Adam Neumann is obviously a great huckster and con man. The real question is whether the VCs are conned or just betting that they can ride this con to profit before it falls apart. I genuinely think it could be either and maybe some of both.
Recently, Mark Andreesen did a long podcast with Sam Harris, and friend of mine texted me the perf…
Adam Neumann is obviously a great huckster and con man. The real question is whether the VCs are conned or just betting that they can ride this con to profit before it falls apart. I genuinely think it could be either and maybe some of both.
Recently, Mark Andreesen did a long podcast with Sam Harris, and friend of mine texted me the perfect summary: "It's amazing that somebody can sound so smart about a few things and sound utterly ridiculous about everything else. You have to be really rich before people let you get away with that."
What, there is a QUESTION whether the VC's are themselves conned or just betting they can skip out before the marks get wise? Please! Laughing myself into a hernia.
VC funds are typically investing other people's money, maybe some of their own. They may even be investing your pension money!
To thrive over time, they have to develop a track record. They have to hit more than 1/1000, but they don't hit on the majority. A Google, Amazon, or the like can make up for a lot of WeWorks. The thing is that they can talk themselves into a lot of silly investments once their own surplus of self confidence convinces them of their special insight.
They kiss a lot of frogs, often arrogantly and foolishly, but they need to be right sometimes. Moreover, a leading VC firm often has a network that helps bring in good management, talent, positive press, and other investors that can snowball into success if there is something good at the heart of an investment.
And to be fair, it's not always easy to tell what is a foolish investment. Things that look silly at first often pay off (which confuses the issue once investors later encounter things that are just silly and stay silly). Amazon was "just" an online book store -- how the heck are you going to make money shipping books to people's houses? Google was "just" another search engine in a crowded market with well established competitors. eBay - hah! - an online flea market.
On the latter point, eBay, during the first dot com boom, I met a woman who had worked at one of the big consulting firms, where she was part of a team hired to evaluate eBay as a potential investment at the very start. They thought the concept was ridiculous. They returned a discouraging report, but meanwhile, eBay offered her a job. She dismissed it out of hand, as she was sure it would be a career disaster.
A few years later, she regretted her choice not to be one the first eBay employees for obvious reasons, so she quit the consulting firm to join an online gardening startup. The opportunity was obvious, right? Tens of millions of Americans do yard work. Yeah, she should have jumped at the silly opportunity and skipped the seemingly sensible one.
Could just be the playing of the odds. 1/1000 suckers strikes it rich. That's a lot of rich suckers in this world waiting to get fleeced. Between them, the inheritors, and those that fall into money without being suckers but also without being terribly wise...
This is exactly right. One-trick-ponies lead VCs into the hot hand fallacy.
"I’m speaking with myself, number one, because I have a very good brain and I’ve said a lot of things... I know what I’m doing and I listen to a lot of people, I talk to a lot of people and at the appropriate time I’ll tell you who the people are. But I speak to a lot of people. My primary consultant is myself, and I have, you know, I have a good instinct for this stuff." - Donald Trump
Adam Neumann is obviously a great huckster and con man. The real question is whether the VCs are conned or just betting that they can ride this con to profit before it falls apart. I genuinely think it could be either and maybe some of both.
Recently, Mark Andreesen did a long podcast with Sam Harris, and friend of mine texted me the perfect summary: "It's amazing that somebody can sound so smart about a few things and sound utterly ridiculous about everything else. You have to be really rich before people let you get away with that."
What, there is a QUESTION whether the VC's are themselves conned or just betting they can skip out before the marks get wise? Please! Laughing myself into a hernia.
It's fun to be cynical, but in real life, yeah, VCs can be very credulous.
It's hard to overstate how naive some of these masters of the universe actually are.
VC funds are typically investing other people's money, maybe some of their own. They may even be investing your pension money!
To thrive over time, they have to develop a track record. They have to hit more than 1/1000, but they don't hit on the majority. A Google, Amazon, or the like can make up for a lot of WeWorks. The thing is that they can talk themselves into a lot of silly investments once their own surplus of self confidence convinces them of their special insight.
They kiss a lot of frogs, often arrogantly and foolishly, but they need to be right sometimes. Moreover, a leading VC firm often has a network that helps bring in good management, talent, positive press, and other investors that can snowball into success if there is something good at the heart of an investment.
And to be fair, it's not always easy to tell what is a foolish investment. Things that look silly at first often pay off (which confuses the issue once investors later encounter things that are just silly and stay silly). Amazon was "just" an online book store -- how the heck are you going to make money shipping books to people's houses? Google was "just" another search engine in a crowded market with well established competitors. eBay - hah! - an online flea market.
On the latter point, eBay, during the first dot com boom, I met a woman who had worked at one of the big consulting firms, where she was part of a team hired to evaluate eBay as a potential investment at the very start. They thought the concept was ridiculous. They returned a discouraging report, but meanwhile, eBay offered her a job. She dismissed it out of hand, as she was sure it would be a career disaster.
A few years later, she regretted her choice not to be one the first eBay employees for obvious reasons, so she quit the consulting firm to join an online gardening startup. The opportunity was obvious, right? Tens of millions of Americans do yard work. Yeah, she should have jumped at the silly opportunity and skipped the seemingly sensible one.
Could just be the playing of the odds. 1/1000 suckers strikes it rich. That's a lot of rich suckers in this world waiting to get fleeced. Between them, the inheritors, and those that fall into money without being suckers but also without being terribly wise...
Marc is an idiot savant. He does one - ONE - thing well.
And like other situational geniuses, thinks that his specific genius universalizes to all of his endeavors.
This is exactly right. One-trick-ponies lead VCs into the hot hand fallacy.
"I’m speaking with myself, number one, because I have a very good brain and I’ve said a lot of things... I know what I’m doing and I listen to a lot of people, I talk to a lot of people and at the appropriate time I’ll tell you who the people are. But I speak to a lot of people. My primary consultant is myself, and I have, you know, I have a good instinct for this stuff." - Donald Trump
Trouble is he's convinced others to give money to his "genius".
Yep. Getting rich while the suckers lose their shirts is admired, in spite of any protestations to the contrary. Otherwise laughingly called BDE.