| I believe that your metaphor above is correct in getting at some features of the startup world, namely: 1) Many founders are attracted by glory rather than logic. 2) Large companies receive research information from startup successes and failures. But I don't agree with the gladiator metaphor at all because it implies a degree of deviousness and collusion that isn't present in the startup sphere, and is disingenuous to imply. Take your example of the king offering $0.5M for the finder of a treasure. Here you imply that his goal of offering the prize is to "give villagers a fake hope" and "inspire the poor". What if the treasure in reality was just worth $0.6M to him? Then the king might conclude a) if someone had the treasure, he'd be happy to pay $0.5, but b) suppose the cost of finding the treasure via hire at $1M, then it is not worth hiring people to dig it up. Thus, the king may not decide to hire people to dig this, while happily posting a prize. He doesn't need to have ulterior motives to do this. Now let's take the economics further. Suppose some people are efficient and other people are not efficient diggers (they're good bakers), and there is no way to observe this beforehand. Then if he hires people to dig, the king will lose money because he's at half efficiency with half bakers and half diggers. If he posts a prize, the efficient diggers will self sort into digging, and the bakers will produce real good. Our data points are few, and really just 1) and 2), so we can't know for sure companies are being evil (and I don't believe they are). It's a classic case of an underdetermined system. |