The “crisis” of the American venture capital funds

Jerfferey Funk writes:

Today’s big losses are not what Silicon Valley founders and futur­ists predicted. Artificial intelligence, driverless vehicles, ride sharing, blockchain, virtual reality, augmented reality, and the Internet of Things were supposed to change the world, enabling a dramatic in­crease in productivity growth. The resulting wealth was expected to be so huge that we would be able to support the unemployed with a universal basic income (UBI). Indeed, Andrew Yang, a successful entrepreneur, ran for president in 2020 on a platform whose most notable feature was a UBI pledge.

Which one of it has come true? None. Zilch. Nada.

The long form is depressing. I would recommend reading it only if you have the patience (or nothing else to do). The reason, however, I linked to it is because the author misses one central tenet- hype that precedes actual product. Most VC firms I have had an interaction, depend on an idea which they can hype and as such their sales team is more top heavy than actual product execution teams. I won’t name a prominent VC firm that backed a doctor-listing “white pages”. That’s it. Multi-million dollar acquisition showcased on their website as a crown jewel. Either the VC firm is profoundly stupid or the “innovator” is extremely smart remains an unsolved mystery.

VC firms are looking for the next “sell-out”. Manufacturing base increases real jobs. Paper wealth and valuations are good for the boards (and stock markets) and financial newspapers that devote their energies to it.

That’s why I remain wary of the promises of AI offering the next breakthrough in medicine.