I've been feeling a lot of this myself. This corporate balance can't last. People will strive to merge their outlooks and philosophies with their day to day actions, so companies that don't help satisfy that thirst for something more out of life in their employees will have trouble. Plenty of people just want a punchcard, but I doubt it crests 30% in a secure population.
Just what that alternate model might be... I'll keep searching. In the meantime, co-ops are promising. There aren't many tech co-ops; most seem to be farms. But maybe.
Gotta say it's a little ironic their Zebra's Unite DazzleCon[1] is itself being held in Unicorn-central San Francisco. Why not like ... Iowa? Not exactly helping the accessibility for real businesses nationwide by hosting this in SF.
Are cheap flights to Des Moines available? You'd probably want to hold it someplace with a reasonably low-cost venues but still accessible via low-cost carriers from many cities.
Startup person (at a "Zebra") in St. Louis here. We've got a neat little scene downtown, and a convention center right in the middle of it all. Definitely have some programs that would love to get this kind of thing into town (Arch Grants, etc.).
Probably not gonna happen, but it sure is tone deaf as shit to have this convention in SF.
Not convinced. By a lot of their definitions we're a Zebra (profitable, no VC, using 1% of our gross revenue to make a positive impact, not aiming for a 1 bn valuation) - but for my taste, their manifesto is way too much feel-good, self-limitation and mediocrity. It seems like a knee-jerk reaction to overhyped unicorns, but not much more. Why does it have to be exactly one way or the other? Although we're bootstrapped, it doesn't mean we're a "lifestyle business", we can still (and are currently) disrupt/ing an entire industry. If you look at Google or SpaceX as an end result, you might realize that ambitions and being a great employer that makes a positive impact on the world aren't mutually exclusive.
1). Operating on how the world should work and not how it practically works.
2). "We believe that developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternative models will balance profit and purpose, champion democracy, and put a premium on sharing power and resources. Companies that create a more just and responsible society will hear, help, and heal the customers and communities they serve ... The capital system is failing society in part because it is failing zebra companies: profitable businesses that solve real, meaningful problems and in the process repair existing social systems." Conflating start-ups (and business) with charities. Using an inefficient model for resource distribution in enterprise.
3). "Think of our most valuable institutions — journalism, education, healthcare, government, the “third sector” of nonprofits and social enterprises — as houses upon which democracy rests. Unicorn companies are rewarded for disrupting these, for razing them to the ground. Instead, we ought to support companies that provide extreme home makeovers." Resistance to change.
4). Encouraging "sustainable prosperity" for a startup whose main goal is to become a profitable business, instead of exponential growth.
5). "Sustainable, 2x exit." Slowing down future entrepreneurial pursuits with an arbitrarily exit limiter.
6). "Plurality." I assume this means "heavily democratic," which is deadly for startups.
7). "Win-win instead of Zero-Sum." I.e I assume "compromise." Self-explanatory (SE).
8). "Cooperation instead of competition ... mutualism." SE.
9). "Shared resources instead of hoarded." See: #2
10). "Seeks enough instead of more." SE.
There's more, but there's a quote about how much effort it takes to retort bullshit in comparison to how little it takes to spout it.
The author brings heavy socialist overtones and a naive worldview on how businesses work. I'm not one to deny other's opinions solely because they have no experience, but in this case most of her points can be invalidated by going out and testing her zebra plan.
Strongly agree with you. Her post was all feels an no reals. In other words, it feels good but neglects the motivating forces in reality that drive people's actions.
VC isn't broken. It is what it is. It's that way because it's what people find to be most profitable. People often assign moral value to things where morality is irrelevant or was never intended in the first place.
No freaking way. No one says you have to cooperate with everybody. In fact, creating an alliance of cooperators to stand in opposition to an uncooperative entity is a fairly effective tactic.
Their values are in the right place, though I think a glance at the "bigger picture" is warranted. (Ugh, not that again! Yeah sorry.)
Literally most of the American economy, most of the GDP, used to be made up of "zebras," maybe still is. People sensibly and boringly making dependably useful goods and performing useful services at reasonably transparent prices.
What's great about that from an investor's point of view is that you can buy in and expect a reasonably solid rate of growth, especially when you optimize for the long term and ignore the short-term fever-dreams and diaper-crappings of the market.
Nowadays though, that part of the economy (the real part, the "zebra" part) has been faltering for several reasons I won't get into. That means you can't count on those steady or even decent returns in traditional places anymore. Which in turn means there's a lot more money out there circling the block, looking for a place to park where it won't lose value.
That is how the Silicon Valley venture capital ecosystem exists at its current size. When rich people can put their money in traditional places like refrigerator manufacturers, and confidently earn a decent return, they don't (not as much) go looking so hard for something better. They might take a small bit of their their portfolio and play around with it, but there won't be a huge "bubble" like you've got now.
SV is a market all right, only the good being "demanded" (by VCs) and "supplied" (by startups) is "growth potential." High demand in that market is possible only because the rest of the economy, the zebra economy, is so lackluster. And because everyone plausibly believes computers can extract value from a system in a disproportionate way that might pay off --- which is true by the way!
Anyway, all that easy money looking for a place to park, means at least some of the deals are fake and some of the startups are fake, and most of the valuations are fake, and all the fakery leads to all sorts of rampant doucherie to use the French term.
Agreed. If you want more Zebras, raise interest rates. The capitalist system isn’t the problem, it’s the cheap money handed out by fiat from the government to banks that funds the madness and the impending fiasco as investors chase ever more fleeting returns. Zebras die when Unicorns have access to nearly unlimited cheap capital to chase after markets with subsidized products being sold at negative margins. It’s price dumping on a massive scale. ZIRP turns the economy into a lottery favoring those with the best access to the trough. Raising interest rates will be painful, but it’s the only way to fix the current situation and goes against the overwhelming Keynesian consensus. Central banks are great when you need to fund a war, but other than that, they can’t take their foot off the gas and simply distort the economy, increase economic inequality, and exacerbate business cycles instead of smoothing them out. We never should have removed political from political economics. [1]
I don't believe so. Their values are "Hey, let's promote a system of motivations that we think is objectively better rather than the reality we are currently in, that hasn't changed much in the past 2000 years."
Sure, if you can change human nature or the prisoner's dilemna, have at. Otherwise, writing articles like this might as well just end with "and they lived happily ever after".
> 2. Zebra companies are often started by women and other underrepresented founders.
Is this really the number 2 reason? Like, is the suggestion here if we got white men to start Zebras then Zebras would be more popular?
The other obnoxious thing is that they don't actually provide evidence for this; they cite that very few women get VC money and then claim that it's because they're running Zebras. And it's not relevant to say they start "30 percent of businesses" because I doubt that's 30 percent of software businesses.
That is mentioned in the article: "For young companies pursuing both profit and purpose, the existing imperfect structures (hybrid for-profit/nonprofit, Public Benefit Corps, B-Corps, L3Cs) can be prohibitively expensive."
The world could always use a few more zebras. In tech, they tend to be less compelling because of the easy-come easy-go dynamics: One day you might have most of the market, the next day the ecosystem has shifted, the market went somewhere else, and nobody buys your product. I think this, more than anything else, has pushed tech investment towards the unicorn model, since a company that aims to strangle out all competition is more free to subsequently operate at its own pace.
And if you look at "big tech", past and present, the survivor companies mostly have it in their culture to pragmatically engage in monopolistic behaviors: IBM, Intel, Microsoft, Apple, Oracle, Adobe, Autodesk, etc.
There's a big gap between that and the Stallman-style hard "free software" position, which also drives a lot of presently used fundamental software technologies. F/OSS has ultimately had a sort of accelerationist effect on the market by raising baseline capabilities, increasing the leverage of startup companies to challenge incumbents. In some respects, F/OSS is losing because the platforms most used are also generally more locked down and black-boxed than in the past. In others, F/OSS is winning, because people will no longer pay for certain categories of software.
These kinds of challenges define what the marketplace is today; verticals where a monopolistic, marketing-driven approach is bolstered by tech get a lot of press hype and VC interest, while pure engineering and social-benefit companies tend to live in the background, scraping by with a "side hustle" that funds their core mission, or if they're a little more naive, aiming to get acquired before their money runs out.
23 comments
[ 3.3 ms ] story [ 82.9 ms ] threadJust what that alternate model might be... I'll keep searching. In the meantime, co-ops are promising. There aren't many tech co-ops; most seem to be farms. But maybe.
"Companies We Keep" - an introduction to co: https://www.amazon.com/gp/product/B005KTT65Q/ref=oh_aui_sear...
[1]: https://www.zebrasunite.com/dazzlecon/
Looking at https://www.southwest.com/flight/routemap_dyn.html and my memory of cities convention venues, St. Louis, Atlanta, and Nashville seem like good options
Probably not gonna happen, but it sure is tone deaf as shit to have this convention in SF.
2). "We believe that developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternative models will balance profit and purpose, champion democracy, and put a premium on sharing power and resources. Companies that create a more just and responsible society will hear, help, and heal the customers and communities they serve ... The capital system is failing society in part because it is failing zebra companies: profitable businesses that solve real, meaningful problems and in the process repair existing social systems." Conflating start-ups (and business) with charities. Using an inefficient model for resource distribution in enterprise.
3). "Think of our most valuable institutions — journalism, education, healthcare, government, the “third sector” of nonprofits and social enterprises — as houses upon which democracy rests. Unicorn companies are rewarded for disrupting these, for razing them to the ground. Instead, we ought to support companies that provide extreme home makeovers." Resistance to change.
4). Encouraging "sustainable prosperity" for a startup whose main goal is to become a profitable business, instead of exponential growth.
5). "Sustainable, 2x exit." Slowing down future entrepreneurial pursuits with an arbitrarily exit limiter.
6). "Plurality." I assume this means "heavily democratic," which is deadly for startups.
7). "Win-win instead of Zero-Sum." I.e I assume "compromise." Self-explanatory (SE).
8). "Cooperation instead of competition ... mutualism." SE.
9). "Shared resources instead of hoarded." See: #2
10). "Seeks enough instead of more." SE.
There's more, but there's a quote about how much effort it takes to retort bullshit in comparison to how little it takes to spout it.
The author brings heavy socialist overtones and a naive worldview on how businesses work. I'm not one to deny other's opinions solely because they have no experience, but in this case most of her points can be invalidated by going out and testing her zebra plan.
VC isn't broken. It is what it is. It's that way because it's what people find to be most profitable. People often assign moral value to things where morality is irrelevant or was never intended in the first place.
Literally most of the American economy, most of the GDP, used to be made up of "zebras," maybe still is. People sensibly and boringly making dependably useful goods and performing useful services at reasonably transparent prices.
What's great about that from an investor's point of view is that you can buy in and expect a reasonably solid rate of growth, especially when you optimize for the long term and ignore the short-term fever-dreams and diaper-crappings of the market.
Nowadays though, that part of the economy (the real part, the "zebra" part) has been faltering for several reasons I won't get into. That means you can't count on those steady or even decent returns in traditional places anymore. Which in turn means there's a lot more money out there circling the block, looking for a place to park where it won't lose value.
That is how the Silicon Valley venture capital ecosystem exists at its current size. When rich people can put their money in traditional places like refrigerator manufacturers, and confidently earn a decent return, they don't (not as much) go looking so hard for something better. They might take a small bit of their their portfolio and play around with it, but there won't be a huge "bubble" like you've got now.
SV is a market all right, only the good being "demanded" (by VCs) and "supplied" (by startups) is "growth potential." High demand in that market is possible only because the rest of the economy, the zebra economy, is so lackluster. And because everyone plausibly believes computers can extract value from a system in a disproportionate way that might pay off --- which is true by the way!
Anyway, all that easy money looking for a place to park, means at least some of the deals are fake and some of the startups are fake, and most of the valuations are fake, and all the fakery leads to all sorts of rampant doucherie to use the French term.
1. https://en.wikipedia.org/wiki/Political_economy
I don't believe so. Their values are "Hey, let's promote a system of motivations that we think is objectively better rather than the reality we are currently in, that hasn't changed much in the past 2000 years."
Sure, if you can change human nature or the prisoner's dilemna, have at. Otherwise, writing articles like this might as well just end with "and they lived happily ever after".
Is this really the number 2 reason? Like, is the suggestion here if we got white men to start Zebras then Zebras would be more popular?
The other obnoxious thing is that they don't actually provide evidence for this; they cite that very few women get VC money and then claim that it's because they're running Zebras. And it's not relevant to say they start "30 percent of businesses" because I doubt that's 30 percent of software businesses.
https://en.wikipedia.org/wiki/Benefit_corporation
And if you look at "big tech", past and present, the survivor companies mostly have it in their culture to pragmatically engage in monopolistic behaviors: IBM, Intel, Microsoft, Apple, Oracle, Adobe, Autodesk, etc.
There's a big gap between that and the Stallman-style hard "free software" position, which also drives a lot of presently used fundamental software technologies. F/OSS has ultimately had a sort of accelerationist effect on the market by raising baseline capabilities, increasing the leverage of startup companies to challenge incumbents. In some respects, F/OSS is losing because the platforms most used are also generally more locked down and black-boxed than in the past. In others, F/OSS is winning, because people will no longer pay for certain categories of software.
These kinds of challenges define what the marketplace is today; verticals where a monopolistic, marketing-driven approach is bolstered by tech get a lot of press hype and VC interest, while pure engineering and social-benefit companies tend to live in the background, scraping by with a "side hustle" that funds their core mission, or if they're a little more naive, aiming to get acquired before their money runs out.