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> And chances are people in the field would have been aware of what interesting things there are in that field, and would have some idea of what you've come up

by graycat 11y ago

> And chances are people in the field would have been aware of what interesting things there are in that field, and would have some idea of what you've come up with. So, do some research that others are not likely to do. Then carry that research all the way to a successful business. My research is some math, based on theorems and proofs, based on some advanced prerequisites. Sure, at least in principle, there are some university mathematicians who could duplicate what I derived. It's been a while since I was a teenager. Since then I've spent a lot of time around low end business, and high end research mathematics, business, startups, and computing. Sure, a lot of that experience has just junk quality information, but the experience does let me have some understanding of the people and cultures. Based on that understanding, there are at least three bottlenecks that help protect me: (1) To duplicate my research, the university research mathematicians would mostly need a relatively clean formulation of the the math part of the real business problem as a math problem. That formulation requires also understanding some of my business model, which is not mathematics, in particular, what data to get and how to get it and, then, what the heck data to give the users/customers that they will like, a lot, and why. E.g., first cut a lot of people will say that I will need ballpark 10^27 bytes of data. Nope! Just why not is a bit clever; although the basic reason is some solid math, it's a bit novel; also need to understand and keep in mind the business model; only a small fraction of research mathematicians have all the math prerequisites; and, net, only a small fraction of people in pure math would think of it. Some of what I'm doing most people who are close to such things will say I can't do that. For things close to what I'm doing, they are right. For exactly what I'm doing, they are wrong. I found a narrow path through the woods that works for just what I'm doing. If my path were broad instead of narrow, a lot of books would have to be revised. (2) The research I did is relatively applied, i.e., would be regarded by the research mathematics community as a niche; then such mathematicians would have to do the work of focusing on the niche; that would take them away from their main stream of research, get them few or no academic promotion points, and is something they wouldn't want to do. (3) Even among good university research mathematicians, some of the crucial math prerequisites are not well understood. For a human, there is little so obscure as some math theorems and proofs where the human is missing the important prerequisites. Outside of university research math departments, the chances of anyone even being able to duplicate my work is much smaller. Then there is the issue of business: The university research mathematicians are a very long way culturally from a startup in information technology; they don't have nearly enough background in the basic computing; e.g., they don't really know in any good detail how a Web server works, or TCP/IP, know an appropriate programming language, understand server farm system management, etc. Then in business, they don't understand information technology startups. E.g., they haven't been reading Hacker News, VentureBeat, AVC.com, Mark Andreessen, etc. They couldn't, and even if they could likely wouldn't, do the work alone (too big of a distraction from their university research career) and with just the math wouldn't be able to attract a team without some significant bucks. Further, for a VC, a professor with a math paper and a dime won't cover a 10 cent cup of coffee. My effort is yet another example of something classic in innovation -- field crossing. So, for the fields, there are some advanced math prerequisites, some understanding of some niche topics in pure and applied math, the particular, niche math research I did, the computing, and, to tie it all together, the whole business model I have in mind. So, early on, no one will bother trying to compete with me. Later I will have some barriers to entry from the data I've gathered, some viral and network effects, some happy users who won't t want to try something else or pay switching costs, and will have some publicity, and a brand name. Or, until I'm quite successful, people who could do the math couldn't easily and wouldn't do the rest; the people who could and would do the rest won't do the math; and no one with a suitable checkbook would cough up enough money to put a team together that could do all the required field crossing. Later? Mostly too late unless someone wants to buy me out and I'm willing to sell. > Obviously you are the only person writing your code, but should you assume that someone with a similar background could not come up with something quite similar if he wanted to research it? The "code" is not the point. The crucial, core point is the math. Given the math, nearly all the code is quite routine, and the rest is not much more difficult. The real, core technical challenge of the code is the math in the design and specifications document for the code. Saying that I did some math research doesn't give away much; it just puts one in the QA section of a research library with racks and racks of books and journals where one can easily get totally lost for many lifetimes. And, for the rest of the news, my work is very likely not in the that library at all. Can I do original math research? Done it often enough in the past!

gmarx 11y ago
years ago I was working on a pitch for a startup based on tech I had developed. My adviser, a successful serial entrepreneur told me not to call the tech "revolutionary" (or something like that) because potential investors hear it all the time and it smells like BS. But dammit, some things are revolutionary!
- graycat 11y ago
  I thought about that, too. In the end, I came up with another description of the investors: Well, I can't explain that one; here we don't want NSFW material! So, I'll give a SFW version; I'll concentrate on information technology since biomedical is at least a little different: (1) The investors are not very technical people. Often we're talking people with backgrounds in business development, marketing, routine software, former CEOs of startups that were largely non-technical, etc. In contrast, the people in high end research university STEM field research know how to evaluate technical work, e.g., as reviewers and editors of good peer-reviewed journals. And if some paper is outside the field of some prof, then he will still know how to get the work reviewed by others, e.g., as the editor in chief of a journal gets the editors and reviewers to do the work. Then, just think a little about what is involved in such peer-review and, then, begin to see how hopeless it would be for the usual investors to do such work. For the VCs, such technical review work is hopeless, and they don't do it. Or for your description that they hear hype, that's not really the problem; instead, hype or not, "revolutionary" or not, they just ignore anything like research. Or look at the bios of the VCs: Could hold a convention in an airplane wash room for all of them able to do or even able to direct peer-review of STEM field research. (2) Evaluating research is something the VCs just won't do. Likely if one of their limited partners (LPs) caught one of their VCs using an evaluation of some research, then the LP would make sure that VC never got another dime, at least not from that LP. (3) Sometimes VCs make money, and sometimes they don't. On average the don't make very much. In any case, they don't try to make money with the results of research. (4) Mostly VCs don't evaluate the technical work. Instead, for early stage investing, their criteria are fairly simple: (A) Look for traction significantly high and growing rapidly. (B) Be sure the work is for a really large market. (C) Usually be sure the CEO and company HQ will be a short drive from the VC's offices. (D) Look for anything that is really wacko that would be a disqualification. If (A)-(D) look good, then contact the CEO and argue that a check of equity funding would help their growth rate enough to more than pay for the stock dilution. Have a term sheet that for the CEO is just onerous and puts the VCs in solid control, e.g., able to replace the CEO with someone loyal to the VC. For seed funding, the VCs look at the product, although not at any technical internals, and try to estimate how the target users/customers would like the product. For later stage funding, the VCs look mostly just at what an accountant does. And for any VC funding, they look at what they know about the market: Commonly VCs claim to have "deep domain knowledge"; in terms of anything technical, that is a wild belly laugh; could break a bone slapping a thigh over that one. But they do have at least a cursory, from 10,000 feet up, view of the markets. So, they have heard of viral, social, local, mobile, sharing, photo apps, own both an iPhone and an Android, have used Google, Facebook, PInterest, SnapChat, InstaGram, and Uber, have heard about tablets, laptops, Windows, Apple, Linux, have seen articles on Apple's watch, have gotten a lot of pitch decks, attended a lot of pitches, and have listened for a few minutes each to a few. For more, they know most of the other VCs on, say, Sand Hill Road, and attend morning what's hot pick-up seminars in coffee shops. For exits they know about acquihires, pitchforking, M&A, and maybe even IPOs. While in some sense the VCs understand that the need to find companies that are new and exceptional, they look for patterns they have seen from the past, patterns that must reject most new and exceptional companies. Really, they dream of a CEO of a company they funded calling them and telling them about the next SnapChat. Sometimes they make money, and sometimes they don't, but that's what they do. The VCs commonly say that their funding is not for everyone, and that is very true. While what the VCs do sometimes makes money, in no way are the VCs a broad source of innovation funding. For revolutionary technology, the VCs couldn't care less. Actually, they would prefer that anything technical not be important -- the don't want to get involved in anything technical.

by graycat 11y ago

gmarx 11y ago

years ago I was working on a pitch for a startup based on tech I had developed. My adviser, a successful serial entrepreneur told me not to call the tech "revolutionary" (or something like that) because potential investors hear it all the time and it smells like BS. But dammit, some things are revolutionary!

graycat 11y ago
I thought about that, too. In the end, I came up with another description of the investors: Well, I can't explain that one; here we don't want NSFW material! So, I'll give a SFW version; I'll concentrate on information technology since biomedical is at least a little different: (1) The investors are not very technical people. Often we're talking people with backgrounds in business development, marketing, routine software, former CEOs of startups that were largely non-technical, etc. In contrast, the people in high end research university STEM field research know how to evaluate technical work, e.g., as reviewers and editors of good peer-reviewed journals. And if some paper is outside the field of some prof, then he will still know how to get the work reviewed by others, e.g., as the editor in chief of a journal gets the editors and reviewers to do the work. Then, just think a little about what is involved in such peer-review and, then, begin to see how hopeless it would be for the usual investors to do such work. For the VCs, such technical review work is hopeless, and they don't do it. Or for your description that they hear hype, that's not really the problem; instead, hype or not, "revolutionary" or not, they just ignore anything like research. Or look at the bios of the VCs: Could hold a convention in an airplane wash room for all of them able to do or even able to direct peer-review of STEM field research. (2) Evaluating research is something the VCs just won't do. Likely if one of their limited partners (LPs) caught one of their VCs using an evaluation of some research, then the LP would make sure that VC never got another dime, at least not from that LP. (3) Sometimes VCs make money, and sometimes they don't. On average the don't make very much. In any case, they don't try to make money with the results of research. (4) Mostly VCs don't evaluate the technical work. Instead, for early stage investing, their criteria are fairly simple: (A) Look for traction significantly high and growing rapidly. (B) Be sure the work is for a really large market. (C) Usually be sure the CEO and company HQ will be a short drive from the VC's offices. (D) Look for anything that is really wacko that would be a disqualification. If (A)-(D) look good, then contact the CEO and argue that a check of equity funding would help their growth rate enough to more than pay for the stock dilution. Have a term sheet that for the CEO is just onerous and puts the VCs in solid control, e.g., able to replace the CEO with someone loyal to the VC. For seed funding, the VCs look at the product, although not at any technical internals, and try to estimate how the target users/customers would like the product. For later stage funding, the VCs look mostly just at what an accountant does. And for any VC funding, they look at what they know about the market: Commonly VCs claim to have "deep domain knowledge"; in terms of anything technical, that is a wild belly laugh; could break a bone slapping a thigh over that one. But they do have at least a cursory, from 10,000 feet up, view of the markets. So, they have heard of viral, social, local, mobile, sharing, photo apps, own both an iPhone and an Android, have used Google, Facebook, PInterest, SnapChat, InstaGram, and Uber, have heard about tablets, laptops, Windows, Apple, Linux, have seen articles on Apple's watch, have gotten a lot of pitch decks, attended a lot of pitches, and have listened for a few minutes each to a few. For more, they know most of the other VCs on, say, Sand Hill Road, and attend morning what's hot pick-up seminars in coffee shops. For exits they know about acquihires, pitchforking, M&A, and maybe even IPOs. While in some sense the VCs understand that the need to find companies that are new and exceptional, they look for patterns they have seen from the past, patterns that must reject most new and exceptional companies. Really, they dream of a CEO of a company they funded calling them and telling them about the next SnapChat. Sometimes they make money, and sometimes they don't, but that's what they do. The VCs commonly say that their funding is not for everyone, and that is very true. While what the VCs do sometimes makes money, in no way are the VCs a broad source of innovation funding. For revolutionary technology, the VCs couldn't care less. Actually, they would prefer that anything technical not be important -- the don't want to get involved in anything technical.