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The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company i

The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company in tech lies in a wholly changed business environment by which super-talented founders with a business sense can draw on a depth of knowledge/expertise (typically gained from work experience in a demanding tech environment) to conceive of a solid business model to profitably disrupt existing enterprises and thereafter apply grit, good sense, unbelievable perseverance, and basic street smarts to execute on that model via a startup world that affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop. One might sum this up by saying "Silicon Valley" but it really is most anywhere in the modern world where any modicum of freedom prevails, though Silicon Valley still offers unique advantages in my view. The odds of failing are still stunningly high and those who make it to success are often bloodied by the process but the door is open today in a way it never has been before. Another way of saying this is that, in the founder/investor partnering that is typically necessary to succeed, no arrangement was even possible for all but a rare few in mom/dad's ancient days, a reasonable arrangement that skewed heavily toward investors was possible just 20 years ago, and an even more reasonable one with founders and investors in near parity (when the founders are strong) is readily achievable today. I actually don't believe that the story told in this blog post conveys a typical situation but what I have just said does so based on my having worked in depth in this world since the mid-1980s.

abtinf 8y ago
> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company in tech lies in a wholly changed business environment by which super-talented founders with a business sense can draw on a depth of knowledge/expertise (typically gained from work experience in a demanding tech environment) to conceive of a solid business model to profitably disrupt existing enterprises and thereafter apply grit, good sense, unbelievable perseverance, and basic street smarts to execute on that model via a startup world that affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop. The length and structure of this sentence obfuscates its meaning.
- ojbyrne 8y ago
  I assumed it was satire.
- newnewpdro 8y ago
  That's putting it nicely.
- bspn 8y ago
  It would also crush all-comers in a game of buzzword bingo!
- vonseel 8y ago
  After several minutes I was able to read it in full... and lots of reading and back-tracing. He says our business model is "wholly-changed" and now founders need to be super-talented and a long list of other things in order to succeed in the modern world. I would argue that founders have always needed incredible smarts and a good product/market fit to succeed. I don't think anyone would claim that the "titans" of industry (think Rockefeller, John Jacob Astor) didn't have street smarts, grit, and perseverance. > affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop For sure, there's more resources (cheaply) available than ever before. IMO, this should all add up to make it easier to start a business and succeed. Maybe that's what he wanted to say.
clarkevans 8y ago
This is the winner-take-all economic system that we have constructed for ourselves. It's not a law of nature.
- dilyevsky 8y ago
  Actually it kinda is (power law and all). Whether or not we should choose to adhere to it is another question.
- barry-cotter 8y ago
  Winner take all systems occur anywhere that there are large differences in quality of performers and the top performers can serve many consumers (almost) as easily as serving as small numbers. Before recorded music the very best professional musician probably made five times as much as the one who was just barely able to reliably get work. There’s an entire economics literature on these systems. https://en.wikipedia.org/wiki/Tournament_theory https://en.wikipedia.org/wiki/Tournament_theory > Tournament theory is the theory in personnel economics used to describe certain situations where wage differences are based not on marginal productivity but instead upon relative differences between the individuals. Where this doesn’t apply you get Baumol’s Cost Disease. https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease > Baumol's cost disease (or the Baumol effect) is the rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher (low or no) labor productivity growth. > The rise of wages in jobs without productivity gains is from the requirement to compete for employees with jobs that have experienced gains and so can naturally pay higher salaries, ...
- jtolmar 8y ago
  "People will come up with reasons the system they live under is the laws of nature," probably is a law of (human) nature, though.
- BurningFrog 8y ago
  "Winner-take-all" is an end result, not an explanation. The explanation, or part of it, is a unified interconnected world market where even a tiny idea, well executed, can be incredibly well rewarded, since it scales across the economy of most of humanity. Nobody really "constructed" it. It emerged.
barry-cotter 8y ago
> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement That system existed for at most 40 years, probably less. It lasted from the beginning of the post WW2 boom to the oil crash in 1973. It lingered on in companies built up during that era and the expectations and cultures built up then but it was surely dead by 1990. To call a system that barely lasted the working life of one human ancient is a bit much, no?
- robotresearcher 8y ago
  Governments and the church have supported that career structure for hundreds, maybe thousands of years. For example, military officers take salary, perks and retirement. Also large, long lived companies like the 17th century East India Company employed tens of thousands of people, many for decades. China also has centuries old companies and civil service institutions. Neither entrepreneurs nor megacorps are recent inventions.
  - barry-cotter 8y ago
    True but hardly relevant to the great majority of people throughout history. The modern civil service is a copy of the Chinese Imperial model but outside the Sinosphetr that started in what the ~1800’s? In China throughout the vast majority of its history you had well under one professional, career civil servant per 1,000 of population. The professionalised military is also a creature of the European Wars of Religion at the earliest. Officers didn’t get pensions, they got the opportunity to loot and if they survived and were lucky they got land. Converting officers from nobles or mercenary captains who brought their own men and equipped them to military civil servants was a long drawn out process. Parastatal companies like the EIC or VOC were products of societies that had just barely mastered professional rather than personal administration. They were also very unusual. Setting them up took special acts of the legislature and vanishingly small portions of the population served in them, or any similar organisation. Professional bureaucratic organisations outside the state were absolutely in place by the Renaissance, like Florentine banking houses but they were small. Entrepreneurs and mega corps are not recent inventions but mega corps not intimately entwines with the state are. In what Francis Fukuyama calls a closed access order they’re impossible and open access orders are at most two centuries old. See his book, Origins of Political Order. The efflorescence of megacorps, outside the state, that could believably promise a lifetime career with the security of the civil service was a time limited thing.

abtinf 8y ago

> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement and the new one of building a breakout company in tech lies in a wholly changed business environment by which super-talented founders with a business sense can draw on a depth of knowledge/expertise (typically gained from work experience in a demanding tech environment) to conceive of a solid business model to profitably disrupt existing enterprises and thereafter apply grit, good sense, unbelievable perseverance, and basic street smarts to execute on that model via a startup world that affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop. The length and structure of this sentence obfuscates its meaning.

ojbyrne 8y ago
I assumed it was satire.
newnewpdro 8y ago
That's putting it nicely.
bspn 8y ago
It would also crush all-comers in a game of buzzword bingo!
vonseel 8y ago
After several minutes I was able to read it in full... and lots of reading and back-tracing. He says our business model is "wholly-changed" and now founders need to be super-talented and a long list of other things in order to succeed in the modern world. I would argue that founders have always needed incredible smarts and a good product/market fit to succeed. I don't think anyone would claim that the "titans" of industry (think Rockefeller, John Jacob Astor) didn't have street smarts, grit, and perseverance. > affords amazing access to capital, an ultra-connected network of technically savvy persons with whom one can potentially ally, and a huge reservoir of resources by which founders can educate themselves to learn, grow, and develop For sure, there's more resources (cheaply) available than ever before. IMO, this should all add up to make it easier to start a business and succeed. Maybe that's what he wanted to say.

clarkevans 8y ago

This is the winner-take-all economic system that we have constructed for ourselves. It's not a law of nature.

dilyevsky 8y ago
Actually it kinda is (power law and all). Whether or not we should choose to adhere to it is another question.
barry-cotter 8y ago
Winner take all systems occur anywhere that there are large differences in quality of performers and the top performers can serve many consumers (almost) as easily as serving as small numbers. Before recorded music the very best professional musician probably made five times as much as the one who was just barely able to reliably get work. There’s an entire economics literature on these systems. https://en.wikipedia.org/wiki/Tournament_theory https://en.wikipedia.org/wiki/Tournament_theory > Tournament theory is the theory in personnel economics used to describe certain situations where wage differences are based not on marginal productivity but instead upon relative differences between the individuals. Where this doesn’t apply you get Baumol’s Cost Disease. https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease > Baumol's cost disease (or the Baumol effect) is the rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher (low or no) labor productivity growth. > The rise of wages in jobs without productivity gains is from the requirement to compete for employees with jobs that have experienced gains and so can naturally pay higher salaries, ...
jtolmar 8y ago
"People will come up with reasons the system they live under is the laws of nature," probably is a law of (human) nature, though.
BurningFrog 8y ago
"Winner-take-all" is an end result, not an explanation. The explanation, or part of it, is a unified interconnected world market where even a tiny idea, well executed, can be incredibly well rewarded, since it scales across the economy of most of humanity. Nobody really "constructed" it. It emerged.

barry-cotter 8y ago

> The difference between the ancient way of working a lifetime for a salary, perks and a gold watch on retirement That system existed for at most 40 years, probably less. It lasted from the beginning of the post WW2 boom to the oil crash in 1973. It lingered on in companies built up during that era and the expectations and cultures built up then but it was surely dead by 1990. To call a system that barely lasted the working life of one human ancient is a bit much, no?

robotresearcher 8y ago
Governments and the church have supported that career structure for hundreds, maybe thousands of years. For example, military officers take salary, perks and retirement. Also large, long lived companies like the 17th century East India Company employed tens of thousands of people, many for decades. China also has centuries old companies and civil service institutions. Neither entrepreneurs nor megacorps are recent inventions.
- barry-cotter 8y ago
  True but hardly relevant to the great majority of people throughout history. The modern civil service is a copy of the Chinese Imperial model but outside the Sinosphetr that started in what the ~1800’s? In China throughout the vast majority of its history you had well under one professional, career civil servant per 1,000 of population. The professionalised military is also a creature of the European Wars of Religion at the earliest. Officers didn’t get pensions, they got the opportunity to loot and if they survived and were lucky they got land. Converting officers from nobles or mercenary captains who brought their own men and equipped them to military civil servants was a long drawn out process. Parastatal companies like the EIC or VOC were products of societies that had just barely mastered professional rather than personal administration. They were also very unusual. Setting them up took special acts of the legislature and vanishingly small portions of the population served in them, or any similar organisation. Professional bureaucratic organisations outside the state were absolutely in place by the Renaissance, like Florentine banking houses but they were small. Entrepreneurs and mega corps are not recent inventions but mega corps not intimately entwines with the state are. In what Francis Fukuyama calls a closed access order they’re impossible and open access orders are at most two centuries old. See his book, Origins of Political Order. The efflorescence of megacorps, outside the state, that could believably promise a lifetime career with the security of the civil service was a time limited thing.