Why Venture Capitalists Are Mad, With Bloomberg Beta Venture Capitalist Roy Bahat

Episode Summary

Executive Summary: Roy Bahat argues that tech’s culture of speed, optimization, norm-indifference, and self-justification has produced both extraordinary innovation and serious societal harm. He says the industry must mature, with checks from government, organized employees, and more responsible VC behavior, while tech and society jointly learn to shape—rather than simply stop—powerful platforms, especially around elections and social media.

Main Topics: The “tech paradigm” and why tech acts aggrieved (Priority: 5/5): Bahat argues tech’s dominant mindset—outsider identity, focus, speed, and optimization—helped create its successes but also made the industry tone-deaf to criticism and consequences, fueling grievance and defensiveness. VC culture, branding, and public behavior (Priority: 5/5): He critiques venture capitalists for performative grievance, bragging, and hostility toward journalists and critics, saying VCs should model nuance and authenticity because their public behavior shapes founder norms. Power, responsibility, and unintended consequences (Priority: 5/5): Bahat says tech leaders often believe they are improving the world, but they still remain responsible for foreseeable harms. He rejects the idea that ‘unintended consequences’ excuse them from accountability. How tech should mature: government, employees, and new founders (Priority: 4/5): He outlines three forces that could improve tech: smarter regulation, employee organization as a check on management, and a younger generation of founders who are more world-aware because tech now touches physical reality earlier. The role of VC in shaping company outcomes (Priority: 4/5): Bahat says VCs have limited direct control but meaningful indirect influence through reputation, expectations, term-sheet norms, and coordinated action among leading firms. Social media, elections, and shaping powerful systems (Priority: 4/5): He argues social media platforms are not the sole cause of political polarization, but they amplify it. The goal is not to eliminate these systems, but to shape their power collectively across industry, government, and civil society. Election uncertainty and civic action (Priority: 3/5): In the final segment, Bahat discusses election risk, prediction markets, and his involvement in a voting mobilization project called Walk the Vote, aimed at increasing turnout through local collective action.

Key Arguments: Tech’s culture of indifference to norms, deep focus, optimization, and speed explains both its innovation and its failures. The industry’s grievance is not limited to VCs; it is widespread across founders, executives, and employees who feel attacked because the world no longer matches their old assumptions. Leaders are responsible for consequences they can foresee, even if they call them ‘unintended.’ Over-correcting by strictly following every norm would prevent products like Uber or ridesharing from existing at all; the answer is balance, not absolutism. Government may need to act, but heavy-handed or uninformed regulation could create new harms; thoughtful change is preferable to violent disruption. Employees are the only constituency with meaningful leverage over large tech companies, so worker organization is likely to become a major force. VCs can shape culture by setting expectations, coordinating on norms, and using influence at the term-sheet and reputation level rather than pretending they have no power. Social media platforms are part cause and part manifestation of social problems; they are not the whole story, but they do amplify radicalization and bad behavior. The next generation of founders may be more responsible because tech increasingly operates in the physical world, where consequences are visible sooner and harder to ignore. The right long-term strategy is to shape tech’s power, not assume it can simply be shut down or made harmless.

Data Points: Bloomberg Beta assets under management: $225 million - Roy Bahat’s venture firm currently manages this amount. Uber drivers referenced in a message: hundreds of thousands - Bahat says Uber included part of his tweet in a message sent to many drivers. Prediction market price for Joe Biden: 59 cents - Bahat cites market pricing as one signal for the election outcome. Prediction market payout for Joe Biden: $1 - He says the Biden contract pays off a dollar if Biden wins. Prediction market price for Donald Trump: 45 cents - Bahat cites market pricing as one signal for the election outcome. Prediction market payout for Donald Trump: $1 - He says the Trump contract pays off a dollar if Trump wins. Prediction market price for Kamala Harris: 4 cents - He mentions this as indicating a built-in expectation around Biden’s health or replacement scenario. Approximate venture industry horizon shift: 15 years from now - He predicts the dominant tech companies may be different by then. First 25 years of tech: Infrastructure era - Bahat describes early tech as chips, wires, computers, and screens. Next 25 years of tech: Information era - He characterizes the mid-period as dominated by companies like Facebook and Google that move bits.

Pivotal Quotes: "we are customer success people, meaning helping our customers, founders to succeed" — Roy Bahat: He explains how venture capital functions as a sales business selling money to companies. "if you are successful, what will be the underside be of of that success and how will you manage it?" — Roy Bahat: He describes a question he asks founders to surface responsibility for consequences. "Technology has its own wants" — Roy Bahat: He uses this idea to explain why platforms must be shaped rather than treated as fully controllable.

Implications: Listeners should expect more scrutiny of tech power, more pressure from employees and policymakers, and a stronger norm that founders/VCs must pair innovation with responsibility. The industry’s future depends on maturity, not denial.