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Things happen.

tom bonked 02 Aug 2025 08:24 +0000
original: skiles@carhenge.club

Most types of business exhibit linear growth. But VC will only fund exponential growth.

The result: companies that would create a lot of jobs and actually maintain their products never get funded and never start. If you must hire more to make more product, that's unacceptable linear growth.

We live in an exhausting VC hype machine because it's more profitable to repeatedly hype up and cash out of short-term exponential growth spurts than to build something real.

Paragraphs by @Mer__edith

External Attachment: What’s a technology that you think is overhyped? I’m going to give a sideways answer to this, which is that the venture capital business model needs to be understood as requiring hype. You can go back to the Netscape IPO, and that was the proof point that made venture capital the financial lifeblood of the tech industry. Venture capital looks at valuations and growth, not necessarily at profit or revenue. So you don’t actually have to invest in technology that works, or that even makes a profit, you simply have to have a narrative that is compelling enough to float those valuations. So you see this repetitive and exhausting hype cycle as a feature in this industry. A couple of years ago, you would have been asking me about the metaverse, then last year, you would have asked me about Web3 and crypto, and for each of these inflection points there’s an Andreessen Horowitz manifesto. It’s not simply that one piece of technology is overhyped, it’s that hype is a necessary ingredient of the current business ecosystem of the tech industry. We should examine how often the financial incentive for hype is rewarded without any real social returns, without any meaningful progress in technology, without these tools and services and worlds ever actually manifesting. That’s key to understanding the growing chasm between the narrative of techno-optimists and the reality of our tech-encumbered world.