Steve Blank: 'VCs Won't Admit They're in a Ponzi Scheme'
Yeah, probably the worst thing about the valley culture is that organic growth has lost it's charm. There was value in bootstrapping, making revenue, then profits and then seeking funding as a way of increasing profits by growing.My understanding is that silicon valley VC culture started out because people were building hardware and this required some investment to get started. Software is totally different and with AWS and the like, building software is so cheap. But no, now it's basically: take money, give out stuff for free and take more money showing the free customers and get even more free questions and take even more money and so on. In the end, nobody knows the true value of the company - the founders, the VCs or the customers. True money is made by either ads, selling customer data or lock-in by making migrations to another service very expensive.What irks me is that this scheme overly favours VCs and to some part the founders. The thing is the stream of founders who are willing to do this is never ending (same thing about privacy. the number of people willing to give up their privacy consciously is never ending). Even YC thinks of the whole thing as a game (if you followed the snapchat thing). I am cynical but this is really about rich people having fun and everyone else (customers, employees) is getting suckered. None of these companies are being built to last.