I don't think there's anything wrong, per se, with engineers wanting to gamble on bigger, riskier projects. Nor do I necessarily see the "productive vs. hypey" dichotomy as a strict dichotomy between startups and the IBMs and Googles of the world.
But I do think that there's a major opportunity cost incurred when dollars and talent get shuttled into hypey, bullshit-driven companies instead of legitimate ones. Including legitimate startups.
Of all the risky startups who could potentially get funded and attract talent, it's better for the good ones to get the money and the talent if possible.
To put it another way: the VC system should be selecting for the next Google, not the next Color. But to whatever extent it's selecting for the next Color, it is sub-optimized. That degree of sub-optimization is the opportunity cost / inefficiency inherent to the system.
Yeah, well, every investor would rather invest in a "legitimate" startup, and every engineer would rather work for one. But telling which is which is the tricky part, isn't it? Some things are only obvious in retrospect.
While true, that's beside the point at hand. The author is suggesting that the VC system is consciously selecting for the Colors of the world -- or, at the very least, that it has created conditions conducive to the next Color.
In other words: it's not simply betting at the track and ending up with the wrong horse. It's actively betting on what it knows to be the wrong horse, because the wrong horse pays off in the short term.
But I do think that there's a major opportunity cost incurred when dollars and talent get shuttled into hypey, bullshit-driven companies instead of legitimate ones. Including legitimate startups.
Of all the risky startups who could potentially get funded and attract talent, it's better for the good ones to get the money and the talent if possible.
To put it another way: the VC system should be selecting for the next Google, not the next Color. But to whatever extent it's selecting for the next Color, it is sub-optimized. That degree of sub-optimization is the opportunity cost / inefficiency inherent to the system.