- Firstly, exploration of space is always fascinating and who knows what we will learn from this (It's quite scary the number of people arguing this is a a waste of money!)
- Secondly, it's another episode in the application of the advances in modern Robotics - and for a good, not a dystopian, outcome. The potential of robotics is well showcased here - the downside (surveillance by Philae's brethren) is more worrying, but can be put aside for now.
Two weeks ago, I heard about a new company called Yondr that was making lightweight smartphone socks-with-locks that prevent the smartphone's user from accessing the device during a concert, movie, or party.
Preventing fans from accessing their phones during a show might seem like an extraordinary step, especially in tech-centric San Francisco. But even the most compulsive texters among us can say that they've seen That Person: the guy in front of you at the concert who holds up his iPhone to record eight minutes of video, forcing you to watch your favourite band through his tiny screen, or the girl whose phone lights up with texts while you're in the theatre trying to watch an important scene.
UnPocket™ is a secure pouch made from layers of stealth fabric that allows you to drop off the surveillance grid at will. UnPocket™ puts you back in control and makes you both untrackable and unhackable.
Here’s the problem. Every venture capitalist, in every interview they’ve ever done will tell you the same casual lie: That they invest in people first and ideas second. They’ll tell you they invest only in people they’d want to work with. They’ll tell you that they have the luxury to say no to companies that don’t do things in line with the way they like to work, the way they like to treat people.
You don’t have to look too far into this year’s frenzied pace of dealmaking, and at the price tags of those deals to know that’s complete bullshit. In all too many cases, what venture capitalists are investing in is assholes.
It’s weighing on those who’ve been in the business for decades, and I’ve been having conversations about it all summer. A senior partner at a top firm recounted a partner meeting at breakfast recently.
“Why are we backing this guy?” he said to a younger rainmaker at the firm. “He’s an asshole.”
His partner replied: “Hey, you gotta get over it. It’s no longer about whether someone is an asshole it’s about can he make money.”
That conversation happened a year ago. Said this multi-decade veteran of the business: “It didn’t use to be that way.”
At some point this business became about funding a founder, not a company. This has coincided with three other theories of venture capital portfolio management that have become prevalent of late. The first is an obsession with a VC’s “social game”—to steal the parlance of reality TV. Since 75% of venturebacked startups are destined to fail, VCs today assume they’ll do less damage overall by writing off a bad performer than doing the hard work to fix it. Even if they oust an ineffective founder, a company may be too damaged to salvage, meantime, the VC has ruined his rep of being “entrepreneur friendly” for nothing.
The second theory is the new valuation math: Given basic liquidation preferences and soft landings at bigger Valley companies, the risk to losing all your money is somewhat protected. Likewise, companies like Facebook and Google have thrown traditional valuation math out the window too, caring only if someone might disrupt them in another ten years.
So the only thing anyone cares about is the upside. VCs—in this point in the cycle—are smart to worry less about erring on the side of paying up too much for a deal than erring on balking at a seemingly high valuation. Especially when the next day Mark Zuckerberg could rewrite every rule by paying $2 billion for a hardware company that doesn’t even have a product on the market. As Bill Gurley of Benchmark says, “You can only lose your money once” if you invest. If you don’t, you can effectively lose that would-be appreciation many times over.
Is it the mantra of a bubble? Maybe.
The third change that rules venture decision making is an acceptance that no one has any clue of what works.
The determiners of success in the Valley are no longer CIOs deciding on huge iron boxes that cost millions a pop. It’s not even whether geeky early adopters will like Twitter or FriendFeed more. It’s what teens around the world want to do on their phones. A hot mobile app has more in common with a movie premiere than a classic Silicon Valley tech company. And increasingly, VCs know they have no clue what’s a good idea and what’s a bad idea. Better to back all the apps showing “hockey stick growth” on college campuses.
The other sad reality is the continual erosion of what Silicon Valley—as a place—stands for, if anything. This used to be a place of misfits and changing the world. Even the legendary assholes had a cause beyond themselves and checks and balances on their board. It just may take another economic collapse to get back to that.