The Case for Uber Going Public

Fred Wilson, a prominent venture capitalist, recently expressed his belief that companies like Uber should go public. This sparked a debate about the merits of going public versus remaining private for startups.

• Wilson argues that liquidity is good for all stakeholders (employees, investors, and the company).
• He believes that going public offers a long-term competitive advantage for well-run companies.

Public Markets: A Crucible for Innovation

The author draws a parallel between the public market system and the history of democracy. He argues that the competitive nature of public markets, with its scrutiny and transparency, fosters innovation and resilience.

• Just as democracy, with its messy debates and internal struggles, ultimately produces a more resilient system, public markets push companies to adapt and improve.
• The author cites the example of the US's rebound from the 2008 financial crisis as proof of this resilience.

Lessons from History: China vs. The West

The author explores the work of Niall Ferguson, who argues that the West's dominance arose from its competitive nature and embrace of science.

• Ferguson contends that the European landmass, without barriers for protection, was constantly engaged in warfare, forcing advancements in military technology, medicine, and food production.
• This constant competition, while often brutal, fostered innovation and progress.
• The author contrasts this with the autocracies of China and the Ottoman Empire, which ultimately crumbled due to a lack of competition and innovation.

The US: A Patchwork of Experimentation

The author highlights the federal structure of the US government as a positive example of experimentation and learning.

• Each state can pass its own laws, allowing for different approaches to issues.
• Successful policies can be adopted by other states, while failures provide lessons to avoid.
• This system encourages competition and innovation at the state level, contributing to the overall success of the US.

Uber: A Case Study in the Private vs. Public Debate

The author argues that companies like Uber, while tempted by the ease of remaining private, would ultimately benefit from the competitive pressures of the public market.

• Public scrutiny and transparency can lead to better decision-making and accountability.
• The author believes that the long-term success of companies like Uber lies in their ability to adapt and innovate, which is facilitated by the public market environment.

Democracy, Competition, and the Future of Startups

The author concludes that the history of democracy and the competitive nature of the public market system are intertwined.

• While the private sector offers control and ease of decision-making, public markets foster innovation, accountability, and resilience.
• He believes that the long-term success of startup companies lies in embracing the competitive pressures of the public market.