> Venture Capital also imports theories of scarcity and under-production that our entire open-source ecosystem have shown don't apply in the same way to the digital world.
What's scarce isn't software, it's time. For certain classes of products (specifically, those with network effects), getting earlier to a larger market can be the difference between a company worth billions and a company that goes bankrupt. What 2005-2015 VC tries to do is to inject funding into companies specifically so that they can go on massive hiring sprees and try to capture the market before any of their competitors.
> The VC model for funding technology...
This is the root of your misconception. VC doesn't fund technology, it funds growth. It's not the same thing. Sometimes it correlates, where technology is what permits previously-impossible growth to happen, but it's not the same thing.
> VC is ripe for disruption.
No, what you're seeing is a classic bubble. The success of early Silicon Valley VC funds like Sequoia and A18Z came from understanding that VC funds growth, not technology. Today you look at the funding landscape and you see thousands of sources for "VC" funding by people who think that any technology will lend itself to massive scale and growth, and most of those efforts fail miserably, particularly the ones where there are no network effects or other barriers to entry and the businesses eventually commoditize. At which point, it's very clear - if you sell a commodity, and you're not yet a Fortune 500-sized enterprise, then from a VC expectations point of view, you failed.
If you want to fund technology - really fund technology - then advocate for better public funding of research. Only state-level governments can afford to put funding into research projects that will have a 20+-year horizon from idea to commercially-ready product. There are well-established pipelines for taking academic research with commercial applications and turning them into profitable companies.
What's scarce isn't software, it's time. For certain classes of products (specifically, those with network effects), getting earlier to a larger market can be the difference between a company worth billions and a company that goes bankrupt. What 2005-2015 VC tries to do is to inject funding into companies specifically so that they can go on massive hiring sprees and try to capture the market before any of their competitors.
> The VC model for funding technology...
This is the root of your misconception. VC doesn't fund technology, it funds growth. It's not the same thing. Sometimes it correlates, where technology is what permits previously-impossible growth to happen, but it's not the same thing.
> VC is ripe for disruption.
No, what you're seeing is a classic bubble. The success of early Silicon Valley VC funds like Sequoia and A18Z came from understanding that VC funds growth, not technology. Today you look at the funding landscape and you see thousands of sources for "VC" funding by people who think that any technology will lend itself to massive scale and growth, and most of those efforts fail miserably, particularly the ones where there are no network effects or other barriers to entry and the businesses eventually commoditize. At which point, it's very clear - if you sell a commodity, and you're not yet a Fortune 500-sized enterprise, then from a VC expectations point of view, you failed.
If you want to fund technology - really fund technology - then advocate for better public funding of research. Only state-level governments can afford to put funding into research projects that will have a 20+-year horizon from idea to commercially-ready product. There are well-established pipelines for taking academic research with commercial applications and turning them into profitable companies.