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The sad truth about Facebook

241 points by edw519 16y ago

houseabsolute 16y ago
Don't we have to first establish that Silly Valley has lost its stride before talking about how it happened?
Aetius 16y ago
Yeah, it would be easier innovate on hard problems, Mr. Myhrvold, if you you weren't trying to strangle startups and small tech firms every chance you get with your Intellectual Ventures.
- sabj 16y ago
  I was nodding along with the premise until I came to this part. "His company, Intellectual Ventures, intentionally runs counter to the prevailing trend in Silicon Valley." By, uh, patent trolling? O_o
- bpm140 16y ago
  Dammit. I raced back after reading the article to post this exact statement. Once again someone beats me to the karma :)
- paraschopra 16y ago
  I'm not sure, but is his company every sued any startup for patent infringement. I read about his company in super-Freakonomics and he seemed to be genuinely caring about solving hard, big problems. He may be amassing patents to get protection but unless he actively screws small companies by buying patents, I'm not sure I would call his company a patent troll.
  - prodigal_erik 16y ago
    They create and acquire patents for revenue, not defense. They don't need protection from infringement suits because they don't sell any products (and their research should fall within US patent law's exemption for that purpose). There's also speculation they have backed some infringement suits raised by shell companies. I'm torn. There ought to be some way to compensate researchers for actually solving hard problems (here I'm excluding a lot of poorly-examined software patents which basically claim the whole problem via the obvious solution) yet doesn't involve giving them an exclusive stranglehold on anyone using their work even accidentally.
    - jacquesm 16y ago
      The cure is worse than the disease at this point, the situation is such that the patents to tend to go overwhelmingly to those that troll rather than to those that have ideas and actually implement them. That's kind of logical too, after all having an idea and writing it up in a patentable form is much less work than following through so while the 'doers' are stuck on their first one the 'patenters' are on their 10th or more.
rubyrescue 16y ago
Reads like a PR piece written by Myrhvold...
HappySushiCo 16y ago
Build things that people will ultimately find useful... as opposed to products that are conducive to a quick sell to the angels and VCs. Build a product that can potentially make money on its own merit. A 2 million dollar series A round should not be considered as a sign of a successful startup. This article does raise some valid points (regardless of the intentions of the writer). Strike the part about Intellectual Ventures because it unfortunately overshadows the main point.
zaidf 16y ago
Talk. About. A. Troll. (edit: ah, no wonder. the author is fake steve jobs blogger) This is almost as good as the article from the 90s making fun of the Internet and how useless it is. ...a place where smart kids arrive hoping to make an easy fortune building companies that seem, if not pointless, at least not as serious as, say, old-guard companies like HP, Intel, Cisco, and Apple. "Easy fortune" huh? That's what you call those 15-20 hours days many founders pull? This writer owes an apology to the Valley. Just another version of old dudes complaining about the new gen.
- starpilot 16y ago
  If you're not aware, most of the old guard companies pulled 15-20 hour days starting out too. And making a physical product is generally MUCH more frustrating than anything in web app land. Hurrying up and waiting, for a flawed product messed up by the machinists. Also much higher startup capital costs for anything nontrivial like semiconductors. Expensive equipment, office space, manufacturing space, all this stuff you need to start. Not just two or three guys with open source software working in a dorm. Studying the physical sciences is also more mentally taxing than coding PHP. I've gotten paid for both. You can't compare designing aircraft in CAD and Excel (what I do) that could kill someone if done improperly, with setting up email verification for your social networking site. Not even close.
  - zaidf 16y ago
    Nothing I said belittles the efforts of past Valley heroes. As for it becoming cheaper to do a start-up now versus previously, well doh. That should not be an excuse to belittle today's start-ups as the author does so recklessly. And where is the discussion headed anyways? I am sure it was harder for entrepreneurs in 1900 than 1950 on the whole. Studying the physical sciences is also more mentally taxing than coding PHP. You make it sound like that is all a start-up is: some php code. Most successful start-ups are a lot more than php code. Also, having to walk ten miles before we had a means of transportation was more taxing than taking cars. What are we gonna do about that? Attack the whole world for not having it as hard as when folks had to walk 10 miles?
  - 16y ago
iamelgringo 16y ago
Complete poppycock. Running Hackers and Founders SV, I think I have a pretty decent picture of what Silicon Valley is like on the ground floor, and as far as I'm concerned it's pretty frigging amazing. There's tons of small teams doing amazing things with Big Data and real time analytics like Factual (making Open Data easier to manage and use), MixPanel (Real Time analytics for applications). There's a number of companies doing really interesting things with cool languages like Clojure and Erlang, even if they are "silly companies". There's companies like Justin.TV which is the largest real time video streaming company in the world. Real time video streaming is very, very hard to do at scale. AirBnB is revolutionizing the hospitality industry, and last I read are the largest provider of rooms in New York. There are amazingly cool companies working on SSD database appliances, and on databases optimized specifically for SSD's. SSD add on cards for your PCIE graphics slot that give you 6x the throughput of a SATA port. Those companies don't exactly make for exiting reading in Newsweek, so they don't get a lot of press, though. Yeah, there's a lot of people making Facebook apps. Sure, you can mock twitter because on it's surface it seems silly and trivial, but they have invented an entirely new communication protocol which companies like StockTwits are leveraging to allow individuals to broadcast their recent stock trades. And, not only that, but the article says that Twitter hasn't figured out how to make money yet. In fact, Business Week reports that they were profitable in 2009: http://www.businessweek.com/technology/content/dec2009/tc20091220_549879.htm http://www.businessweek.com/technology/content/dec2009/tc200... Sure Zynga makes somewhat whimsical addictive games, but if you stop and crunch the numbers, Farmville's digital economy is probably mlarger than the real world economies of many developing nations. So, if you'd like to believe that Silicon Valley has lost it's way go right ahead. But, from where I sit, things are just beginning to get interesting. Silicon Valley is just starting to fire on all cylinders since the tech bubble popped in 2000. If you want to know how I'm seeing Silicon Valley: I'm strapping in and getting ready for a great big ride.
- newgrad 16y ago
  The real writer, not the one who posted it on HN, probably doesn't even know this thread exists.
- felipe 16y ago
  The point of the article is that Silicon Valley used to be focused on hardcore infrastructure like semiconductors, networking, operational systems. Note that almost all companies you mentioned are related to either marketing, media or entertainment. Even Factual, their main customers are media-related.
srw 16y ago
This article is about SV or Nathan Myhrvold who runs an "invention lab" or can we say that a patent troll company?
alanh 16y ago
I can’t believe the expert quoted in the article is none other than Myrhvold. Now, I don’t know the guy, but I understand that his current line of work is something to the effect of: Abuse the current software patent mess by suing people who, you know, are actually creating things.
bretthellman 16y ago
Someone was having a bad day or something...
- neolefty 16y ago
  Couldn't get the kids off his lawn? I can totally sympathize.
rblion 16y ago
“the unknown engineers and professors who have good ideas. Are those people going to get funded or will they be talked out of it and told they should do something like Zynga, because virtual goods is where it’s at these days?”
patrickgzill 16y ago
Newsweek, a/k/a the poster boy of declining circulation, (from 3.1 million in 2007 to 1.5 or less in 2010) lecturing others on how to run their business? (source: http://idsgn.org/posts/newsweek-can-a-redesign-save-a-dying-magazine/ http://idsgn.org/posts/newsweek-can-a-redesign-save-a-dying-... )
rahooligan 16y ago
I think Twitter has immense value. And I would be happy to see it go public and achieve $billions in market cap. Cant say the same thing about facebook or zynga. sometimes i feel like facebook is that waste-of-my-time show that i get pulled into when i switch on my tv. it sucks up time from my life i will never get back.
- zaidf 16y ago
  it sucks up time from my life i will never get back. You could be talking about the entertainment industry. They seem to be doing ok in the market.
  - rahooligan 16y ago
    yeah they do very well. check out http://www.americaisretarded.com/ http://www.americaisretarded.com/. it is possible to make money without generating much value (like 'the situation' from jersey shore). facebook has a big market cap but imo it doesnt have much value.
    - spitfire 16y ago
      The term you're looking for is fad. Facebook, like the situation, is a fad. It'll pass. Anyone remember myspace? orkut? friendster? These all blew up hugely, then people got bored or grew up.
- nkohari 16y ago
  Twitter has a strong impact on our culture, but without a rational business model, and several quarters of profitable growth, an IPO will never happen. I certainly wouldn't buy stock in a company which doesn't know how to make money, no matter how impactful their product is.
  - rahooligan 16y ago
    my bet is twitter will figure out monetization. im sure they have something in the works. look at ad.ly for instance - instream advertising. they seem to be doing well.
lotusleaf1987 16y ago
Myhrvold is a known patent troll, even going so far as to sue the same companies multiple times under shell companies: http://www.techdirt.com/articles/20100217/1853298215.shtml http://www.techdirt.com/articles/20100217/1853298215.shtml Why anyone cares what this guy says is beyond me. The author says Myhrvold runs 'an invention lab'... yeah not exactly. A better term would be patent extortionist: http://techcrunch.com/2008/09/17/nathan-myhrvolds-patent-extortion-fund-is-reaping-hundreds-of-millions-of-dollars/ http://techcrunch.com/2008/09/17/nathan-myhrvolds-patent-ext... Here's another article for good measure: http://www.techdirt.com/articles/20060626/1011256.shtml http://www.techdirt.com/articles/20060626/1011256.shtml
dasil003 16y ago
So essentially his argument is that he prefers industry work to flashy consumer plays. I can't say I disagree. The only thing is that there's no indication that the "serious" stuff is any less significant than it was 50 years ago. Yeah, you have Madison Ave layered on top now thanks to the mainstream adoption of the internet, but should everyone just leave that money on the table in the name of "science"?
zuggywugg 16y ago
finally, someone who shares my opinion!
tlrobinson 16y ago
Stopped reading at "says Nathan Myhrvold".
seldo 16y ago
Twitter is a noisy circus of spats and celebrity watching, and its hapless founders still can’t figure out how to make money. Anybody who says this is clearly just trolling, since everyone knows they are making a ton of money selling the data to the search engines before they even get started on the advertising, which they are working on. And as for "twitter is for celebrity watching", that meme died a year ago.
- deleted 16y ago
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nadam 16y ago
Maybe this article is a PR piece. But I agree with that 'social' and non technology-focused startup ideas are overvalued currently by young enterpreneurs, by the media and by investors. As if those problems which existed 10-20 years ago would not exist anymore. As if those problems currently solved by 'old companies' and generating incredible amount of money, could not be solved better by some startups. Not enough startups are competing _directly_ against those old products like Microsoft Office, Adobe Photoshop, etc... Not enough young companies are based on deep technology. Almost everyone want to be rich quickly adding very little technology-wise to exisitng open-source stuff like Ruby on Rails. To use Zed's terminology I am half a 'long beard' half a 'product guy'. So I am trying to create something which is a product for people, but potentially can go quite deep technology-wise.
DamonOehlman 16y ago
I'm sure that the message of both the movie and this spin-off piece are skewed towards fantasy and there is great work coming out of SV all the time. But let's face it innovation doesn't decide to shack up in one place, settle down and have a couple of kids, calling one place home for the rest of it's existence. Hubs of both engineering and social innovation will dwarf SV in coming years. The only question is where...
qthrul 16y ago
The correct URL for this piece is actually: http://bit.ly/Daniel-Lyons-Link-Bait http://bit.ly/Daniel-Lyons-Link-Bait HTH.YMMV.VWP.
tapp 16y ago
“If we distract people with the lure of easy money... we’re going to wind up derailing the thing that has been driving our economy” It seems to me that if one were sincerely worried about this, the concern would be better directed at Wall Street, where many of the world's best minds go to be wasted on creating the next CDO or HFT/computerized-frontrunning technique while contributing nothing back to the world.
mr_luc 16y ago
Not only is the author a troll -- as pointed out, he runs the Fake Steve Jobs blog -- his primary source, Nathan Myhyrvhvhlodold, is a troll. Let me clarify: Nathan might be a genius, but he's a genius whose words we can't ever risk taking seriously because of the raging conflicts of interest that imbue his every interaction with the press or social media. His company: > "Intellectual Ventures is a private company claiming to invest in "pure invention." Their business model has a focus on developing a large patent portfolio and licensing these to companies with infringing products." Myhrvold brings smart scientists and thinkers into a room, picks their brains, and then he and his own very smart people sit down and come up with as many patents as they can. They aren't driven by malice. They're driven by rational self-interest: presently, with our broken patent system, people who aren't actually going to go out there and try to solve the world's problems can sit in a room all day coming up with ideas and make money from that. Let's run his statements through a conflict-of-interest filter: "Silicon Valley is working on easy problems" translates to: > Hey world, it's only cool to work on things that require large up-front investment on PATENT-FRIENDLY products, so people with lots of patents can make money by attaching ourselves to the necks of people who are actually making the world a better place instead of talking about it. Tempting, Nate. More to the point, it's tempting to get sucked into rebutting individual points, such as the fact that those heroes of the valley would have killed to have the resources available now to anyone with a credit card, Linode and Twilio.com. Or the fact that he's essentially complaining about low barriers to entry. Or the fact that things that start easy and trivial, in the early stages, quickly get deep and techy. It's easy to mock things that look facebook-y, but it's hard to solve, say, 10k or 100k continuous connections, or to write fast evented code or contribute to libraries that make the whole world faster. We start simple and get smart. But if you start rebutting these things, you've been sucked into a hole. The issue is, he wants people to work on patent-friendly stuff. Fin.
- gaius 16y ago
  But you can't patent an idea - you have to have an implementation! Srsly - you have fundamentally misunderstood what a patent is. If it's "a method for mangling widgets" then you have to have built a real, working widget mangler too, and include the blueprints in the patent application.
praeclarum 16y ago
Geeze, does this guy understand the word prosperity? We should be happy that "the computer problem" is solved (at least for now). Computer technology has plateaued and there is no hard engineering required right now. This is a good thing! It gives us time to experiment with software. So Silicon has gone the way of Northeast Steel. So what if the world changes? If you want to do hard engineering, you go to the fields that require it - war inc. (looking for more efficient ways to kill our neighbors), space flight (the modern space race is exciting), industrial automation (eventually the populace of Asia will want to climb out of indentured servitude and we need to replace them with something). These fields still need smart engineers and big $ startups.
losethos 16y ago
I'm not being sarcastic or anything, but this reminds me of salary comparisons. Why shoud person X make Y when person Z makes Q. There's a delicious unfairness in capitalism that forces people to overcome coveting. God made life seemingly unfair just to fuck with self-righteous people, because they need to overcome it. Matthew Chapter 20 1 1 "The kingdom of heaven is like a landowner who went out at dawn to hire laborers for his vineyard. 2 After agreeing with them for the usual daily wage, he sent them into his vineyard. 3 Going out about nine o'clock, he saw others standing idle in the marketplace, 4 2 and he said to them, 'You too go into my vineyard, and I will give you what is just.' 5 So they went off. (And) he went out again around noon, and around three o'clock, and did likewise. 6 Going out about five o'clock, he found others standing around, and said to them, 'Why do you stand here idle all day?' 7 They answered, 'Because no one has hired us.' He said to them, 'You too go into my vineyard.' 8 3 When it was evening the owner of the vineyard said to his foreman, 'Summon the laborers and give them their pay, beginning with the last and ending with the first.' 9 When those who had started about five o'clock came, each received the usual daily wage. 10 So when the first came, they thought that they would receive more, but each of them also got the usual wage. 11 And on receiving it they grumbled against the landowner, 12 saying, 'These last ones worked only one hour, and you have made them equal to us, who bore the day's burden and the heat.' 13 He said to one of them in reply, 'My friend, I am not cheating you. 4 Did you not agree with me for the usual daily wage? 14 5 Take what is yours and go. What if I wish to give this last one the same as you? 15 (Or) am I not free to do as I wish with my own money? Are you envious because I am generous?' 16 6 Thus, the last will be first, and the first will be last." God likes to fuck with people's sense of fairness. I laugh at those who complain. God says... acquainted discoursed external god shady Edition consolations recorded examined bleeding ensues deafen searches permitted seventh deem seduce honouring minister resistedst innocency pliant recognised judge enjoin Itself knotty approved imparts grantest littles earnest shadows authority rend whichsoever consecrating incumbrances Or how about the prodigal son: http://www.usccb.org/nab/bible/luke/luke15.htm http://www.usccb.org/nab/bible/luke/luke15.htm God basically says, "STFU Because I'm God and you're not." Some people are still unclear on the concept of God. God says... C:\TEXT\BIBLE.TXT not stand: her husband hath made them void; and the LORD shall forgive her. 30:13 Every vow, and every binding oath to afflict the soul, her husband may establish it, or her husband may make it void. 30:14 But if her husband altogether hold his peace at her from day to day; then he establisheth all her vows, or all her bonds, which are upon her: he confirmeth them, because he held his peace at her in the day that he heard them. 30:15 But if he shall any ways make them void after that he hath You attack me, you're declaring yourself an enemy, no matter who you are and I will get all my friends to fuck with you. Legions of angels and shit who can puppet any person on Earth. Yeah, I got one of them ghetto cell phones all crazy homeless people have.
mechanical_fish 16y ago
This article is full of it, but for more reasons than have been articulated so far. One problem is that the article mistakes light for heat. Just because they get less press than Facebook doesn't mean that old-school high-tech engineering startups don't exist. Facebook et al are focused like a laser on getting their names out. That is what social networking is: word-of-mouth viral publicity. Whereas most hardware startups are born below the radar, and the majority die below the radar, and many of the successful ones get bought out by bigger companies and never rise above the radar under their own name. But that doesn't mean they don't exist. Some statistics would have been nice. The balance of companies has shifted a lot over time, but that's because computing has grown and matured. Back in the 1970s Silicon Valley's only customers were nerds. That meant a lot of emphasis on nerdly products. H-P calculators. Oscilloscopes. Chipsets. After thirty years of work on mobile phones, broadband networking, and UX design, we've improved computing to the point where there are now many Valley firms whose customers are non-nerdly iPhone owners and Web users. That's a huge number of people. And it turns out that you can make as much gross revenue by selling a $2.99 app directly to 2 billion people as you can by selling a $2.99 part to a firm that will make 2 billion mobile phones, but the former requires much more marketing and makes a lot more noise. But the big problem with this article is that it is trying to blame a forest-management problem on the individual leaves. If the USA is not investing enough resources in "alternative energy, better batteries, and nanotechnology", don't blame Silicon Valley startup culture. That's putting the cart before the horse. Entrepreneurs go where the money is, and who controls how much money goes into cutting-edge hardware research? The government, mostly. Either directly (by giving out research grants) or indirectly (by providing an artificial "market" with a single customer -- often the Department of Defense, but sometimes an entity like NASA -- that happily commits to spending money on the very latest high-tech toys; or by creating and enforcing the incentives that drive the market for, e.g., alternative energy). The Internet got developed because the government commissioned it. Rocket technology got developed because the government commissioned and bought it. H-P and Intel became big companies by selling equipment and parts to the high-tech companies that sold to the government. The nanotech researchers I know are paid by the Department of Defense, the National Institutes of Health, or the National Science Foundation. Biotech research? Funded by the NIH or the DoD. Alternative energy? The size of our research efforts have tended to wax and wane with the size of the DoE budget; the economics of deploying alternative energy have everything to do with the cost of oil and gas (determined by forces outside of an entrepreneur's control, like taxes, and tax-funded highway projects, and tax-funded transportation projects, and zoning policy, and tax-funded military maneuvers, and government-mediated international agreements) and the extent of environmental regulation (determined by government and politics). If you want to address these problems you must first analyze them correctly. If you're a rag like Newsweek it's easy and fun to pick on Mark Zuckerberg, but the real problem is economic and research policy: We've got an economy with flat or declining demand and lots of excess capacity (I, for one, could certainly be talked into applying my Ph.D. in EE to alternative energy problems instead of to PHP applications... if the price was right) yet our government officials are perversely engaged in an effort to further depress demand and raise our excess capacity by cutting spending. I wonder if there are any magazines that are ostensibly devoted to discussing problems in society, government and policy, instead of trading in mindless gossip, cheap shots, and PR hit pieces?
DanielBMarkham 16y ago
Two things. One positive and one negative. Positive. The author understands the gist of what's going on. Places like YC focus on Minimum Viable Product and doing just one thing that people want. These are great and wise strategies for both investors and entrepreneurs, but there's also another term for it that's not as flattering: bottom-feeding. Going after the little bits of value here and there, not being a hunter, existing by providing the least amount of value possible. There are huge bottom-feeders! Facebook is one of them. But it's little tidbit work. Stuff like reminding me when I like to scratch my nose, or a service for recommending dog groomers. Negative. The problem here is that the author seems to think he knows where technology is headed, and that's always a foolish bet. His view is that we should be making complex things and solving hard problems. While I agree that hard problems need to be solved, I don't think you can decide ahead of time which problems are going to be the ones that gain traction. This is like the government or VCs "deciding" that one area of effort is going to give more results than another. Nobody knows. This is the risk of startups. It's why the smart move is to do the little stuff. More to the point, there are two kinds of innovation (to steal from Kuhn). There is "normal" innovation, where people take existing tech and put it together in new ways to make trivially more usable things than existed before. Then there is paradigm-changing innovation, where completely new things appear. By far, normal innovation is the norm. Probably 99.9% of all innovation is normal. Maybe more. Systems change from the ground-up, not from the top-down. Eventually a bunch of little things reach critical mass and a paradigm-changing innovation occurs. But hell, most of the time you can't force the little innovations to work, much less the big ones. I love the contrarian tone, but it's just not a realistic article.
- brendonjason 16y ago
  Regardless of whether its wise to bet on where technology is heading, the point I got from this was that more thought should be going in to what technologies should be focused on as a matter of principle, regardless of "what sells to the masses at the moment." We've seen where demand (Wall Street) driven acute focus on the short term has brought many companies today, ie, over-reliance on what was once popular but quickly hit the dust the second something slightly more trendy came along. Of course, making so many rapid platform adjustments drives people into borrowing ... from Wall Street. But companies were told over and over by a barage of management consulting gurus that things were so fast and blurry, they couldn't afford to not keep borrowing more and more money to pump out more and more crap to keep up with the almost instantly changing trends. On the other hand, look at apple - just over a decade ago they were considering bankruptcy, and instead of giving in to the urge to "do what would sell at the moment" they decided to ignore "expert advice" and instead invest in a simple but well-thought out development plan (iPad seems new but is really just a long-held fantasy of Newton II) and chart their own long-term course of doing what they wanted at a time when it wasn't certain there was going to be a long term for them. Now of course everybody praises them for their determination to do what they wanted rather than catering to the fickle whims of the market. Now look where they are. They define the market. They don't make what you want - they tell you what you want and make sure you get the hint that they know what you want even better than you do. And more and more people seem to agree. I think that's what this article highlights - what will the world be like 5 years from now (more of the same) if facebook keeps getting more and more money to hire more talented people so they can figure out clever new ways to help people keep each other up to date on useless banalities that do nothing to advance anything other than their intimate familiarity with useless and ephemeral trivia about their sometimes friends but mostly loose associates. The world is facing more and more problems ... exponential inter-relationships between these problems will at some point overwhelm us ... and smart people are figuring out how to steal money from grandparents on wall street or how to better allow you to tell everyone you ever bumped into in life that you got a new refridgerator. Path dependency is very real and we may come to a point where we can't solve the important problems anymore even if we want to or need to.
ugh 16y ago
“Facebook lets you keep in touch with your friends; for this profound service to mankind it will generate about $1.5 billion in revenue this year by bombarding its 500 million members with ads.“ This statement seems very indicative of the author’s cluelessness or hypocrisy. $1.5 billion from 500 million members means that they bombard each member on average with $3 worth of ads every year. I’m bombarded with more ads when buying three issues of Newsweek. Facebook lets you keep in touch with your friends for $3 a year. That sounds like quite an impressive feat to me. There is much that is wrong with Facebook but I don’t think that they are making their money with ads is one of those things.
- deleted 16y ago
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varjag 16y ago
> We’ve already fallen behind in areas like alternative energy, better batteries, and nanotechnology. Nanotechnology? You can't fall behind in vaporware.
shadowsun7 16y ago
A response: http://news.ycombinator.com/item?id=1729035 http://news.ycombinator.com/item?id=1729035
dstein 16y ago
A lot of people here seem to be calling foul. But whenever I read a list of startups that YCombinator has funded the formula in every case is: Clone of (X) Targeted For Audience (Y) The article is correct about a lot of things. Angel investors (including YC) don't really seem interested in investing in really game changing technology, they're interested in following a trend by buying lotto tickets for a few thousand dollars with the hopes that several will hit medium to large sized jackpots in the shortest possible time frame.
sabat 16y ago
SV innovation was once about creating the technological infrastructure that we all take for granted. Now, it's about using that technology in new, interesting ways to see what might happen. I have met and spent time with Dan, before he became such a cynic. He was excited about the idea of being near startups and wanted to come up with an idea for his own. What I see when I read his pieces is sadness, disappointment. While I can't blame him, we should understand his point of view in context: he could-a been a contender.
johnconroy 16y ago
A powerfully retarded article, if I may say so
bbgm 16y ago
While I think there is some truth in the article, and the lack of innovation in SV, one should probably remind the author that some of the more interesting pure technology startups are still SV based. To pick two close to my interests Complete Genomics: http://www.completegenomics.com/ http://www.completegenomics.com/ Pacific Biosciences: http://www.pacificbiosciences.com/ http://www.pacificbiosciences.com/ Tilera: http://tilera.com http://tilera.com (started out of MIT but now in San Jose) There is a lot more "noise" out there just because it's easier. I suspect it would have been the same in the past if the capital required was lower. That said we should be asking ourselves if what we are doing has a purpose? I meet too many people with a good "idea" but no purpose, and in the long term that might become a problem.
rbanffy 16y ago
It's kind of amusing to watch the ad-hominem arguments take flight. While it's true Daniel Lyons is Fake Steve Jobs and that Nathan Myhrvold runs a company focused on thinking up ideas that could lead to products after some research and patent them before spending a dime making any real progress beyond writing them down, while at the same time extorting those who do, the argument against companies like Facebook or Zynga stand: what are they doing to improve the human condition? Are they doing more or less than companies like HP, Intel, Cisco, Apple and Google?
- chopsueyar 16y ago
  Not sure if you were paying attention, but Zuckerberg was on Oprah, and he is giving the state of New Jersey $100 million in Facebook stock, in a matching grant. How much stock has Google given NJ? </sarcasm>
grails4life 16y ago
Nathan Myhrvold is also a patent troll: http://www.pcworld.com/article/132174/ubuntu_microsoft_is_patent_pal.html http://www.pcworld.com/article/132174/ubuntu_microsoft_is_pa...
nir 16y ago
One reason I like HN is that comments seem to lean more towards the Perceptive (vs Judgmental) end of the scale in the Myers-Briggs sense, compared to other sites. So it's sad to see many of the responses in this thread. Myhrvold/Lyons/Newsweek aren't the issue here, the issue is what you choose to do with your life. In 1983 Steve Jobs recruited Pepsi's president to Apple by asking him to choose between changing the world and selling sugared water. Much of Valley's current output is closer to sugared water than to the Macintosh.
- chopsueyar 16y ago
  In 1983 Steve Jobs recruited Pepsi's president to Apple by asking him to choose between changing the world and selling sugared water. Much of Valley's current output is closer to sugared water than to the Macintosh. Beautiful summation.
nervechannel 16y ago
One might point out the irony of this being posted on a site called "Hacker News" where many of the most popular posts are about venture capitalists, investment, business models blah-di-blah-di-blah.

241 points by edw519 16y ago

Don't we have to first establish that Silly Valley has lost its stride before talking about how it happened?

Yeah, it would be easier innovate on hard problems, Mr. Myhrvold, if you you weren't trying to strangle startups and small tech firms every chance you get with your Intellectual Ventures.

sabj 16y ago
I was nodding along with the premise until I came to this part. "His company, Intellectual Ventures, intentionally runs counter to the prevailing trend in Silicon Valley." By, uh, patent trolling? O_o
bpm140 16y ago
Dammit. I raced back after reading the article to post this exact statement. Once again someone beats me to the karma :)
paraschopra 16y ago
I'm not sure, but is his company every sued any startup for patent infringement. I read about his company in super-Freakonomics and he seemed to be genuinely caring about solving hard, big problems. He may be amassing patents to get protection but unless he actively screws small companies by buying patents, I'm not sure I would call his company a patent troll.
- prodigal_erik 16y ago
  They create and acquire patents for revenue, not defense. They don't need protection from infringement suits because they don't sell any products (and their research should fall within US patent law's exemption for that purpose). There's also speculation they have backed some infringement suits raised by shell companies. I'm torn. There ought to be some way to compensate researchers for actually solving hard problems (here I'm excluding a lot of poorly-examined software patents which basically claim the whole problem via the obvious solution) yet doesn't involve giving them an exclusive stranglehold on anyone using their work even accidentally.
  - jacquesm 16y ago
    The cure is worse than the disease at this point, the situation is such that the patents to tend to go overwhelmingly to those that troll rather than to those that have ideas and actually implement them. That's kind of logical too, after all having an idea and writing it up in a patentable form is much less work than following through so while the 'doers' are stuck on their first one the 'patenters' are on their 10th or more.

rubyrescue 16y ago

Reads like a PR piece written by Myrhvold...

HappySushiCo 16y ago

Build things that people will ultimately find useful... as opposed to products that are conducive to a quick sell to the angels and VCs. Build a product that can potentially make money on its own merit. A 2 million dollar series A round should not be considered as a sign of a successful startup. This article does raise some valid points (regardless of the intentions of the writer). Strike the part about Intellectual Ventures because it unfortunately overshadows the main point.

zaidf 16y ago

Talk. About. A. Troll. (edit: ah, no wonder. the author is fake steve jobs blogger) This is almost as good as the article from the 90s making fun of the Internet and how useless it is. ...a place where smart kids arrive hoping to make an easy fortune building companies that seem, if not pointless, at least not as serious as, say, old-guard companies like HP, Intel, Cisco, and Apple. "Easy fortune" huh? That's what you call those 15-20 hours days many founders pull? This writer owes an apology to the Valley. Just another version of old dudes complaining about the new gen.

starpilot 16y ago
If you're not aware, most of the old guard companies pulled 15-20 hour days starting out too. And making a physical product is generally MUCH more frustrating than anything in web app land. Hurrying up and waiting, for a flawed product messed up by the machinists. Also much higher startup capital costs for anything nontrivial like semiconductors. Expensive equipment, office space, manufacturing space, all this stuff you need to start. Not just two or three guys with open source software working in a dorm. Studying the physical sciences is also more mentally taxing than coding PHP. I've gotten paid for both. You can't compare designing aircraft in CAD and Excel (what I do) that could kill someone if done improperly, with setting up email verification for your social networking site. Not even close.
- zaidf 16y ago
  Nothing I said belittles the efforts of past Valley heroes. As for it becoming cheaper to do a start-up now versus previously, well doh. That should not be an excuse to belittle today's start-ups as the author does so recklessly. And where is the discussion headed anyways? I am sure it was harder for entrepreneurs in 1900 than 1950 on the whole. Studying the physical sciences is also more mentally taxing than coding PHP. You make it sound like that is all a start-up is: some php code. Most successful start-ups are a lot more than php code. Also, having to walk ten miles before we had a means of transportation was more taxing than taking cars. What are we gonna do about that? Attack the whole world for not having it as hard as when folks had to walk 10 miles?
- 16y ago

iamelgringo 16y ago

Complete poppycock. Running Hackers and Founders SV, I think I have a pretty decent picture of what Silicon Valley is like on the ground floor, and as far as I'm concerned it's pretty frigging amazing. There's tons of small teams doing amazing things with Big Data and real time analytics like Factual (making Open Data easier to manage and use), MixPanel (Real Time analytics for applications). There's a number of companies doing really interesting things with cool languages like Clojure and Erlang, even if they are "silly companies". There's companies like Justin.TV which is the largest real time video streaming company in the world. Real time video streaming is very, very hard to do at scale. AirBnB is revolutionizing the hospitality industry, and last I read are the largest provider of rooms in New York. There are amazingly cool companies working on SSD database appliances, and on databases optimized specifically for SSD's. SSD add on cards for your PCIE graphics slot that give you 6x the throughput of a SATA port. Those companies don't exactly make for exiting reading in Newsweek, so they don't get a lot of press, though. Yeah, there's a lot of people making Facebook apps. Sure, you can mock twitter because on it's surface it seems silly and trivial, but they have invented an entirely new communication protocol which companies like StockTwits are leveraging to allow individuals to broadcast their recent stock trades. And, not only that, but the article says that Twitter hasn't figured out how to make money yet. In fact, Business Week reports that they were profitable in 2009: http://www.businessweek.com/technology/content/dec2009/tc20091220_549879.htm http://www.businessweek.com/technology/content/dec2009/tc200... Sure Zynga makes somewhat whimsical addictive games, but if you stop and crunch the numbers, Farmville's digital economy is probably mlarger than the real world economies of many developing nations. So, if you'd like to believe that Silicon Valley has lost it's way go right ahead. But, from where I sit, things are just beginning to get interesting. Silicon Valley is just starting to fire on all cylinders since the tech bubble popped in 2000. If you want to know how I'm seeing Silicon Valley: I'm strapping in and getting ready for a great big ride.

newgrad 16y ago
The real writer, not the one who posted it on HN, probably doesn't even know this thread exists.
felipe 16y ago
The point of the article is that Silicon Valley used to be focused on hardcore infrastructure like semiconductors, networking, operational systems. Note that almost all companies you mentioned are related to either marketing, media or entertainment. Even Factual, their main customers are media-related.

srw 16y ago

This article is about SV or Nathan Myhrvold who runs an "invention lab" or can we say that a patent troll company?

alanh 16y ago

I can’t believe the expert quoted in the article is none other than Myrhvold. Now, I don’t know the guy, but I understand that his current line of work is something to the effect of: Abuse the current software patent mess by suing people who, you know, are actually creating things.

bretthellman 16y ago

Someone was having a bad day or something...

neolefty 16y ago
Couldn't get the kids off his lawn? I can totally sympathize.

rblion 16y ago

“the unknown engineers and professors who have good ideas. Are those people going to get funded or will they be talked out of it and told they should do something like Zynga, because virtual goods is where it’s at these days?”

patrickgzill 16y ago

Newsweek, a/k/a the poster boy of declining circulation, (from 3.1 million in 2007 to 1.5 or less in 2010) lecturing others on how to run their business? (source: http://idsgn.org/posts/newsweek-can-a-redesign-save-a-dying-magazine/ http://idsgn.org/posts/newsweek-can-a-redesign-save-a-dying-... )

rahooligan 16y ago

I think Twitter has immense value. And I would be happy to see it go public and achieve $billions in market cap. Cant say the same thing about facebook or zynga. sometimes i feel like facebook is that waste-of-my-time show that i get pulled into when i switch on my tv. it sucks up time from my life i will never get back.

zaidf 16y ago
it sucks up time from my life i will never get back. You could be talking about the entertainment industry. They seem to be doing ok in the market.
- rahooligan 16y ago
  yeah they do very well. check out http://www.americaisretarded.com/ http://www.americaisretarded.com/. it is possible to make money without generating much value (like 'the situation' from jersey shore). facebook has a big market cap but imo it doesnt have much value.
  - spitfire 16y ago
    The term you're looking for is fad. Facebook, like the situation, is a fad. It'll pass. Anyone remember myspace? orkut? friendster? These all blew up hugely, then people got bored or grew up.
nkohari 16y ago
Twitter has a strong impact on our culture, but without a rational business model, and several quarters of profitable growth, an IPO will never happen. I certainly wouldn't buy stock in a company which doesn't know how to make money, no matter how impactful their product is.
- rahooligan 16y ago
  my bet is twitter will figure out monetization. im sure they have something in the works. look at ad.ly for instance - instream advertising. they seem to be doing well.

lotusleaf1987 16y ago

Myhrvold is a known patent troll, even going so far as to sue the same companies multiple times under shell companies: http://www.techdirt.com/articles/20100217/1853298215.shtml http://www.techdirt.com/articles/20100217/1853298215.shtml Why anyone cares what this guy says is beyond me. The author says Myhrvold runs 'an invention lab'... yeah not exactly. A better term would be patent extortionist: http://techcrunch.com/2008/09/17/nathan-myhrvolds-patent-extortion-fund-is-reaping-hundreds-of-millions-of-dollars/ http://techcrunch.com/2008/09/17/nathan-myhrvolds-patent-ext... Here's another article for good measure: http://www.techdirt.com/articles/20060626/1011256.shtml http://www.techdirt.com/articles/20060626/1011256.shtml

dasil003 16y ago

So essentially his argument is that he prefers industry work to flashy consumer plays. I can't say I disagree. The only thing is that there's no indication that the "serious" stuff is any less significant than it was 50 years ago. Yeah, you have Madison Ave layered on top now thanks to the mainstream adoption of the internet, but should everyone just leave that money on the table in the name of "science"?

zuggywugg 16y ago

finally, someone who shares my opinion!

tlrobinson 16y ago

Stopped reading at "says Nathan Myhrvold".

seldo 16y ago

Twitter is a noisy circus of spats and celebrity watching, and its hapless founders still can’t figure out how to make money. Anybody who says this is clearly just trolling, since everyone knows they are making a ton of money selling the data to the search engines before they even get started on the advertising, which they are working on. And as for "twitter is for celebrity watching", that meme died a year ago.

deleted 16y ago
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nadam 16y ago

Maybe this article is a PR piece. But I agree with that 'social' and non technology-focused startup ideas are overvalued currently by young enterpreneurs, by the media and by investors. As if those problems which existed 10-20 years ago would not exist anymore. As if those problems currently solved by 'old companies' and generating incredible amount of money, could not be solved better by some startups. Not enough startups are competing _directly_ against those old products like Microsoft Office, Adobe Photoshop, etc... Not enough young companies are based on deep technology. Almost everyone want to be rich quickly adding very little technology-wise to exisitng open-source stuff like Ruby on Rails. To use Zed's terminology I am half a 'long beard' half a 'product guy'. So I am trying to create something which is a product for people, but potentially can go quite deep technology-wise.

DamonOehlman 16y ago

I'm sure that the message of both the movie and this spin-off piece are skewed towards fantasy and there is great work coming out of SV all the time. But let's face it innovation doesn't decide to shack up in one place, settle down and have a couple of kids, calling one place home for the rest of it's existence. Hubs of both engineering and social innovation will dwarf SV in coming years. The only question is where...

qthrul 16y ago

The correct URL for this piece is actually: http://bit.ly/Daniel-Lyons-Link-Bait http://bit.ly/Daniel-Lyons-Link-Bait HTH.YMMV.VWP.

tapp 16y ago

“If we distract people with the lure of easy money... we’re going to wind up derailing the thing that has been driving our economy” It seems to me that if one were sincerely worried about this, the concern would be better directed at Wall Street, where many of the world's best minds go to be wasted on creating the next CDO or HFT/computerized-frontrunning technique while contributing nothing back to the world.

mr_luc 16y ago

Not only is the author a troll -- as pointed out, he runs the Fake Steve Jobs blog -- his primary source, Nathan Myhyrvhvhlodold, is a troll. Let me clarify: Nathan might be a genius, but he's a genius whose words we can't ever risk taking seriously because of the raging conflicts of interest that imbue his every interaction with the press or social media. His company: > "Intellectual Ventures is a private company claiming to invest in "pure invention." Their business model has a focus on developing a large patent portfolio and licensing these to companies with infringing products." Myhrvold brings smart scientists and thinkers into a room, picks their brains, and then he and his own very smart people sit down and come up with as many patents as they can. They aren't driven by malice. They're driven by rational self-interest: presently, with our broken patent system, people who aren't actually going to go out there and try to solve the world's problems can sit in a room all day coming up with ideas and make money from that. Let's run his statements through a conflict-of-interest filter: "Silicon Valley is working on easy problems" translates to: > Hey world, it's only cool to work on things that require large up-front investment on PATENT-FRIENDLY products, so people with lots of patents can make money by attaching ourselves to the necks of people who are actually making the world a better place instead of talking about it. Tempting, Nate. More to the point, it's tempting to get sucked into rebutting individual points, such as the fact that those heroes of the valley would have killed to have the resources available now to anyone with a credit card, Linode and Twilio.com. Or the fact that he's essentially complaining about low barriers to entry. Or the fact that things that start easy and trivial, in the early stages, quickly get deep and techy. It's easy to mock things that look facebook-y, but it's hard to solve, say, 10k or 100k continuous connections, or to write fast evented code or contribute to libraries that make the whole world faster. We start simple and get smart. But if you start rebutting these things, you've been sucked into a hole. The issue is, he wants people to work on patent-friendly stuff. Fin.

gaius 16y ago
But you can't patent an idea - you have to have an implementation! Srsly - you have fundamentally misunderstood what a patent is. If it's "a method for mangling widgets" then you have to have built a real, working widget mangler too, and include the blueprints in the patent application.

praeclarum 16y ago

Geeze, does this guy understand the word prosperity? We should be happy that "the computer problem" is solved (at least for now). Computer technology has plateaued and there is no hard engineering required right now. This is a good thing! It gives us time to experiment with software. So Silicon has gone the way of Northeast Steel. So what if the world changes? If you want to do hard engineering, you go to the fields that require it - war inc. (looking for more efficient ways to kill our neighbors), space flight (the modern space race is exciting), industrial automation (eventually the populace of Asia will want to climb out of indentured servitude and we need to replace them with something). These fields still need smart engineers and big $ startups.

losethos 16y ago

I'm not being sarcastic or anything, but this reminds me of salary comparisons. Why shoud person X make Y when person Z makes Q. There's a delicious unfairness in capitalism that forces people to overcome coveting. God made life seemingly unfair just to fuck with self-righteous people, because they need to overcome it. Matthew Chapter 20 1 1 "The kingdom of heaven is like a landowner who went out at dawn to hire laborers for his vineyard. 2 After agreeing with them for the usual daily wage, he sent them into his vineyard. 3 Going out about nine o'clock, he saw others standing idle in the marketplace, 4 2 and he said to them, 'You too go into my vineyard, and I will give you what is just.' 5 So they went off. (And) he went out again around noon, and around three o'clock, and did likewise. 6 Going out about five o'clock, he found others standing around, and said to them, 'Why do you stand here idle all day?' 7 They answered, 'Because no one has hired us.' He said to them, 'You too go into my vineyard.' 8 3 When it was evening the owner of the vineyard said to his foreman, 'Summon the laborers and give them their pay, beginning with the last and ending with the first.' 9 When those who had started about five o'clock came, each received the usual daily wage. 10 So when the first came, they thought that they would receive more, but each of them also got the usual wage. 11 And on receiving it they grumbled against the landowner, 12 saying, 'These last ones worked only one hour, and you have made them equal to us, who bore the day's burden and the heat.' 13 He said to one of them in reply, 'My friend, I am not cheating you. 4 Did you not agree with me for the usual daily wage? 14 5 Take what is yours and go. What if I wish to give this last one the same as you? 15 (Or) am I not free to do as I wish with my own money? Are you envious because I am generous?' 16 6 Thus, the last will be first, and the first will be last." God likes to fuck with people's sense of fairness. I laugh at those who complain. God says... acquainted discoursed external god shady Edition consolations recorded examined bleeding ensues deafen searches permitted seventh deem seduce honouring minister resistedst innocency pliant recognised judge enjoin Itself knotty approved imparts grantest littles earnest shadows authority rend whichsoever consecrating incumbrances Or how about the prodigal son: http://www.usccb.org/nab/bible/luke/luke15.htm http://www.usccb.org/nab/bible/luke/luke15.htm God basically says, "STFU Because I'm God and you're not." Some people are still unclear on the concept of God. God says... C:\TEXT\BIBLE.TXT not stand: her husband hath made them void; and the LORD shall forgive her. 30:13 Every vow, and every binding oath to afflict the soul, her husband may establish it, or her husband may make it void. 30:14 But if her husband altogether hold his peace at her from day to day; then he establisheth all her vows, or all her bonds, which are upon her: he confirmeth them, because he held his peace at her in the day that he heard them. 30:15 But if he shall any ways make them void after that he hath You attack me, you're declaring yourself an enemy, no matter who you are and I will get all my friends to fuck with you. Legions of angels and shit who can puppet any person on Earth. Yeah, I got one of them ghetto cell phones all crazy homeless people have.

mechanical_fish 16y ago

This article is full of it, but for more reasons than have been articulated so far. One problem is that the article mistakes light for heat. Just because they get less press than Facebook doesn't mean that old-school high-tech engineering startups don't exist. Facebook et al are focused like a laser on getting their names out. That is what social networking is: word-of-mouth viral publicity. Whereas most hardware startups are born below the radar, and the majority die below the radar, and many of the successful ones get bought out by bigger companies and never rise above the radar under their own name. But that doesn't mean they don't exist. Some statistics would have been nice. The balance of companies has shifted a lot over time, but that's because computing has grown and matured. Back in the 1970s Silicon Valley's only customers were nerds. That meant a lot of emphasis on nerdly products. H-P calculators. Oscilloscopes. Chipsets. After thirty years of work on mobile phones, broadband networking, and UX design, we've improved computing to the point where there are now many Valley firms whose customers are non-nerdly iPhone owners and Web users. That's a huge number of people. And it turns out that you can make as much gross revenue by selling a $2.99 app directly to 2 billion people as you can by selling a $2.99 part to a firm that will make 2 billion mobile phones, but the former requires much more marketing and makes a lot more noise. But the big problem with this article is that it is trying to blame a forest-management problem on the individual leaves. If the USA is not investing enough resources in "alternative energy, better batteries, and nanotechnology", don't blame Silicon Valley startup culture. That's putting the cart before the horse. Entrepreneurs go where the money is, and who controls how much money goes into cutting-edge hardware research? The government, mostly. Either directly (by giving out research grants) or indirectly (by providing an artificial "market" with a single customer -- often the Department of Defense, but sometimes an entity like NASA -- that happily commits to spending money on the very latest high-tech toys; or by creating and enforcing the incentives that drive the market for, e.g., alternative energy). The Internet got developed because the government commissioned it. Rocket technology got developed because the government commissioned and bought it. H-P and Intel became big companies by selling equipment and parts to the high-tech companies that sold to the government. The nanotech researchers I know are paid by the Department of Defense, the National Institutes of Health, or the National Science Foundation. Biotech research? Funded by the NIH or the DoD. Alternative energy? The size of our research efforts have tended to wax and wane with the size of the DoE budget; the economics of deploying alternative energy have everything to do with the cost of oil and gas (determined by forces outside of an entrepreneur's control, like taxes, and tax-funded highway projects, and tax-funded transportation projects, and zoning policy, and tax-funded military maneuvers, and government-mediated international agreements) and the extent of environmental regulation (determined by government and politics). If you want to address these problems you must first analyze them correctly. If you're a rag like Newsweek it's easy and fun to pick on Mark Zuckerberg, but the real problem is economic and research policy: We've got an economy with flat or declining demand and lots of excess capacity (I, for one, could certainly be talked into applying my Ph.D. in EE to alternative energy problems instead of to PHP applications... if the price was right) yet our government officials are perversely engaged in an effort to further depress demand and raise our excess capacity by cutting spending. I wonder if there are any magazines that are ostensibly devoted to discussing problems in society, government and policy, instead of trading in mindless gossip, cheap shots, and PR hit pieces?

DanielBMarkham 16y ago

Two things. One positive and one negative. Positive. The author understands the gist of what's going on. Places like YC focus on Minimum Viable Product and doing just one thing that people want. These are great and wise strategies for both investors and entrepreneurs, but there's also another term for it that's not as flattering: bottom-feeding. Going after the little bits of value here and there, not being a hunter, existing by providing the least amount of value possible. There are huge bottom-feeders! Facebook is one of them. But it's little tidbit work. Stuff like reminding me when I like to scratch my nose, or a service for recommending dog groomers. Negative. The problem here is that the author seems to think he knows where technology is headed, and that's always a foolish bet. His view is that we should be making complex things and solving hard problems. While I agree that hard problems need to be solved, I don't think you can decide ahead of time which problems are going to be the ones that gain traction. This is like the government or VCs "deciding" that one area of effort is going to give more results than another. Nobody knows. This is the risk of startups. It's why the smart move is to do the little stuff. More to the point, there are two kinds of innovation (to steal from Kuhn). There is "normal" innovation, where people take existing tech and put it together in new ways to make trivially more usable things than existed before. Then there is paradigm-changing innovation, where completely new things appear. By far, normal innovation is the norm. Probably 99.9% of all innovation is normal. Maybe more. Systems change from the ground-up, not from the top-down. Eventually a bunch of little things reach critical mass and a paradigm-changing innovation occurs. But hell, most of the time you can't force the little innovations to work, much less the big ones. I love the contrarian tone, but it's just not a realistic article.

brendonjason 16y ago
Regardless of whether its wise to bet on where technology is heading, the point I got from this was that more thought should be going in to what technologies should be focused on as a matter of principle, regardless of "what sells to the masses at the moment." We've seen where demand (Wall Street) driven acute focus on the short term has brought many companies today, ie, over-reliance on what was once popular but quickly hit the dust the second something slightly more trendy came along. Of course, making so many rapid platform adjustments drives people into borrowing ... from Wall Street. But companies were told over and over by a barage of management consulting gurus that things were so fast and blurry, they couldn't afford to not keep borrowing more and more money to pump out more and more crap to keep up with the almost instantly changing trends. On the other hand, look at apple - just over a decade ago they were considering bankruptcy, and instead of giving in to the urge to "do what would sell at the moment" they decided to ignore "expert advice" and instead invest in a simple but well-thought out development plan (iPad seems new but is really just a long-held fantasy of Newton II) and chart their own long-term course of doing what they wanted at a time when it wasn't certain there was going to be a long term for them. Now of course everybody praises them for their determination to do what they wanted rather than catering to the fickle whims of the market. Now look where they are. They define the market. They don't make what you want - they tell you what you want and make sure you get the hint that they know what you want even better than you do. And more and more people seem to agree. I think that's what this article highlights - what will the world be like 5 years from now (more of the same) if facebook keeps getting more and more money to hire more talented people so they can figure out clever new ways to help people keep each other up to date on useless banalities that do nothing to advance anything other than their intimate familiarity with useless and ephemeral trivia about their sometimes friends but mostly loose associates. The world is facing more and more problems ... exponential inter-relationships between these problems will at some point overwhelm us ... and smart people are figuring out how to steal money from grandparents on wall street or how to better allow you to tell everyone you ever bumped into in life that you got a new refridgerator. Path dependency is very real and we may come to a point where we can't solve the important problems anymore even if we want to or need to.

ugh 16y ago

“Facebook lets you keep in touch with your friends; for this profound service to mankind it will generate about $1.5 billion in revenue this year by bombarding its 500 million members with ads.“ This statement seems very indicative of the author’s cluelessness or hypocrisy. $1.5 billion from 500 million members means that they bombard each member on average with $3 worth of ads every year. I’m bombarded with more ads when buying three issues of Newsweek. Facebook lets you keep in touch with your friends for $3 a year. That sounds like quite an impressive feat to me. There is much that is wrong with Facebook but I don’t think that they are making their money with ads is one of those things.

deleted 16y ago
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varjag 16y ago

> We’ve already fallen behind in areas like alternative energy, better batteries, and nanotechnology. Nanotechnology? You can't fall behind in vaporware.

shadowsun7 16y ago

A response: http://news.ycombinator.com/item?id=1729035 http://news.ycombinator.com/item?id=1729035

dstein 16y ago

A lot of people here seem to be calling foul. But whenever I read a list of startups that YCombinator has funded the formula in every case is: Clone of (X) Targeted For Audience (Y) The article is correct about a lot of things. Angel investors (including YC) don't really seem interested in investing in really game changing technology, they're interested in following a trend by buying lotto tickets for a few thousand dollars with the hopes that several will hit medium to large sized jackpots in the shortest possible time frame.

sabat 16y ago

SV innovation was once about creating the technological infrastructure that we all take for granted. Now, it's about using that technology in new, interesting ways to see what might happen. I have met and spent time with Dan, before he became such a cynic. He was excited about the idea of being near startups and wanted to come up with an idea for his own. What I see when I read his pieces is sadness, disappointment. While I can't blame him, we should understand his point of view in context: he could-a been a contender.

johnconroy 16y ago

A powerfully retarded article, if I may say so

bbgm 16y ago

While I think there is some truth in the article, and the lack of innovation in SV, one should probably remind the author that some of the more interesting pure technology startups are still SV based. To pick two close to my interests Complete Genomics: http://www.completegenomics.com/ http://www.completegenomics.com/ Pacific Biosciences: http://www.pacificbiosciences.com/ http://www.pacificbiosciences.com/ Tilera: http://tilera.com http://tilera.com (started out of MIT but now in San Jose) There is a lot more "noise" out there just because it's easier. I suspect it would have been the same in the past if the capital required was lower. That said we should be asking ourselves if what we are doing has a purpose? I meet too many people with a good "idea" but no purpose, and in the long term that might become a problem.

rbanffy 16y ago

It's kind of amusing to watch the ad-hominem arguments take flight. While it's true Daniel Lyons is Fake Steve Jobs and that Nathan Myhrvold runs a company focused on thinking up ideas that could lead to products after some research and patent them before spending a dime making any real progress beyond writing them down, while at the same time extorting those who do, the argument against companies like Facebook or Zynga stand: what are they doing to improve the human condition? Are they doing more or less than companies like HP, Intel, Cisco, Apple and Google?

chopsueyar 16y ago
Not sure if you were paying attention, but Zuckerberg was on Oprah, and he is giving the state of New Jersey $100 million in Facebook stock, in a matching grant. How much stock has Google given NJ? </sarcasm>

grails4life 16y ago

Nathan Myhrvold is also a patent troll: http://www.pcworld.com/article/132174/ubuntu_microsoft_is_patent_pal.html http://www.pcworld.com/article/132174/ubuntu_microsoft_is_pa...

nir 16y ago

One reason I like HN is that comments seem to lean more towards the Perceptive (vs Judgmental) end of the scale in the Myers-Briggs sense, compared to other sites. So it's sad to see many of the responses in this thread. Myhrvold/Lyons/Newsweek aren't the issue here, the issue is what you choose to do with your life. In 1983 Steve Jobs recruited Pepsi's president to Apple by asking him to choose between changing the world and selling sugared water. Much of Valley's current output is closer to sugared water than to the Macintosh.

chopsueyar 16y ago
In 1983 Steve Jobs recruited Pepsi's president to Apple by asking him to choose between changing the world and selling sugared water. Much of Valley's current output is closer to sugared water than to the Macintosh. Beautiful summation.

nervechannel 16y ago

One might point out the irony of this being posted on a site called "Hacker News" where many of the most popular posts are about venture capitalists, investment, business models blah-di-blah-di-blah.