20 ms·

After the end of the startup era

• karmakaze 9y ago
  So the premise is that the startup era is ending: > ...because we’ve all lived through back-to-back massive worldwide hardware revolutions — the growth of the Internet, and the adoption of smartphones — we erroneously think another one is around the corner, and once again, a few kids in a garage can write a little software to take advantage of it. [...] But there is no such revolution en route... Then it says: > It is widely accepted that the next wave of important technologies consists of AI, drones, AR/VR, cryptocurrencies, self-driving cars, and the “Internet of Things.” These technologies are, collectively, hugely important and consequential — but they are not remotely as accessible to startup disruption as the web and smartphones were. But a real counter to the premise is actually presented: > (However, in fairness, software and services built atop newly emerging hardware are likely an exception to the larger rule here; startups in those niches have far better odds than most others.) So once again, 'a few kides in a garage can write a little software to take advantage of it.' They start as niches, but we can't say what their potential is without discovery and development.
  • Cacti 9y ago
    Well, the argument that 1995 through 2015 was a cycle completely different from whatever the next one will be, is not without merit. I mean, it is easy to forget, but many, many things had to come together at one time in order for this to pop off like it did: * high speed internet * widespread consumer demand for high speed internet and services * multi-core, low-power hardware that gave us smartphones and cheapish "device" pcs like tivo/roku/etc. * widespread cellular and wifi networks * miniturization and improvement of many types of sensors * widespread data collection of all types * massive investments and growth in consumer GPU devices, which underwrote the ML boom and I'm probably missing some things, but you get the idea. All of these things had to come together at the same time to give us the boom that we just went through, and it gave us rise to the likes of Google, Facebook, and so on. This is very unlikely to repeat itself. Those who grew up in the late 90s, early 2000s may not really notice, but the difference between 1995 and 2010 is astronomical. This is not to say that we're about to crash, or that there won't be another boom in short order, just that it will likely follow a very different pattern than the previous one. The period of 1995-2010/2015 was really a very unique confluence of events, historically speaking, and over what is really a very, very short time frame. Whereas the current boom is built around leveraging the smartphone and widespread internt access, the next will not be, as it will already be filled out by competitors.
    • karmakaze 9y ago
      The recent past does appear very special but I wouldn't discount the near future either. e.g. the tech for AlphaGo was made by a startup. In any case I took the piece at it's title's face value, where startups are nowhere near over. Unicorns shouldn't really factor into that.
      • Eridrus 9y ago
        > e.g. the tech for AlphaGo was made by a startup. Making the next AlphaGo is far less accessible than making the next AirBnB. The gold rush where we're basically sticking a web/mobile app on a business and off to the races is ending.
        • platz 9y ago
          Time to sell shovels
          • pjmlp 9y ago
            After the first year in whatever cycle it is always about shovels.
            • TeMPOraL 9y ago
              It's why everyone wants to sell "a platform" today...
        • trhway 9y ago
          Now we start to stick AI on a business. And like with uber/airbnb where an app became the business, we'll see unicorns where the AI will become the business.
          • graycat 9y ago
            AI is some applied math. But as applied math goes, AI is only a tiny fraction, nearly absurdly narrow, and not very impressive. There's a lot more good applied math to be brought forward to exploit the recent fantastic hardware.
  • wuliwong 9y ago
    I've been thinking for the past year or two that we are hitting a bit of an inflection point. Previously, it seems the hardware developments moved somewhat linearly PC -> internet -> mobile but now it seems like there is all of a sudden significant overlap. Multiple new disruptive hardware technologies with significant, potential consumer applications are emerging simultaneously. I might be just drawing arbitrary lines. "Mobile" depended on a number of technologies to happen. Possibly, looking back, this large number of simultaneous technologies will be described by one overarching technology category.
    • curun1r 9y ago
      Your problem may be that you're using hindsight to see the PC, internet and mobile eras and using somewhat irrational exuberance to view the current "disruptions." It's a pretty good bet that not all of them will pan out or have the kind of pervasive impact on society that you're predicting and that 20 years from now, again with hindsight, you'll see the 1 landscape-altering technology that defined the current era and fits into your linear model. For instance, people have been predicting that VR will be the next big thing for years now. I remember a birthday party more than 30 years ago at an arcade with an expensive VR setup that, while far more limited than today's applications, was still an awkward piece of headgear that's more of a novelty than a potentially-ubiquitous change to society. It's still possible that we hit some sort of inflection point where technology improves to the point where AR/VR becomes unobtrusive enough that it can become ubiquitous, but that's by no means a certainty. Similarly, I think the jury is still out on IoT, drones, 3D printers and cryptocurrencies/blockchains. If I had to place a bet, I'd say that when we look back on this time period, we'll be talking about machine learning and AI defining this era. The rest of the "current hotness" technologies I could easily see not getting that big.
      • KGIII 9y ago
        I have to wonder if some of that growth was related to Moore's Law? Namely, the number of transistors grew and the use of them grew linearly with them in a sort of 'if you build it, they will come' fashion? Now, as I understand it, growth has slowed outside of the labs and Moore's Law appears to no longer be valid. So, there will likely still be growth, but the growth will be more rare, difficult, and expensive? Like your VR example, we've often had great predictions of the future and so very few of them actually pan out as expected. I don't know, it's just a thought I've pondered.
  • abakker 9y ago
    Notice how there is an incredibly alignment between the problems in VR/AR, Drones, Self Driving Cars, and IoT? They require solving problems in 3D space in the real world either reacting or simulating. hmm...might we solve some of these problems with AI? I am not a software developer, but these problems are very conceptually similar, and it seems we're all waiting on software/compute capabilities to leverage all of these new hardware technologies simultaneously.
    • atomashpolskiy 9y ago
      Given this combination of technologies, I'd say we're waiting for robot warfare :)
  • BurningFrog 9y ago
    As I recall it, the next wave usually doesn't conform with what "it is widely accepted" it will consist of.
• Invictus0 9y ago
  This isn't to say that you can't still build a successful startup, but it is saying that you probably won't build the next Uber/Airbnb. The difference is a few zeros but you'd still be wealthy either way.
• skrebbel 9y ago
  NYC-based angel investor Jerry Neumann calls this the "deployment age" and has a very nice, and somewhat prescient, write-up about it: http://reactionwheel.net/2015/10/the-deployment-age.html http://reactionwheel.net/2015/10/the-deployment-age.html
  • Alex3917 9y ago
    He's just quoting Carlotta Perez. But he doesn't get it quite right, we're in the installation phase for some technologies and the deployment phase for others.
    • tormeh 9y ago
      Yeah, he's kind of focusing on only his field, but that's OK. AI and genetic engineering are clearly just getting started, but if it's not in his field then it might make sense for him to not care.
    • lioeters 9y ago
      Thanks for mentioning Carlotta Perez. I found a fairly recent (Aug 2017) article by her and cohorts that discusses these "installation" and "deployment" phases. It's a more optimistic article, so I created a separate post: Are We on the Verge of a New Golden Age? https://news.ycombinator.com/item?id=15531574 https://news.ycombinator.com/item?id=15531574
• Hydraulix989 9y ago
  This just sounds like unwarranted negativity to me. There will always be innovation.
  • quadrangle 9y ago
    I don't think the takeaway is that innovation will slow down. The point of the article is that the large, powerful companies that we have now are on top of the game, understand technology, networking, internet, and there's no big new shift where they'll lose to startups. Innovation will continue and Alphabet and Amazon etc. will remain dominant and powerful, controlling and doing much of the innovation. Startups had whole new markets to enter in the past where big corporations were not prepared to go. Now, any potential new markets aren't wide open for small startups and the big corporations are ready to jump in and dominate. It's not the same. End of widespread startup success ≠ end of innovation (but it will mean some types of innovation are stifled or don't happen)
• DennisP 9y ago
  I'm pretty heavily involved in the Ethereum ecosystem, and it's a great place for startups.
  • shp0ngle 9y ago
    One ICO a day keeps doctor away
  • logicallee 9y ago
    I have some questions as to why you would say that - could you reach out to me at my email or add yours to your profile? Thanks.
    • eradicatethots 9y ago
      Why do you say thanks? They may not want to say any more than they’ve already said, or they may be unfriendly to you.
      • DennisP 9y ago
        No worries, I'm not an unfriendly person.
• Alex3917 9y ago
  > It is widely accepted that the next wave of important technologies consists of AI, drones, AR/VR, cryptocurrencies, self-driving cars, and the "Internet of Things." While I agree with a lot of this analysis, the fact that the author seems not to understand the difference between cryptocurrency and blockchain doesn't exactly signal credibility in this domain.
  • chrisco255 9y ago
    I think each one of those platforms are growing rapidly. So what if they haven't hit critical mass yet? Each one has that potential. What are we looking at then, a few years before one or several of those become as big as mobile?
• dudul 9y ago
  Not every startup needs to become the next Amazon or the next Uber. Startups will still be around, some will still be successful, but yeah, maybe they won't turn into mastodonte that easily.
• baxman22 9y ago
  I agree with this premise. I knew it was over about 2 years ago when I noticed that about half of new startups were built to sell to other startups, or to serve the existing startup market in someway. That’s a sign of saturation. Another paradigm shift in media (like recorded sound, recorded video, radio, tv, computing, web, and mobile) is what’s needed to produce another startup boom. It all comes down to media—�—the media is the message.
  • mbrock 9y ago
    Money as a medium, from McLuhan's Understanding Media, as an encouragement to think of cryptocurrency as a medial paradigm shift... “Money talks” because money is a metaphor, a transfer, and a bridge. Like words and language, money is a storehouse of communally achieved work, skill, and experience. Money, however, is also a specialist technology like writing; and as writing intensifies the visual aspect of speech and order, and as the clock visually separates time from space, so money separates work from the other social functions. Even today money is a language for translating the work of the farmer into the work of the barber, doctor, engineer, or plumber. As a vast social metaphor, bridge, or translator, money—like writing—speeds up exchange and tightens the bonds of interdependence in any community. It gives great spatial expansion and control to political organizations, just as writing does, or the calendar.
  • chrisco255 9y ago
    VR/AR fits that bill. It's just that no one has nailed the form factor and hardware yet so that it can reach mass adoption.
    • city41 9y ago
      Or is it a chicken and egg problem? VR interests me, but I don't feel there is a killer app yet to make the plunge worth it.
      • pault 9y ago
        Disregarding the new applications enabled by the medium, think of it as simply a new display form factor. Once the quality exceeds the best flat screens we can produce, having one unobtrusively attached to your eyes at all times becomes a no-brainer (from a cost-benefit perspective; obviously there are lifestyle-altering implications that each individual will have to embrace or reject on their own terms).
• bobsil1 9y ago
  Clickbait. ML won’t require mass amounts of data forever. One-shot learning will get solved.
  • Eridrus 9y ago
    > One-shot learning will get solved. This is nonsense. I would challenge you to show any few-shot learning work that isn't basically some form of transfer learning in disguise. Few-shot learning is super useful if you're in a position where you don't have much data, but will never compete with huge stacks of data.
    • bobsil1 9y ago
      Of course it's a kind of transfer learning. >will never compete with huge stacks of data Children learn with sparse data based on composable models, and are bio machines.
      • andreasgonewild 9y ago
        This boils down to a fundamental divide in life view. Anyone who has done any amount of expanding their consciousness will tell you that there is a ghost in the machine. It's always a mistake to assume that all you can see is all there is to see.
        • bobsil1 9y ago
          I am a materialist, there is no magic :)
          • Eridrus 9y ago
            I agree that there is no magic, but evolution has done some pretty impressive initialization.
          • andreasgonewild 9y ago
            You are also most probably human, have you even bothered to have a look inside?
• peter303 9y ago
  I remember the beginning of the startup era. When Bill Gate and Steve Jobs started their companies in 1976, rhere were very few venture capital firms and the stepped procedure of investment you see today. A company had to borrow from more conventional banks and/or grow their own capital from revenues. A big help was when President Carter lowered capital gains tax in 1977. That stimulated investment firms.
• 11thEarlOfMar 9y ago
  The evidence is likely in the data housed by Y Combinator, 500 Startups, and others in their market. Chart the statistical mean valuation of each cohort by year since graduation and see if that mean is changing. If Evans is correct, the mean should be declining for each successive cohort. Alternatively, since the number of funded startups seems to be increasing, you may prefer to look at total valuation over time since graduation. Even if the mean is decreasing, the total number of 'successful' startups may be increasing and no 'end' is signaled. I'm not convinced that 'there are no good startup ideas left in this technology era' because the big winners are all black swans. By definition, they defy conventional wisdom.
  • baxtr 9y ago
    Thank you. For me, the weak spot of the article is the missing data for this story.
  • TAForObvReasons 9y ago
    > 'there are no good startup ideas left in this technology era' The low-hanging fruit has been thoroughly picked, 'tis all
  • cirgue 9y ago
    I think there is something to the notion that we have for the time exhausted the low-hanging fruit produced by smartphone market penetration. There are still plenty of good and potentially extremely lucrative startup ideas, but the untapped market potential will not come from taking advantage of mobile alone.
  • austenallred 9y ago
    This reminds me of when Pando went to Demo Day and saw no interesting companies and a bunch of knock offs https://pando.com/2013/03/26/y-combinator-demo-day-2013-still-looking-for-the-next-airbnb-or-dropbox/ https://pando.com/2013/03/26/y-combinator-demo-day-2013-stil.... They completely missed Zenefits, Teespring, and a few others. I’m not convinced that the dominant YC companies looked obviously dominant at their early stages; they only seem dominant in retrospect. As for why the giant companies at YC are still the dominant winners, it’s because the winners just keep growing. We don’t have a sense of scale; when Airbnb was a $500m company it was YC’s poster child. Now Airbnb is worth many billion dollars, and of course it still is the poster child, while companies like LendUp are valued at $500m but are not even talked about. It’s not that because YC and startups are less successful, it’s that some are so incredibly successful you stop paying attention to the successful ones. If the measure is valuations coming out of YC, Airbnb raised at a $3m valuation. A lot of YC companies raised $3m at a $14m+ valuation, but that’s more an indication of the market than of the likelihood of success of those companies.
• Liron 9y ago
  I'm not sure comparing the YC batches is convincing evidence. Off the top of my head, Coinbase (YC S12) is the 2017 analogue of a company that is "poised to dominate its industry", already valued at $1B+.
  • Liron 9y ago
    Another poised-to-dominate unicorn is Flexport (YC W14).
• dirtyaura 9y ago
  I think there is a constant shift towards different kind of startups, as one field saturates and big players emerge. Currently the shift has been from "easy" towards "harder". in the early 2010s there was a shift from viral consumer services and apps towards b2b services and Uber-style marketplaces, which both are arguably harder to make than most consumer apps, and now there is a shift towards hard tech startups, which, again are harder to build. But startups were more about hard tech in 80s, early 90s. It will take a while that new big consumer tech platforms emerge, but when it happens, then again there will be shift towards viral consumer services.
• jotm 9y ago
  Well, back to good old small business it is.
  • geetfun 9y ago
    That’s right. The small business SAAS biz in niches.
• dreamdu5t 9y ago
  If the smartphone boom was “2007-2016” it’s premature to claim nothing is next. It’s too soon to say “there is no such revolution en route”, when we had one practically yesterday!
• gjmveloso 9y ago
  I don’t think it’s the end of the startup era at all. It might be the end of startup hype ending on itself, with valuations not tight to reality and companies without business.
• thisisit 9y ago
  No one wants to be called the next Yahoo, so even a whiff of competition means the startup gets acquired. This considering FAANG companies have so much cash on their books, not to mention ease at which credit can be had.
• rpmcmurphy 9y ago
  The world does not need more Mark Zuckerbergs, it needs millions of small and mid-size businesses working on the build out of low carbon energy sources. Converting the world electricity supply to run off renewable sources will require tens of trillions of dollars of investment over a period of decades. It's not a small opportunity, but unlike the app economy, it's not a winner take all market. This is mostly a good thing, although we won't see many overnight billionaires from it.
  • caust1c 9y ago
    I agree the future is built on small businesses. But to have the most impact on the environment we could all just stop eating so much meat.
    • landryraccoon 9y ago
      > we could all just stop eating so much meat. Sounds promising. Maybe you can build a small or medium sized organization around trying to make that happen.
      • apoverton 9y ago
        Impossible Foods is a startup working on this mission. They have a really tasty product too. http://impossiblefoods.com/about/ http://impossiblefoods.com/about/
        • bobsman123 9y ago
          But it’s not meat, so I won’t eat it. I need to eat 4000 calories a day and a lot of that needs to come from meat.
    • auxym 9y ago
      Heck, even replacing beef by chicken or farmed fish is a lot less resource intensive.
    • b4lancesh33t 9y ago
• jtth 9y ago
  > Big businesses and executives, rather than startups and entrepreneurs, will own the next decade; today’s graduates are much more likely to work for Mark Zuckerberg than follow in his footsteps This is a tautology and reflective of the mindset that produces articles like this one. There is only one Zuckerberg. Unicorns are by definition rare, and disrupting entrenched business interests is rare because they are entrenched. That's what it means.
  • freehunter 9y ago
    Yeah this is another example of how SV exists in a bubble and can't see the broader world. Today's graduates are more likely to work for Zuckerberg than to follow him, as were yesterday's, as were the day before's and so on. It only seems like everyone is a founder because that's how it was in SV. It only seems like every stopped creating startups because that's how it is in SV. But like everything else in the world, trends start at the coasts and work their way inward, to the point where SV tech growth may be stagnating or declining, but Midwest startups are booming. And if the Midwest is firing up, African startups are virtually exploding. Big businesses have always owned every decade of capitalism, and that's not going to change. Economies of scale is too hard to turn away from. But startups aren't dying, they're just taking on less sexy, harder problems that don't impact SV. So of course SV thinks entrepreneurship is dying.
    • auggierose 9y ago
      I am not an expert in this, but SV has actually a great record on taking on super hard problems. It's just that Facebook is not one of them.
      • rhizome 9y ago
        I think FB tackles hard problems, it's just that the hard problems they tackle aren't FB-specific so much as decades-old market research, interest-tracking, and adtech in the internet era, not to mention datacenter design and engineering. But none of these achievements require FB to exist as FB in any way more than a test bed.
    • 9y ago
• rdtsc 9y ago
  I look at it from another end - I feel there is a sort of an app fatigue. Maybe it is jut me. I used to be excited about Uber-like things, note taking apps, DropBox, coupon sites, review sites. Installed some of them, used them, then kind of stopped. Someone at work would say "you should try this new thing, totally cool" and I'd be inclined to do it, but now would pass it probably. Extrapolating scientifically from the sample of 1, it would seem that a small loss of excitement over trying new services and apps over the larger population would be enough to prevent the fabled hockey stick growth. No hockey sticks -> no unicorns -> less VC money for new startup -> articles about the death of startups -> comments on HN about articles about the death of startups
  • coldtea 9y ago
    A.k.a. reality 101: there's no hockey stick growth that lasts forever.
  • callalex 9y ago
    Apps have also gotten much worse than in their heyday. They are all built in whatever the latest cross platform iframe-with-makeup framework which always feels clunky, and they all have to start out as free to get their foot in the door and then make it their life’s purpose to annoy you repeatedly until you cave and give them $.99 every month. The hardware space is now much more diverse so a developer doesn’t have the luxury of making pixel-perfect, detailed experiences because their app has to work on watches and refrigerators as well as phones (and now there’s even a phone screen with a forehead, thanks iPhone X).
    • dyarosla 9y ago
      Using phrases like 'all built with', 'all have to start out as free', and so on, is fairly inaccurate. There are plenty of apps that run native, cost money upfront, and are still viable, profitable businesses.
      • samstave 9y ago
        The "unicorn" in this statement is simple "build something people want" (to pay for) You need to add value to others no matter what you do, that's the definition of "building" Value is what is extracted from work. "Buildings" are the expression of physical labor put into something OF value. It's literally defined in our lexicon.
• lkrubner 9y ago
  The era of startups began to end in the 1970s: "Where are all the startups? U.S. entrepreneurship near 40-year low" http://money.cnn.com/2016/09/08/news/economy/us-startups-near-40-year-low/index.html http://money.cnn.com/2016/09/08/news/economy/us-startups-nea... In recent weeks, this issue has been discussed several times on Hacker News. I recall someone recently wrote a comment and said, "We should distinguish between new businesses, like a pizza shop, and real startups, that might become big companies." But why exclude a little pizza shop that might become the next PizzaHut or Dominos or Little Caesars? During the real startup era, in the mid 20th century, there were hundreds of successful pizza startups that turned into big companies. If we say "We won't count small pizza places because they can not possibly become big companies that get listed on Wall Street" then we are simply assuming our conclusions. If we exclude all of the categories which were once hot, and which should be hot right now, and only focus on the handful of sectors that still have some life in them, then we can end up believing that the era of startups is still happening right now, but we are blinding ourselves to reality. When the economy is healthy, small businesses, with the right leadership, can make the jump to the big time. It is from the frothy, primordial soup of little mom and pop shops that new giants emerge. Two examples off the top of my head: both McDonalds and Barnes & Noble were small family businesses, for decades, before new management took over and found a way to turn them into giants. Focusing on the tech sector, and acting as if it is the only sector that matters, allows us to ignore the sclerosis that has crept over the USA economy since the end of the post-war boom, back in 1973. We should take a step back and look at the long-term trend. The economy has been increasingly sick for 40 years now. We should ask ourselves, where does this trend end? How large do the monopolies grow? Will there ever be an era when the USA returns to creating new businesses at a rate that would have been normal for most of the 20th century?
• CalChris 9y ago
  The champion of the dying cause is a trope going back (at least) to Greek poet Pindar. It usually treats the titans of the near past as god-like and looks at the future as one of inevitable decline. It ends with Get Off My Lawn. I've already lost a few bets on the future. I didn't see Uber/Lyft although I thoroughly hated taxis. What do I know?
• komali2 9y ago
  >IoT devices [are] hard to prototype, generally low-margin, expensive to bring to market, and very expensive to scale. Just ask Fitbit. Or Jawbone. Or Juicero. Or HTC. I feel like this is the public's idea of "iot," while I've learned after a year of working for an iot stack provider that the real "internet of things" explosion is found in places nobody looks except the procurement guys - the stadium lights, the refrigerators, the factory doors, etc. Small, single-minded decided sending one or two bytes of data, spread en masse through an industrial area.
  • leggomylibro 9y ago
    Yeah, it seems like you could replace 'IoT' with 'physical product.' Sounds like the author has been living in the land of hand-waved 9-figure growth estimates for a bit too long.
    • erikb 9y ago
      No you cannot. A brick is also a physical product. But it doesn't communicate. There needs to be software and technology involved, and more than one object needs to talk via a network.
      • leggomylibro 9y ago
        That's true, but a brick still requires a sophisticated set of knowledge which we accept to be public domain by this point, after a few thousand years. You need to know how to make and fire clay, what sorts of additives can help, how to package and ship them en masse... There are a lot of problems involved in bricks. OSHA once categorized bricks as hazardous materials (don't breathe the dust when grinding them). We've just gotten really good at dealing with those problems because of how useful bricks are and how easy it is to teach people about making them. Anecdotally, I once took an archaeology course in college, and we had a guest speaker come in who knew how to do flint-knapping[1]. Like, prehistoric toolmaking out of volcanic rocks. I'll bet you'd run into some real hurtles trying to market an obsidian knife today, if you didn't have experience in that area. [1]: https://en.wikipedia.org/wiki/Knapping https://en.wikipedia.org/wiki/Knapping
• hluska 9y ago
  I try to be patient with Techcrunch, but seriously, phrases like this make me see red: > The market capitalization of Bitcoin vastly exceeds that of any Bitcoin-based startup. The same is true for Ethereum. The market cap of the US dollar exceeds that of any financial institution. What's the fucking point?
  • jayd16 9y ago
    The point is that the success of bitcoin does not mean a huge windfall to bitcoin based startups. Reread the paragraph.
    • tyingq 9y ago
      I suppose it depends on how broadly you define startup. Surely some drug dealers, online casinos, etc, are doing well. I believe Silkroad did $1B+ in sales.
  • xkcd-sucks 9y ago
    Starting businesses is outmoded, the new fashionable high growth thing is starting currencies?
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• pfarnsworth 9y ago
  Meh, articles like this are neither new nor interesting. Journalists have been writing articles like this for decades. At some point, one of the journalists who writes these articles will be right, but I doubt this one will be. It's the same with how the US dollar will get replaced as the reserve currency. Maybe some time in the future, but definitely not now and not in 10 years. There will always be cycles, but it's so easy to be a naysayer, just write a medium post. People have been calling for the collapse of Silicon Valley since the dotcom crash, and at some point they'll be right, but they've been wrong so far. Currently, I don't see any companies that are particularly interesting, but I'm confident there's some young kid out there that will create something great that will capture everyone's attention in the next couple of years, and then a new land-grab will occur all over again. It always has happened, and will always continue to happen.
• strin 9y ago
  Most industries tend to consolidate over time with a few big players. For technology it's particularly true given the winner takes all phenomenon. Unless there is a fundamental new technology / hardware platform, there's little chance small startups can go into existing ones. However, I am more interested in seeing technology disrupting old heavy industries. Please go outside the silicon valley and there are plenty of those.
• gpsx 9y ago
  There definitely is a change in Silicon Valley from before. I don't think it is a lack of things to be created by any means. The difference I see is that before the thing to do was create startup. Now everyone wants to go work for Google, Apple, Facebook or another large company. And why not, you can get a huge salary there without the risk and hard work of a startup. With so many more of the smart people are going to big companies rather than trying to make something on there own, I definitely expect less innovation here in the US, for now at least. On the positive side, there are some things a big company can do that a small company can't. This may contribute to why so many people are going to work at big companies, and we may see some good results.
  • pault 9y ago
    The weirdos and hackers are still doing the same stuff they've always done. What you are seeing is the influx of people who would have gone into law or finance identifying tech as having the biggest payoff for the least amount of effort. The Silicon Valley of before was a small fraction of its current size.
• EGreg 9y ago
  I call bullshit on this. The problem is centralization, but that hasn't prevented startups. It just caused them to be bought by large companies like Faceook (YouTube, WhatsApp and Instagram are some examples) I write about this extensively here: https://qbix.com/blog/index.php/2017/08/centralization-and-open-source/ https://qbix.com/blog/index.php/2017/08/centralization-and-o... Decentralization of trust, power, energy generation, and much more is on the way. This will lead to a lot more startup activity. https://www.ted.com/talks/clay_shirky_on_institutions_versus_collaboration/up-next https://www.ted.com/talks/clay_shirky_on_institutions_versus...
• jv22222 9y ago
  To my way of thinking the pendulum is swinging away from funded startups to folks bootstrapping side projects. So, on the "large" end you'll have the googles, facebooks, etc and on the "micro" end you'll see a bloom of people starting small projects like those shown on indihackers. It's something I've been hoping for since 2011! http://justinvincent.com/page/1392/entreporn-the-fallacy-that-wastes-your-life http://justinvincent.com/page/1392/entreporn-the-fallacy-tha...
  • RepressedEmu 9y ago
    My short term goal right now is to sell/grow enough side projects to go full time with prototyping "micro businesses". I feel like a startup studio of 4-8 people could get some serious work done. It would also just be a great time exploring new ideas and green-field code all day every day. But hey, a young guy trapped in a megacorp-cube can dream, right?
    • jv22222 9y ago
      Same here. Send me an email justin@nugget.one let's chat.
      • RepressedEmu 9y ago
        This is why I love HN! Talk soon.
• placebo 9y ago
  I think this was a very sober presentation of things, however it seems that it underestimates our inability to tell how the future will pan out, especially when we're moving on an exponential function of technological progress and creativity. Sure, the Internet window is closed and so is the mobile apps window but no one saw either of them coming - likewise, I can't tell yet what the next really big thing will be or when (unfortunately) but I wouldn't mourn garage entrepreneurship just yet.
• ChuckMcM 9y ago
  Having lived through three "deaths" of silicon valley so far I will reserve judgement until the price of housing goes down to the national median
• hedora 9y ago
  It’s almost as bad as when we solved all of physics in 1917. I’d write more, but I have to go to the chemist’s to buy some westinghouse relays for my Bell systems electrified collating typewriter-telegraph.
  • fapjacks 9y ago
    Yes! Jeez, thank you. These articles are nothing but clickbait, but more insidious clickbait than the other stuff, because it's cloaked behind a faux point: It's not actually a thoughtful piece of writing, but it's trying to dress up like one.
  • nbarbettini 9y ago
    "640K ought to be enough for anyone" - Bill Gates, ~1985
• neya 9y ago
  Ironically, you have a giant media house (AOL), one of whose important revenue streams is selling hopes of the startup world ("Startups, start here". [1]) through their Disrupt conferences, writing something like this. My personal opinion - as long as there is a market demand and as long as you're a business fulfilling that demand, startup or not, whether the tech is accessible or not, it's all that matters. [1] https://techcrunch.com/event-info/disrupt-berlin-2017/ https://techcrunch.com/event-info/disrupt-berlin-2017/
  • mindhunters 9y ago
    Of course market demand and other factors matter but the point of this article is that large tech companies are now a barrier on the way of small startups to their success. We all see that now, most startups fail and even if some of them gain some traction, they are being bought by big guys. And one of the main causes of that is the outdated nature of large corporations. Nowadays, one of the main platforms to promote your company is Google. However, google advertising is good for those who pay more. Thus, companies with more cash have a privilege over smaller companies even if the second ones do their job better. And that's only one example with one large corporation. To conclude, big guys, which were praised by the whole tech community all the time are now a barrier on our road to progress.
• jorblumesea 9y ago
  This is a trend that's been occurring over the past 50 years in all business sectors. The conglomeration of everything, from healthcare to food creates a oligopoly where only the big players have a seat at the table. Tech was just immune from it because of its immaturity and infancy of the technology itself. Now that its a mature business its being subjected to the same pressures and issues of any established industry. In some ways it's just tech "growing up".
• analogic 9y ago
  robo machine startup end u
• just_one_time_ 9y ago
  We have already moved on to the ICO era.
• onewaystreet 9y ago
  Weird that an article on the end of startups doesn't mention the likely next big area for startups: Genetics.
  • maxwin 9y ago
    Genetics research is slow. It could be 10 , 20 or 50 years away.
• bogomipz 9y ago
  >"Big businesses and executives, rather than startups and entrepreneurs, will own the next decade; today’s graduates are much more likely to work for Mark Zuckerberg than follow in his footsteps." I disagree with this. I think the bloom is off the rose for these companies(FB, Google, Amazon et al)in terms of an image as a "cool place" to work. I they will increasingly be viewed for what they essentially are - just other big corporations. Big corporations that only have their own best interests at heart. This nearly reads like a propaganda piece intended to discourage people from doing their own thing.
• notaboutdave 9y ago
  I get what he's saying. The internet used to be peaceful grassy plains. Now it is loud bustling New York with bigger fish that are out to get you. This doesn't mean you can't disrupt everything, but now you have to outrun this new establishment that reinvests all its money into eating you more efficiently. Companies like Facebook already have giant audiences, and copying your product can be done virtually overnight.
• pabl0rg 9y ago
  Interesting article, but if the big five really dominate all resources in SF/SV, maybe other cities will become the next Silicon Valley.
• krmboya 9y ago
  Reminds me of what got me to this site many years ago. I was reading a lisp programming book that had a footnote that somehow got me to HN. As a teenager I got enamoured by the idea of the future of the tech being driven by small fast-moving hacker friendly companies rather than big corp, as portrayed in PG's writings and this site. I remember how I increasingly became disillusioned as I gradually realized that many (most?) startups were optimizing for the acquisition by the same big corp (investors gotta cash out, right?) instead of building long-term sustainable businesses. This seems to have attracted the kind of personality that just wants to play the game, cash out and get rich.
  • shopkins 9y ago
    Agreed. Working for a company that optimizes for cashing out loses luster really quickly. As someone who's been on that hamster wheel for too long, have to say it'd definitely be more interesting to work for a company that builds for long-term sustainability.
  • dlwdlw 9y ago
    I like the Hollywood model of bespoke teams for projects. A stable salary could be created via long term "royalties" that each project creates. (or may not be require if each project is big enough.) This model requires projects that have long term stability upon creation but also a recognized lifespan due to attention attrition. Like movies. A lot of bad code nowadays exists because of pressure from "creators" that don't actually create. They are middlenmanagers appeasing their boss who is appeasing their boss and so on. There is nothing tying it to reality so all sense of quality is lost. The main things that prevent this now IMO is the friction of setting up these groups for value capture and the maintenance of the subsequent results. To me, the most exciting part of block chains is that they can create a non-human central authority that can theoretically embody any set of rules including group structure and value capture. New photo sharing apps can end up capturing value like new superhero movies. Winner take all dynamics still exist but enduring monopolies do not. The contracting model will also solve another huge issue which is the shitty interview process. (mostly self imposed) After spending some time at well known large companies what I've realized is that they aren't the best of the beverythey are simply places to hide, specialize, or grow. They are like oasis' that survive due to captured value streams or large value stores or deep moats. Inside people can become specialists in service of this "city" but lack the well roundedness grittiness of a desert wanderer. But unlike a city which is neutral provided you can generate value/pay rent, companies are like cults in the the entrances are guarded and the HOA rules are super strict and apply to everyone. So while they can generate highly specialized "trebuchets" that wanders cannot the citizens can be far from happy. The Hollywood model would greatly benefit the group of people who may currently feel too tied down.
• deleted 9y ago
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• jackcosgrove 9y ago
  Startups have also seemed to have morphed from ventures started by founders, to vehicles for investors to make long plays for monopoly control of a market, like Uber and Netflix. I am not sure of the laws regarding dumping and artificially low prices, but when startups operate at a loss for years and gobble up the entire market, that looks like what they're doing.
  • deleted 9y ago
    [deleted]
• Animats 9y ago
  From the article: "We’re already seeing this. Consider Y Combinator, by all accounts the gold standard of startup accelerators, famously harder to get into than Harvard. Then consider its alumni. Five years ago, in 2012, its three poster children were clearly poised to dominate their markets and become huge companies: AirBnB, Dropbox, and Stripe. And so it came to pass." "Fast forward to today, and Y Combinator’s three poster children are… unchanged. In the last six years YC have funded more than twice as many startups as they did in their first six — but I challenge you to name any of their post-2011 alumni as well-positioned today as their Big Three were in 2012. The only one that might have qualified, for a time, was Instacart. But Amazon broke into that game with Amazon Fresh, and, especially, their purchase of Whole Foods." Look at the list of Ycombinator companies from the 2012 batch.[1] Where are they now? [1] http://yclist.com/ http://yclist.com/
  • hkmurakami 9y ago
    The journalist reveals his or her ignorance by not considering Gusto or Flexport to be well positioned, imo.
    • edoceo 9y ago
      Yeah, Gusto is a big win IMO. Payroll stuff sucks, especially for early stage businesses. I've used all the services over the past 15 years, my current company is using Gusto, still sucks, but sucks the least, best price, best service. And 1000s of small businesses trust Gusto to process millions of dollars of their most sacred money each month. Underrated.
      • jaxn 9y ago
        Zenpayroll was great! Gusto sucks. And the change took place right around the time of the name change. Now, both Gusto and Zenefits are trying to play the same game and both are basically parasitic companies feeding off lock-in and transaction fees.
        • edoceo 9y ago
• gfiorav 9y ago
  The point has been proven: there’re some business models that can be jump start with VC, and generate tons of cash flow. It will never go away. What’s happening is that the world is learning no to invest hundreds of millions in a ”bro app”. VCs learning = less investment in absurd enterprises = less total number of startups
• noddy1 9y ago
  The cryptocurrency space has brought multiple unicorns - they just mostly don't come from silicon valley and don't follow the typical VC funding model. Bitcoin Ethereum Ripple Bitcoincash Litecoin Dash NEM NEO Monero Iota
  • rifung 9y ago
    I admit I don't know too much about cryptocurrencies but how are those unicorns? Aren't those all currencies and not companies?
• dba7dba 9y ago
  We don't need more humongous private firms like Google/Facebook/Apple. If they were to be replaced by other firms, they will only be even bigger and more powerful. Pretty sure most would say no to that. What we need is more tech savvy populace that know how to put up their own website (facebook replacement) and apps to share photos (instagram) with family and friends.
• vladislav 9y ago
  This article is using false assumptions about AI to back up its narrative. "AI doesn’t just require top-tier talent; that talent is all but useless without mountains of the right kind of data. And who has essentially all of the best data? That’s right: the abovementioned Big Five, plus their Chinese counterparts Tencent, Alibaba, and Baidu." Making the next quantum leaps in AI is not a question of data advantages. 1) We have just seen the world's best Go-playing AI trained completely from self-play, without access to any labeled data nor hand-engineering, trained on a few machines. This happened at Google, but could have easily been done by a small startup. https://thenextweb.com/artificial-intelligence/2017/10/20/googles-deepmind-achieves-machine-learning-breakthroughs-at-a-terrifying-pace/ https://thenextweb.com/artificial-intelligence/2017/10/20/go... 2) Even the pioneers of deep learning are now strongly pushing back on the methodology that lots of labeled data is required to solve AI problems. Geoffrey Hinton: "I don't think it's how the brain works. We clearly don't need all the labeled data." https://www.axios.com/ai-pioneer-advocates-starting-over-2485537027.html?utm_source=twitter&utm_medium=twsocialshare&utm_campaign=organic https://www.axios.com/ai-pioneer-advocates-starting-over-248... In a nutshell, the biggest challenge of pushing AI forward is tackling unsupervised learning, not having "better data".
  • shams93 9y ago
    You can also leverage Google's apis and their expertise. These kind of articles forget about the api economy. Then we have new technologies like "serverless" that radically lower the bar to entry for new business to get into the game. Why did I work for the guy who founded Geocities instead of founding something myself? Up to my neck in studio loans and remember in 1998 you had to cough up $1 million for a starter oracle license to go big, today you can scale as you go. The only thing that will end the startup is a lack of creativity and vision, it keeps getting easier and easier to jump in.
  • computerex 9y ago
    1) That's false. AlphaGo did not just train by self-play. It trained on millions of pre-played games, and the bot also uses hand-engineered features for their MCTS hybrid (best) model. Refer to their paper for details. 2) Read the article that you are referencing please. What you are implying is not the thesis of that article nor is it what Geoffrey Hinton is saying. What Hinton is saying is, we should throw out deep learning. What he is saying is that the current approaches to AI are fundamentally broken and aren't going to result in artificial general intelligence. Backpropagation is not just used in supervised learning, it is also used in unsupervised learning. I happen to agree with Hinton, in that there is too much hype around the current state and successes of AI, which has mainly been in "narrow AI". AI is a term that gets thrown around a lot these days. But there is a big difference between technology that automates the tedious tasks of daily life, and artificial general intelligence. In the world of deep learning, data is king.
• Animats 9y ago
  One killer for startups is the weakening of patents. After eBay vs. MercExchange, easy post-grant re-examination, and Seagate[1], the worst-case penalty for infringing a patent is only paying the royalties that would have been paid if a license had been negotiated. So there's no incentive left for big companies to buy technology; they can just steal it. This is new. All those things changed in the last 15 years. The result is that VCs have gone for market share, not technology. (Or they've gone for pharma, where patents still work.) Until about 2000, Silicon Valley VCs wanted startups to show that they had a strong intellectual property position. That all changed in the first dot-com boom, when it started being about buying market share. This hurts innovation. Why work on a hard problem? [1] http://www.fulcrum.com/punitive_damages_are_now/ http://www.fulcrum.com/punitive_damages_are_now/
• forapurpose 9y ago
  > today’s new technologies are complicated, expensive, and favor organizations that have huge amounts of scale and capital already. That is not a fact of life or act of nature, but to a great degree it is a choice. Decades ago, engineers built many technologies that were conceptually simple, elegant, open, free-as-in-liberty, and hackable - not by accident, but to empower hackers and end-users. Those efforts created the environment, platforms and tools that the startups thrived on. What are today's engineers building for the next generation? For example, I recently had to learn in-depth how computers boot these days - down in the weeds with ME, TPM, UEFI, SEDs, PXEs, GPT, and more: First, the complexity of that small step to starting your computer is beyond an individual's comprehension; just one spec was 2,500 pages; many technologies' roles overlap and it's not clear why there is redundancy or how they integrate with each other. Perhaps there is someone who specializes in this narrow field as a full-time job and actually grasps it all, or maybe if I had a year to dedicate to it - but I can't imagine some new teenage hacker mastering it. Second, much of it is proprietary or at least not free. TPM and ME, for example, are ultimately outside the user's control. Compare that to the former system of POST - BIOS - MBR - boot loader. I'm not saying change is bad and that we couldn't have improved on it, but clearly nobody thought about making it hackable or empowering end-users. I'll go a little further and say it reflects - I can't support a causal connection - a broader loss of interest in the 'American Dream', equality of opportunity (or at least an abundance of it for all), and empowering the little guy and underdog. The U.S. also cuts back education and other programs that give opportunity to less advantaged citizens, often with the idea that the powerful should not be hindered by taxes or government. Polls show interest in democracy is slipping, with the US government saying it's not worth promoting abroad (the White House and State Dept both explicitly said it) - democracy is political empowerment of the little guy; everyone gets a vote and is equal. Some political groups even explicitly argue that their group should dominate the others. I'm not starting a political debate; I'm just pointing out that it's a much different outlook.
• StillBored 9y ago
  This sounds suspiciously like the mid 1990's when everyone was bemoaning how the big software companies had basically ended the at home software startup shop. Then the web struck and all these big companies had to get nimble enough to complete with the scrappy little web shops. This basically happened again the mid 2000s with smartphone development. I'm not sure if the machine learning revolution will favor the guy at home with a GTX 1080, but until we go for a decade or more without any big hardware/software companies starting up then I will believe it. OTOH, I suspect that the US as lost the competitive advantage to china in this regard. The "IOT" revolution probably isn't going to start in the US since all the little board dev shops are in china where you can actually purchase all the little parts you need without having to wait 6 weeks for a part or pay 10x in shipping.
  • intended 9y ago
    eh, I think what people need to consider in this is the meta-learning pattern. First wave of disruption - its all equal. Anyone with an idea, coding chops and time can give it a shot Second wave - leaders of the first wave get caught unaware, some survive, others don't and new leaders are created. Third wave - There is no third wave. Survivors of rounds 1 and 2 have learned the lesson, and realize that being wrong footed means death. They spend every erg of energy they can spare to identify trends, buy potential competitors and invest in survival.
  • hfourm 9y ago
    Similarly, there is a big growth in the small scrappy startup space around cryptocurrency and associated blockchain technologies. Not to start a conversation over ponzi schemes, scams, and vaporware, but its impossible to ignore the millions of dollars of investment moving around on a monthly basis in this space.
• rdl 9y ago
  This doesn't feel particularly true in the enterprise space. There still is the constraint on IPO exits due to (unclear what exactly -- that's another topic), but I don't see companies like HPE, IBM, Dell, etc. getting more innovative, nimble, or effective. It might just be that in the consumer space there are some exceptionally good companies, where that hasn't really happened in enterprise, or it could be a function of the technologies and markets. Amazon (AWS) and Google to some extent compete in enterprise as well, but they're not as dominant relatively.
• bane 9y ago
  Why would this be the end of the startup era? That era has been going on for decades it's just taken different forms. It's maybe the end of the overvalued photo sharing mobile app company era (it can't come soon enough). Even "old" startups like Palantir that claim valuations at $20 billion are privately being revalued down significantly [1]. We're simply moving into a different era and the very public, very flash, direct to consumer startup market appears to be well beyond saturated. The money will go back to where it's always gone, quieter B2B type companies that build boring technology that solves less glamorous, but more important, problems. 1 - https://www.bloomberg.com/news/articles/2017-10-17/palantir-will-struggle-to-hold-on-to-20-billion-valuation-report-says https://www.bloomberg.com/news/articles/2017-10-17/palantir-...
• karmakaze 9y ago
  Even ignoring "AI, drones, AR/VR, cryptocurrencies, self-driving cars, and IoT" from the article, there are still two big areas still in its infancy: 1. Rich web apps - We know Gmail, Gdocs, Salesforce, etc are/have taken over from desktop apps. I'm continuously discovering more, e.g. Figma. Basically anything that was a single-user desktop app can be made into a realtime collaborative networked one. 2. Mobile business apps - Yes we have mobile versions of business web apps but these are typically as useful as responsive web apps which drop critical features needing to resort to a poor [x] request desktop app experience. What is needed is to create apps which make full use of what works on mobile. Speech input, gestures, what have you. Just as PCs took over from centralized computers, and web from OSes, future computing will be more mobile and ubiquitous. Current apps are translations of desktop/web ideas. We have a long way to go to making great mobile ones. The many significant discoveries and inventions along the way will come from both large and smaller contributors.
  • intended 9y ago
    >single-user desktop app can be made into a realtime collaborative networked one Dear God, Why? I would rather have MORE single desktop, single license products which I can buy once and then forget about having to upgrade every year, and buy yet another license for. (B2B)
• SFSandra 9y ago
  This article fails to take into account blockchain startups (esp for mobile) and the trend toward decentralization.
• tanilama 9y ago
  Current startups are jokes. Not really many of them have techs, let alone a working business model. All they have is websites/apps, nothing more.