As others have pointed out, I don’t think Berkshire Hathaway and YC really compete in the same markets. Warren Buffett and Charlie Munger have some great words of wisdom on their approach to investing, but I am reminded of two of quotes in particular: “Our favorite holding period is forever” and “Never invest in a business you can’t understand”. Berkshire looks for long term returns by making safe, reliable investments.
This is the exact opposite of YC and other startup incubators. Their approach is to invest in newer companies with great potential, but also great risk of failure. The business models of these companies are not always clear.
From a personal level (I live in Omaha), I find it interesting to contrast Berkshire Hathaway and YC from a cultural perspective. YC is located in Silicon Valley, while Berkshire has its headquarters in Omaha, Nebraska. When asked about why he stays in Omaha, Buffett said "It's very easy to think clearly here. You're undisturbed by irrelevant factors and the noise generally of business investments."
Silicon Valley’s culture is the opposite of Omaha in many respects. Companies are concerned about chasing the latest and greatest trends even if many founders don’t complete understand those trends. Startups aren’t thinking about the next 10 or 20 years, they are more concerned about their next round of funding.
The success of Berkshire Hathaway demonstrates a valuable point: Silicon Valley isn’t the center of the world. Plenty of successful companies thrive in backwoods locations like Omaha. This isn’t meant to say Omaha’s culture is superior to Silicon Valley’s, they are just different. Diversity is a good thing.
This is the exact opposite of YC and other startup incubators. Their approach is to invest in newer companies with great potential, but also great risk of failure. The business models of these companies are not always clear.
From a personal level (I live in Omaha), I find it interesting to contrast Berkshire Hathaway and YC from a cultural perspective. YC is located in Silicon Valley, while Berkshire has its headquarters in Omaha, Nebraska. When asked about why he stays in Omaha, Buffett said "It's very easy to think clearly here. You're undisturbed by irrelevant factors and the noise generally of business investments."
Silicon Valley’s culture is the opposite of Omaha in many respects. Companies are concerned about chasing the latest and greatest trends even if many founders don’t complete understand those trends. Startups aren’t thinking about the next 10 or 20 years, they are more concerned about their next round of funding.
The success of Berkshire Hathaway demonstrates a valuable point: Silicon Valley isn’t the center of the world. Plenty of successful companies thrive in backwoods locations like Omaha. This isn’t meant to say Omaha’s culture is superior to Silicon Valley’s, they are just different. Diversity is a good thing.