"Kreuz, who typically enjoyed drinking 17 beers a day, was a little groggy, and on hearing this, grabbed his suitcase, got off the plane, went through customs, jumped in a cab and asked the driver to take him to the city."
My takeaway from the article was don't drink 17 beers a day
I just want to say thank you for putting this together as a free resource. Clearly a lot of effort went into this (and you all are making it better over time)
This is interesting but he kind of jumps all over the place; it strikes me more as a brain dump of ideas and hypotheses.
There are a few areas where he’s playing pretty fast and loose with the facts, too. For example: NYC has way more homeless people than SF, but they aren’t as visible because under city law, the city is required to provide shelter to all of them. It has nothing to do with the weather, and in that sense NYC is way nicer to its homeless than SF.
There are two major levers to recover from a down turn - monetary policy and fiscal policy. In the last downturn, 2008, both were heavily pulled - most people forget this but monetary policy was (rightly in hindsight) a near instant drop and fiscal policy was all the hundred billion programs like TARP.
Raising rates in good times means more of a lever to pull in bad times. Letting the credit bubble continue to inflate, while keeping rates arbitrarily low to let a bull market run for benefiting the wealthiest, makes little sense historically.
I'm sticking around for the next hour and happy to answer questions related to the investment/decision making process for a venture capitalist (or from the perspective of an angel investor or founder CEO, which I've also been)
The way I visualize it is thinking in terms of levers. And there are only two major levers - monetary policy and fiscal policy. Monetary policy is historically the more effective of the two at stimulating the economy. The problem is we have pulled the monetary policy almost all the way down. The only way to pull it further is negative interest rates, which is terrifying in its implications. On the fiscal policy side, pulling that lever costs in the hundreds of billions each time (e.g. TARP was ~$450 billion) and is less effective.
Money quote: "I've seen how powerful it is for a city to have those people. Five years ago they shifted the center of gravity of Silicon Valley from the peninsula to San Francisco. Google and Facebook are on the peninsula, but the next generation of big winners are all in SF. The reason the center of gravity shifted was the talent war, for programmers especially. Most 25 to 29 year olds want to live in the city, not down in the boring suburbs. So whether they like it or not, founders know they have to be in the city. I know multiple founders who would have preferred to live down in the Valley proper, but who made themselves move to SF because they knew otherwise they'd lose the talent war."
They do. Worth noting that A8C acquired our company LearnBoost/Cloudup in 2013, where we had built/supported Socket.IO and many other Node.js libraries for the prior +3 years
Yep. LearnBoost was incorporated from my dorm room on Jan 4, 2010 - but I had been working on it on my own for months before the incorporation. Then I raised most of our seed round, merged with Guillermo and Thianh... from which we built LB, a huge open source presence in Node.js, tried everything possible to grow on the edtech side, and then launched Cloudup in June 2013
Revenue can be deadly friction in many early stage startups.
If you are in a market with network effects, you need to acquire users FAST. What would grow faster: Facebook monetizing each user from day 1 at $1 a user or Facebook growing fast, kicking in network effects, and delaying monetization. What would ultimately have more value?
So this isn't saying "don't make money", it's about examining the market you are in and making a strategic, thoughtful choice.
I'll write a post about this next week. Basically - we dream with founders.
From our perspective, there are always 30 reasons to say no. But if there is a truly compelling reason to say yes, on a path to a large company, we're in.
Sadly, this is the kind of stuff that people will talk about. But it's factually incorrect in many places.
As for "VC's playing defense" and being afraid to back consumer startups, that's a broad mischaracterization. George and I backed two Series A companies this month and we're looking for more - heck, our whole team has plenty of capital. For backing great companies, no great firms are sitting back - it's competitive in consumer and in enterprise. If anything, VC's are playing offense.