On the psychology of Silicon Valley and the SVB crash.
snip
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What I think VCs are not very good at is worrying about the downside potential. What I mean by that is: If you read interviews with start-up people, there’s a tremendous amount of puffery. They will say, “This is the greatest product, and we’re going to be the next Facebook” or “the next Google” or the next whatever. “We’ll be the Uber for schoolchildren” or something like that. And there’s usually a sense of unbridled optimism among this crowd.
Banking and finance, however, are the exact opposite. It’s related to something called risk management. So companies that deal with large amounts of money, particularly financial companies, have risk managers. They usually report to a C-suite executive, and they’re very important. Their job is to worry. Their job is to ask, “What are some scenarios in which we could lose a lot of money?” And they try to protect against downside risk. And I think most of the tech companies that have their money in places like SVB are just not thinking about risk management. [Editor’s Note: SVB itself reportedly had no risk officer for most of last year.]
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the chinese version of the gop
Of of course their machine has firmly established control, but the lying is similar.
a tip of the hat to Roland
07:19 in Current Affairs, General Commentary, health and diet | Permalink | Comments (0)