How does that attempt at snark even make sense? In frame 1, before YC funds a Bitcoin startup, the Fonz is already on a trajectory that requires him to jump over a shark.
I like what Paul Graham is trying to do, and I don't actually think one obvious bad call constitutes "jumping the shark". If terrible, stupid decisions constitute shark-jumping, then I shouldn't have any limbs left.
However, I strongly dislike Bitcoin (obvious scam) and don't know why YC would gamble its reputation in such a degenerate way as to associate with it. Also, I felt the world could use some crude ASCII art.
PG already answered your exact criticism [1]. He's playing the extreme long tail "black swan" odds.
"I don't know what fraction of them currently raise more after Demo Day. I deliberately avoid calculating that number, because if you start measuring something you start optimizing it, and I know it's the wrong thing to optimize. [5] But the percentage is certainly way over 30%. And frankly the thought of a 30% success rate at fundraising makes my stomach clench. A Demo Day where only 30% of the startups were fundable would be a shambles. Everyone would agree that YC had jumped the shark. We ourselves would feel that YC had jumped the shark. And yet we'd all be wrong."
Good-faith business failure is fine. It's excellent, insofar as it's a byproduct of something very good: taking risks in a world of convex payoff.
Associating with a Bitcoin startup is a different story. Bitcoin is a sleazy scam designed to enrich people who got in early and sold at the top.
It's not a problem of making a call that fails. That's going to happen in this business. It's the taste issue. Unless they were something else in their YC application and became a Bitcoin startup, they should have known better.
Let's count all the ways 'michaelochurch is being fatuous here:
* Even if you agree with him that Bitcoin is a scam, as I do, YC does not necessarily agree
* Similarly, Coinbase doesn't have to agree with us, in which case they're also not willfully furthering a scam
* None of his points have anything to do with the thread, which isn't about intrinsic problems with Bitcoin but instead stability problems at Coinbase.
Fwiw I'm genuinely curious how people who are convinced BTC is a scam see it playing out. Generally, once a scam is exposed, it collapses, so what does that look like with bitcoin? But if that's too OT, I'll save it for another thread.
Early entrants in the market extract profits, leave the "currency" to deflate back to Flooz valuations. At a certain point in the life cycle of things like BTC, trading takes on a life of its own. I'm sure tulip traders could have given you an impassioned defense on the intrinsic long-term value of tulip bulbs during that bubble, too.
I like YC. VC-istan would be far more degenerate without the influence of Paul Graham. However, they're not infallible.
Ridicule (what you called "fatuous snark") is a social immune system that sees degeneracy (e.g. funding Bitcoin) and says, "Stop doing that". It has a function.
He wasn't critiquing snarky jokes[1], he was critiquing the fact that your snarky joke was badly constructed and didn't correctly cut to the point you were trying to make. Which means your snark, instead of reading as funny and biting, read as trite and less relevant.
Maybe I need to take a break, lest my snark jump the-- no, that's too obvious.
My point was, "If Y Combinator is actually funding Bitcoin startups, they're dipping into the taint-bottom of the barrel and need to take stock." I thought that some Ascii art might lighten the mood surrounding cultural calamity. Funding good-faith business failures is inevitable and fine-- it's an unpredictable game-- but funding Bitcoin is an obvious sign of a decision not given enough time.
Of course, he and you are right that the shark-jumping metaphor is clumsy if we're looking for exact correspondence. Incubators work in parallel and a single bad decision is macroscopically inconsequential. It's not like a sequential narrative (from which the shark-jump motif comes) where one bad segment can set the whole thing off. I didn't actually mean that this suggests terminal decline, only that YC miiiiight want to be more thoughtful/selective if it's actually at the point of funding Bitcoin startups.
Anyway, I'm off to go create a currency out of mediocre Internet humor. It's called BitClown. Anyone want in? 0.1% equity, unlimited vacation, free beer and abundant bad jokes.
Bitcoin is not an "obvious scam" any more than the world is obviously flat, or fiat currencies were obviously going to fail. Remember going off the gold standard? Probably not, but lots of people considered it an "obvious scam." Perhaps it is, but it certainly has been a long game.
While early adopters surely have made an enormous profit, it is not a scam, and has a significant chance of being a major player in the world economy.
f is Fonz/YCombinator, w* is water, and S is a fucking vicious shark.
Frame 1 (before funding a BitCoin startup):
Frame 2 (decision to fund a BitCoin startup): Frame 3 (after funding a BitCoin startup):