Impetuous Silicon Valley: Venture capitalists ignore performance in blind investment

Beijing Time March 16 News, the U.S. Science and Technology blog site Siliconbeat recently published Chris Oblein (Chris O ' Brien) wrote a commentary, said news aggregation site Digg and mobile application incubator Milk founder Kevin Ross (Kevin Rose) Joining Google, a harbinger of Silicon Valley venture companies blindly investment, ignore the performance of the bad style.

The following is the full text of the article:

In Silicon Valley, "embrace failure" is the most popular success secret. Of course, success also requires other elements, but it is often the words that people blurt out without hesitation.

Yet despite the importance of this creed, the news that Google has Kevin Ross into its own company is a source of consternation and frustration. Technology blog Site AllThingsD First burst the news that Ross will join Google, and then another technology blog site TechCrunch also reported that milk the rest of the team will join the group of Google.

So far, neither Google nor Ross has made any formal statement.

The mobile application incubator, milk, has not made much of a difference, and its locally recommended application Oink recently closed only 3 months after its launch. It was the news aggregation site Digg that made Ross famous, but he decided last year to leave Digg to start again.

Ross hired at least 5 employees when he created the milk (TechCrunch reported that Milk had 8 employees) and financed 1.7 million dollars with the support of at least 24 investors.

Milk's investor portfolio is quite luxurious, TechCrunch founder Maik Al Burlington (Mike Arrington), Google executive Donne Dauchi (Don Dodge), a well-known angel investor Rohn Camves (Ron Conway), Dave Molin (Dave Morin), a former Facebook platform director who later created the private social networking site path, and Ashton Cuche (Ashton Kutcher), a celebrity star-born investor, are in the column.

"We also heard that milk investors were happy with the outcome of the deal, which is between 15 million and 30 million dollars," TechCrunch reported. ”

And now, it's not hard to imagine that a significant portion of this money is in the pockets of Ross and his milk team-they have not spent the money they've raised before, and the rest of the money is given to so many investors, and each investor may have a little payback in addition to taking back his investment. At least they will be able to retreat when the investment is about to be wasted.

Still, this short-term investment in almost nothing companies/teams is still surprisingly rewarding. I know that the scramble for talent is raging in Silicon Valley, and TechCrunch also reported that Ross and Milk also negotiated with Facebook, a move that may have helped them raise their value.

However, so many talented people in order to apply for Google's position to squeeze the head, Google spent so much money to buy milk, what can be different from the benefits of ordinary recruitment? In addition to the Milk team discount Kevin Ross This brand, in fact, it does not reflect any outstanding place. And while Silicon Valley needs to encourage risk-taking, many are not taking risks. What is worse is the decoupling of returns from performance-a phenomenon that is dangerous at any time. I can't help but think of the day when the internet was greeted with a first round of bubbles, when many crappy startups didn't do it for long, but they could still sell a millions of or even tens of millions of dollars in a good price and then exit gracefully. If you can reap the rewards from a failed start-up, it is not a risky venture, and it could encourage reckless risk-taking.

Another question is, what will Google's other employees think about the new milk team?

For investors, the Kevin Ross and milk team joined Google as a harbinger of a bad wind: funding a group of tech professionals who can't find jobs and selling them to big companies such as Facebook, Google and Yahoo.

Such an approach should not be rewarded or encouraged.