Dao argues that we've seen the rise of a new breed of entrepreneurs, who manage to be successful despite not building real businesses:
"There seems to be a new breed of entrepreneurs whose greatest skill is playing the political game. We now have “golden boys” who get funded because they’ve mastered the politics of the startup ecosystem. This group never appears to fail because even when they do, they deftly maneuver a face saving acqui-hire that lets them spin it as a win. Venture capitalists overfund them at unjustifiable valuations and tech giants buy these startups based on perceived talent even when their companies are on the path to becoming a total bust."I understand the frustration that Dao feels. I too have seen plenty of lower-quality entrepreneurs luck their way into large sums of cash. I have also seen how the Silicon Valley hype machine makes people seem "successful" even when they aren't. This was one of the sad factors behind the death of my friend Jody Sherman.
But the fact is, this is no different than any other era. The startup world isn't perfect or perfectly fair. The undeserving get rewarded. The deserving get the shaft. But thank goodness, those are still exceptions, not the rule.
If I were to draw up a list of golden boys (and girls), I could easily come up with several dozen names. But you know what? Silicon Valley rewards far more entrepreneurs who are actually deserving. Someone like Mark Zuckerberg deserves his wealth because he created a real business (the ethics of some of his actions along the way are a subject for another time).
We investors aren't dumb. If someone keeps losing us money, or requiring us to work like hell to bail them out via acquihire, we're going to stop giving that person money. The same is true for any employees who have ever had the misfortune of working with a lower-quality entrepreneur. They'll never work with that person again.
You may be able to fool some of the people some of the time, but Silicon Valley is small enough that the people you burn will eventually catch up with you.