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Is there a reason that's surprising? The difference between a great idea and a dumb idea is largely commercial success. Amazon was crazy when it started, now

Is there a reason that's surprising? The difference between a great idea and a dumb idea is largely commercial success. Amazon was crazy when it started, now it's huge. Startups are experimentation, and you have to try lots of things to find the right things. I'd be _worried_ if most startups didn't end up "crap" in one way or another - it would mean we were being too conservative in our experimentation. That doesn't mean we have infinite tolerance for "crap", but to say "mostly crap" doesn't seem alarming to me.

B1FF_PSUVM 11y ago
> Amazon was crazy when it started, No, it was not. Amazon started out by just selling books, which others had already been doing before Bezos came along. For instance, books.com belonged to an outfit in Ohio that would sell you books through a telnet terminal interface (http yet to come). Amazon marketed better ("a river of one million books") and executed well on the web. Books.com was sold to Barnes&Noble a few years later.
- ergothus 11y ago
  I'll stand by my position. BOTH Amazon and books.com were crazy initially. Books had never had been proven to be sellable in quantity to an audience that hadn't physically seen them. The web was so young, it was still called the World Wide Web in the media, and everything was expressed in strained superhighway analogies. We can look back on it and say "Of _course_ people will want to do shopping online", but that's with the benefit of hindsight. While it was a _stupid_ idea, it wasn't a well-proven one. Nowadays Amazon can spend quarter after quarter deliberately avoiding profitability, and no one strenuously questions it because it is known they can focus on profitability anytime. Back then it was a far more open question if they had something people would want, and something that wouldn't be easily copied by the established competitors.
  - B1FF_PSUVM 11y ago
    > audience that hadn't physically seen I heard the Sears&Roebuck catalog was quite a hit in its time. Also, some people made some money selling by mail and phone. Crazy stuff.
    - ergothus 11y ago
      Snark is funny, but you're doing exactly what I said: commenting with the benefit of hindsight. Obviously SOME people, ENOUGH of the RIGHT people thought it would work, because Amazon existed, but I'll point out that books WEREN'T big sellers in those catalogs you speak of. I remember when Amazon was founded. (Heck, I was taught how to order from a catalog in Home Ec classes). A lot of people found the idea cute. Laughable. Or maybe just naive. I mean, sure, you could sell SOME stuff in a catalog, but would enough people want to buy books that way? (SciFiFantasy book club ala Columbia House notwithstanding) And that assumed enough people understood these fancy "home computers" to order things. All with enough volume to justify the costs. I mean, we're talking about a time when no one said "Amazon", they'd say "www.amazon.com" (WWW required when you said it!), and that's assuming they didn't say "H.T.T.P. colon. uh, is that forward or backslash?..." and so forth. I mean, had the idea NOT been crazy, it'd have been done earlier. And when it was enacted, lots of smart people had doubts. Lots of rich people didn't try to get their foot in that door. All because there were very realistic doubts. They just turned out to be horribly wrong and Amazon succeeded like crazy.
      - psb217 11y ago
        Books are almost the perfect item to sell from a catalog. They require no personalization, they have a pronounced long tail demand distribution (i.e. a small store often won't have what you want), they can be stored space-efficiently and near indefinitely in a warehouse, they're rarely returned due to manufacturing defects, they're rarely returned due to "poor fit" or because "the color wasn't what I expected". All information required for deciding to purchase a book is also ideally suited to the internet -- i.e. opinions of authoritative figures, discussion among like-minded people, etc. To think that profitable companies could be built around selling clothes, furniture, and appliances by mail from paper catalogs, but that there might be no profit in selling books online, is absolutely daft.
S4M 11y ago
By "crap", I think he means something like "poorly understood copy cats of successful ideas", not "really bad ideas". See the whole quote: > I think what we’ve had is a handful of investors who have extreme vision who make great investments in things that are amazing businesses: Facebook, Google, Uber. And then everybody else reacts to that success by trying to do the thing that most approximates the thing that’s working. As a result, most of those businesses are fundamentally not good, they’re poorly run, and they never should have been invested in in the first place. But the capital came in because the person who had control of the capital was able to justify it intellectually to themselves versus something else that could have become the next Facebook or Google.
- sinatra 11y ago
  I can actually see why some VCs would invest that way though. A startup proves that there's a massive market opportunity (think Uber's initial days), it's still not a certainty that that startup will be the eventual winner. So, I can see some VCs thinking: Now that one of the biggest risks (finding whether there's a market at all) is reduced, we can just build a better team and maybe become a much better second-mover. Or, although I am convinced that there's a massive market, I disagree with how the first-mover is trying to handle it.

B1FF_PSUVM 11y ago

> Amazon was crazy when it started, No, it was not. Amazon started out by just selling books, which others had already been doing before Bezos came along. For instance, books.com belonged to an outfit in Ohio that would sell you books through a telnet terminal interface (http yet to come). Amazon marketed better ("a river of one million books") and executed well on the web. Books.com was sold to Barnes&Noble a few years later.

ergothus 11y ago
I'll stand by my position. BOTH Amazon and books.com were crazy initially. Books had never had been proven to be sellable in quantity to an audience that hadn't physically seen them. The web was so young, it was still called the World Wide Web in the media, and everything was expressed in strained superhighway analogies. We can look back on it and say "Of _course_ people will want to do shopping online", but that's with the benefit of hindsight. While it was a _stupid_ idea, it wasn't a well-proven one. Nowadays Amazon can spend quarter after quarter deliberately avoiding profitability, and no one strenuously questions it because it is known they can focus on profitability anytime. Back then it was a far more open question if they had something people would want, and something that wouldn't be easily copied by the established competitors.
- B1FF_PSUVM 11y ago
  > audience that hadn't physically seen I heard the Sears&Roebuck catalog was quite a hit in its time. Also, some people made some money selling by mail and phone. Crazy stuff.
  - ergothus 11y ago
    Snark is funny, but you're doing exactly what I said: commenting with the benefit of hindsight. Obviously SOME people, ENOUGH of the RIGHT people thought it would work, because Amazon existed, but I'll point out that books WEREN'T big sellers in those catalogs you speak of. I remember when Amazon was founded. (Heck, I was taught how to order from a catalog in Home Ec classes). A lot of people found the idea cute. Laughable. Or maybe just naive. I mean, sure, you could sell SOME stuff in a catalog, but would enough people want to buy books that way? (SciFiFantasy book club ala Columbia House notwithstanding) And that assumed enough people understood these fancy "home computers" to order things. All with enough volume to justify the costs. I mean, we're talking about a time when no one said "Amazon", they'd say "www.amazon.com" (WWW required when you said it!), and that's assuming they didn't say "H.T.T.P. colon. uh, is that forward or backslash?..." and so forth. I mean, had the idea NOT been crazy, it'd have been done earlier. And when it was enacted, lots of smart people had doubts. Lots of rich people didn't try to get their foot in that door. All because there were very realistic doubts. They just turned out to be horribly wrong and Amazon succeeded like crazy.
    - psb217 11y ago
      Books are almost the perfect item to sell from a catalog. They require no personalization, they have a pronounced long tail demand distribution (i.e. a small store often won't have what you want), they can be stored space-efficiently and near indefinitely in a warehouse, they're rarely returned due to manufacturing defects, they're rarely returned due to "poor fit" or because "the color wasn't what I expected". All information required for deciding to purchase a book is also ideally suited to the internet -- i.e. opinions of authoritative figures, discussion among like-minded people, etc. To think that profitable companies could be built around selling clothes, furniture, and appliances by mail from paper catalogs, but that there might be no profit in selling books online, is absolutely daft.

S4M 11y ago

By "crap", I think he means something like "poorly understood copy cats of successful ideas", not "really bad ideas". See the whole quote: > I think what we’ve had is a handful of investors who have extreme vision who make great investments in things that are amazing businesses: Facebook, Google, Uber. And then everybody else reacts to that success by trying to do the thing that most approximates the thing that’s working. As a result, most of those businesses are fundamentally not good, they’re poorly run, and they never should have been invested in in the first place. But the capital came in because the person who had control of the capital was able to justify it intellectually to themselves versus something else that could have become the next Facebook or Google.

sinatra 11y ago
I can actually see why some VCs would invest that way though. A startup proves that there's a massive market opportunity (think Uber's initial days), it's still not a certainty that that startup will be the eventual winner. So, I can see some VCs thinking: Now that one of the biggest risks (finding whether there's a market at all) is reduced, we can just build a better team and maybe become a much better second-mover. Or, although I am convinced that there's a massive market, I disagree with how the first-mover is trying to handle it.