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I don't understand all the moralizing going on in this thread.

VC is about funding the companies that could make a lot of money. When did we start expecting them to be the morality police?

Sure, if YC wants to build up a reputation for funding "honorable" startups, then they can choose to do so (and will choose to do so to the extent that they think it makes business sense). The comments here that say "This might be bad for YC's image and hurt YC long term" are all well and good. But lots of them amount to "this is bad and you should feel bad", and these just seem disconnected from the reality of market economics.

If YC doesn't fund some scuzzy but profitable company, someone else will. You can't solve job-outsourcing by asking companies not to outsource jobs, because the companies that play along will just get their asses kicked by those who don't. If you want to solve this problem, you have to do it at some other level (usually the laws and taxes level).

It's unreasonable to demand that YC pass on profitable businesses just because we don't like what those businesses are doing. I agree that IM doesn't seem to be making the world a better place, but that's not a problem that gets fixed by asking everyone to cooperate in starving them out.

Perhaps there's a line at which it's worthwhile to call out people for following the incentives that the market has given them, but I think this line is probably a lot closer to the "murder" end of the spectrum than the "installer checkboxes" end.

(Expecting downvotes, think I'm okay with that.)

I've never understood this line of reasoning.

It is entirely within YC's right to fund businesses that a portion of the Internet find scummy.

Shockingly, it's entirely within the rights of that portion of the Internet community to then whinge about them funding said scummy businesses.

And it's YCs right to care, or not, about that opinion.

Someone once wrote a blog post that had a paragraph on cheating (on your spouse etc) and what constitutes cheating. He said that it doesn't matter whether you think what you did was cheating, only whether your spouse thought you were cheating. Your worthiness is entirely in the eyes of the other person, not yours. The other person is who you're 'selling' yourself to.

And so it is with companies. If McDonald's customers suddenly care about healthy food, McDonald's has to too.

The question is, is the portion of the Internet community that thinks these people are scummy YC's spouse? Should YC bend to their version of reality?

That's for YC to decide.

There are a bunch of people who believed that YC was somehow different from/better than tactics and behaviors exemplified by firms like Bain Capital. Some of those people are starting to wake up.

There are shitty things in the world. Some of those shitty things are profitable. Many many profitable things are not shitty. It is entirely up to the individual whether they want to be a part of the shitty things, particularly when the individual has the privilege of being in demand. If you're a software developer who decides to work on scammy tools to make money, that's fine, but don't expect me to not factor that information into how I decide what kind of person you are.

Further, YC is supposed to be innovation, and disrupting entrenched markets. Profitable innovation and profitable disruption, yes, but as I said, there's more than one way to make money, and the way YC claims to want to make money is in those ways. Bundling crapware with Windows installers is not a disruptive or innovative way of making money. It would be classified as a shitty, scummy way of making money that has been happening for years. Many of us here that admire YC admire them because we think that innovation and disruption ultimately are beneficial. So when YC, instead of funding innovation and disruption, funds scumminess and shittiness that's been happening for years, we are disappointed in them.

If IM would be solving a problem, I would agree. Unfortunately it is crapware. Crap. Ware. It is not solving a problem. It is making the world a worse place. Maybe they should start Investing into viruses?! where does this end? It's something I wouldn't expect of pg and yc. It's simply immoral and shit behaviour. Divest or be disgraced!

Classic straw man argument. Viruses are illegal in almost every case and thus clearly they should not, and will not, invest in viruses. Not that I support IM, but they are solving a clear and distinct problem: software is hard to monetize.

I'm not sure why you characterise this as a straw man argument. GP post suggests that investing in viruses is unethical on a similar scale to investing in deceptive crapware installers.

You drew a separate distinction between those scenarios (whether or not there is a legal difference between deceptively installing crapware and promulgating viruses). I would suggest that you are re-stating and seriously misrepresenting GP's argument, rather than pointing out any genuine fault with that argument.

On a related note, in my view tying your ethical standards to whether or not a given activity is currently illegal is both lazy and far from optimal.

The virus statement was a rethorical question.. Unfortunately it is not a real problem that users face. It's a problem that a very small minority has and that inconveniences the majority. If that's what you set out to do in life..

I guess most of us here got used to YC's reputation and don't want to see it loosing it.

> If YC doesn't fund some scuzzy but profitable company, someone else will.

This is never a valid argument for explaining your behavior. There's a good chance that someone else will do it anyway, so now there are two bad actors instead of one.

Yep, if there are less VCs and incubators willing to fund these companies then these companies will find it harder to get favourable terms, therefor there is less incentive to start these sorts of business.

The problem with your logic is that if these ethically grey business models are profitable, you have to agree that the less morally demanding VC will indeed fund them (after all, profit is profit). Eventually, YC might still have their high ethical standards, but its the unscrupulous VC that makes the most dough. And the market selects for those who makes the most dough, not those who has the highest moral standing.

Well, YC does not control the entire market but they are certainly prominent in it and seem to have no lack of interest from investors and entrepreneurs.

I think what YC does probably does send stronger signals to the market through the startups they invest in than it does through pure dollars and cents.

> VC is about funding the companies that could make a lot of money. When did we start expecting them to be the morality police?

Maybe they should start investing in private prisons and arms dealers. I hear they make loads of money.

To come down from that loaded statement, a good investment is different from a profitable one. Or at least, I'd like our culture to believe that.

Nobody necessarily expects YC to be a charity, on the other hand they have made significant PR and marketing capital on the basis of being basically a force for good in the world.

For example PGs own writings: http://www.paulgraham.com/good.html

It's not an issue of installer checkboxes - it's an issue of abuse of trust. Would you feel the same way about the no-doc home-loans that were handed out just so that some brokers could make some money? They were simply some checkboxes too that nobody cared to read through - and look where it led us.

YC already is associated, by their own will, with companies that innovate, work on crazy new ideas, build the future, disrupt markets, solve problems. Not sleazy marketing schemes.

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