"The main problem with Silicon Valley is its wealth creation engine," he said. "That model is broken." He contends that "unicorns," or billion-dollar companies, come to fruition through venture capitalists placing bets on certain founders, then bidding up valuations of their companies with successive rounds of funding. Those funds then end up subsidizing money-losing operations solely to buy market dominance. "Sidecar is a great example of everything that's wrong with Silicon Valley," O'Reilly said. "It pioneered the ridesharing business, but couldn't compete with the hundreds of millions of dollars being poured into Uber and Lyft, despite neither company ever making a dime." He instead believes founders should focus on building businesses with the goal of making money from customers, not the kind of financial engineering, as he sees it, that the venture world engages in.