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American tech giants are making life tough for startups
- rambleraptor 8y agoThis is also responsible for geographic inequality throughout the country. The large tech companies are based out of Silicon Valley and Seattle. The majority of their employees and economic activity will be in those areas.
- adventured 8y agoThat has gradually changed a lot in the last ten years. A decent house is $150,000 to $200,000 where I'm at. That's 2,000-2,500 sq feet, 0.75 to 2 acres of land. The murder rate here is almost zero, violent crime is very low, and I have access to high speed Internet and normal shopping / consumer goods. I can day trip to multiple major metros. Public housing here is actually nice, safe, clean. The homeless rate is nearly zero. And I spend zero time in traffic. Put your $50,000 down on the home. Your mortgage payment is now $725 to $750 or so. Make $6k, $8k, $10k, whatever per month doing Go, Python, JavaScript, etc. remote contracting. Or just take a decent remote job. Your take home is ~$54k on $85k income contracting, before any deductions. Your bills are $2,500 per month. You can easily pay your house off in seven or eight years. And that's not a crazy scenario or a high-end outcome in terms of contract work. That's doable for anyone in the top 50% skill wise. You can pull off that scenario all over the US. Or make $150,000 in Seattle, and that same house costs $1.2 to $1.5 million. Somehow figure out how to come up with your $325,000 down payment. Now your mortgage is $5,000 per month. Your property tax is over $10,000. Your take home pay is $9k to $9,500 per month. Your house, for just the mortgage and taxes, is going to cost you around ~66% of your take home pay, versus ~16% in my scenario. That house is going to cost $2 million total - minimum - over 30 years of mortgage payments, plus another $300,000+ in tax payments. I feel pretty bad for engineers making ~$150,000 or less in Seattle or San Francisco. Telecommuting will set you free.
- ataturk 8y agoI'm in the midwest. I've had zero luck with remote work. Zero. The rest of what you said is spot-on.
- pm90 8y agoEngineers in sf make a lot more than 150k in their late 20s/early 30s even outside big 5
- robertAngst 8y agoThat is after you include stock. Not a bad deal today, but I'm still questioning if 1 trillion dollar companies exist or are overvalued.
- pm90 8y agoThat is a fair point. Liquid salary doesn't usually go much beyond 200k; all of the additional comp is in RSU's. If there is a huge downturn, a lot of engineers will lose a great chunk of their assets.
- jackgolding 8y agoMy current "quarter life crisis" is around this number, it appears to getting from $150-200k in liquid salary is MUCH more difficult than $100-150. So if liquid income is your "north star metric" job wise, what do you do?
- SirensOfTitan 8y agoAnother reminder, alongside the apparent Microsoft GitHub acquision, that regulators need to step up and prevent large tech firms from acting anti competitively. From another Economist article ("How to Tame the Tech Titans", https://www.economist.com/leaders/2018/01/18/how-to-tame-the-tech-titans https://www.economist.com/leaders/2018/01/18/how-to-tame-the...): > Two broad changes of thinking would go a long way towards sensibly taming the titans. The first is to make better use of existing competition law. Trustbusters should scrutinise mergers to gauge whether a deal is likely to neutralise a potential long-term threat, even if the target is small at the time. Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, which makes navigation software. To ensure that the platforms do not favour their own products, oversight groups could be set up to deliberate on complaints from rivals—a bit like the independent “technical committee” created by the antitrust case against Microsoft in 2001. Immunity to content liability must go, too. > Second, trustbusters need to think afresh about how tech markets work. A central insight, one increasingly discussed among economists and regulators, is that personal data are the currency in which customers actually buy services. Through that prism, the tech titans receive valuable information—on their users’ behaviour, friends and purchasing habits—in return for their products. Just as America drew up sophisticated rules about intellectual property in the 19th century, so it needs a new set of laws to govern the ownership and exchange of data, with the aim of giving solid rights to individuals.
- osrec 8y agoThe problem is that regulators rarely have the farsightedness to see which acquisitions are indeed anti-competitive. And I don't think it's always obvious, especially on the bleeding edge of tech. The farsighted ones are probably part of the acquiring company (or at least acting as consultants to the hiring company).
- weliketocode 8y agoDefinitely. Instead of a regulatory body proactively thinking about practices as anti-competitive, there appears to be a very reactionary approach of punishing large incumbents that pursue m&a out of necessity or approaching anti-competitiveness as partisan politics.
- georgeburdell 8y agoAs a hardware engineer who admittedly has a bit of contempt for software types, I can't help but think that maybe software startups just aren't novel enough these days? As noted in the article, software has dramatically lowered the barriers to starting a company, so isn't it inevitable that major companies would exploit the same low barriers (powered by their ability to gather intelligence on the next big thing via their platforms)?
- lardo 8y agowhy contempt?
- confiscate 8y agoI assume it is because he thinks engineering involves making physical objects, rather than abstract ones. I am a software guy, and I have heard other hardware guys make similar statements as well. An example is a physical car engine (hardware), vs a video game rendering "engine" (software)
- ataturk 8y agoThe problem with hardware startups is the patent situation--there's pretty much nothing you can devise that doesn't have defensive patents around it.
- walshemj 8y agoWhich some what ignores the fact that a 2 stroke engine has three moving parts in its simplest form. and mech engineering doesn't have its clients demand 5 months before a new engine delivery you now make it a rotary Wankel engine as that's the new hotness :-) Ex BTEC A1 (Thermo Fluids ) Eng Tech BTW ;-)
- dijit 8y agoIs BTEC suddenly a notable qualification? And isn't A1 the lowest level (up to 5?). Last thing I heard was that Pearsons BTEC system was a gateway to University in the UK; akin to GCSE or A-Level depending on the level taken. And A1 would be year 10 (14-15 years old) ~ GCSE level grades.. no? If this is no longer the case my BTEC's are going to get a prominent position on my CV.
- mlthoughts2018 8y agoWhile I agree with more efforts to thwart tech industry anti-competitive behavior, and I hardly think the prominent tech giants are innocent in this, I also think it’s disingenuous to act like modern start-ups are stereotypically “the small business owner” or that their own behavior isn’t at least partly to blame. My interactions with start-ups have rarely been pleasant. As an employee, I was underpaid (and wildly so on a risk-adjusted, expected value basis when comparing the lowered salary with what could be earned elsewhere), overworked, and felt the management was not informed either on the business side or the tech side, but instead came off as people with wealthy parents who viewed starting a company as the modern day status equivalent to what socialite children used to think about non-profit work or humanities graduate school. If we’re being honest, there’s a lot of dysfunction with the way start-ups are operated, and plenty of misaligned incentives that lead to running a business more to drive hype than to actually find a product-market fit or empower employees to be productive. Before I would start thinking, “won’t somebody think of the start-ups!” — I’d expect them to be a lot better behaved, a lot more concerned with ergonomics & healthy work places, more sincerely interested in productivity, and more eager to pay competitively. If they’re doing all this right, then I might have more sympathy when a bad actor displaces then for real anti-competitive reasons.
- arzt 8y agoPlease, for the sake of all that is holy, let's not let Coinbase get sold to Facebook.
- thosakwe 8y agoNot just startups. Indie/one-person shops too. Everybody’s getting drowned out.
- NicoJuicy 8y agoEuh, you mean Amazon
- perseusprime11 8y agoHow is this news? Yesterday’s immigrants make life tough for future immigrants. Likewise, yeaterday’s startups make it hard for new startups. It’s a circle of life. Evolution at play. Capitalism at play.
- xor1 8y agoYesterday's young (and today's old) make it hard for future generations. Are you defending that?
- forapurpose 8y ago> It’s a circle of life. Evolution at play. Capitalism at play. I'm not sure what that implies. We could say war and the strong robbing the weak aren't news, but we've developed societies and rule of law to limit those catastrophes and promote justice and opportunity for everyone. As a result, people have time, freedom, resources, and security to acquire skills and develop software, among other things, rather than having to fight for survival.
- eeZah7Ux 8y agoThat view is pure social darwinism: https://en.wikipedia.org/wiki/Social_Darwinism https://en.wikipedia.org/wiki/Social_Darwinism
- microcolonel 8y agoI don't know, maybe I'm not enough for the startup but I don't feel very intimidated. If I've ceded control of my board, surely they can sell the company. If I make a product that Microsoft or Google or Apple can copy in the next 6 months. then surely that is my fault. Added: I will say that I am not comfortable with some of the state powers that allow other businesses to mangle the legal system around you to sabotage you, but the solution to that is less state control (thus less reason to lobby), not more.
- Eridrus 8y agoSoftware folks are quick to write off companies which are not technically difficult to build (eg all of social media), but I think Slack is a very interesting case to think about. The software is simple, the idea has existed forever, there were competitors in the space. But the thing that really drove the space forward was Slack raising hundreds of millions and marketing the shit out of their software. Only after that have the big guys gone "oh, shit, we have to get in there". I'm not really impressed by Slack as an engineering/innovation company, but it provides a very interesting perspective on business.
- aitrean 8y agoI'll admit I'm sitting on the fence, and perhaps ignorant about anti-competitive behaviour in tech. These companies are winning over marketplaces by providing the highest quality, and lowest price services to consumers? Hypothetically, where they slip up in providing the best services, startups could thrive? Or are there elements I'm neglecting as to how large company domination negatively impacts innovation?
- mtgx 8y agoThey buy out companies long before most of them can become a threat. Google used to buy a new company every week a few years ago. Also, when a smaller company does somehow manage to get known in the industry, it's usually under pressure to raise money or be acquired in order to compete with some other huge competitor. I think this is mostly a regulatory fail in letting some companies grow so large and acquire smaller players. I think past a certain point, they shouldn't be allowed to do it. Finding out what that point is might be a little difficult, but probably not impossible.
- aitrean 8y agoI understand their strategy of neutralizing threats through acquisition. However, for this strategy to be effective, the companies have to consistently turn a profit on their acquisitions. Although it seems absurd for Facebook to spend 19 billion to acquire a 14-person company (Instagram), failing to keep Instagram popular amongst consumers will turn it into a 19 billion dollar writeoff as some Instragram clone captures consumer attention. IBM has a long record of acquiring competitive or smaller companies, but they're doing relatively poorly in the markets as of late. So while it seems clear that these companies might make life a nightmare for a lot of silicon valley entrepreneurs, they're still creating the best net value for society, no?
- amorphid 8y ago> Facebook to spend 19 billion to acquire a 14-person company (Instagram) Do you mean WhatsApp? I think they "only" paid $1 billion for Instagram.
- exabrial 8y agoGoogle: we're so righteous we won't take Pentagon contacts. Also Google: let's make the click through EULA as uninteligible as possible when we record our user's locations.
- reificator 8y ago> we're so righteous we won't take Pentagon contacts. I think you mean "won't renew". They already took them.
- craftyguy 8y agoYea, joke is on us, because they'll still develop the thing they told the pentagon they would develop, all while appearing to be 'good guys' to people (which is apparently quite a few people) who don't understand how contracts work.
- dba7dba 8y agoWhether google does it or not, China will.
- RandomBK 8y agoThose existing contracts are about see quite a few "scope changes"
- craftyguy 8y agoI doubt that, and you have no way to prove it.
- brian-armstrong 8y agoNew ReCAPTCHA: select the correct person for a drone strike to proceed.
- schoen 8y agoI don't think it's original to him, but Joey Hess (joeyh on Hacker News) posted an image of that concept: https://joeyh.name/blog/entry/prove_you_are_not_an_Evil_corporate_person/ https://joeyh.name/blog/entry/prove_you_are_not_an_Evil_corp...
- parvenu74 8y agoReading this article makes me think Microsoft acted to acquire GitHub before the other company-hoarding giants could acquire them.
- wdr1 8y agoNot the tech giants, but GDPR too.
- s73v3r_ 8y agoNo. The GDPR just says that you've got to care about user data. If your startup can only survive by selling out user privacy, then perhaps it doesn't deserve to exist.
- oldgun 8y ago> Big tech firms have been known to intimidate startups into agreeing to a sale, saying that they will launch a competing service and put the startup out of business unless they agree to a deal... > Big tech firms are able to shell out huge sums to keep top performers and even average employees in their fold and make it uneconomical for their workers to consider joining startups. Reminds me so much of the show Silicon Valley. A great satire!
- iteabagkevin2 8y agoDon’t those points sound great for startups and workers? 1) We will give you a large sum of money for your startup. 2) we will pay our workers so much they won’t want to do a startup.
- abdullahkhalids 8y agoThey do. The unstated statement by the GP is that what's good for an individual is not always good for society at large. Competition is good for society; monopoly is usually only good for the monopoly and those few who can threaten the monopoly but are happy to roll over for money.
- pjc50 8y agoThe sale in (1) is often on very unfavourable terms, because the valuation of a startup depends on whether the quasi-monopolist is trying to kill it or not. How much would your startup be worth if it was banned from the App Store, for example? 2) is fine .. unless there are secret no-poach agreements in place.
- Consultant32452 8y agoI have a hard time figuring out what to be angry about. One day we're upset at the evil capitalists for paying workers too little. Now I guess we're upset at the evil capitalists for paying people too much.
- orcdork 8y agoWhat about "evil capitalists" using their advantage unfairly to stifle & crush competition, keeping their profits high, while keeping salaries artificially deflated for the majority of workers. But ok, let's just create this fantastical narrative that "paying workers too little" and "paying people too much" cannot possibly apply at the same time to different segments of the population. Hell, let's even use the loaded phrase "evil capitalists", a great term if what we're looking for is to deftly avoid any real criticism of capitalism.
- jonthepirate 8y agoI once got a legal threat from facebook when I was setting up an app because I registered a domain to serve my app assets with a name like myappfacebookorigin.com and it said that the word facebook is famous and I need to cease and desist. I wish they had paid me back for the domain or forced the registrars to warn me I would get legal threats for using their trademarked name.
- TheSpiceIsLife 8y agoIt’s not obvious that using a trademark you down own might result in the trademark owner asking you not to?
- nicodjimenez 8y agoThe tech giants have learned to think on longer time horizons than capital markets have. Which means that big companies and VC's (their vendors) ultimately end up dominating most startups, which in turn means that the original core essence of the company that made it successful in the first place gets weeded out for short term gain. The companies that can resist these powerful dynamics are very rare. They tend to be tiny, or extremely successful (eg. Airbnb, Uber, ...). It's the companies in the middle that have to worry the most.
- softwaredoug 8y agoGood point. We may be in this position because private investors on average are naive buzzword chasing sycophants while Google etc have scale, leverage and knowhow to direct and control the market over the long term.
- jfk92n8 8y agoNonsense MS already did this Walmart already did this ATT already did this The newer tech companies are just replaying American Business 101 There’s no more mystery or nuance needed Own it all is the meme in American enterprise going back decades
- scottybowl 8y agoAnother example is Partner programs. We're relatively new entrant in the social media scheduling industry and are unable to compete with Buffer and Hootsuite because they have API access to post to Instagram via the Facebook Partner program. In order to even apply to be a Partner we have to have a "backer" within Facebook who will vouch for us. Weve been trying to find such a person since February and we're still not any closer to being able to apply. It's a hugely anti-competitive approach and makes it impossible for non Silicon Valley startups to get a foothold in the market.
- _bxg1 8y agoBreaking News: Oligopoly Stifles Competition, Experts Baffled
- isolli 8y agoThis article makes the case for government intervention [0]. The central thesis is that, had Microsoft not been sued for antitrust in the 90s and wary of yet another lawsuit, they would have killed Google in its infancy. Apparently anonymous sources in both companies confirmed this would have been a distinct possibility. [0] https://www.nytimes.com/2018/02/20/magazine/the-case-against-google.html https://www.nytimes.com/2018/02/20/magazine/the-case-against...
- pravinva 8y agoHypotheticals don't work in law. You don't punish someone who hasn't commited a crime.thats common law. Now if it were Europe style civil law, it would be different. Also if Google had died in its infancy, there's nothing that guarantees that another search engine would not not prop up. All great ideas come to fruition when the time is right. 'Search' was ready in 1999. Similarly many falsely believe that the internet wouldn't exist without DARPA. Note that packet switching etc had already found private profitability and without govt regulation would have expanded to become the foundation of the internet
- tim333 8y agoThe NYC article isn't really about a hypothetical. It's about foundem.com's battle with Google over maybe being lowered in Google's rankings because they are a rival search engine. Whether Google should be punished for that, assuming it's true, or left to rank things as they like is more the debate.
- shardinator 8y agoPerhaps they should be free to do as they choose, but make what they are doing very explicit. In the early days Google heavily promoted the idea that their rankings were independent and free of commercial biases, and we now implicitly assume that's true. If that's not the case, then perhaps we enforce explicitness about that - somehow.
- stevenwoo 8y agoIsn't hypotheticals the entire basis of civil asset forfeiture? Civil forfeiture as practiced in the United States is based entirely on the supposition that all property is subject to seizure without any burden of proof on law enforcement and that the owner has to prove they bought the property with legal means. Hypothetically everything someone owns was bought illicitly. Any law enforcement agency can just claim it, though it's in practice they like to take cash because there's a low chance of a paper trail and dispute resolution in favor of owners with that. Property is always assumed guilty in 42 states and federal court. https://www.splcenter.org/20180116/civil-asset-forfeiture-forfeiting-your-rights https://www.splcenter.org/20180116/civil-asset-forfeiture-fo...
- pravinva 8y agoThis is not anti competitive behaviour. In fact, this IS competition. Competition means all sorts of actions that lead to me having more customers than you. The only problem is when the entrenched business use govt/lobbying/abusive patent law to get this done. Buying out competition and trying to enter a low barrier to entry business is the very definition of competition. Suck it up
- TulliusCicero 8y agoAgreed, I'm having a hard time seeing how this is anti-competitive. It sounds like they're just saying that tech giants are competing very successfully by virtue of being really big and having lots of money. Paying people really well, buying out startups with good tech, competing with startups, etc.; none of that sounds illegal, or even unethical. There's also an argument to be made that big tech giants have some benefits for startup ecosystems. The option of being bought out, for example, acts as a safety net, so that even if your company doesn't have explosive growth that lets it go public, well at least you'll get something out of it. Similarly, having tech giants nearby means that even if your startup just implodes, you can probably still get a decent job in the area (going from big company to startup to back again is really common in the bay area, for example). Disclaimer: I work at Google, my opinion is my own, etc.
- st1ck 8y agoThis. If there has to be a regulation, I'd require companies to give more freedom to users, e.g. to choose default search engine, install alternative app stores, allow access to public data without account (e.g. LinkedIn) etc.
- s73v3r_ 8y ago> Big tech firms are able to shell out huge sums to keep top performers and even average employees in their fold and make it uneconomical for their workers to consider joining startups. Perhaps startups should look at changing that. Offering more actual money, better options, and stop with the fuckery that makes most people believe that their options would be totally worthless even when the company is acquired/goes public.
- carusooneliner 8y agoThe article is an accurate assessment of the landscape today, but is it going to be true next year or five years from now? You can never be too sure! Using a bit of imagination to think of risks these giants face : * Antitrust - could happen when it's politically advantageous to publicly bash tech giants * Stock market - a recession could reduce tech giants’ leverage by a lot * China - competition from Chinese companies or the Communist party imposes an embargo * Technology - another AI winter or maybe some other company gets the edge in quantum computing for instance * Demand - their products today are better versions of what they were ten years ago, not completely new things. What if users turn away from these tech companies as they become the ‘old way of doing things’? * Startups - Google grew on Microsoft's watch, Amazon on Walmart's, Facebook on Google's, Apple on Nokia's, Snap on Facebook's. What's next? * Crypto - ethereum, bitcoin, etc. could usher in a whole new internet experience where giants on the 'old' internet find it hard to gain a foothold While working on a startup today might feel like picking pennies in front of a bulldozer, tech giants face a number of risks of their own. Startups would better focus on internal excellence than fret about tech giant monopoly.
- eruci 8y agotough!