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>Contrary to popular belief, entrepreneurs typically make terrible innovators. Left to its own devices, the private sector is far more likely to impede technolo

>Contrary to popular belief, entrepreneurs typically make terrible innovators. Left to its own devices, the private sector is far more likely to impede technological progress than to advance it. That’s because real innovation is very expensive to produce: it involves pouring extravagant sums of money into research projects that may fail, or at the very least may never yield a commercially viable product. In other words, it requires a lot of risk – something that, mythmaking aside, capitalist firms have little appetite for. My key takeaway from the article. When you research things, it's not like Sid Meier’s Civilization, you don't get a tech tree. You might spend years looking and find nothing or you might make the internet. Corporations won't invest that way, it would kill them.

mcphage 9y ago
> Corporations won't invest that way, it would kill them. It probably wouldn't, but their stockholders would.
- WalterBright 9y ago
  Stockholders have massively rewarded AMZN for inventing and investing heavily in cloud computing. Me, I'd be buying lots of shares in SpaceX if it were publicly traded. I had to settle for buying TSLA shares (up about 50% from where I bought it).
  - mcphage 9y ago
    > Stockholders have massively rewarded AMZN for inventing and investing heavily in cloud computing. Yes, but AMZN is pretty unique in that regard. I don't know why, but AMZN shareholders have put up with things that I don't see any other shareholders putting up with. And it's gone well for them, so I'm definitely not saying it's a bad decision for their shareholders, just that... it's not the norm.
    - WalterBright 9y ago
      Lots of companies have high P/E ratios, meaning the investors believe in the future of the company rather than next quarter.
      - mcphage 9y ago
        The average P/E ratio right now of the S&P 500 is around 25, which, historically, is on the high side: http://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart http://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ear... Amazon's P/E ratio right now is 178, which historically, is quite low for them: https://ycharts.com/companies/AMZN/pe_ratio https://ycharts.com/companies/AMZN/pe_ratio, since it often is in the 500-1000 range. So I don't think the P/E ratio is good evidence that stockholders value long-term planning, since the best example of a company whose stockholders do value long-term planning has a P/E ratio is 7x higher—and has been above 50x higher—than the S&P 500 average.
        WalterBright 9y ago
        > I don't think the P/E ratio is good evidence that stockholders value long-term planning I'm afraid that makes no sense to me. A high P/E is the quintessential play for the long term future rather than next quarter's profits.
        mcphage 9y ago
        > I'm afraid that makes no sense to me. Ah, because I wasn't very clear. > A high P/E is the quintessential play for the long term future rather than next quarter's profits. I agree there. But the question then is, what is a high P/E? We can look at Amazon, who is known for playing for the long term future, and we see their P/E ratio is currently ~180, but usually in the 500-1000 range. So that'll give us a good idea what "high P/E" looks like. And then if we compare it to the S&P 500 average, which is about 25, but usually in the 15-20 range, is that high enough to qualify as evidence that their shareholders are playing for the long term future? And I'd say, no: it's evidence that they are not. If 200, 500, 1,000 are "high P/E", then 15, 20, 25 are low. Looking at specific companies, you would get a different picture, but it seems like, as a whole, stockholders of the S&P 500 at least are not investing in the long-term future.
WalterBright 9y ago
But corporations did invent and deploy networks before the internet - BIX, Prodigy, Compuserve, MCImail, Ethernet. And FidoNet was very successful, and was the creation of hobbyists.

mcphage 9y ago

> Corporations won't invest that way, it would kill them. It probably wouldn't, but their stockholders would.

WalterBright 9y ago
Stockholders have massively rewarded AMZN for inventing and investing heavily in cloud computing. Me, I'd be buying lots of shares in SpaceX if it were publicly traded. I had to settle for buying TSLA shares (up about 50% from where I bought it).
- mcphage 9y ago
  > Stockholders have massively rewarded AMZN for inventing and investing heavily in cloud computing. Yes, but AMZN is pretty unique in that regard. I don't know why, but AMZN shareholders have put up with things that I don't see any other shareholders putting up with. And it's gone well for them, so I'm definitely not saying it's a bad decision for their shareholders, just that... it's not the norm.
  - WalterBright 9y ago
    Lots of companies have high P/E ratios, meaning the investors believe in the future of the company rather than next quarter.
    - mcphage 9y ago
      The average P/E ratio right now of the S&P 500 is around 25, which, historically, is on the high side: http://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart http://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ear... Amazon's P/E ratio right now is 178, which historically, is quite low for them: https://ycharts.com/companies/AMZN/pe_ratio https://ycharts.com/companies/AMZN/pe_ratio, since it often is in the 500-1000 range. So I don't think the P/E ratio is good evidence that stockholders value long-term planning, since the best example of a company whose stockholders do value long-term planning has a P/E ratio is 7x higher—and has been above 50x higher—than the S&P 500 average.
      - WalterBright 9y ago
        > I don't think the P/E ratio is good evidence that stockholders value long-term planning I'm afraid that makes no sense to me. A high P/E is the quintessential play for the long term future rather than next quarter's profits.
        mcphage 9y ago
        > I'm afraid that makes no sense to me. Ah, because I wasn't very clear. > A high P/E is the quintessential play for the long term future rather than next quarter's profits. I agree there. But the question then is, what is a high P/E? We can look at Amazon, who is known for playing for the long term future, and we see their P/E ratio is currently ~180, but usually in the 500-1000 range. So that'll give us a good idea what "high P/E" looks like. And then if we compare it to the S&P 500 average, which is about 25, but usually in the 15-20 range, is that high enough to qualify as evidence that their shareholders are playing for the long term future? And I'd say, no: it's evidence that they are not. If 200, 500, 1,000 are "high P/E", then 15, 20, 25 are low. Looking at specific companies, you would get a different picture, but it seems like, as a whole, stockholders of the S&P 500 at least are not investing in the long-term future.

WalterBright 9y ago

But corporations did invent and deploy networks before the internet - BIX, Prodigy, Compuserve, MCImail, Ethernet. And FidoNet was very successful, and was the creation of hobbyists.