Date codified: 2005
Primary evangelist: Sean Parker
Thesis: Young founder-CEOs should not be replaced by professional managers or lose board control, because they’re uniquely suited to run companies in the internet and mobile era.
Inherent flaw: This setup overcorrects the previous norm of replacing founders after raising a series A funding round. Subsequent “innovations” gave founders super-voting control as a matter of course and let them sell shares during funding rounds with no effect on their power.
“Software is eating the world”
Date codified: 2011
Primary evangelist: Marc Andreessen
Thesis: Businesses and industries are increasingly being run on software delivered via the internet.
Inherent flaw: Markets such as real estate have different economics than, say, media and communications; having an app does not mean that you can produce high margins like a software company or deserve a tech-company valuation.
“Startup = growth”
Date codified: 2012
Primary evangelist: Paul Graham
Thesis: “A startup is a company designed to grow fast. . . . The only essential thing is growth.”
Inherent flaw: Public-market investors ultimately care about profits, too, and every sacrifice made for growth at the expense of profitability—from taking on debt to entering new markets for the sake of a story for private investors—creates a lack of discipline within a company.
“Monopoly is the condition of every successful business”
Date codified: 2014
Primary evangelist: Peter Thiel
Thesis: Founders need to seek out markets they can monopolize, because it’s harder to capture value created in competitive industries. Ultimately, companies with no competition are more competitive.
Inherent flaw: This monopoly-seeking ethos has been misapplied to global sectors impossible to dominate, from transportation to food to real estate. It’s also anti-democratic and increasingly the focus of regulators.
Date codified: 2015
Primary evangelist: Reid Hoffman
Thesis: To become the first major player in a large global market, one needs to build out a company very rapidly.
Inherent flaw: Even Hoffman has admitted that this approach wastes money and produces a win-big, lose-big mentality, which is great for venture capitalists and founders—but no one else.
A version of this article appeared in the Winter 2019/2020 issue of Fast Company magazine.