6 ms·

I'll stick my neck out on this and say, the author is right and these are the people who are ruining Silicon Valley. Take a look around at the big named "innova

by scurvy 11y ago

I'll stick my neck out on this and say, the author is right and these are the people who are ruining Silicon Valley. Take a look around at the big named "innovators" and you'll notice that they're really "iterators". People building a "business" around a small, incremental improvement in an previously existing process. I refer to this as the HFT, hedgefund incremental approach. Let's pick up nickels in front of bulldozers while the getting is good(1). Get enough money before the bulldozer hits you. This seems like the premise behind AirBnB, Uber, Square, and every other unicorn. Can't wait 3 minutes to order your food at the cafe? Billion dollar business! Can't wait 4 minutes and chat with your companion while you wait for your dinner check to arrive? Billion dollar business! Creating electricity from small, safe, pollution-free hydrogen power cells? Eh, maybe a few hundred milli tops. Not worth it. It's this kind of quick buck thinking around simple, non-inventive iterations on existing models that are actually killing the Valley. The Valley should be for big ideas and wild bets. Not bets on people to do your laundry for you. These Wall Street/finance people need to pack up and go back east. (1) This was the idea behind Long Term Capital Management (LTCM). We all know how well that worked out.

supster 11y ago
I agree with your general sentiment, but I feel like your examples are wrong. Uber has fundamentally reshaped how we view and consume transportation. With the addition of self-driving cars, it has the potential to utterly reshape logistics. Square has completely modernized the dinosaur POS business. As someone who works with a lot of small businesses, I can tell you that Square has really impacted their lives for the better. AirBnB, while I like a lot as a consumer for opening up a whole new genre of places I can stay and feel at home, has admittedly started to devolve into managing a bunch of unzoned hotels. LTCM while insanely leveraged was actually arbitraging an anomaly in Tbills. It was a great business run quite well, right until the Russian gov't defaulted and sent shockwaves through the bond market. That kind of high sigma event is pretty hard to forsee.
- scurvy 11y ago
  I'm much more interested in the company that brings us self-driving cars (or flying cars) than the glorified taxi company that leverages them. Call me a dreamer. I'll probably die broke and penniless though. Also, comedic if you think that LTCM was well run. They were sniffing their own flatulence and getting high on their own supply. They employed two Nobel laureates and based their model on those laureates....whose work ended up being completely flawed. How many people use Black-Scholes today? Zip (if they have a clue). You really should read "When Genius Failed" if you think they ran a good business.
  - supster 11y ago
    Fair point, but the company bringing us self-driving cars started off as a glorified search company selling ads on the side. Maybe we should give these companies some time to mature, build a recurring cash base, and replow that back into cool R&D.
  - nordsieck 11y ago
    I'd suggest to you that incremental improvement is generally more important than revolutionary improvement, even if it's distinctly less sexy.
    - scurvy 11y ago
      That's OK. It just doesn't belong in Silicon Valley. Ship it out to XYZ Valley/Alley/Prairie. I'm also a fan of punctuated equilibrium and cladogenesis as opposed to evolution over millenia. But maybe that's just me.
  - liamzebedee 11y ago
    Don't downplay the social innovation of Uber though- it's created a worldwide transportation service run completely by a group of ordinary drivers, who need simply a car and a smartphone.
    - TeMPOraL 11y ago
      By "it created" you mean it's a first globally recognizable brand (part of the recognition obviously comes from their blatant violation of local laws). We had lots of similar companies in Europe; as far as I can tell, they even had apps first. They just weren't sexy. I'm not trying to diminish the effect (for better or worse) Uber is having on transportation market. It's big and it's because of them. But it's not because they were innovative in some way.
- venomsnake 11y ago
  > Uber has fundamentally reshaped how we view and consume transportation. I live in a European capital. I have been calling cabs by SMS to address for 15 years now. I write starting address, end point and receive in sms the number of the cab and in how many minutes it will be at my door. Can you point the fundamental difference with Uber?
  - supster 11y ago
    Great, now if you go to a Tier 3 city in China will that work also? Has your SMS cab service built a worldwide network with deep liquidity? Does your cab service account for supply and demand in realtime? Does you cab service experiment in other forms of logistics from helicopters, food delivery, bike couriers? Does that service employ the entire former Carnegie Mellon Robotics department for R&D into self driving cars? If you said yes to all of these, please let me know, I would love to invest!
    - venomsnake 11y ago
      Two of sentences you wrote deal with investment to the future that is not yet implemented - so they cannot change "fundamentally how we view transportation" yet. Supply and demand in realtime is not an issue, since my town is oversupplied on cabs so a crunch rarely arises. The worldwide network with deep liquidity is useless when we are talking about local service. Those third tier city china drivers will have hard time giving a hand in London if a crunch arises. Uber is just a gypsy cab with a polished app. Everything else is just in the works.
  - SilasX 11y ago
    That doesn't seem to take advantage of modern IT like Uber does: 1) Keeping a record of driver and passenger ratings (disincentivizing bad behavior on both sides) 2) Streamlined complaint resolution process 3) Remote monitoring of the ride to see if they took an unnecessarily long route 4) Payment being handled behind the scenes so you can just get in and out without stopping to pay (plus not having to do the tipping dance for Americans) 5) Getting updates as the car gets closer 6) (once at scale) Pairing people together on similar journeys to save money (UberPool/Lyft lines). 7) (not sure if the system you refer to had this) The destination already being loaded on the nav when you step in. 8) Edit: plus, apparently they collect a ton of data about rides to estimate where requests are most likely to be and encourage drivers to be there
jdminhbg 11y ago
> This seems like the premise behind AirBnB, Uber, Square, and every other unicorn. If you can't see the value created by each of these companies, I kinda have to wonder how much you ever get out of your house. Even just the amount of consumer surplus generated by Uber -- not driving home drunk, and not having to wait for a completely unreliable cab company -- is massive. Classifying what they're doing as nickels and bulldozers is so short-sighted it's a little hard to understand as anything other than simple sour grapes.
- TeMPOraL 11y ago
  Uber is generating consumer surplus by working illegally and disrupting the social trust that is the fabric of society. But whatever. I don't know much about Square, from what I've seem they do seem to be making big improvements in the space. But Uber doesn't do anything new - it's hardly even an iteration. They're just sexy, and created a worldwide brand. In Europe we had tons of local Ubers for years, and even dedicated services for markets like "not driving home drunk" popping up around periods when a lot of people drink (think Ne Year's Eve). The biggest value Uber is bringing is being centralized. A single brand. That has nothing to do with technology, and everything to do with business side.
  - jdminhbg 11y ago
    > Uber is generating consumer surplus by working illegally and disrupting the social trust that is the fabric of society. The social trust and fabric of society stuff is kind of too funny to even lampoon, but the first half is important: if you can generate consumer surplus by breaking the law, what exactly does that say about the law, and on whose behalf it's working?
    - TeMPOraL 11y ago
      > The social trust and fabric of society stuff is kind of too funny to even lampoon* It's funny because you probably grew up in a civilization and take it for granted. > if you can generate consumer surplus by breaking the law, what exactly does that say about the law, and on whose behalf it's working? It doesn't say anything. You can create consumer surplus breaking any law if you're willing to dump externalities elsewhere, on parties you don't count as consumers. A thief can for sure create consumer surplus by distributing stolen money among friends. So can the owner of a factory enrich the city by dumping toxic waste into a river, driving his costs down but poisoning people downstream.
afarrell 11y ago
Uber is making a massive long-term bet: driverless cars. Hydrogen fuel cells, if practical, would be worth massive investment, but folks who would use them seem to have decided that lithium ion batteries would make more sense and are making a $5 billion investment in that. There are a lot more smaller companies pursuing small ambitions, but that makes sense: a small company doesn't have the resources to tackle a capital-intensive problem without first demonstrating that it is a somewhat-reasonable bet.
- scurvy 11y ago
  I was actually referring to hydrogen power on a neighborhood scale, not car. These were just abstract examples, but I guess the HN crowd sometimes gets caught up in the details. It's a byproduct of a flawed communication mechanism.
noname123 11y ago
I'll stick out my neck and say that perhaps the dearth of truly innovative startups is because solving real problems are very difficult. Most of us are pampered because we were told that we were smart because there is a shortage of coding skills. But coding skills cannot solve cancer, invent alternative energy sources nor create self-driving skills (that is AI research). So we all gravitate towards making a web app to do laundry quicker. However since there is no real competitive advantage to whose web laundry app is better, coders are actually the commodity used by the business/marketing to a race to the bottom of who can raise the money the fastest, do the best viral marketing and creating a cult of persona in the tech press. I don't mean to be negative but I just want to make a point that it is up to ourselves to learn a new skill-set if we want to solve bigger problems vs. carping about scruples-less businessman exploiting coders whose skills due to agile, coding bootcamps and improved programming toolchains are getting increasingly commoditized.

by scurvy 11y ago

supster 11y ago

I agree with your general sentiment, but I feel like your examples are wrong. Uber has fundamentally reshaped how we view and consume transportation. With the addition of self-driving cars, it has the potential to utterly reshape logistics. Square has completely modernized the dinosaur POS business. As someone who works with a lot of small businesses, I can tell you that Square has really impacted their lives for the better. AirBnB, while I like a lot as a consumer for opening up a whole new genre of places I can stay and feel at home, has admittedly started to devolve into managing a bunch of unzoned hotels. LTCM while insanely leveraged was actually arbitraging an anomaly in Tbills. It was a great business run quite well, right until the Russian gov't defaulted and sent shockwaves through the bond market. That kind of high sigma event is pretty hard to forsee.

scurvy 11y ago
I'm much more interested in the company that brings us self-driving cars (or flying cars) than the glorified taxi company that leverages them. Call me a dreamer. I'll probably die broke and penniless though. Also, comedic if you think that LTCM was well run. They were sniffing their own flatulence and getting high on their own supply. They employed two Nobel laureates and based their model on those laureates....whose work ended up being completely flawed. How many people use Black-Scholes today? Zip (if they have a clue). You really should read "When Genius Failed" if you think they ran a good business.
- supster 11y ago
  Fair point, but the company bringing us self-driving cars started off as a glorified search company selling ads on the side. Maybe we should give these companies some time to mature, build a recurring cash base, and replow that back into cool R&D.
- nordsieck 11y ago
  I'd suggest to you that incremental improvement is generally more important than revolutionary improvement, even if it's distinctly less sexy.
  - scurvy 11y ago
    That's OK. It just doesn't belong in Silicon Valley. Ship it out to XYZ Valley/Alley/Prairie. I'm also a fan of punctuated equilibrium and cladogenesis as opposed to evolution over millenia. But maybe that's just me.
- liamzebedee 11y ago
  Don't downplay the social innovation of Uber though- it's created a worldwide transportation service run completely by a group of ordinary drivers, who need simply a car and a smartphone.
  - TeMPOraL 11y ago
    By "it created" you mean it's a first globally recognizable brand (part of the recognition obviously comes from their blatant violation of local laws). We had lots of similar companies in Europe; as far as I can tell, they even had apps first. They just weren't sexy. I'm not trying to diminish the effect (for better or worse) Uber is having on transportation market. It's big and it's because of them. But it's not because they were innovative in some way.
venomsnake 11y ago
> Uber has fundamentally reshaped how we view and consume transportation. I live in a European capital. I have been calling cabs by SMS to address for 15 years now. I write starting address, end point and receive in sms the number of the cab and in how many minutes it will be at my door. Can you point the fundamental difference with Uber?
- supster 11y ago
  Great, now if you go to a Tier 3 city in China will that work also? Has your SMS cab service built a worldwide network with deep liquidity? Does your cab service account for supply and demand in realtime? Does you cab service experiment in other forms of logistics from helicopters, food delivery, bike couriers? Does that service employ the entire former Carnegie Mellon Robotics department for R&D into self driving cars? If you said yes to all of these, please let me know, I would love to invest!
  - venomsnake 11y ago
    Two of sentences you wrote deal with investment to the future that is not yet implemented - so they cannot change "fundamentally how we view transportation" yet. Supply and demand in realtime is not an issue, since my town is oversupplied on cabs so a crunch rarely arises. The worldwide network with deep liquidity is useless when we are talking about local service. Those third tier city china drivers will have hard time giving a hand in London if a crunch arises. Uber is just a gypsy cab with a polished app. Everything else is just in the works.
- SilasX 11y ago
  That doesn't seem to take advantage of modern IT like Uber does: 1) Keeping a record of driver and passenger ratings (disincentivizing bad behavior on both sides) 2) Streamlined complaint resolution process 3) Remote monitoring of the ride to see if they took an unnecessarily long route 4) Payment being handled behind the scenes so you can just get in and out without stopping to pay (plus not having to do the tipping dance for Americans) 5) Getting updates as the car gets closer 6) (once at scale) Pairing people together on similar journeys to save money (UberPool/Lyft lines). 7) (not sure if the system you refer to had this) The destination already being loaded on the nav when you step in. 8) Edit: plus, apparently they collect a ton of data about rides to estimate where requests are most likely to be and encourage drivers to be there

jdminhbg 11y ago

> This seems like the premise behind AirBnB, Uber, Square, and every other unicorn. If you can't see the value created by each of these companies, I kinda have to wonder how much you ever get out of your house. Even just the amount of consumer surplus generated by Uber -- not driving home drunk, and not having to wait for a completely unreliable cab company -- is massive. Classifying what they're doing as nickels and bulldozers is so short-sighted it's a little hard to understand as anything other than simple sour grapes.

TeMPOraL 11y ago
Uber is generating consumer surplus by working illegally and disrupting the social trust that is the fabric of society. But whatever. I don't know much about Square, from what I've seem they do seem to be making big improvements in the space. But Uber doesn't do anything new - it's hardly even an iteration. They're just sexy, and created a worldwide brand. In Europe we had tons of local Ubers for years, and even dedicated services for markets like "not driving home drunk" popping up around periods when a lot of people drink (think Ne Year's Eve). The biggest value Uber is bringing is being centralized. A single brand. That has nothing to do with technology, and everything to do with business side.
- jdminhbg 11y ago
  > Uber is generating consumer surplus by working illegally and disrupting the social trust that is the fabric of society. The social trust and fabric of society stuff is kind of too funny to even lampoon, but the first half is important: if you can generate consumer surplus by breaking the law, what exactly does that say about the law, and on whose behalf it's working?
  - TeMPOraL 11y ago
    > The social trust and fabric of society stuff is kind of too funny to even lampoon* It's funny because you probably grew up in a civilization and take it for granted. > if you can generate consumer surplus by breaking the law, what exactly does that say about the law, and on whose behalf it's working? It doesn't say anything. You can create consumer surplus breaking any law if you're willing to dump externalities elsewhere, on parties you don't count as consumers. A thief can for sure create consumer surplus by distributing stolen money among friends. So can the owner of a factory enrich the city by dumping toxic waste into a river, driving his costs down but poisoning people downstream.

afarrell 11y ago

Uber is making a massive long-term bet: driverless cars. Hydrogen fuel cells, if practical, would be worth massive investment, but folks who would use them seem to have decided that lithium ion batteries would make more sense and are making a $5 billion investment in that. There are a lot more smaller companies pursuing small ambitions, but that makes sense: a small company doesn't have the resources to tackle a capital-intensive problem without first demonstrating that it is a somewhat-reasonable bet.

scurvy 11y ago
I was actually referring to hydrogen power on a neighborhood scale, not car. These were just abstract examples, but I guess the HN crowd sometimes gets caught up in the details. It's a byproduct of a flawed communication mechanism.

noname123 11y ago

I'll stick out my neck and say that perhaps the dearth of truly innovative startups is because solving real problems are very difficult. Most of us are pampered because we were told that we were smart because there is a shortage of coding skills. But coding skills cannot solve cancer, invent alternative energy sources nor create self-driving skills (that is AI research). So we all gravitate towards making a web app to do laundry quicker. However since there is no real competitive advantage to whose web laundry app is better, coders are actually the commodity used by the business/marketing to a race to the bottom of who can raise the money the fastest, do the best viral marketing and creating a cult of persona in the tech press. I don't mean to be negative but I just want to make a point that it is up to ourselves to learn a new skill-set if we want to solve bigger problems vs. carping about scruples-less businessman exploiting coders whose skills due to agile, coding bootcamps and improved programming toolchains are getting increasingly commoditized.