaS businesses are so much less capital intensive than hard goods based businesses so I’d imagine those companies don’t start in SV so they can has less expenditures in areas that don’t matter.

> It's a cycle that feeds upon itself and has been a successful model

you just don't hear about the failures out there. I bet there's much more failures than there are successes.

If it weren't, banks would've all lent out money to startups!

> you just don't hear about the failures out there. I bet there's much more failures than there are successes.

Sure there are, but a few successes can make up for a lot of failures. Ycombinator, for instance, has been doing its thing for quite a while now and appears to be doing quite well.[1]

[1]Not personally having looked into their financials

The people who were willing to work for a risky startup with a vast vision are willing to work for another risky startup with a vast vision again.

The reverse causation seems like a compelling explanation: innovators built Uber and AirBnB, rather than Uber and AirBnB built innovators (as the title implies).

It's a little of both, and some other factors as well. People joining risky ventures with vast visions all the time, in all kinds of places, you just never hear about the ones that fail. And for the companies that do succeed, especially in SV, there is always a post-hoc founder story told retroactively in order to keep the troops motivated and investor money flowing. If you actually look at FAANG they all started with very focused products with the vision scaling just ahead of their successes to propel hypergrowth for a long period of time. And doing so, btw, takes a lot more than just innovators, it takes an army of people who are mostly focusing on the right things at the right time.

The advantage of ex-Uber, ex-Airbnb folks is not that they are more innovative—it's that they have experience in solving the organizational problems of doubling the size of a company over and over and over again within a very short time frame. If you only get people who are good at making innovative small-scale projects then they'll hit a wall when the organizational challenges of hypergrowth suck all the productivity and alignment out of the team. If you get people who only have experience operating at huge scale they won't be able to prioritize short term goals needed to get and maintain traction.

What exactly does "risk" mean in this situation: former employees of a successful unicorn, presumably armed with their payouts, start new companies with the backing of a VC fund, also started by former employees of the successful unicorn?

It's interesting to see a credential effect here similar to universities.

Which credentials are the most valuable then? Which company as a new grad is most similar to Stanford, MIT?

I think as far as credentials go, it's pretty simple: (market capitalization of the company) * (the level of responsibility given at the company).

The smaller the company is, the higher the position has to be to make the credentials stand out.

For instance, being a recent graduate at FAANG is probably more or less equal to being a pre-A series startup CTO, if there are no other entries in the CV.

I didn't downvote, but I take issue w/ the example you cite. In terms of credentials & signalling, recent grads taking jr software engineer / entry-level positions in FAANG are not comparable to startup founders.

That said, at more senior levels, your model fits more closely. A mid-level Alphabet product manager is likely to have been a founder or C-level exec in a startup or two.

> not comparable to startup founders.

I was referring to early stage startup founders, which are very likely to fail in the first 12-18 months. After a startup receives VC funding or becomes profitable, of course the credentials of its founders stand above the entry-level positions at FAANG. Otherwise, they might just signal a lack of fair judgement.

I don't think it's so much "credentials" as opposed to being tied to a well-respected co + having experience navigating a co through hyper-growth + risk taking attitude.

I am an alum of one of these cos, and I suspect the makeup of the average employee as far as risk-taking goes (and again experience seeing a company go from nothing to $20b+) is much higher than an equally competent employee at, say, Microsoft or Amazon. There's a level of self-selection involved here.

Airbnb or Uber are not really tech companies. They are business companies with a WebApp required as part of the execution. They didn't invent anything on the technical level, they brought some business ideas to existing tech (I mean Airbnb is literally a website with a DB)

In the same way that United is not a tech company, but they have a website that accepts reservation.

Tech companies create new Tech as part of their lifecycle: Intel, AMD, Google, etc etc. They create new Tech that didn't exist before, and this is core to their product.

I get that Silicon Valley shifted from Real tech 20 years ago to Futile WebApps that deliver pizzas faster, but it makes me sad that the new definition of tech shifted so much to pure business.

I think you're drastically underestimating what those companies do

What defines a “real” tech company? Gatekeeping what can or cannot be defined defined as a tech company. Am I on Reddit or hacker news? Wow.

I was actually making a point that what defines a tech company shifted over time.

10 years ago, we had some "hard tech" with a lot of tech innovation. I was arguing that the meaning of "tech company" shifted to a business company, using tech as a way to streamline operations. Those are very different in my opinion.

I obviously prefer the first one. But I accept that in the collective mind, tech company mainly means a website nowadays.

Anyone dealing with requests per second at their level is a tech company to a greater capacity than most companies will ever be.

Do they create software as a service, hardware, and so on? No, but they are a group of practitioners that are really good at putting the pieces together.

They've also built a few things like M3 and Envoy.

not necessarily true. AirBnb created Lottie which drastically changed the way people can do cookie cutter animations in in apps. I'd argue that their business decisions are driven by tech. By improving their tech/apps they enable their business to succeed more than the others. Ubers app is also pretty complex, it's not just a simple queue of riders and drivers

Times were different during PayPal mafia. I don't see how just working at Airbnb or Uber makes one any different than the rest in 2019 to start a successful startup. Bias maybe ?

I started losing the grab of the term 'Tech'

Perfectly encapsulated in this tweet:

18: Go to Harvard or Stanford for CS.

22: Work at FAANG companies.

25: Quit and raise millions for your startup.

26: Sell your company to a FAANG company/IPO

28: Join a VC firm, invest in people like you, and make predictions on Twitter all day.


I think this has become outdated. From my experience FAANGs are largely filled with people who are risk-adverse, which is why it makes sense to me that the next gen of startups will come from alumni of successful unicorns given the risk-seeking attitude you had to have in the first place to join one of those cos earlier on.

I mean how many ex—Amazon founders do you see? Probably not at all in proportion to the number of alumni relative to all VC funded cos.

>I mean how many ex—Amazon founders do you see? Probably not at all in proportion to the number of alumni relative to all VC funded cos.

Is there a reason to single out Amazon specifically? Because I’ve heard of lots of Xoogler founders and exFB founders.

Amazon isn't a unicorn in the sense of people placing extremely high expectations on it and pumping it full of money. Instead they're simply re-investing the money they make. At an impressive rate, but steadily and with not so much risk if they mess up a new venture.

I understand this is off topic but does Netflix ever actually acquire startups?

They are a very different company to Facebook, Apple, Amazon or Google, I feel like they are bundled in mainly to make a cooler acronym.

I don’t get why Microsoft isn’t one of the letters. I get that it needs to be easy to say but still.

Because the acronym comes from stock markets, when FAANG were hot tech stocks. Microsoft already was old and boring at that point, so didn't count.

Isn't Apple about as old as Microsoft? Or is it "Amazon & Airbnb"?

"hot" doesn't necessarily mean new: Amazon also wasn't new on the stock markets, but it was on a clear upwards trend, as was Apple. Apple had iPhones/iPads, entirely new worlds, Microsoft had ... yet another Windows?

Old maybe, but not boring. Their tech stack is still the best there is.

You and I have heard different things but I suppose those who don’t like it are more likely to leave and then tell me horror stories.

I'm sure many would call it crusty.

How about FAMANG?

French media uses GAFAM and their wiki on it is hilarious [0].

[0]: https://fr.m.wikipedia.org/wiki/GAFAM

Or just a less offensive acronym.

How is it offensive?

How about AFGA, then.

Call them AGFA and we can buy film from them.

That was possible only when working at FAANG was very impressive. Hasn’t been true since 2005.

I don't get it. Should highly capable people not pursue a lucrative career path?

I think the tweet is implying that 99% of the "leaders" and "brilliant successes" in our "creative, innovative, disruptive" industry are in fact a coterie of not-very-remarkable, yet very-privileged, 30-somethings whose achievements rest on a combination of luck and having made the most soulless and conformist career decisions available.

People can do whatever they want, but if they're truly "highly capable" maybe they should try something a little more challenging than following the herd?

I hold no ill will against all of these people getting rich this way. Let's just not pretend like they're innovators, though.

I still don't get it. Are the CS programs at Stanford and Harvard not challenging enough? Are Google and Facebook not demanding places to work?

They aren’t compared with your own startup.

When "success" means having your product shut down and getting yourself acquihired, we as an industry need to find a better definition of success.

Ah yes, "innovation" in skirting regulations as AirBnb does. Harming local communities and extracting wealth in the name of "tech disruption".

I agree that Airbnb wasn't particularly innovative and didn't use technology in an interesting way, but they're not "extracting wealth." They're closer to an arbitrage play that takes advantage of, originally, surplus inventory, but now, price differences between hotels and apartments. The house rental market was also underserved before they showed up. It's not like OTAs offered home for rent next to hotels.

Its easy to be cynical. It’s harder to recognize that any significant societal change is going to come with some identifiable downside and that those downsides aren’t automatically a reason to not make the change.

What kind of benefit does society get from Airbnb that's so necessary to disrupt the lives of people living in a city and raising rents on folks that can't afford it?

"AirBnb increasing rents" is theory popularized by hotel industry and never been confirmed with hard data. AirBnb allows anyone to profit from demand for lodging, as opposed to few large hotel chains taking all profit. For many AirBnb hosts it's their livelihood. E.g. do you see benefit in anyone being able to start a restaurant or do you think only large restaurant chains should be able to do it? Also AirBnb increases tourist traffic benefiting other businesses.

Well you stepped right into it.

You need a TON of permits to open a restaurant and you can not open in your house, it has to be in a commercial space.

Furthermore, you are free to open your own hotel. You just need to do it in a commercial zoned area since you are doing commercial things.

Technology has always outrun regulation. It’s not any different in these cases. Regulators will catch up as they always have. This, truly, is how progress has been made since the dawn of time.

You’re taking the same position people took against the printing press, automobiles, and computers when they were all in their infancy.

Restaurants in people’s homes were incredibly common until health regulators showed up.

Regulation was way ahead of airbnb here. Enforcement had to catch up.

Yes I did sort of lump those together. But it's not 100% enforcement either. Lots of place didn't and don't have rules against short term rentals - but we're seeing more and more pop up in response to Abnb

Yeah, I wonder why.

I don’t follow your comment, though it seems pretty sarcastic.

How do you suggest that it works? How do you propose that we regulate innovation before the innovation occurs? Bit difficult, no?

some regulation is useful

I wonder if RCO8786 would eat at a small family owned restaurant with a low health score.

Of course not. I’m in no way arguing against regulation, I have no idea how you concluded that. I’m saying that regulation always trails innovation.

That is such a slippery slope. How do you distinguish between painful societal change that will actually produce long term benefits versus painful societal change that is virtue signaling as good but really is lining the pockets of, ironically, Chinese and Saudi Arabian investors.

A) that’s not what a slippery slope means B) carefully and thoughtfully. Airbnb has also enabled a whole slew of new small business owners. Uber has demonstrably cut down on the number of traffic deaths attributable to drinking and driving. Etc etc. you have to evaluate the whole.

Disrupting and extracting value from NIMBYs would definitely be on my personal “request for startups” list.

TIL world only consists of SF, and not cities like Toronto, NYC, Amsterdam, Berlin, Paris, Brussels, etc....

Somewhere along the way, "NIMBY" lost a key part of its original meaning. A NIMBY used to be someone who said "I want X, but Not In My Back Yard." For example, if someone said "I want to stay in unregulated/unzoned hotels, but I don't want them In My Back Yard," he would be a NIMBY. Someone who didn't want them to exist -- in his backyard or elsewhere -- would not be.

NIMBYs seems to be the new slur for "exerting property and voting rights". That's democracy and capitalism.

There's a reason it's not in their backyard. It's their backyard.

If it was property rights, they'd be voting on what can be built on their own property. Instead, NIMBYs vote on what can be built in the surrounding neighborhood and beyond, as if the purchase of a home also includes a guarantee that everything around it can never change.

It's elitist gatekeeping and deep selfishness masked as "wanting to retain neighborhood character".

It's rational economic self-interest. This is why zoning regulation needs to come from jurisdictions higher than the local government.

Which is why I don't blame the NIMBY homeowners for doing it as much as I blame the current system for being designed to allow nonstop input from local groups. There is such a thing as too much democracy, and this is it.

Zoning should be made on the state or county level, and for every development that's planned to be built, if it follows the zoning, approve it. Enough of this nonsense "yeah it follows zoning but I don't like it".

No its not. I want the same things you do - good city services, shorter commutes, etc. Allowing runaway building without properly developing infrastructure is long term negative for everyone involved.

Most of those you label "NIMBY" are just looking to maintain an existing community and civic service level.

The people you should be directing your ire towards is not your strawman "NIMBY" but the city planners and commercial developers who overzone and overbuild office space and under-zone housing.

Why do you think they're under-zoning housing? Because office space tends to be built away from existing homes and doesn't face as much opposition from NIMBYs.

Housing, on the other hand, is blocked by them because that "gargantuan 4 story apt building" is going to lower their precious home value. I agree that infrastructure needs to keep up with development, but that's not impossible to do.

If NYC, Chicago, Seattle, etc can do it, why does SF seem to have such a hard time doing so? Because SF local government is a shitshow that does nothing but serve the interests of existing homeowners, who somehow want to benefit from the prosperity of growing cities without the construction/density those cities require.

'Exerting property rights' = preventing others from building on their property.

'Exerting voting rights' = zone newcomers, poor people, and apartment dwellers out of existence so they can't vote in our local elections.

Yes, those rights. If you’re a newcomer, buy where the community aligns with your development and density desires. Otherwise, go elsewhere. Don’t expect the community to change for you because you think your ideas are “better”.

This isn’t meant to sound combative, these are just facts.

I’m genuinely curious what you think we should do about getting stuck in local optimums?

Allowing buildings to be 2x the height means, lower home prices in general but also the oldest owners have the worst views/property prices in the neighborhood. So optimizing locally, people should not want more homes built.

Meanwhile, 2x taller buildings mean, 2x the people can sleep at night and work in the morning boosting the economy without the inefficiency of a long commute, traffic, CO2, etc. I.e. long term improvements for a larger set of humans.

In the name of progress/innovation shouldn’t the calculation be based on ROI for humanity/environment/etc and not based on a locally popular vote?

One person’s progress and innovation is another person’s theft or deprivation of value and enjoyment. Provide economic incentives for upzoning, and if the community doesn’t bite (which is their right), move on.

Electrification of mobility and transport makes the environmental argument a moot point.

Disclaimer: I live in suburbia.

> Electrification of mobility and transport makes the environmental argument a moot point.

I disagree. Electric cars are more efficient than IC, but they still use electricity which mostly comes from fossil fuels. Add in all the massively increased infrastructure spending and emissions per capita that are needed for suburbs, and urbanization is a no-brainer from an environmental perspective.

A million EVs are sold every six months, and the time to sell a million EVs is shortening. Hundreds of GWs of renewables come online each year.

Urbanization is like nuclear power, financially and politically untenable. It is not a reasonable path to success.

How is urbanization financially untenable? IIRC, it’s been shown that suburbia generally isn’t paying its way when it comes to infrastructure, which is optimistically built with debt, and then isn’t self-sustaining from property taxes of just those served. Because there’s a lot more infrastructure to maintain per person to have people so spread out, and the values aren’t correspondingly higher.

Urban infrastructure costs are lower (less roads, small land area to cover with police, fire, etc), but the real estate costs quickly balloon (dense real estate in desirable locations is more expensive). Do I care if my single family home is $1k-2k/year more in tax costs than urban areas if my house is $100k-300k cheaper than a condo in the city (these numbers are pulled directly from the Chicago housing market)? I do not. I would even pay much more to not live in the city (my taxes could double, and I would still come out ahead living in the 'burbs over my lifetime), but that's an argument for another thread about the continuing willingness of the debt markets to provide cheap capital for municipalities who need to pay for sprawl. Misallocated capital is the bane of many a social ill.

Are you able to convince large populations of people they should pay much higher real estate costs for lower local taxes when they're still going to pay more (total monthly housing or lump sum payment) than in the suburbs? I do not believe that argument will fly.

Right, I think the real bill would be far more than double, but I haven't looked into this topic in depth, so I can't really say. While the party lasts, and the suburbs are heavily subsidized by cities/debt markets, sure, you'd have a hard time convincing the people being subsidized to change their ways. If that party ends, I think economic reality will do all the convincing. But markets and policy can stay irrational for a very long time, so who knows.

Condo prices are ludicrously detached from the fundamental efficiency because the supply of urban housing types is so severely restricted, on the basis of all the arguments you’ve just given.

If houses were banned on all but a few blocks, they’d be expensive too.

Urbanization is the arc of human civlization for thousands of years. The automobile era is a weird little blip.

I’m afraid this reasoning totally falls flat for the SF bay area and other tech hubs. It can’t simultaneously both be the case that Google, Facebook, Uber, Apple and Microsoft are permitted to have outsized global influence and massive impact on communities everywhere AND Sf bay/seattle/wherever else gets to tell every other community to mind their own business because local communities should control their own culture.

Those companies themselves create the conditions that force tech workers everywhere to look for jobs in a few select cities.

That is the height of hypocrisy. The moment Google and Facebook stake out massive cultural monopolies is the moment the community they reside in has to give up a little bit for the well being of the larger national and global community.

I agree that tech companies are the problem, and the only solution is regulation to force them to decouple geography from their jobs. Those jobs could be done remotely or relocated to other communities, yet they dump the externalities on local communities. And this is the result.

What is “the community”? There are plenty of people with interest in / demand for urbanism, just not in a spatial distribution that confers zoning power. For now. Greater awareness might create that interest (most people are surprised to learn that the strip malls they loathe are exactly as required by law). Or zoning power might be limited from a higher level of government where spatial fragmentation is less important. But a big set of people interested in urban living does exist. Why do you think it’s so expensive?

These people are a) a market opportunity, and b) a set that might grow dramatically given the right technology catalyst. I personally think e-bikes will play a large role in getting people out of the cars-competing-for-space mindset at the root of so much NIMBYism, while preserving much of the convenience of personal transport over buses.

Allying with a few neighbors to defect against the rest of the world doesn't confer some kind of automatic "democratic and therefore good" quality on the behavior.

TIL a community that votes on their own zoning laws is NIMBY just because you think you have the right to rent a cheap hotel room there.

Yes. In voting, it is often the case that one choice is moral, the other is immoral.

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