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Hard Tech is Back
- nxzero 11y agoCongrats on the exit, but the idea that GM will be around for the next wave of innovation is what it is. To me hard tech is about building the future, not finding an off ramp. In fact, this maybe one of the many factors killing real change, the desire to make for the hills when a giant offers to take you.
- Hydraulix989 11y agoGM has been doing great stuff. The Tesla Model 3 is already here; it's the Chevy Volt.
- falcolas 11y agoSo, was the Cruise acquisition for the talent or the tech? How many other "Hard Tech" startups have had successful exits, when compared to how many have failed? How does this ratio compare to software startups?
- BinaryIdiot 11y ago> So, was the Cruise acquisition for the talent or the tech? It has to be the tech or tech + talent. Are there enough people worth $1 billion or more to do only a talent acquisition?
- taneq 11y agoYes. That's the thing about acqui-hiring. As much as we like to pretend that with enough dollars you can buy the talent required to own a product-space, the fact is that in certain spaces, individual mortals can create billions of dollars of value. You just have to pick the right space and the right individual.
- BinaryIdiot 11y ago> Yes Do you have any data showing acqui-hiring of $1 billion or more? I've never heard of such an amount and retention after an acquisition is really, really hard. Seems crazy to spend so much only to have people leave after 1-2 years (or less depending on the company).
- Hydraulix989 11y agoSelf driving cars is a fiercely competitive space, maybe they shopped it around? Uber, Apple, Tesla, and every car company would be interested.
- ethbro 11y agoMaybe more plausible when it's the core talent + specific tech applicable to the problem? You're buying both a base platform / proof of concept+ implementation and the key individuals responsible for creating it. Then training your people on the platform with the deeper knowledge from the key individuals in the 1-2 years you've got them employed. If you can buy a breakthrough and enough knowledge transfer to get your people operational on adapting it, it's worth it even if you don't get any additional breakthroughs?
- ganeumann 11y agoTo take an example at the far end of the spectrum: in 1989 WPP (the world's largest owner of advertising agencies) bought The Ogilvy Group (a very large ad agency) for $864 million ($1.7 billion in today's dollars.) Ogilvy was nothing but people...there was no other value (except, maybe, the brand, but that's debatable.) At the time people criticized the deal, saying "all of their assets go down the elevator every night." But it turned out to be a great acquisition for WPP. While the founders and first few employees may leave after an acquisition, preferring to work for themselves, everyone after that is an employee and, as long as they are managed and compensated well, will generally not care so much who the company's owner is.
- BinaryIdiot 11y agoFair enough. Good example. I just don't hear anything near this size happening as a talent acquisition but I guess it's possible then.
- shoyer 11y agoI'm sure the tech was part of it, but my guess is that they were mostly buying it for the ready made team. I think this is pretty similar to the Monsanto acquisition of Climate Corporation (where I worked) several years ago. If you're a big traditional company, building an innovative technology team from scratch is really hard, even if you're willing to spend a lot of money on it. It takes a lot of time and effort, and you probably don't have the internal leaders or culture to attract top talent. Buying a promising startup and continuing to operate it as an independent organization is a straightforward (if expensive) way to solve this bootstrapping problem. From a strategic perspective, it can make complete sense if the opportunity cost of getting a product to market a year or two late can be measured in billions of dollars. There are a lot of advantages to being first to market.
- emcq 11y agoIt's both. They still have a long way to go for autonomous driving, but they have a young ambitious team and their leadership seems very strong. Relative to a company like Google, their weakness may be on the hardware side, but GM likely has access to very strong mechanical engineers, and they certainly now have the funds to go out and hire more folks.
- minimaxir 11y agoI'm all for taking Medium thought pieces on the fundraising environment down a peg, but the problem with Hard Tech is that it requires a nontrivial amount of venture capital. You can't be ramen-profitable when your startup requires purchasing cars for testing or renting giant computing clusters for training AI models. In relative contrast, it is trivial and risk-free to make a lean MVP for a generic Uber-for-X and send in a YC application.
- Retric 11y agoYou can go pretty far with AI using just a few GPU's. 10's of Teraflops is cheap.
- hyperbovine 11y agoTake it away, Koons Crooks.
- hobofan 11y agoPurchasing a Titan X for 1k is still quite painful if you do a startup with virtually no funding. Source: I just did that.
- rorykoehler 11y agoWhy buy when you can rent?
- hobofan 11y agoYou mean on AWS/Azure? Because I have to develop a framework (https://github.com/autumnai/leaf https://github.com/autumnai/leaf) with it, and there is no way I am going to introduce any more complexity than necessary that early.
- rorykoehler 11y agoUnderstood. Leaf looks interesting. Will be keeping an eye on it. Having just recently focused on machine learning I still haven't settled on a stack. I find your rational behind using Rust quite helpful. What kind of timeframe are we looking at for when this is production ready?
- te_chris 11y agoThis is the rationale of EF (said as someone who was in it). They've recognised that IP is VERY valuable again and are capitalising on it in a massive way.
- tclmeelmo 11y agoWhat is meant by "Hard Tech"? Hardware technology, nontrivial problems, or something else?
- nmrm2 11y agoHard Tech means nontrivial problems in all varieties, but Altman is particularly "excited about AI (both general AI and narrow AI applied to specific industries, which seems like the most obvious win in all of startups right now), biotech, and energy." (edit: okay, okay, maybe the article isn't clear.)
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- tclmeelmo 11y agoI didn't find it to be clear, otherwise I wouldn't have asked. SV has its own jargon, and not being from SV, I think it's fair to want to clarify what is meant by a capitalized phrase like "Hard Tech" in case there is a deeper meaning known to those inside SV.
- nmrm2 11y agoFair enough. But I don't think "Hard Tech" is being used as SV jargon here. The first paragraph defines what is meant by "hard technology" mainly in the negative -- critics who say "SV isn't doing hard technology", for whatever value of "hard technology" they mean.
- mod 11y agoIf the article was clear, it would have replaced "hard" with "difficult." Hard is ambiguous, especially when talking about technology.
- ghaff 11y agoYes. My reading of the headline was "hard" in the sense of "hardware" because hardware tends to require larger investments and more time--and it's often much harder to advance to a viable point incrementally. To be sure, these characteristics also mean that hardware tends to be more difficult than many types of software but the terms don't mean the same thing.
- gist 11y ago> A popular criticism of Silicon Valley, usually levied by people not building anything at all themselves Why can or should criticism only come from [1] people that are building things themselves? What about the press (as only one example) or people who write books? What about people teaching in colleges? What about people leaving comments on HN or any other forum? Criticism only valid if coming from someone building something themselves? Don't agree with that. [2] [1] Which to me by the choice of words is what is meant by this statement. [2] If that is the case companies should never solicit any feedback from their customers about their product or their business model.
- steffan 11y ago>> A popular criticism of Silicon Valley, usually levied by people not building anything at all themselves > Why can or should criticism only come from [1] people that are building things themselves? What about the press (as only one example) or people who write books? What about people teaching in colleges? What about people leaving comments on HN or any other forum? Another interpretation is that while criticism can come from any source, those who are not building things themselves necessarily have a different perspective than those who do, and therefore their arguments should be heard in that context.
- gist 11y ago> those who are not building things themselves Also there are people not currently building but that have built something in the past (or assisted others who have done so). Such as sama or pg. > have a different perspective than those who do, and therefore their arguments should be heard in that context. That perspective could also be more valuable in some cases. Keep in mind that many of today's "disrupters" are people outside a traditional industry who actually do great things exactly because they have little experience and are not jaded. Fresh outlook not restrained by traditional thinking. The problem that I had (if you want to call it that) was not that sama made that statement. It's the fact that I feel he implied a negative which was not warranted. Plus the use of "usually" when the truth is nobody is in a position to know the exact experience or background of someone offering criticism particularly what they have done in the past. [1] [2] [1] There could be people even here on HN who have extremely significant backgrounds in building things that prefer to remain anonymous. [2] I am now thinking maybe this is why PG has others read his essays. So he could simply change a sentence or insert a word and avoid criticism and excessive footnotes.
- kornork 11y agoIs there a list somewhere of these kind of companies?
- nailer 11y agoNot sure, but biggest one so far is probably Deepmind, from the UK. Magic Pony (machine learning for reverse-compressing video data, re-adding data that was removed during the compression process) is pretty cool.
- kornork 11y agoI'm thinking from the perspective of "I'm sick of working at your standard SaaS. I'd like to see what else is out there for software developers."
- lmm 11y agoIsn't that just a buzzword-heavy way of saying "better video compression"?
- nailer 11y agoNo. AFAICT, it's perceptual reverse-compression: ie, you look at a bad mp4 of a brick wall, and even though it's shitty, you mentally figure out the mass of pixels is a brick wall. Imagine if the computer actually re-added a crisp brick wall there.
- lmm 11y agoVideo compression algorithms already optimize for perception rather than objective measures like PSNR, so I still don't see the fundamental difference.
- qaq 11y agoAny pointers on who might be a good VC outfit for SaaS type startup that actually needs to run their own clusters as opposed to throwing everything onto AWS?
- n00b101 11y ago> Any pointers on who might be a good VC outfit for SaaS type startup that actually needs to run their own clusters as opposed to throwing everything onto AWS? Very curious, why do you think you need to run your own clusters, to the point where you think you need to seek unusually risk prone capital? If your justification is that you are are optimizing for cost (e.g. maximizing your performance per dollar), then you must think the capex dramatically lowers opex at scale if you move from AWS to specialized hardware (say, an FPGA bare metal cluster instead of a GPU or CPU cluster in AWS). In such a case I would argue that you should just get enough paying customers first using AWS, to build up enough cash-flow that would then clearly justify the capex for scaling up and going colo. And at that point, you would not need to shop around for wild risk taking capital, the CBA could easily be explained to any VC and in fact you could probably even just get a bank loan to finance the capex if it is a clear winner in reducing costs. The only scenario I can see where you really need to run your own hardware from day 1 is if you need to terminate some dedicated circuits for specialized data feeds (e.g. real-time market data)... In that scenario, I would recommend looking into co-locating the data appliance in a third-party data center that is physically nearby to US-EAST and can run a Direct Connection into AWS for you. Otherwise, you may want to consider the possibility that your desire to own your own cluster may be a case of premature optimization and scaling up too early/too fast. It's a very expensive thing to do and an easy way to accidentally run out of money if you don't have client contracts signed beforehand.
- qaq 11y agoWe connect storage nodes via infiniband for lower latency and higher throughput. Think RDS type service where you can have significantly larger instances like say up 40TB DB running on 4 way box (soon 8 way) box.
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- davidw 11y agoIt was always kind of frustrating to see the amount of brain power and tech going into the place I worked in Italy, www.CenterVue.com compared with typical 'web' startups. Those guys have computer vision, mechanical and electriconic engineering, and lots of software of various kinds. They're doing pretty well, but not nearly as well as plenty of way more "trivial" startups. I put trivial in quotes because it's never easy, but... you'd like to hope there's some correlation between effort and reward.
- davidivadavid 11y agoThere is a correlation, but effort is a vector more than a magnitude. Lots of effort in the wrong direction gets you nowhere. Meanwhile small effort surfing on a trend can work quite well.
- balls187 11y ago> A popular criticism of Silicon Valley, usually levied by people not building anything at all themselves, is that no one is working on or funding “hard technology”. Lost all interest in saltman's point when I read this line. It's a valid criticism, regardless if the people who are making it are "builders" or not. It was a turn off, because it makes the author seem bitter about (what I think is) a valid criticism.
- untog 11y agoAgreed. The notion that you can't criticise something unless you've tried to do it yourself is nonsense.
- oldmanjay 11y agoThe notion is actually that criticizing something you don't understand is valid but not necessarily useful.
- TheOtherHobbes 11y agoFallacy: you don't need to understand the internals of something to critique its utility.
- jsprogrammer 11y agoDoes that mean saltman spams alarmist Medium thought pieces?
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- furyofantares 11y agoI don't understand -- you had a bad reaction to a single line in the introductory paragraph and knowingly let this turn you off to the entire post? Is that a valuable type of filter for you?
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- FussyZeus 11y ago> A popular criticism of Silicon Valley, usually levied by people not building anything at all themselves, I have to take issue here. I don't need to be a "builder" to see that what a given startup is building is either worthless or an attempt at solving a non-problem. I'm not a helicopter pilot, but if I see a helicopter stuck in a tree, I don't need to be one to know that the guy screwed up.
- lmm 11y agoSure, but a lot of people like to complain that snapchat/tinder/etc. are wastes of time or poor uses of talent when really they make a lot of people's lives a lot better.
- FussyZeus 11y agoIt's far from an objective observation, I'm merely pointing out that the idea that you need to be doing a thing in order to criticize someone else's thing is hogwash.
- softawre 11y agoHogwash? I don't use that word, but I still think you using it is jibberwasocky.
- jacalata 11y agoIs a positive opinion worth anything if it comes from someone not building the product? If so, why is it different for a negative opinion?
- lmm 11y ago"I find this product useless" is useful. "Other people are stupid for finding this product useful" is useless, just as is "other people are stupid for not finding this product useful".
- msoad 11y agoZOOX[1] is another self driving car startup that is up for acquisition. [1] http://zoox.co/ http://zoox.co/
- jackcosgrove 11y agoI worked in industrial automation for a few years and most of the software there is terribly outdated. It's definitely ripe for disruption. There are "firm tech" business ideas that involve building better sensing and control software for hard tech industries. Given the low cost of sensors and networking these days it's not prohibitively expensive. I think making a hard tech product for consumers is still very hard, and those who succeed should be commended. People wanting to dip their toes in the water might consider things like building a factory management portal like Splunk that aggregates sensor data, or something that involves sensing and reporting rather than actuation. Actuation can be dangerous and therefore legally risky.
- caseysoftware 11y agoI think the reason these systems haven't been challenged yet is lack of knowledge. People tend to attack areas and industries that they know a lot about. This is why college hackathons have tons of dating, what to do, and delivery apps. It's their world. If you don't have people coming out of the industrial automation space with a good understanding, it's hard to walk back in with a useful product.
- jackcosgrove 11y agoExactly. Industrial automation also isn't sexy and manufacturing margins are small so the big dogs in the industry have limited R&D resources. The upside is a lack of competition and a B2B environment. No need for a marketing department when you just have to attend a few industry trade shows a year.
- Azkar 11y agoAnd most places already have a system that works and no incentive to upgrade their tech from 15 years ago.
- toddmorey 11y agoBe careful with "lack of competition". You are ALWAYS competing with the incumbent solution. No matter how clumsy or awkward it seems; no matter how much better it could be; those solutions have amazing staying power and your niche can become your enemy because there's a limit universe of customers to sell the solution to.
- amelius 11y agoNow if we all just stop focusing on how to make better CSS, we might actually create some new hard tech.
- AlwaysBCoding 11y agoFlexbox is life-altering though.
- jkyle 11y agoConsidering I write exactly 0 lines of any sort of web based code on my median day it hasn't altered my life at all.
- qntmfred 11y agohave you used a website before? have you built a car before? have you driven a car before?
- jkyle 11y agoSure, but I don't consider most of those life altering events. The new safety features on my current car, like collision detection and dynamic cruise control, have certainly changed the way I drive and so altered my life in a small way.
- ryanSrich 11y agoNo need to devalue the work of others. It's likely many of these new hard tech problems will require software. Software that runs on the web. Software that is styled via CSS.
- collyw 11y agoCSS styles fine, it could be a lot better in terms of ease of use for the developer. It often feels like black magic getting something to style the way I want it, and its not something that I can sit down and work out with a pen and paper, instead it seems to rely on knowing lots of tricks and obscure features.
- n00b101 11y agoBuilding hard core technology products is very risky and challenging for entrepreneurs. Complicating matters further, recent financial market volatility and sentiments being expressed in "Medium thought pieces about when the stock market is going to crash" are amping up the fear and uncertainty faced by newcomers. It is therefore extremely encouraging and important to hear this message clearly and directly from Sam, that this is indeed a lucrative area worth pursuing and that there are investors who have the risk appetite to continue to fund such ventures.
- samstave 11y agoIf I dont know anything about developing AI specifically - but have an idea of how AI can help an industry, how could I go about making that hard idea something with merit/velocity/validity?
- rorykoehler 11y agoLearn AI?
- samstave 11y agoSure - but I'd rather bounce off someone who already knows it and can tell me if I am nuts, first. I know its a hard problem, the idea - I just dont know if its worth doing...
- rorykoehler 11y agoIf it's worth doing or not is entirely detached from the methods used to do it. Your business brain should be able to figure that out. If you want to work with AI/Machine Learning do a course to understand at least the basics. Besides the fact that you won't regret it, understanding the capabilities of a technology through how it works will help you understand how to apply it. AI isn't necessarily obvious like a CRUD app is.
- samstave 11y agoThank you for this input. May you please point me in the right direction to start learning? I am pretty senior role in my tech career and have not too much time - so even if its just a youtube channel that could start me learning by watching, I would appreciate it.
- rorykoehler 11y agoI found Andrew Ng's Coursera course to be very quick to get up to speed on the basics. If you're already in a tech role you will find it easy but informative. Definitely something you could do in a couple of evenings a week.
- vegabook 11y agoSounds like a desperate scramble to rebalance the portfolio which, reputationally, is far too long of last decade's, now-stalling, strategies. Problem is the brand is not 'hard tech', it's irredeemably soft tech. The brand is consumer biz disruption and social. YC is a short (if only it were listed) just like the rest of the web stack, for reasons of acute oversupply. It is woefully ill positioned on hard technologies. Kudos for trying, though! Heroic effort.
- ternbot 11y agoAnyone want to start a ternary computing startup? In the post Moore world I think there is a market and it is one of those innovations none of the big players are working...
- graycat 11y ago"Hard tech"? Okay. I have such a project. Big ass problem: Found one, where a the first good solution is a must have for nearly everyone in the world with Internet access. "Hard tech" solution: A bunch of applied math, with advanced prerequisites, some original, for a unique, really good, fun to use, interactive and addictive, by far the best in the world solution -- Did that. "Hard"? Silicon Valley has more hen's teeth than entrepreneurs who could understand the theorems and proofs of my math even if I explained it to them. Why? They didn't take the prerequisite pure/applied math courses in grad school. Neither did more than a tiny fraction of computer science profs. Code: 80,000 lines of typing, running, in alpha test -- did that. "We hope to hear from you." You did, and you ignored it. Using my HN UID, look up my submission in your records. If you are interested now, then let me know.
- nailer 11y agoIf someone else wanted to contact you how would they do that?
- amit_m 11y agoWhat is the problem you are solving?
- graycat 11y agoMy post is for Sam. Do you represent Sam and YC? I invited Sam to contact me, and from my HN UID his records will give him my e-mail address so that he can contact me. Sam requested that anyone with "hard tech" contact him. Here I'm taking "hard" as difficult, challenging, or technically advanced and not necessarily 'hard' as in 'hardware'. I do intend to announce, say, my beta test on HN, but for the current alpha test that seems a bit early. Sam asked people to contact him, and here I did and reminded him of my earlier submission that he might be interested in now. At least for now, the next step is up to Sam.
- cryoshon 11y agoHere's a several billion dollar hard tech idea that would benefit many, many, many people: cheap/fast/efficient water desalination and purification. It's a hard problem. Current solutions aren't cutting it. Unlock water from the oceans, and a lot of people can be helped. I'm ready to start this company, just need a few dozen engineers/chemists and a boatload of funding.
- chejazi 11y agoDo you have a scientific breakthrough in cheap/fast/efficient water desalination and purification?
- cryoshon 11y agoNo, that needs to be invented. That's why it's hard.
- tinco 11y agoIf it has to be invented it's not hard tech, it is hard science. YC has a separate strategy for that.
- cryoshon 11y agoFor these kinds of projects, the line is very blurry, though I agree there is a large science component. Can't make use of the science portion of it if the engineering portion isn't ready, too.
- pbreit 11y agoI'm not convinced that's a better approach than making sure we capture all the rain water.
- 6stringmerc 11y agoAs an amateur inventor with a serious backlog of "hard tech" type inventions (e.g. actual products, not software or 'platforms') I've done my best to inquire and reach out to several different potential funding sources, all of which have been extremely quick to pass. The basic reasoning is "this doesn't fit with our preferred verticals" and I'm left to figure out what that meant other than We only speak app as a self-imagined consolation. This article is not exactly re-assuring because the noted interests - AI, biotech, and energy - are all extremely crowded fields more than likely competing with large institutions, research organizations, and let's be honest, probably a TON of regulatory hurdles to consider if planning to do business in the US. For context, one of my primary inventions is a mobility / utility device that would have residential, commerical, and industrial applications. By design it can be applied to a variety of uses. I've done basic patent research and the pathway looks extremely good, quite tempting for me to just go ahead and file ASAP. It's hard tech. It's not glamorous, but it's a huge market opportunity on prima face. I've got a co-worker pal who finally got his beverage and branding invention patented and now he's in the marketing to local schools, catalogs, and if early indications are correct, he may have an genuinely lucrative future with it. In my view, he's a more likely investor target than anybody out on the West Coast or in a VC room. I simply base this perspective on personal experience and how this post sounds promising yet concludes with a short list of massive goals. Might as well wrap it up with "We just want to invest in a better mousetrap" considering the scope. Cottage industry isn't runaway freight train profit creation, I get that, but I'd also counter that if one wants to get into the next frothy bubble of biotech then good luck with that.
- clarkmoody 11y ago> isn't runaway freight train profit creation But YC is in the business of hopping aboard every rocket ship it can find. Sam & Co do not want to invest in small business. They want massive payouts. It's the only way the VC game works. If you're dedicated to getting funding, you have to keep knocking on tons of doors until you find an investor that matches your particular payout goals. The West Coast / SV venture capital scene makes a ton of noise about massive successes to entice many otherwise-profitable small business ideas to try and become huge. When they don't reach a hyperbolic trajectory, it's a VC failure, but the same business could have easily done well for the founders and early employees as a lifestyle business. A stable orbit if you will, but not going to the Moon. Find investors who want reasonable returns from your business at your scale. Don't think that the SV VC approach is the only way to get your business idea funded.
- saosebastiao 11y agoWell written and mostly agreeable but I've got a lowbrow dismissal incoming: I disagree that Cruise could be considered hard tech. The hard tech in that space was done by universities competing for DARPA awards, and Google after that. Cruise took inaccessible hard tech and made it more accessible. And that isn't an insult to Cruise. The problem space is still difficult, and they created more value tackling that than the vast majority of startups do on much easier problems. I happen to think that the opportunities for making the cutting edge more accessible vastly outweigh the opportunities for cutting new edges, and nobody should be discouraged from doing it because it isn't as glamorous as the research on the ground floor.
- jmcannon 11y agoInterestingly, Kyle (founder of Cruise) was intimately involved with the DARPA Grand Challenge at MIT when the goal was to engineer a self-driving car.
- 6stringmerc 11y agoI don't think you're being dismissive at all - if anything I think you've added some much relevant context to the discussion. I appreciate you mentioning this relationship between development and monetization.
- billmalarky 11y ago"Cruise took inaccessible hard tech and made it more accessible." This seems to be a standard path for businesses in the tech space. The value many of these companies bring is not the tech itself but the ability to get that tech to the masses (which is no small feat). It's why the classic techie response to a tech product is "who cares I can already do that with {insert X inaccessible technologies glued together with shell scripts}." The original dropbox thread on HN is a great example of this.
- seibelj 11y agoFor those interested: https://news.ycombinator.com/item?id=8863 https://news.ycombinator.com/item?id=8863
- pilingual 11y agoCongratulations to Cruise! Cruise Kyle Vogt's third acquired company. It's still ambiguous as to whether your first startup should be "hard tech" or not. I think in the case of self-driving cars it makes sense because automobiles are a trillion dollar market and the anxiety to stay competitive with the rapidly changing landscape is intense. Plenty of room in this market yet. What is the biggest competitive advantage and who has it? Data & Tesla. Tesla is the only company with the appropriate data to make self-driving a reality faster than anyone else (tell me when Google starts collecting data in Norway). Data collection equipment is relatively inexpensive. Maybe figure out how to get people to attach sonar or lidar or tap into their car's computer to access that data. What else is a problem, even for Tesla? How about predicting pedestrian behavior and making eye contact -- or identifying if a pedestrian is disabled and sending a signal to those pedestrians that it is OK to walk. At the end of the day the market being targeted has huge weight to the likelihood of a successful outcome. Incidentally, if you want to get into YC: https://twitter.com/hunterwalk/status/708304772055441408 https://twitter.com/hunterwalk/status/708304772055441408
- tgb29 11y agoGood post. Congrats to Cruise for the acquisition and to YC for generating a return on their investment. There are definitely opportunities in AI-narrow applications using machine learning-and biotechnology right now.
- emcq 11y agoThis acquisition fits exactly with GM's plans outlined by investing $500 million in Lyft to create self-driving car infrastructure [0]. It seems like companies who build products that have clear and significant business value with excellent market timing are successful. Perhaps you can extrapolate to saying hard tech is now a hot field but this is the first successful exit that comes to mind recently, rather than private investors putting more money on the table. [0] http://www.reuters.com/article/us-gm-lyft-investment-idUSKBN0UI1A820160105 http://www.reuters.com/article/us-gm-lyft-investment-idUSKBN...
- mathattack 11y agoMy impression on Appification vs Hard Tech is the length of the development cycle. The combination of a few trends (Predominately smart phones, social networks & data analytics) enabled a whole new wave of technical possibilities. It was relatively quick to monetize this via App development, so that was the first wave to take advantage. Hard Tech can take longer (though from Cruise's point of view, not always that much longer) so these companies are only coming to fruition now. When I look at AlphaGo's success, I think we are a new dawn of amazing things from Hard Tech.
- tardo99 11y agoReally, really bad deal for GM.
- mhb_eng 11y agoAs a mechanical engineer, I am excited to see more of a focus on hard tech content here! Unfortunately, there isn't really a HackerNews for EE's or ME's (though if someone wants to build it, I'd be grateful). So it can be tough to find startups working on these sorts of hard problems that are looking for all flavors of engineer (except civil, they stink and nothing they make moves /s). Personally, I work in ocean robotics and defense, which is I think is very cool, but mostly handled by large defense contractors and military research departments.
- noobiemcfoob 11y agoAs a CE/EE myself, I feel your pain. This area of engineering seems to have such a high barrier to entry. I imagine that is mostly because of the production cost and most necessary software tools still being heavily license based with their physical counterparts being prohibitively expensive as well. It's just easier to play around with software until you find something novel.
- ashwinl 11y agoIf you live in the SF Bay Area, Detroit, Austin, DC, Pittsburg or Chandler, I disagree. Try the TechShop and its host of classes. http://www.techshop.ws/take_classes.html?storeId=4 http://www.techshop.ws/take_classes.html?storeId=4
- Hydraulix989 11y agoIt's Pittsburgh with an h at the end. Source: Born and raised black and yellow.
- lemiant 11y agoMy mechanical co-founder swears by Hackaday. It's somewhat different, but a great place to see mechanical projects.
- hodwik 11y agoIs that a community? I thought that was just a blog.
- david927 11y agoA popular criticism of Silicon Valley, usually levied by people not building anything at all themselves, is that no one is working on or funding “hard technology”. Don't pretend that Silicon Valley is not superficial in many regards. Yes, some of those silly, fluff apps have gone on to make money and that's your metric so you defend it. But for many people, Silicon Valley embodies a different principle, like the one found at Xerox PARC, of people trying to make the future better and not just drive a nicer car.
- nxzero 11y agoOn the flip side, there's some that are willing to sell their soul to play with the tech of the future. Honestly wish it was easier to find people that aren't into tech for the money or somehow forgot the meaning of what it is to be evil.
- adrianbd 11y agoI had actually never checked out any YC demo day presentations, so this post pushed me to do so. I watched about a dozen of them from the latest batches and I must say I did feel that they were very underwhelming. Sure, I understand that my expectations of how a company looks so early on might be skewed and they have only about 3 minutes, but all the speeches were so templated (stressing ridiculously overhyped market values etc.) that I thought they were really uninspiring. Might be the fault of the VCs who are just looking to randomly jump on the next potentially successful ship endorsed by YC, but I honestly got tired of hearing about the next app that will change the world of X within 10 minutes. As you mentioned, some of these products have been genuinely amazing and winning lottery tickets that on average bring huge profits to YC, so we should probably look at it more pragmatically rather than expecting them to make the future better.
- bpchaps 11y agoEntirely agreed. This whole thing is frustrating. I just went to apply to YC but ended up closing the tab. A significant portion of the process seemed geared towards "We want highly visible projects with highly charismatic individuals." For example, I'm required to post a video of myself/group talking about the project. I'm not posting a damn video. Fine - I get that you want to be able to see the product/s up close with the passion of the founders, etc. But, hell - the project I'm working on is dirty, "hard", far from glamorous and isn't very presentable - especially on camera where my strong anxieties come out. Though, because of my personality I'm effectively disqualified, despite all else. If I'm missing something I'd very much like to me corrected.
- al2o3cr 11y ago"Leave the Medium thought pieces about when the stock market is going to crash and the effect it’s going to have on the fundraising environment to other people—it’s boring, and history will forget those people anyway." Sam channels Baghdad Bob for a minute there - "there are no American tanks in Baghdad. Especially not the one that just rolled by on-camera"
- omegaham 11y agoI don't think that Sam is Baghdad Bob, but Medium is the exact opposite - it's "American tanks are going to roll through Baghdad tomorrow! Run for the hills!" Doomsaying is only interesting when you get it right. I think that Sam is saying, "If you have a good idea, you'll succeed regardless of whether the economy is good or shitty." If you have a bad idea, you'll fail regardless. The ones who really benefit from the strong economy are the marginal ideas - ideas that normally would not get funded, but people have the spare money to throw at lottery tickets on the off-chance that they're missing something. Cue Pets.com and other 90s Internet startups.
- profeta 11y agopress release at the top of the front page? i thought Ycombinator self-posts were not "votable". this is hardly hard-tech since the same thing is being done in a garage with off the shelf parts http://www.bloomberg.com/features/2015-george-hotz-self-driving-car/ http://www.bloomberg.com/features/2015-george-hotz-self-driv...
- dlrush 11y agoEvery company doing hard tech should be considering federal funding for early stage R&D. The US gov't has been consistently providing more early stage capital than VC for several decades through the SBIR program. (About $2.5B each year). Capital through the program is NON-DILUTIVE, Phase 1 grants can be $225K, Phase 2 grants to $1.5MM, and you likely have government and private sector customers at the end of Phase 2. Steve Blank's Innovation Corp initiative is now working with the NIH, NSF and Defense to help companies development product-market-fit once basic funding has been achieved as well. Disclaimer: My company GrantIQ.com helps companies find federal funding opportunities & helps large companies identify breakthrough technologies being developed through these programs.
- bliti 11y agoCan you share more info? Or maybe an email address?
- mattzito 11y agoThe last time I looked into these types of grants was admittedly years ago, but from what I recall, there's extensive reporting and research requirements that you have to fulfill. It seemed like an overly onerous burden compared to the resources available to an early stage startup. Is that accurate? Have things changed?
- jseliger 11y agoEvery company doing hard tech should be considering federal funding for early stage R&D. The US gov't has been consistently providing more early stage capital than VC for several decades through the SBIR program. This is generally good advice, but I'm a grant writer (see http://www.seliger.com http://www.seliger.com if you're curious) and have worked on many SBIRs and STTRs. I'll add that there are downsides as well. One is simple timing: if the appropriate SBIR or STTR funding cycle just concluded for that year, you may have to wait another year to apply. Then another 1 – 3 months for a decision. Then longer for final authorization of the budget. The other day I talked to a guy whose best potential SBIR source had had a deadline the month prior. Second, Phase 1 grants can just be too small for the amount of effort that goes into them. Third, they don't come with the advice / community / expertise of good VCs. Fourth, they take a lot of effort to prepare, and for first-time grant writers they can be quite hard. The alternative is to hire someone like my firm. While I'm biased towards doing that for obvious reasons, we also cost money. While I don't want to talk anyone out of applying, I do want to note that the downsides are considerable too. As a side note, I used to submit some SBIR and STTR RFPs to Hacker News (search for "seliger" here: https://news.ycombinator.com/from?site=nsf.gov https://news.ycombinator.com/from?site=nsf.gov), but I stopped after a while because no one upvotes the submissions.
- kposehn 11y ago> Leave the Medium thought pieces about when the stock market is going to crash and the effect it’s going to have on the fundraising environment to other people—it’s boring, and history will forget those people anyway. Blunt. True, but blunt. Hats off to Sam.
- throwaway2121 11y agoSure, but history will also forget Sam and Ycombinator (Dropbox, AirBnB, give me a break).
- rwallace 11y agoNot if they end up funding the next Ford, IBM or Intel. Hence, I suppose, the point of this post.
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- david927 11y agoDan, with all due respect, and I have tons of it for you, it was his remark not mine and I found it cheeky because in my honest opinion, running YC is not significant, certainly not historically. But you're right, it is bitter. My apologies. I take it back. Edit: Why doesn't the delete button last longer? I would like to delete that comment and it's not that old.
- dang 11y agoI don't know what remark you had in mind and am sorry I missed the context there. We recently changed how comment deletion works because too many users were abusing the feature by deleting comments with ongoing replies. We're still happy to delete individual comments on request. I've deleted yours provisionally on the assumption that's what you still want. (If not, let us know.) I've deleted mine as well.
- lowglow 11y agoWe're working on "Hard Tech" over at Playa. If you're interested in AI/Cybernetics/ML/Ambient Intelligence come check out the platform we're building out. Http://getplaya.com/
- tonylemesmer 11y agoHardware is difficult. Investors are wary of difficult problems. They will invest if the problem is difficult and they think they are speaking to a team of people who can deliver the technology to market no matter what. Lots of good inventors are terrible implementers. If the invention is good but the team seems incapable that would be a reason for non-investment. Also - "hard tech" seems like the wrong thing to be aiming for. There are lots of hard problems to solve with simple tech and disrupting markets. Are these not valuable targets?
- Naritai 11y agoThe article, along with the zeitgeist that it refers to, is that all SV has been thinking about for the last ~5 years has been "simple tech and disrupting markets", at the expense of developing real technology.
- tonylemesmer 11y agoSimple tech and simple problems are not the same thing. SV has been going after simple (or non existent) problems.
- p4wnc6 11y ago> " popular criticism of Silicon Valley, usually levied by people not building anything at all themselves, is that no one is working on or funding “hard technology”." Wow. Passive aggressive much?
- elliotec 11y agoSeriously. Sam Altman has an interesting view of the world, which goes exactly as far as the boundaries of the SV bubble (bubble as in insularity as well as market inflation). He seems to be increasingly against anyone not exactly like him.
- throw129381 11y agoYeah, I've contributed a lot to OSS (has Sam Altman done so?), and he comes across as a taker. IMO OSS licences should exclude Silicon Valley parasites until they show a modicum of gratitude.
- bobby_9x 11y agoGratitude? OSS is supposed to be about donating your time, without asking for anything in return. Othetwise, you are just as bad as your perception of silicon valley.
- crpatino 11y agoLet me take the opportunity to repeat myself. We need a "professional-courtesy" license. Something like a GPL on steroids that can only ever be distributed as tarballs. The minute to pass a binary around, the minute you try to deploy with any sort of devops, etc, you have just opted-in for a commercial license, which requires a (modest) yearly fee. This way, your generosity will gain jobs for a fellow hackers somewhere. Takers still can pay for the benefit of convenience, though.
- kordless 11y agoI've never heard you say it, but I have a model that will do what you are describing here.
- Hydraulix989 11y agoSo yeah, Sam is trying to recruit people into starting these kinds of companies. Hard tech has always been "back" (when did it go away, Elon Musk?), but it is quite the pivot from the YC of yesteryear that capitalized on things like better UX for AJAX calendars, web hosting, and drag-and-drop file storage. The really hard tech though really evokes that initial visceral reaction of "too risky" for investors, especially if there's no real indicators in the form of traction or an MVP ("well just wait a sec there, professor, the problem is hard, so we haven't solved it yet"). As an investor, I certainly wouldn't feel comfortable shoveling stacks over to some guys who told me they were going to build true AI with a decade-long outlook. Yikes! It's also a tougher proposition for founders. You're basically betting 5-10 years of your life on a problem that you don't even know you can solve with no revenue/exit strategy in sight. Meanwhile, that guaranteed salary at Google sure is looking more and more appealing. I would almost recommend graduate school for these types of people looking to leave their mark on the world in solving a really hard problem where any real contribution only inches the world closer to solving it. The struggle is real for all actors here. For founders, the trick is finding that sweet spot where a problem sounds hard on paper (such as self-driving cars or VR headsets, wooo!), but actually is feasible using current technology (e.g. stick some lenses in a piece of cardboard), but due to timing or market forces or whatever, nobody is currently paying attention to it yet. Then at least, you can execute just like an AJAX calendar app would and obtain the same outcome (to vastly understate the challenges involved!).
- vannevar 11y agoFor founders, the trick is finding that sweet spot where a problem sounds hard on paper (such as self-driving cars or VR headsets, wooo!), but actually is feasible using current technology... This is how true innovation happens. Like evolution, innovation is not a steady inching forward (though that kind of progress certainly operates continuously in the background), but a series of sudden leaps punctuated by relative stability. Those sudden leaps happen when the right brain is in the right place at the right time to make the right analogy or synthesis with existing ideas. You can't fund people to produce it on command, you can only hope to be among the first to recognize that it has happened and to invest in it at that early point, before the innovation is disseminated. For an approach that does seek to produce innovation on command, see Ken Stanley's work on novelty search: https://www.youtube.com/watch?v=dXQPL9GooyI https://www.youtube.com/watch?v=dXQPL9GooyI
- MicroBerto 11y agoMore technology for sending dick picks? Jeez, can we please move on and do something that actually benefits this world with our talents?
- NiftyFifty 11y ago1 out of 238 start-ups. W00
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- freyr 11y ago> A popular criticism of Silicon Valley, usually levied by people not building anything at all themselves, is that no one is working on or funding “hard technology”. I'm not critical of Silicon Valley. Silicon Valley includes many companies working on hard problems, or investing money into long-term moonshot programs. The criticism is levied towards, for example, the social media giants that pull in top engineers to work on social media problems exclusively. The criticism is also directed at Silicon Valley VCs, who lure smart young people to work on semi-trivial problems because it's the quickest path to profit. It's not necessarily fair criticism. VCs have an incentive, first and foremost, to fund successful businesses. If their surest path to success in today's economy involves building semi-trivial apps, that's what they'll pursue. The same can be said for the finance industry, where the most successful players are employing our nation's top mathematicians and scientists to extract money from public markets using high-frequency trading. We can't expect them to self-regulate. But how can we incentivize smart people to work on something less lucrative?
- _delirium 11y agoSome of the criticism has just been that there's kind of a category error being made: not that these aren't good businesses, but that they aren't really tech companies, and calling them "tech companies" is more of a PR move. For example AirBnB is a successful business, but very little of its success has to do with technology it builds. It certainly operates in a field shaped by technology, and does need some amount of technology to operate the business (a website, some billing infrastructure, etc., roughly technology on par with any airline or hotel company). But, like Wal-mart a generation earlier, its success comes mainly from noticing that ongoing changes in technology and purchase habits open up new kinds of business opportunities as a specific kind of intermediary, and pushing hard to exploit that market opening. Craigslist is perhaps an even more pure example of that, a "technology company" where having almost no actual technology, beyond the very basic level of "a webpage", is kind of their ethos.
- golergka 11y agoI think this criticism comes from not understanding how much of a positive effect social media has on a modern world. There have been a lot of discussion of the negative sides of twitter, facebook, instagram and others, but the positive effects are either so positive that they don't warrant a discussion or so hidden that no one really has patience to research them properly.
- conanbatt 11y agoI remember meeting one of the founders 2 years ago in a party and congratulating him for doing a startup with truly innovative goals. Amazing to believe 2 years later they got bought for a billion dollars.
- DrNuke 11y agoIt seems to me that nuclear (Gen IV), space (propulsion, moon bases) and AI (virtual prototyping) may speed up innovation in a combined manner. Elon Musk and Sam Altman in the US are at the top of the game here and may counter stiff competition from China. On the other hand, my team of middle-aged nuclear engineers & related network from Italy can't do that much but would gladly help, if needed.
- jjtheblunt 11y agoIt comes across as a grotesque arrogance to assert, with no facts cited, that people expressing opinions are usually not building anything themselves. Citations if you please.
- Animats 11y agoBut is it compatible with YC? "Hard tech" usually means years of work and millions of dollars up front. YC is oriented towards sub-$100K fundings and a few months to "demo day".
- dkopi 11y agoDemo day expectations would be different. The point of any accelerator is to push you forward as much as they can during those few months, so you can show a lot of progress and make the most out of a demo day. $100K in funding can help you go a long way towards raising those millions of dollars.
- tryitnow 11y agoWhat does he mean by "hard tech"? And would most engineers consider Cruise really hard tech? I don't know (I mean that honestly, not passive agressively).
- tim333 11y agoIf Cruise is hard depends on the end goal. If it's a fully autonomous vehicle, yes that's hard.
- vonsydov 11y agofaith in tech restored
- tim333 11y ago>From the Summer 2014 batch, 3 of the 4 companies who have raised the most money since graduating YC are “hard tech” companies. So I guess that's Cruise $18.8m Ginkgo Bioworks $54.12M (engineers new organisms) and Helion Energy $12.11M (fusion) ?
- tclmeelmo 11y agoI wonder how significant that 3 of 4 observation is, given that "hard tech" is requires more money all around to operate. In context, those numbers don't feel that big to me.
- rdlecler1 11y agoI'm the founder of AgFunder. We've worked with a bunch of agtech/hard tech companies and it's been very very frustrating taking them to VCs because they don't fit in their box. We had one company called SWIIM which we called the AirBnb for water that was creating a market for water and in doing so helping to fix a major issue of properly valuing water--enormous market, great unit economics, but there was hardware and deployment and it didn't look anything like VCs normally invest in. Another company we have on now called Autonomous Tractor Company (ATC) which is basically Cruise Automatic for tractors... There are 500,000 used tractors out that they can turn into true driverless tractors (not just GPS assist). VCs can't get their heads around the fact that they don't actually have to build tractors and that this is actually very capital efficient. Kudos to YC which gives great signalling to many misunderstood companies.
- Hydraulix989 11y agoA lot of this stuff takes the form of government grants and university collaborations. Check out CMU's National Robotics Engineering Center. If I remember right, they were at one time partnering with John Deere to build autonomous tractors. http://www.ri.cmu.edu/research_project_detail.html?project_id=760&menu_id=261 http://www.ri.cmu.edu/research_project_detail.html?project_i... Good luck with your funding. I can certainly commiserate.
- manx 11y agoHard Problem: Current internet discussion technology does not allow millions of users to participate in a discussion without loosing overview. In other words: Current discussion protocols do not scale. A technology providing that could help make our politics more democratic. It could also lower the need for communication hierarchies like in big companies. I'm doing research in this area and built several prototypes. I strongly believe we can achieve the goal, but doing it with only one teammate researcher makes the process very slow. We are two master degree computer scientists and need a bigger team. Contact me if you are interested.
- mathgenius 11y agoIt's not just the discussion protocols, it's the topology upon which those protocols run.
- manx 11y agoExactly. Was that not clear from my description?
- untilHellbanned 11y agoCruise is an N=1, ironic to make this proclamation. And Cruise founder had massively successful exiting history. I wouldn't say this validates YC's recent bets on hard tech. People who do hard tech for a living (myself included) are more measured. Sama sounds like Donald Trump with the "I told you so". Unlike real estate, science can't be bullied to success. This makes me increasingly bearish on YC's future.
- ecesena 11y agoCan someone expand on the definition of hard tech? With possibly examples of what is or isn't considered hard tech?