[agentgumshoe]

This is bad for Block. I hope. It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance. Just about all of silicon valley seems to have run the longest and broadest grift we've seen.

This year's gonna get real interesting.

[rvz]

> Just about all of silicon valley seems to have run the longest and broadest grift we've seen.

I would say nearly all of Silicon Valley tech startups. Around 90% them are a complete SaaS grift and are also eternally unprofitable and are very good at losing money.

Hence why they are solely dependent on begging for VC money every month to pump the pyramid scheme that recently collapsed a week a ago. We saw which startups were affected and would have instantly been bankrupt had it not been for them beggeing to the government for a totally-not-a-pseudo-bailout scheme to 'save' them.

To see who was caught in the fallout, we needed catalyst events such as the start of the market crash in November 2021, the collapse of crypto in 2022 and now in 2023, a large tech bank (SVB) becoming insolvent and failing.

> It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance.

Now the grift has continued to spread into the AI hype squad with everyone and their bots spinning their own ChatGPT SaaS startup. Don't be surprised to see them falling like dominoes since the real winner in this AI hype is OpenAI. Not the startups built around it.

[agentgumshoe]

Indeed, VC's loaded with 'free' money pumping whatever idea could bring in the consumers enough to keep a narrative spinning.

I haven't seen any particularly strong profitability case for ChatGPT and the like yet, unless you call ad dollars from promoting "ChatXX does this amazing trick!" as proof.

People barely even questioned the ludicrous wages being thrown around in silicon valley, supported by 'funding rounds' and silly valuations of future growth.

But, it all sucks because the people that will lose are the last-in-chain investors and the to-be-unemployed. Not the VC crybabies currently out there complaining about their need for protection by the establishment they protest.

[lanstin]

Yeah. I used to work outside the valley, until 2008. I moved to San Jose to work with friends I worked with from Netscape.

Until I moved, I earned five figures, you know a bit more each year, and was happy. I had a house, a big spacious house by San Jose standards, and a nice town with friendly friends and so on. When I started in SV, they raised me to USD 120,000 and the HR recruiter literally apologized for it not being more. Since then it has gone up about four x, for no really good reason that I can see, since it is fun work I would do for much less. Only when you get into profit per worker does it make sense.

And that isn’t due to some moral failure entirely, but something about the weird asymmetries that networked technology seems to facilitate. One little neighborhood, but services and products for dozens or hundreds of countries. Each time a country is added to the network, the winner takes some more.

[mcdonje]

More like 1998. But yeah, the model of tech-washing has increased in popularity since then. The example that most readily comes to mind is Uber, and they started in 2009.

[eternalban]

I used to hate on Uber on principle (and what I read). But Uber definitely added something positive to society. A city with Uber experiences a reduction in DWI incidents. Transportation on demand is not some crypto fluffware. Let's remember that the very premise of tech utopia was [addressing] regulatory capture by ineffective parties. That also is a legitimate concern.

So the question (if we suspend judgement of these initial tech waves) is: if ignoring and bypassing regulations to introduce new approaches is also broken, what is the solution to the original problem? As an illustration, examine a hypothetical of when or if civic centers would themselves modernize transporation for hire regulations, mechanisms, etc.

[noloblo]

> Just about all of silicon valley seems to have run the longest and broadest grift we've seen.

What do you mean by this

[boh]

Silicon Valley creates companies with unsustainable business models that have to rely on tax/labor/regulatory loopholes. They pretend that profitability is due to actual technological innovation while negatively affecting actually functioning companies who don't have the same access to capital (bcs real companies can't pretend like they're capable of infinite growth). What most Silicon Valley companies wind up being are financial instruments that function exclusively as exit strategies. The Silicon Valley business is to essentially create innovation narratives they can sell without facing the consequences of poor business practices.

[gonzo41]

I always think about uber. The moment that they have to start treating drivers like employee's they can't make money because self driving cars are still a dream and the taxi business is cut throat and always has been.

[marcosdumay]

> the taxi business is cut throat and always has been

For drivers, yes. But in many cities the taxi system was engineered so that the owners of "positions" got lavish profit.

[JumpCrisscross]

> moment that they have to start treating drivers like employee's they can't make money

Revel, in New York, has employees and does fine.

[boh]

Define "does fine". Spending and losing VC money doesn't count.

[JumpCrisscross]

> Define "does fine". Spending and losing VC money doesn't count

Then Revel does fine.

[lanstin]

Many transit solutions are successful in NYC but not elsewhere.

[readthenotes1]

"bcs real companies can't pretend like they're capable of infinite growth"

WeWork is a real company and managed it for a while

[Out_of_Characte]

Wouldnt know what the OP refers to but silicon valley has been skirting regulations and running as close to a ponzi scheme as humanly possible, the likes of uber with blitzscaling, esentially growing their userbase with venture capital only to increase the amount of venture capital they can get to 'eventually' make a profit. Or SVB wanting to not be regulated because they hold less than 250B only to fail with terrible consequences. Then theres the numerous crypto startups that promise return on stake funded by new depositors to pay the old depositors. Money was cheap but in an economic downturn any weakness will result in investors leaving, cash drying up. So whoever cannot show profits will quickly wither and cause chain reactions in similar weak companies. I'm sure you can find an amazing list on hindenburg and you'll see most of them are tech companies because thats where the biggest venture capital pie was between 2008 and now.

[nluken]

The “innovations” of many (but not all) post-2008 unicorns are more about creating a legal grey area to bypass regulation than they are actual technological advances. Uber and Airbnb are prime examples. If Uber was forced to used licensed cab drivers or Airbnb forced to use licensed hotels, you would see the breadth of what these companies actually bring to the table, which isn’t nearly as much as their valuations would indicate. That’s before we get into the adverse externalities these services can create (looking directly at Airbnb here)

[fallingknife]

Yes, if Uber was forced to use the government cab cartel, then it wouldn't be better than the taxis. The entire point is they made taxis that actually work by getting around the taxi cartel.

[CPLX]

But that's only half the story.

The other half is that they used nearly free money provided by the US central bank, routed through VC firms, and engaged in anti-competitive predatory pricing.

The pricing issue is stark and impossible to miss. I produce events for a living and I'm in a different city every week. The cost of an uber ride now is invariably 2-3x higher than it was a few years ago at minimum sometimes 5-10x higher.

I remember tooling around Chicago and getting fares that were like $2.17 and $3.22 a couple years ago. Any fares within downtown Brooklyn were $8, period, often discounted via a promo to $4-5. Now they're routinely $25, maybe $15-18 on a slow day.

That's where all the VC money went, and it simply wasn't possible to compete with that unless you had access to all that free money too, which local business didn't.

[hef19898]

Outside the US, well, Uber is not directly emplying their drivers. If Uber had all drivers on their payroll, taxi cartel or not, Ubers story, and financials, would look a lot different, wouldn't they?

[marcosdumay]

People still choose to be Uber drivers, despite jobs that pay minimum wage existing. So, I'd bet the story would be way more complicated than your picture.

The main thing they get from offshoring the driving is scalable renting of capital. But well, I have no idea if one could not just rent it without the labor.

[mtnGoat]

Did they make it work though? Function yes, profittably, not yet.

[hotpotamus]

Does Uber use government maintained streets as part of its business?