It's not the first time I get an almost left-libertarian vibe from Paul Graham's writing.
As before, I feel he almost nails it, but not quite. I do think that a world of small companies populated by intrinsically motivated people who are mostly equals would be much better than what we currently have.
However, we have to acknowledge that the way the economic game is set up, this kind of endeavour is disincentivized. Neo-liberal capitalism favours concentration of power, mega-corporations with kill-zones around them and with huge lobbying power. Outside finding highly specialised niches, I think tech companies can find it hard to stay both successful and small.
The VC funding model also seems to go against this idea. As far as I understand it (I don't work in SV, so my understanding is all second-hand), the approach is to fund lots of companies hoping that a few will make it big and accepting that most would fail. This is in complete contradiction with the idea of small, non-hierarchical enterprises.
> The VC funding model also seems to go against this idea. As far as I understand it (I don't work in SV, so my understanding is all second-hand), the approach is to fund lots of companies hoping that a few will make it big and accepting that most would fail. This is in complete contradiction with the idea of small, non-hierarchical enterprises.
The VC funding model uses the expectation that a few will make it big and the others will fail or be let go.
However, they do spread out funding among many initially smaller companies, and to some extent grant a lot of autonomy to each company to decide for itself what to do with the money, including spend it poorly.
Because VCs already expect many to fail, they are not panicked about it. I think that's relatively non-hierarchical, compared with the alternative where a big investor takes over a company and dictates how to run it.
So it's not clear to me whether VCs are a cause of hierarchy overall when considering all companies in the world, or if they are merely incentivising growth in some, while providing more flexibility to others to do their own thing than if modern VC did not exist.
As before, I feel he almost nails it, but not quite. I do think that a world of small companies populated by intrinsically motivated people who are mostly equals would be much better than what we currently have.
However, we have to acknowledge that the way the economic game is set up, this kind of endeavour is disincentivized. Neo-liberal capitalism favours concentration of power, mega-corporations with kill-zones around them and with huge lobbying power. Outside finding highly specialised niches, I think tech companies can find it hard to stay both successful and small.
The VC funding model also seems to go against this idea. As far as I understand it (I don't work in SV, so my understanding is all second-hand), the approach is to fund lots of companies hoping that a few will make it big and accepting that most would fail. This is in complete contradiction with the idea of small, non-hierarchical enterprises.