While I sort of apologize for the schadenfreude from the peanut gallery (sorry/not sorry), it might be exciting to watch this lot devour each other, aka a species eating its own young out of existence.
Although there have been many wonderful things that have come out of Silicon Valley, it's time that we acknowledge that it is, like many things, a mixed bag unto itself.
17
With all due respect, I think these comments are missing the point. IMHO the issue here is the Monday morning quarterbacking. If Jason had been a steadfast critic, tweeting his concerns before the company "pivoted out of existence" (love that expression), I don't think people would have reacted the way they did. But to jump in after it goes BK and criticize what a dumb idea it was seems self serving. It comes across as "I told you so. Look how smart I am" whether it was meant that way or not. That is what people are really reacting to. Wall Street analysts criticize companies all the time and they don't get the same reaction. Why? Because they are consistent in their criticism. They do not wait until the outcome is known to publish their thoughts on a company.
10
Ah the true culture emerges. The bottom line no matter what was originally said about "yes we can take criticism" is this:
What behavior is rewarded?
What behavior is punished?
That's the real culture and the end conclusion is next time... keep your mouth shut.
9
Surprise, surprise, the tech "titans" are as insecure and vile social media users as the rest of the world.
20
I work in tech. Jason Palmer is 100% right. Maybe among VCs it's not ok to criticize on Twitter, but those of us who are employees criticize this kind of crap all the time.
Stay far, far away from Peter Thiel and anything he has to do with. He is a libertarian, which basically means he is a misanthrope. I would never take his money.
On the other hand, Palmer seems like a decent guy with his head in the right place. I'll got to him for my next startup.
22
When I was a graduate student at MIT, I sent an email to my research group after we had given an important presentation to funders. My email expressed congratulations to everyone but also noted that we had quite a lot of work to do to improve our project and its presentation. I got a world of hurt for sending that email; including being ostracized from the group's work for the rest of the year. PS the work of the group did not achieve anything other than hype. It amazes me that talented, highly educated people cannot be more open to honest feedback and yes, even, criticism in the name of higher achievement. How can we improve if no one is honest with us---and if anything less than adulation is seen as "mean"? How is it kind to lead someone down the primrose path?
31
Looking in from outside the vc/sv world, Jason Palmer just told the truth in his tweet. He gave reasons why, based on his professional opinion.The only mistake Palmer made was backing down and apologizing for...telling the truth. But lots of “adults” had an emotional reaction to it. Emotional reactions reveal much about the inner workings of the person having the reaction. Conclusion: it appears many people in the vc world are children walking around in adult bodies, their emotional responses indicate a lack of inner awareness about themselves, and this usually goes hand in hand with massive ego development. Maybe they should actually use that transcendental meditation app one of the them invented....
27
Confession: I can’t understand the timeline/sequence of events in this article, what “the truth” is/was, or what the main point is.
1
CEOs of Silicon Valley start-ups have one overarching goal, attracting investors. Successful CEOs are showmen selling dreams of profit to their employees and shareholders. Their audience wants to hear big numbers. If the company won't be profitable, CEOs will rave of their large user base. As long as the schtick is captivating, funding is secured and employees will keep working long hours all for the dream. Criticism and negativity are grounded in reality, the place were the dream dies.
8
Sounds like an appaling distillation of the everyone-gets-a-trophy Millennial ethos, class-signaling Ivy League hyper-politeness, and metastazing snowflakiness, with a collective Messiah complex thrown in. And for what? To get obscenely rich by unleashing another social media platform, addictive game, or job-killing convenience? Really want to change the world? Start a company in the Midwest that creates jobs.
30
A warning sign to all of us...when people don't feel comfortable being honest you are on the road to self-destruction. The Silicon Valley guys are the Investment Bankers of the 80s...that didn't end well.
21
@MJ SV now is what Detroit once was.
2
Now this ,,, is funny! Maybe they pivot
So the culture of Victimhood raises it's ugly head again.
Why is it that people who want to "disrupt" things, "change" things, "challenge" things, suddenly cry "you're being mean to me" when someone says they disagree with them?
Clumsy as he might have been, this guy just stated a fact. he dodged a bullet by not making that investment.
Why do so many people get on the "thin skinned train" and whine over a direct and true criticism?
19
Jason was right the first time.
Too much money made the team incredibly arrogant. They did not do the work to understand education or the challenges of actually delivering first-rate educational innovation.
"It turns out actually building new schools, acquiring real estate (in Manhattan and San Francisco) and getting permits is hard, time-consuming and takes longer than expected"
The imprimateur of Zuck (and $100M) seems to have convinced management they were geniuses, before actually accomplishing anything.
Fine for those who are worth billions and this is pocket change, not so good for those of us who actually wanted to improve education and invested to build the business.
15
Positivity is also in oversupply on LinkedIn. Corporate executives backslapping each other for jobs well done and little to no authentic criticism or discussion of negative effects.
8
Not sure which is more disappointing, the thin-skinned men who can’t handle feedback, or the scared guy who retracts his very appropriate feedback and then tries to compare well funded startups to non profits because they don’t make money. More evidence that we need more women chefs in SV.
24
@François I
Working for a SV startup founded by three women, I can assure you that the women in SV aren't any better. The cult of optimism is gender neutral.
8
The culture described is how Theranos happened
34
No wonder Jeffrey Epstein got such a warm welcome from the technology industry.
11
Very mature people in the startup world - not!!!
3
This story misconstrues the situation and ends up inappropriately denigrating Silicon Valley. Yes, the community can be overly upbeat and even pollyanish about technology, but honest, constructive criticism is always welcome here. It sounds like Mr. Palmer's earlier critiques were in that spirit, and they received no pushback.
Mr. Palmer's infraction here was to basically tweet out "I told you so" right after a well-meaning (but evidently ill-advised) start-up had failed. That's just obnoxious. That's not constructive criticism, it's dancing on a grave. He was rightly criticized for this. The same thing would happen in any community; you might advise a friend that a new restaurant idea is unlikely to succeed, but would you publicly mock him or her if the friend tries anyway, and fails? It's just bad form.
11
@M.
I don’t see how you can compare a small local restaurant to a VC backed unicorn.
5
Were they well-meaning, though? "Let's blow up the existing system, because we know better than all the experts who've devoted lives and generations to figuring out how to do this and we can make a mint in the process!" sounds more like pure arrogance and greed than genuine care for others.
19
@m Who said anything about blowing up the existing system? They were just trying something new. Of course they were well-meaning; pretty much everyone here is. It probably was arrogant (and maybe that's part of why it failed), but it's not like they were using our tax dollars to do it, so who cares?
Look, I don't know much about altschool specifically, nor anyone involved in it, but I'm starting to get really disturbed by how fashionable it's become to pile on to the tech sector in the press. Stories like this make it seem like it's all dotcom zillionaires and uber bros here, when mostly it's just regular people trying to make the world a little better in their own little ways. They often fail, and sometimes there are unintended consequences, and lord knows there's plenty of room for criticism. But I'll take them over internet troll cynics any day.
2
The lesson appears to be that tech entrepreneurs are spoiled whiny brats.
9
This is --- perhaps unintentionally --- hilarious. As a writer in Silicon Valley who has to ghost a lot of correspondence and "thought leadership" pieces for C-level execs, I saw my own careful wording and ersatz emotion in some of his writing. Yes, I feel like I could lose my lunch sometimes churning out this stuff, but I need to pay my rent.
28
@Trista I find few things more distasteful than a "thought leader" who's too self-important (or incompetent) to write out their own thoughts.
5
Interesting that the top management at startups give so much importance to courtesy TO them. I've been in the Valley for over 40 years, and I've worked for my share of startups, as both contractor and employee; I can testify that most of them treat their workers like interchangeable parts.
I now work for a company that was a startup 20 years ago, and is now the thousand pound gorilla in its corner of the market. It is still managed by its founder, a rare thing for successful startups. I am treated with unfailing respect by both the people I work with and the company itself. Think there's a connection between those two facts?
34
@Orthoducks Happy to hear that! Can you comfortably share the company name?
2
What is so disturbing is how if I had an edtech company I'd go to Jason Palmer FIRST because he knows the field and can help me. But as the ultimate fraternity, SV really borders on a cult at times; so much for disrupting.
28
@Nathan—Me too!
2
"You’ll be right 9 times out of 10..."
"...believed he would save his investors money by not investing in a start-up that would have lost it."
"88 percent said investors should feel free to criticize."
With all that evidence on their side, they consider it sound judgement to villify and kill the messenger for his honesty?
Little wonder 9 out of 10 startups fail.
13
@expat It just goes to show you how much of a disconnect there is between the folks in SV and everywhere else.
2
I’m glad this story came out. As someone who has been a programmer in the Bay Area for about 4 years, I’m increasingly disappointed in the endless hype and people should be allowed to criticize openly when ideas look surely doomed to fail. God forbid we think critically about whether a large investment will fail that rests on a poor foundation.
I’ve been around a lot of self important types in this industry, saying they want to change the world when they really just want to make money.
I think sometimes I’d like to see an anthropologist go into the tech industry and analyze the tech bro culture bubble. I suppose HBO’s Silicon Valley does a pretty good job of that in its own way.
32
@Elaine Been here much longer and... ditto.
5
“He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother."
39
The SV mindset looks like any other highly rigid ideology from the outside looking in. These people are ruining our country. Spoiled children.
14
Note: All the people involved in this ridiculous behavior are men.
33
@Karen Most are, but I can attest that the few women in positions of power behave, on average, no better than the men.
10
@Karen You wish. Elizabeth Holmes? As women gain power, they will act the same. I just wish for the day soon to come when women really dominate (they will) in society and business. Who will they blame dysfunction on then?
5
The rhetorical pivot from VC master of the universe swagger to the utterly debased opening remark du jour in the age of the Twitter PR debacle - “Hey everyone -...” is as revealing as it is amusing.
The public’s toleration of the absurd amount of publicly unaccountable wealth that has accrued to the upper-echelons of the tech industry rests largely on the idea of “founders” as “innovators,” “visionaries,” and “value creators.”
It is because they understand how just how little scrutiny that idea can be subjected to without being permanently disrupted in the public consciousness that they feel the need to engage in this postmodern public shaming ritual.
9
Quite insightful. Thanks.
2
This is the ethical milieux that gave us elizabeth holmes.
24
Big surprise, the narcissists have thin-skin. Who would've thunk it?
You just need to realize something: these people are selfish and only care about becoming wealthy and famous. It's that simple. I'm a CS major in college and you can instantly identify these types of people in your classes.
21
Instead of tweeting about, well, anything, how about just banging your head against a tree a dozen times or so. The result is the same, and you'll save on electricity.
6
I feel bad this guy got chastised by his industry for giving his two cents on a failed startup. The takeaway here is (1) that techies are thin-skinned and belligerent, (2) what you say on the internet is broadcast across the planet--so don't think aloud electronically, (3) if you don't conform the mob will come after you and ruin your life.
27
The thing about the Valley is you have to be nice in public and you can be vicious in private.
17
In other words, the whole start-up world is a scam, in which everyone puffs everyone else, all in order to deceive investors.
36
This is the guy I would want investing my money!
20
I worked in SV businesses for many years. I was stunned by how many people "drank the Kool-Aid." Given my earlier life background, thankfully I was often seen as "adult supervision." You can't fool all of the people all of the time.
11
What’s next? Safe spaces, trigger warnings and therapy dogs for tech startups, their founders and anchor investors?
8
They invented those things...
2
I'm sorry but these tech people are so full of themselves.
These guys are "truly saving the world"????
gimme a break.
I'm in education. Technology does not help - ever. The best tools for education are: paper, books, pens, pencils, blackboards, chalk. They have already been invented, and those items can never be topped.
When tech people become involved in education, it's to make a quick buck.
34
@Sirlar What they are really trying to do is answer the question of "How can we inject tech into education so we can get schools to give us money?"
15
The thing is that 90% of startups fail. VC's make their money back on the 10% of successes. So bragging about passing on a loser isn't showing much.
5
This is crazy. How can you make progress if you can’t talk openly about failure?
14
Interesting that people from the place where billions are made mining user data and disregarding personal privacy would get so upset by a little truth telling.
28
@Puzzled
You need to understand; these guys are deep-down scared they are going to fail, and with good reason.
I had a friend who rode a motorcycle; anybody who mentioned how dangerous they were got a major earful from him. He felt as if they were jinxing him. Entrepreneurs have that same superstitious sense that anybody who speaks upleasant truth is jinxing them. You don't say those things because that bad juju can come true and spread into their own arenas.
4
How do very successful people in tech even have the time to read the tweet, gossip about the tweet, and tweet about the tweet? What do they do all day? Who has time for that kind of public admonishments? I see it on LinkedIn too. Don't buck the culture or you will be publicly slapped, not just in front of a small group of colleagues, but in front of all your connections and the public. When did that become acceptable? My work skirts the edge of SaaS and this tech/VC culture is intolerant and insufferable. Truth.
11
I'd like to develop an app that generates truthy, random tweets aimed at a wide range of Silicon Valley knuckleheads.
Looking for a VC. Want to throw some money my way?
5
This is not about startups, this is about Zuckerberg. Never insult Zuckerberg.
11
I lived in Silicon Valley for many years, and many of my closest friends became successful tech entrepreneurs. I love them like family. But the culture of the Bay Area is toxic. There was a time, perhaps 20 years ago, when one could arguably see tech as humanity’s great savior, a revolutionary force that would change most things for the better. But now the evidence is in. We know that tech moves fast, breaks stuff, and leaves others to clean up the mess. On the whole, it subverts democracy, impoverishes the middle class, replaces human relationships with screen time and damages our mental and physical health. Nevertheless, the self-belief runs just as high in the Bay Area. In fact, it seems to have risen to messianic proportions among the younger set. The only way to maintain this disconnect from reality is to shout down even mild critics like Palmer and threaten them with excommunication.
67
Did anyone notice in his tweet he gave specific reasons and needs for an edtech company to succeed? Free advice should be honored. It seems like his critics didn’t honor the tweet in its entirety.
12
I've lived and worked here for over 30 years. I just found Palmer's tweet to be mean by any standard, rather than a violation of any rule I'm aware (or unaware) of.
6
@Anj Why did you find his tweet mean? He's just telling the truth.
18
@Anj
"Mean"? You cannot be serious. We are all grownups -- well, maybe not all of us.
Mean is for second graders.
Anyone see the similarity between this behavior and Trump's? A truthful tweet, seen as "mean" and there is serious payback.
11
It says a lot that the VCs attacking Palmer don't bother for a second to contemplate whether he, uh, might actually be right.
This is the problem with the Valley (and I live here). The VCs and tech founders love to think they're making the world a better place, but it has to be all on their own terms. Too often they are unwilling to admit that their innovative solutions are not solutions for every problem in the world.
What they need is a lot more traditional education - and to understand that the beginning of knowledge is knowing what you don't know. And a little bit more Newton wouldn't hurt, who said "If I've seen further it is by standing on the shoulder of giants". They should look back thousands of years, not just around the corner to their "Giant" VC friends.
The arrogance is astonishing. As Zuckerberg's own company has shown us - it can be more destructive than creative.
111
Come on. Valley types are mostly self-absorbed people dreaming about big exits. The VC system is inefficient, wasteful, unfocused and often harmful for the people working for them. The center of the technology universe is not the bay area. Hundreds of excellent technology companies pop up all over the country, embracing their constraints and building viable businesses, impacting real problems, without using words like "disrupt."
VC chest thumping is not interesting.
56
@Jeff P. If you really think about it VC has really become an inefficient way to allocate capital. The correction will be painful.
3
Rather than focussing on the failure of the Mark Zuckerberg-funded educational technology start up and the tech venture capital community's sensitivity to criticism of it, perhaps there is a more important question. Why is it that numerous Silicon Valley tech moguls (e.g. Bill Gates) ban or at least severely limit screen time for their own children and send their children to schools that don't emphasize the use of educational technology, and yet they promote the use of cell phones and such technology for the children of the hoi polloi? Is there something inherently detrimental about too much exposure to cell phones, tablets and computers too early in a child's life?
49
@James, Toronto, I believe Steve Jobs, if he was still alive, would abhor what the smart phone has become in society.
@Mary A
Yes, but then he would like at his bank account and it would be alllll good.
6
I'm not surprised by any of this. VCs and start-up founders have no doubt all grown up receiving "Participation Medals" as children, like they're all winners and should all be on an Olympic podium. They don't like to look reality in the face, expecting to be commended for "just showing up." So it's no surprise when someone offers a modicum of criticism or highlights a failure, they're all still acting like children and throwing a fit.
36
For successful folks, Jason's critics seem pretty darn fragile. This story would be way funnier if these same folks didn't rule our future. I hope that in the future the author will contemplate and publish on the topic of consequences resulting from a world determined by such personalities. Sounds like kindergarteners teaching college to me.
49
Jason Palmer's transgression wasn't against the founders (even though Max Ventilla was an established member of the Google Big Time Winners Alumni Association). It was against the funders who don't like to appear foolish (something that's bad for business when raising their next funds).
May you never experience the empathy of VCs during a "down round" as your vested shares and options disappear before their "liquidity preferences."
42
I am not in tech and in science/ medicine and I see a lot of this cheerleading regularly. Ideas are hyped which aren't really based in science or evidence or aren't tested -- as Mr. Palmer alludes to -- on the people they would impact whether patients or frontline healthcare staff. Too much attention is given to whiz-bang new tech whereas the tried-and-true things that are less glamorous are not attended to even though they may have a greater impact on people.
This sorta cheerleading is the same reason why companies like Theranos turned up in Silicon Valley. Fortunately at least SOME people did their homework: from what I know, major tech and medical firms did not invest in Theranos.
63
@ms
Theranos was an outright scam from the beginning.
The issue here is the self-inflating bubble of mutual praise (and investment).
5
How awesome is it that an industry--run primarily by people who aren't particularly gifted with human empathy--gets itself all spun up by a perfectly sensible critique of a rather foolish sounding investment? Have the offended heard of, like, free speech? The Constitution?
Meanwhile, the same people are just fine with a widespread ethic in the industry that regards users of tech as product.
100
@Bill Lee
"Have the offended heard of, like, free speech? The Constitution?"
Ugh...really? The thing with free speech is this. You can say pretty much whatever you want, what you are not protected from is the backlash for saying whatever you want. Just because you have the right to do something, doesn't necessarily mean you should do that thing.
2
Truth hurts. Such my-way-or-the-highway egos.
22
Jason Palmer spoke the truth.
"Fake News!" screamed the profit-driven 'non-profit' start-ups and their investors.
Speak truth to power?
Not in Silicon Valley.
The response to truth was ferocious, vicious. And wrong.
Sound like Trumpism has embedded in the Silicon Mind?
The 'Silly Cons' of SiliCon Valley?
Sheesh!
40
This isn't about being nice or even civil.
It's about not reducing the pool of ideas that may spawn the "next big thing".
The arrogant VC don't want potential golden geese to give up because someone may dare to speak the truth.
19
Bay Area teacher here. Jason Palmer is right — Alt School is a terrible school. It's for-profit, for starters. The kids spend all day playing on iPads so the school can monetize them through Khan Academy style videos. Teachers work late hours generating endless metrics of student performance instead of lesson planning. Their burnout and attrition rates for teachers are astronomical.
Alt School is what you get when tech bros design a school. Turns out that knowing how to kiss up to VCs has nothing to do with pedagogy. Who knew?
As the author said though, don't ever contradict techies' self-image as world changers who are never wrong. Mediocre white men react badly when you call out their mediocrity.
272
@Just some guy
Actually your post just made me realize that Palmer's tweet was actually intended to virtue signal and kiss up to the "existing districts, schools and educators" that he wants to do business with in the future.
Makes more sense now.
5
Love your last sentence. Mind if I steal it?
11
@Just some guy
People with too much money react badly when you call out their mediocrity.
21
Talk about group think. Or group censorship. Or whatever we should call an industry that shuns and shuts down critical thinking.
118
Reading this article made me so so glad I left San Francisco a few years ago... could not stand the phony, self-centred, self rigeous population, both transplants and locals. And that startup entrepreneurs see themselves as doing as much good as not-for-profits....get me a bucket! Honestly believe that your current disaster of a president is partly a reaction to this sort of nonsense.
69
Ugh! Had no idea that techies had such sensitive egos. I thought we had a one man problem in the White House only to read that young men need to have their egos massaged as well. Doesn't bode well for our future.
41
So its the person who notices that the Emporer has no clothes is the one who is at fault ... because we do not criticize the Emporer at any time ... because it makes other people unhappy??
90
He probably wasn't the only critic beforehand. He's just the one to publicly say "I told you so".
24
Of course you have to LIE, this is how you scam investors and beside it a tax write off when the fail.
They don't care who gets burned as long as they make their money.
Never trust anything from Mark and Facebook
30
Ooh, the ethics free vultures got their feathers rumpled. Greed knows no manners.
36
Having lived in SV for nine years then exiting over twenty years ago I know that it has an underlying know it all current and it stunk then and having just returned from a short visit, it still does, only worse. There is a perversion that all that is being done in SV will make our lives and the world better, HA! From my own perspective, it was then and still remains to be “ all about the money”. The superiority feeling remains, as well and I am glad I left. Oh, I am not nor have I ever been in the tech industry just plain old healthcare where we do try to make everyone’s lives better.
50
Would be great to know the aggregate gains or losses of classes of tech group IPOs. Might be shocking to investors. I’m thinking on average losers dominate winners. At this point tech is very none interesting except for AI. Although it may be gobbled up by military and police functions in future.
6
9:1 failure to success ratio is what they're looking for. They're unicorn hunting.
3
No one ever said NO to investment capital..ever. A venture capitalist is the core resource that helps these "founders" succeed and reach their dreams. Frankly, if Zuckerberg thought this was such a stellar concept he could have readily funded it until it matured enough for an IPO. He didn't and I doubt the motive was anything less than spreading the risk around rather than holding that ball all by himself. Founders are ALWAYS passionate, that's why they're doing what they do. But passion, in and of itself, is never enough. But the diatribes against Palmer was very much like a bunch of school children angry at being called out on their latest escapade. Oh, "founders" are NOT always killing it. They fail more than they succeed too. It's that amazing success that gets the press, the failures are just write offs for the investors.
24
Jason Palmer is the only venture sponsor I would ever seek out. There is nothing more toxic to society than the maintenance of appearances at all costs.
71
At issue here, though, is the truth that when you start a new venture - you don't know what you don't know. Unless you're doing a derivative of an existing "thing," you have no clue what the world is going to be like after your revolutionary product hits the streets.
Did anyone but Steve Jobs know the iPod would be so successful it would detonate the music industry? Spawn phones and tablets and streaming services all of which would provide any song, to anyone, at any time?
It was just a simple MP3 player. Seriously - it was simple electronics - and a wild business idea. And here we are 20 years later with no record stores to visit.
To presume you would improve education without somehow changing conventions would just be silly. At least it would to those who realize they don't already live in a world with their new ideas unleashed.
You can invest in those new ideas, or not. Less than 10% of startup companies succeed - so investing in them is fraught with risk. Nobody picks consistent "winners" though when you pick a winner, you usually win big, and that's what people see, rather than the many losers any investor has bet on.
One thing we can glean from AltSchool's experience, though - is that the senior directors of that company convinced other people to give them $174M.
And if you can do that kind of fundraising repeatedly, eventually you will win.
6
@Iceowl You over-estimate Jobs' iPod "invention". All components of the iTunes and iPod ecosystem already existed in individual (and competitive) forms in disparate companies. Jobs surveyed the landscape and had the money to spend to produce all those components under one roof and ecosystem. It was obvious if one had the money to support the vision - but, please note, the vision was not Jobs': all those other companies who were trying to make a go of it individually stake a more valid claim to that vision.
10
Bad for his business? Because of this I would invest in his portfolio; he seems the only one capable of thinking.
22
Is it possible that when Truman gets to the edge of the Truman Show, people don't celebrate? Is it possible that, well, all those good vibes have been controlling and manipulative all along? That they're just the west coast version of Trump's brutal NYC narcissism? What a shock!
7
The fact that 9/10 startups fail should say something about the utility of most of these "revolutionary" ideas. Keep the happy vibes going, keep the liquidity flowing, while continuing to ignore the fact that Rome is burning.
16
This article makes me very glad that I don't have enough money to be a venture capitalist.
7
Start-ups--especially involving the likes of Zuckerberg--are most certainly NOT "non-profits." Sheesh.
22
Start-ups such as Uber, Lyft, Theranos and countless others receive breathtaking amounts of cash from these enthusiastic venture capitalists. It doesn’t matter that they will never turn a profit or that they may be a complete scam (as in the case of Theranos). Once they go public, the VCs are off the hook, the founders feather their nest, leaving stockholders and employees holding the bag. Pretty nice business model if you take on the right role in the food chain.
56
They're terrified that their bad ideas won't keep getting funded. That's the lesson here.
42
The first rule of Fight Club is don't criticize Fight Club.
17
maybe, twitter is like making a very public announcement to everybody in a huge room. it’s not a “privet” remark. or inside comment to a few people in one industry.
i’m an artist who doesn’t understand these things. but weather what was said is true is less relevant here, than the setting. is that true?
1
Indeed Mr. Palmer made a big mistake. You don't criticize start ups in public and/or on Twitter. Too much "soul" has gone into a start up for some outside punk to tear it apart. Palmer also came across as very arrogant originally.
...Glad Mr. Palmer learned his lesson.
1
He could have left out the part about ‘passing on the opportunity to invest’ but I think his remarks about why he thinks they failed are a really valuable contribution. Anyone investing in education start ups would be wise to consider that it’s not about ‘product’ but perhaps about partnering with existing educational institutions.
Critical points of view should be welcomed even if it has a self congratulatory tint to it.
31
@Dolly Patterson "You don't criticize start ups in public and/or on Twitter."
That line of thinking is evidence of a toxic culture. That culture is what allowed Theranos to go on for so long. You may not realize it, but everyone in SV cheerleading for one another has lead to gross overvaluations that the market will correct eventually.
4
Nary a negative thought to wound these fragile egos?
Ironically, the education part of this sector is a bit more pugnacious, if only internally.
10
Is it OK to call Theranos a failure yet? Asking for a friend.
If not now, when? When is the proper mourning period over according to VCs?
Would love to read and/or hear how they refer to some of their portfolio companies off the record. I’m sure it’s much, much worse than the contents of this single tweet.
85
An earlier commenter likened tech start-ups to pyramid schemes. In the strictest sense, they are not, but many of them do indeed find their inspiration in a get-rich-quick mentality, and their founders are seldom loathe to promise that the new companies will return generous profits to backers and handsome benefits to society.
There is no stronger evidence that such corrupted thinking pervades Silicon Valley than the overwhelmingly critical fire trained on Jason Palmer by other venture capitalists upset that he foresightedly qualified the education technology start-up AltSchool as a risky bet.
A century or so ago, promoting dubious business propositions to credulous investors and the public was to sell "snake oil." Mr. Palmer was right to call attention to this latest example in our own day, and he needn't have made the slightest apology to anyone for doing so.
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@EuropeanSkeptic SO, SO, SO true.
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@EuropeanSkeptic
Technically speaking ALL Venture funded companies are VASTLY risky and the overwhelming majority of them fail. The whole business model of venture capital is based on the idea that 98% fail and 1-2% succeed beyond the venture capitalist's wildest expectations... thus making up for all the millions and millions expended on the duds.
The point that this particular bad idea failed?
It's built into the business model!
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Most startups fail. Posting about it as an outsider to the investment or effort seems to be poor form. But the amount of outrage seems really out of proportion when measured against many other things that could use a little outrage from the elite form time to time, too.
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Amazing how the negative feedback is all heart and soul and positivity, and how none of it addresses Jason Palmer's reasonable points about edtech. Says it all, really.
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Mr Palmer spoke the truth, and sometimes the truth hurts. In fact, the truth hurts most of the time. Because he doesn't live in the Bay Area VC Bubble, he doesn't breathe his own exhaust fumes. He didn't realize that startup 'positivity' keeps the liquidity event dream alive, and the reality hidden. Good for him. We need more people who speak with candor.
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Ooh, don't say anything that might ruffle the feathers of the tech billionaires or their fat cat investors or you'll never eat lunch in Mountain View or Menlo Park again.
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There's a culture of avoiding negativity in the startup world. Many (of us) believe it's necessary. As tech people - engineers, scientists - you've been trained to analyze and predict failure modes. The absolute easiest thing is to find them in yourself and your ventures.
As the Mythbusters said: "Failure is always an option." And 9 out of 10 startups (more like 19 out of 20, but who's counting) will fail. That's easy to predict. Much harder is to imagine what's going to succeed.
So in a startup - the best recipe is to keep failure out of your mind. You all know the odds - especially engineers. How many engineers do you see at the roulette wheel in Vegas? I'll bet you.
none.
Because we know the odds and don't need to be reminded. If you don't "keep your eyes on the prize" you'll wallow in doubt and self-pity, and we startup people are trained to root that out. Those people don't stay with us. They either leave, or we show them the door.
Failure is always an option. We all know that.
We don't need to waste brain cycles worrying about the odds when we're trying to do something revolutionary.
Said another way: who would have got into an Apollo space capsule and gone to the moon if they were worrying about the odds?
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@Iceowl
But it's not about "odds." You write as if starting a company is blind chance, a rolling of the dice.
No. It's about the difference between a good idea and a bad idea.
To pretend that there are no such things as bad ideas, just bad luck, has so many things wrong with it that I can't even begin to list them.
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@Iceowl Of course failure is always an option, but investors are people who have opinions.
Failure to question whether something is actually needed by the market/customers is the path to failure.
It's usually not that revolutionary, friend. It's usually an app.
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@IceOwl
“Failure is an option.” That is an interesting slip of the keyboard.
In engineering, failure is never an option. We think of the possible modes of failure in order to avoid them. With 9 out of 10 start-ups failing you should be asking more questions of people heading for the door. They have probably already seen what is stopping the venture from being a 1 out of 10.
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And yet, he had anticipated the project was going to fail and would be a waste of all of those people's efforts and time. Better yet, his critique was politically and pedagogically sound; he questioned the authority the project assumed over the autonomy of communities in the areas of place based educational needs and aspirations.
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So you are saying that there is an unspoken rule in SV that, "all startups are great and are going to be wildly successful"?
Sounds like a pyramid scheme.
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@Kohl
If I were not otherwise bound to always be positive, I would say that you do not seem to understand what a pyramid scheme is :)
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