The terrifying rise of the political entrepreneur

The cognitive dissonance in Silicon Valley is amusing. You think VC-istan was ever not political? Where do you think VC's come from? They don't grow on trees. They grow in McKinsey and Morgan Stanley, where they learn to deftly navigate corporate politics at the highest levels. Thats not the only thing they learn, of course, but it is a fundamental pillar of the training. Silicon Valley is owned by Wall Street (what do you think it means for VC's to "raise funds?") and favors those who can play that game.<p>Not that I think this is a bad thing mind you. It just is. It's like dating-it's futile to complain about the rules. They're just the rules. You're trying to convert capital into a successful business, so you gotta play by the rules of the people who have the capital. Which is true for pretty much everyone. Being in Silicon Valley doesn't insulate you from the reality that exists everywhere else.

The sweeping generalizations and alleged industry-crossing trends in this article undermine a very basic truth: that a small minority of people are successful by kissing ass rather than kicking it.<p>The author has set up an imaginary "nobility" (including himself, presumably) of people who's intentions are—by his definition—"pure". You're either an entrepreneur or a "corporate stooge". There is no middle ground. There is no one in a Fortune 500 company who is responsible for delivering results, apparently. (Unless we're defining "entrepreneurs" as "anyone who is not a corporate stooge," which seems like a stretch.)<p>Moreover, there's apparently no one who can both play the "political game" and deliver results. As if the mere presence of the former taints the well, so to speak.<p>I think the fact of the matter is the politics—relationships, perception, track record—do matter and should matter. If you think you can build a good product and people will beat a path to your door, you're horribly naive. As a VC faced with two equal products, would you rather back someone who's already built a product and had an exit, or someone who's doing this for the first time? The former is certainly lower risk...

This would be accurate if time were going backwards. The world it describes is how things were in the 90s.<p>For the last two decades, at least, the power of hackers/makers relative to MBAs/smooth talkers has consistently increased, and that trend shows no sign of slowing down.

I really don't like this article. I'm not saying that the author is right or wrong, but what is the author trying to accomplish? They aren't helping change the ecosystem or bring new conversations to the table.<p>I feel like this feeds to pettiness and bitterness toward fellow entrepreneurs that you don't feel "deserve" it. Who cares what they raised? Who cares who they sold to?<p>If you're doing what matters to you, it shouldn't matter.

I don't get it.<p>Convincing people to give you large sums of money has <i>always</i> been based on gaining their confidence. And people being what they are, that confidence has always been based more on how you present yourself than on any objective logical measures.

As Cory Doctorow aptly stated: every good eco system has parasites. I'm sure these types exist, but they are an inevitable side effect of the properties that make the eco system successful.

<i>Now, I’ve decided to refrain from naming names, since any specific mentions would almost certainly induce a wave of denials and distract from identifying and, hopefully, ending the underlying trend.</i><p>You've identified a "terrifying" trend, but you don't want share any names or substantiation because it would distract from the important discussion you think we need to have. That's really shoddy journalism.

Even if there do exist 'political' entrepreneurs, they don't come at the expense of normal ones. Get users, make sales, and you will succeed.

Well ... I think it is much simpler than that - startups are in a buyer's market. We have oversupply of startups concentrated in few relatively narrow classes of problems. So the most connected people win.<p>Which is paradoxical because the uncharted areas today are bigger than ever - but there are not much ships sailing there. Maybe the "solve problems that you have" mantra is becoming too influential. So we have two tracks - one of people with common problems and the tech skills to solve them and the other - much bigger - people that have real problems but lack the skills to solve the problems.<p>But we got success stories like Raspberry Pi - when people tried to solve a problem they didn't have but created something awesome in the process.<p>And just today Google bought a flying wind turbine startup - and it does not look like aqui-hire.

I've gotten hung up on this before, but after two years away from the Valley, I realized a lot of this stuff is small potatoes.<p>We've all seen companies that have been involved in multi-million dollar transactions on pure hot air and politics alone. These can seem discouraging to people who want to build actual businesses, and deals like Tumblr and Instagram are in another league entirely.<p>But, for most of them, you really have to look at the actual magnitude of these things (on a financial level) before you decide to be indignant about them.<p>As a thought experiment, if you take the amounts of money involved in typical fundings and even a lot of exits, and compare it to amounts of money involved in things <i>outside</i> the startup ecosystem, it can be thought-provoking, even if you're comparing apples to oranges.<p>For instance:<p>- The project budgets of large consultancies. (e.g. I worked on a routine project at a consultancy once where the budget was $12M.)<p>- Smaller government agencies and civil engineering works (e.g. new Central Subway on 4th St is around $900M [how much politics do you think is involved in <i>that</i>?])<p>- Real estate listings<p>- The amounts invested in even smaller hedge funds/mutual funds. (I think Zed Shaw had a piece on this)<p>- The profits of bigger SV companies that actually are profitable (Google, Apple, etc). Or, the budget of some given department in such a company.<p>- Real acquisitions outside of tech (see the WSJ on an average day for figures that can make your head spin).<p>I know these things are obvious, but it really needs to be stated sometimes. It's hard to rationalize big numbers unless you really think about it. And you can get tunnel vision living in the Valley.<p>$5M here and there is chump change in the grand scheme of things in the world that venture capitalists and large enterprises inhabit. There is bound to be a certain amount of noise you see observing these transactions, and definitely politics. Fun to watch and comment about, but not <i>really</i> important.<p>While these aren't grave injustices, I guess I would concede that when taken wrong, it does have some chilling effects for people like the OP and myself. The current business climate does create some awkward and unnecessary dilemmas for people in the uncanny valley between being an entrepreneur and an employee. There are plenty of smart people who, in a perfect world, might go for starting a fairly medium-risk/medium-return sort of business. But with all the "smart money" on crazy startups impacting everyone's salaries, the rents, and the news cycles, it changes things. If you do go ahead with it, you might be tempted optimize your business at least partially for a potential acquisition and spend more on generating hype than on the fundamentals. Or you might get such a compelling offer from one crazy, poorly-proven but well-funded and well-connected startup that you forgo your perfectly viable plan entirely.<p>So, the odd politically-motivated acquisition or funding shouldn't make you feel bad, but the cumulative effects can be suffocating for sure!

It's both surprising and alarming to me how many VCs cite "emotion" (rather than logic) as a main if not primary factor in their decision to fund a startup or not. I'd venture (no pun intended) to say that this is the root cause of much of the "politics" and cronyism described by the OP, and I don't think YC is immune to this either.<p>Sure, we can talk all day about "human nature" and how "those are the rules of the game", but there's gotta be a better way for investors to make funding decisions than "trusting your gut" or "I have a good feeling about this team."<p>Yes, VC has changed and evolved over the years thanks in part to new institutions like YC, but the overall VC landscape still reminds me way too much of that scene from the based-on-the-book film "Moneyball" where a bunch of old baseball scouts are sitting around a table discussing who to recruit for next season, and they keep recommending players based on fluff and BS like how good a guy looks swinging the bat (vs. actual hitting stats), how confident he looks, how good he he looks with his shirt off, etc.<p>This all leads me to believe that, while things are getting better, there's still a long ways to go before Silicon Valley and michaelochurch's so-called "VC-istan" can be considered anything close to a true meritocracy.

If anyone read the Fountainhead you can call those groups Keating's and Toohey's

Everything is political, because everyone else is political, except for me - I'm not political.<p>The winners of the political game are the same individuals who reinforce the political game, and the people who complain about the politics are inevitably the ones who can't muster the energy for fake affection, enthusiasm, flattery, obsequiousness and therefore lose the political game.<p>As soon as something has become a culture in itself it is already too late - it is and will forever be political, til the very beginning of the next big culture shift, which will also inevitably become political.<p>It's self-selecting, and it's been going on since the beginning of history.<p>The only answer is to not give a shit. To not complain about politics, or if you happen to be a winner of politics, to be self aware enough not to then turn around and reinforce the game that you just won at.

The OP is presenting this as if the objective of every startup is to get fundings or to get acquired. It's not.<p>The objective should be to help a big number of users with something and make profit.<p>Funding should be just a tool to help you achieve that if you can't bootstrap your business. If there are VCs who fall for tricky presentations, they'll soon realize that it is not that fun to lose money investing in startups with no future.

The rise? Has anyone not paid attention to history? Entrepreneurs have always directly influenced policy.

If there are two camps, these would rather be 'those who want to build a business' (sending invoices, paying customers, etc) and 'those who want to make a big flip' (with major financial rewards)<p>Since VCs (and indirectly LPs) are in the business of growing money, they will follow the money.

Its not as scary as it first appears as VCs have a huge incentive to correct this while in the corporate world, the incentive to correct it is quite less.

I feel like the douche-pocalypse described by OP has already happened. It's not a future threat. It's how most people have to live. The Apple founders would be unable to get funding these days. They wouldn't even get a meeting.<p>VCs have set themselves up as executives (maybe more like record industry shot-callers than steel-company management) of the first postmodern corporation. If you don't take their terms, they can't exactly fire you, so they fund your competition. Tech press is a weird sort of HR organization, and so-called "startup CEOs" are merely product managers within this weird meta-corporation that is just as badly stacked against software talent as a 1970s steel company.<p>It's having pernicious effects on the software industry, which is now a hotbed of mediocrity utterly opposed to what it used to be.<p>I think what killed software entrepreneurialism for good was the rise in housing prices, coupled with the student debt epidemic and the cost of health insurance. Unless independently wealthy, no one can actually afford to "bootstrap" in these locations, so true entrepreneurial activity has been replaced by VC-istan careerism.<p>I don't know where the future is, but it's not in Silicon Valley now-- no place where middle-class houses cost $1.2 million is anywhere near the future-- and it's not in New York, and it may not be in the U.S. at all.<p>On a side note, I wish people would stop calling the VC ecosystem in the Bay Area, "Silicon Valley". That's why I use VC-istan. They're different things. Silicon Valley has a 70-year history and it hasn't always been VC-istan. VC-istan is just how it died.