Instead we get accolades of “rare individuals who can both design and program” and “best hackers among the YC alumni.” Take note of this moment.
I was part of a dinner conversation the other night that included institutional and angel investors, entrepreneurs, and someone who was part of the YC program. The group circled with alarming intent on grilling the YC entrepreneur: “How much time did you actually get with PG?” “It’s a cult of personality.” “The average quality of the companies has really dropped as they’ve broadened.” “I can’t wait for this bubble to pop.” I believe it was mostly in jest — few topics were spared that night — but there was some truth in the defensive undertone.
The hackers and engineers of Y Combinator are doing what hackers and engineers do to any industry, they’re efficiently and ruthlessly disrupting the traditional model of venture capital and are going to destroy far more more wealth for their contemporaries than they create for themselves, as broadband did to entertainment, Craigslist did to newspapers, and Amazon did to traditional retailers. This is what outsiders, by definition, do.
The dark humor in this is that the same people who delight and celebrate investing in disrupting other industries are blind or in denial about it happening to their own.
The question then becomes if you’re an investor with a traditional LP model (and expectations), or a more financial background than an operational one, or an operational background more in management than in design or coding, what should you do to stay relevant through this shift?