I've seen VC being called the "dark side" of entrepreneurship a few times (as in "I launched a startup, got a successful exit and I now turned to the dark side of VC"). It's of course partly joking, but probably also revealing of how VCs are seen by the startup entrepreneurs.
I really says something about the record industry when comparing that "dark side" to the recording industry is seen as derogatory to the "dark side".
Ok - VCs are not like record labels. I'm convinced. Who cares?
I know this post is by a venerable member of the HN community and so questioning his posts may get me downvoted into oblivion, but I read this post and wondered why this matters at all.
It may not matter to you. It is a well written piece and relevant to HN. Some people enjoyed reading it and/or got something out of it so they upvoted it. This is how it works.
I do a lot of work with record labels. VCs are incredibly different than labels, labels do not support innovation...they support packaged hits/artists and are on the way out. But I disagree with the comment, "Imagine record labels staffed with nothing but the people from successful bands, using their money to give other artists a faster way to the top." - Not all VCs are staffed with successful entrepreneurs (some not even entrepreneurs) - I mean what even defines a successful band? By your logic - that would be hits and money - which is no longer an appropriate way to judge.
VCs like packaged shit ideas as much as labels like packaged shit music. Is Zynga really helping the world or just great at turnng shit to gold? That's Kleiner's "best peforming" company! (as of when Doerr was interviewed)
All the VC "Innovation" speak is just part of an abstraction of how more money is generated from less money. Most VCs are as faddish as any label trying to find the "new sound" - and are about as good knowing what "innovation" is...
I think the phrase is quite apt if you remove the "successful" qualifier. Most likely this was just an oversight in his writing.
"Imagine record labels staffed with nothing but the people from bands, using their money to give other artists a faster way to the top."
This actually resonates with me deeply, as the record label I just launched (http://tableandchairsmusic.com) is staffed with 14 out of 14 artists, and we re-invest 100% of the money we make back into helping our artists grow. I wouldn't say we're successful yet, since we just launched last Saturday, but we are in extreme support of innovation :)
Seems to me the fundamental economic difference is that record labels control distribution, so they have much more leverage than VCs.
edit, found a source: "This pattern is mirrored in many other industries, such as the music industry, where record labels control radio / media distribution and are much more powerful than the actual artists, or the clothing industry, where small designers are beholden to retail outlets and have to take terrible terms to get distribution. The takeaway? Being the distribution platform is a lot better than being a producer."
Yea, so the only differences are cause by a less fluid market in the music industry than the venture finance community... Right now - as infomation asymmetries are being solved - labels are losing relevance. I guess the same can be said for VCs too...
As someone who's signed to a record label (Victory Records) and has talked with many other bands about their experiences with their record labels, I'd have to say that this post is mostly true in the sense that VCs and record labels are comparable... but it's way over-generalized.
There are some record labels out there who really do care about their artists and do everything they can to help without tossing moral and ethical standards out the window. I know this for a fact. As for Victory, if you know about the label, well... they're not exactly known for their kindness and would probably fall into the blog entry's generalization, but I believe they are getting better about it.
It isn't nearly as black and white as Jacques is making it seem.
This post should consider the time of the industries. It would be more appropriate to compare VC's to the record labels of the 60's up through the late 90's.
The reason the analogy is ever made to begin with is not rooted in the nuances of these two industries. It comes simply from the big hits nature of both industries and how they both survive off the massive winnings of a very small group of rock stars.
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[ 0.18 ms ] story [ 37.9 ms ] threadI really says something about the record industry when comparing that "dark side" to the recording industry is seen as derogatory to the "dark side".
Kinda reminds me of http://tvtropes.org/pmwiki/pmwiki.php/Main/EvenEvilHasStanda... on tvtropes.org
I know this post is by a venerable member of the HN community and so questioning his posts may get me downvoted into oblivion, but I read this post and wondered why this matters at all.
All the VC "Innovation" speak is just part of an abstraction of how more money is generated from less money. Most VCs are as faddish as any label trying to find the "new sound" - and are about as good knowing what "innovation" is...
"Imagine record labels staffed with nothing but the people from bands, using their money to give other artists a faster way to the top."
This actually resonates with me deeply, as the record label I just launched (http://tableandchairsmusic.com) is staffed with 14 out of 14 artists, and we re-invest 100% of the money we make back into helping our artists grow. I wouldn't say we're successful yet, since we just launched last Saturday, but we are in extreme support of innovation :)
edit, found a source: "This pattern is mirrored in many other industries, such as the music industry, where record labels control radio / media distribution and are much more powerful than the actual artists, or the clothing industry, where small designers are beholden to retail outlets and have to take terrible terms to get distribution. The takeaway? Being the distribution platform is a lot better than being a producer."
[1] http://areallybadidea.com/what-i-learned-from-watching-six-h...
There are some record labels out there who really do care about their artists and do everything they can to help without tossing moral and ethical standards out the window. I know this for a fact. As for Victory, if you know about the label, well... they're not exactly known for their kindness and would probably fall into the blog entry's generalization, but I believe they are getting better about it.
It isn't nearly as black and white as Jacques is making it seem.
The reason the analogy is ever made to begin with is not rooted in the nuances of these two industries. It comes simply from the big hits nature of both industries and how they both survive off the massive winnings of a very small group of rock stars.