8 ms·

Nothing Fails Like Success

139 points by prawn 8y ago

mdorazio 8y ago
While I agree with the general sentiment of the author (and the same general message comes up quite often on HN), I have two issues with the article: 1) It seems to equate "investors" with "VCs", who need big returns or quick losses to make their overall portfolio numbers work. Angel investors don't necessarily fall into this category, nor do more traditional funding sources. Thus, I think the expressed opinion should more be that blindly chasing VC money to fund a business that can't actually turn a legitimate profit on its own is bad, rather than that taking investor money in general is bad. 2) There's an implicit challenge briefly touched on at the very end of the article. If you have a project of love that gets popular quickly, it could literally bankrupt you if you tried to keep it alive on your own. Scaled hosting services aren't free, nor are community support, requested new features, compatibility updates, API costs, etc. etc. It's entirely possible that you could start a side project and then have to shut it down when it starts getting traction because keeping it alive and not-shitty would take more time than it's worth if you're not going to turn it into a venture-funded business.
- yeahitslikethat 8y ago
  Charge more. Delegate.
- TeMPOraL 8y ago
  RE 2), I think the article pretty clearly implies your project of love should pay its own costs. Once your users pay more than they cost you, scaling problem disappears - in fact, economies of scale are your friend here.
  - mdorazio 8y ago
    I didn't read that implication at all. Many projects of love are free with no revenue model at all, or maybe some random ads to offset costs (not cover them), otherwise it's unlikely people would even start using it in the first place. Going from that to a paid/subsidized model strong enough to cover actual development, hosting, etc. is a tall order.
    - JohnFen 8y ago
      > Many projects of love are free with no revenue model at all Yes. I myself have several different ongoing projects. Some of them are in no way intended to be businesses and intentionally have no revenue model at all. Those are free for everyone and will always be (at least until/unless I tire of them and pass them along to someone else). Others are intended to generate some sort of revenue -- with a couple, I only want them to cover their own costs, with others, I want to see them make a profit. Those are not free. There is room for both types of project.
- JohnFen 8y ago
  > It seems to equate "investors" with "VCs" I agree, it does appear that the author made this error. It's a common one, though. I think it would benefit everyone, including VCs, if people were more aware that venture capital is only one type of investing out of a wider pantheon of investing. Each type has its own advantages and disadvantages and the wise entrepreneurs and investors alike should judge the different types of investment strategies according to what most aligns with their goals.
smag 8y ago
This editorial makes sense: once a company takes outside investment that demands outsized returns not in 10 years, but tomorrow, founders and employees will feel pressure to take larger risks and act in ways that might not be moral or ethical. VC-backing is definitely a factor in fraud, anti-competitive tactics, and unethical behavior. But what's the alternative to VC-backing? Doesn't seem possible for everything to be bootstrapped.
- yeahitslikethat 8y ago
  It is. Happens all the time. What are you really after?
  - kikoreis 8y ago
    Are you really arguing that everything can be bootstrapped without up front investment? I know many things can, but equally many cannot in non geological time.
    - mcphage 8y ago
      > many cannot in non geological time Are the things that can't be bootstrapped actually worth doing?
      - JohnFen 8y ago
        Yes, for many. There are many things that are worthwhile but can't be done without a substantial amount of money up front. Most software doesn't fall into this category, but a lot of hardware and services do.
      - throwaway-571 8y ago
        Teranos could have been worth it if it hadn’t been a scam. If you can lower the cost of insulin that would be boon to humanity, but good luck bootstrapping that. Better glucose monitor. Lots of medical thing are worth it from an ethical point of view but not bootstrap-able.
    - 8y ago
jl2718 8y ago
This is interesting, but it probably works the opposite way. Twitter et al makes celebrities out of people who seek moral outrage. In this way they overplay their righteousness, but the effect is exactly the same as amplifying the offending message itself: more ad revenue. Interesting hack of our society’s moral norms. I’m not saying it’s wrong to be offended, but if you are, somebody’s probably getting paid for it.
- ptah 8y ago
  fine display of mental gymnastics
xyzzy123 8y ago
The truly scary idea is that there’s no conspiracy of capital even. What if the advertising dollars aren’t evil, what if we can’t blame them? What if the problem is that garbage and trash fires are just what people want, and the ad dollars just follow the success? I like the idea that there’s some kind of... imbalance? mis-structure to blame? That it’s somebody’s fault or the system is wrong somehow.
- pryelluw 8y ago
  It's pretty naive to try and think that people are not the issue. They are. Advertising simply exploits the flaw.
  - deleted 8y ago
    [deleted]
  - deleted 8y ago
    [deleted]
  - throwaway-571 8y ago
    Advertising is people too. It’s people all the way down. We decided child labor was morally unacceptable, so why not advertising?
    - pryelluw 8y ago
      Id say comparing advertising with child labor proves how biases distort perception.
      - JohnFen 8y ago
        I think you missed his point. What I heard him saying is that in the past, other commonly accepted practices were eventually deemed unacceptable and ended. There's no reason the currently accepted practices of the advertising industry can't follow a similar trajectory.
powerslacker 8y ago
> ...the fact is, hate speech is profitable. It’s killing our society and our planet... Source? Hate speech has been part of every major society since at least the time of the Egyptians. The opposite could easily be true. Hate speech might be an integral part of society. Its also not very profitable. That's why companies police their own content. No reasonable company wants their advertisement associated with the Klan. As for hate speech's effect on the planet -- I don't think the Earth cares who hates who.
- DigiMortal 8y ago
  When I see a quote like that from the article - "it's killing our society and our planet" ...no it's not. This is nothing new and the planet is fine, but the people are fucked! (George Carlin)
- cheerlessbog 8y ago
  By a broader definition it makes sense. People insulting and mocking each other, talking past other. Even the president.. Did we used to do that IRL in the 70's and 80's?
  - JohnFen 8y ago
    > Did we used to do that IRL in the 70's and 80's? Some did, and the vast majority of the population viewed those people as extremists and/or nutcases to be avoided.
  - citrablue 8y ago
    Humans used to resort to physical violence as well as name calling. Rome had a series of senators brutally murdered in session, even before Cesar. Andrew Jackson used to physically attack opponents. The whole Aaron Burr story. My unsupport theory is that we've pacified to the point where anyone can say anything without getting beat up or killed, which allows people to push the envelope. I'm not suggesting we should go back to violence, but i think the lack of direct violence in a person-to-person setting have enabled more and more wild speech.
gregoryexe 8y ago
lost me at hate speech is killing our planet
- the_gastropod 8y ago
  How much climate denialism would you estimate is rooted in little more than a hatred for "globalists" and "the elite"? E.g., https://en.wikipedia.org/wiki/Global_warming_conspiracy_theory https://en.wikipedia.org/wiki/Global_warming_conspiracy_theo...
jppope 8y ago
Enjoyable read. I don't feel like anyone ever addresses the fact that the initial web was modeled after academia, and yet most people were really just looking for a place to share their identity. The (free) companies stepped in to make the web accessible to them. We're all angry at the broken promise of what the web could be and yet most people I know have shuttered their accounts in the negative nether regions of the internet. Facebook is a ghost town. Twitter was one presidential election from going under. Instagram is thriving because there's little direct communication (or hate communication). And things are starting to happen again for the decentralized web. People are blogging again on their own sites (including ditching medium). Github has been a boon for collaboration and now is starting to help open science. New social media platforms are popping up too (e.g. Mastadon). how will it shake out? no clue... but I do think that it will shake out for the better.
- gambler 8y ago
  >We're all angry at the broken promise of what the web could be Most users enjoyed the web in 200X. It wasn't a broken promise. It worked. Then there was a concerted Web 2.0 campaign[1] that pushed in the direction of "harnessing the collective intelligence". Well, Twitter is what "collective intelligence" looks like in real life. [1] Remember this? https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.html https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.ht...
- aswanson 8y ago
  Instagram is thriving because there's little direct communication Laughing at the fact that the best medium is the one where people dont talk to each other.
deleted 8y ago
[deleted]
gambler 8y ago
>"You can cloak this basic economic trade-off in fifty layers of bullshit—say you believe in freedom of speech, or that the antidote to bad speech is more speech—but the fact is, hate speech is profitable." May I point out that this happens to be a major talking point of some big media outlets right now? The same outlets, BTW, that mindlessly cheered on Facebook/Twitter/etc. as late as 2013.
willemave 8y ago
It seems like it’d be possible to quantify what % of views derive from enflaming content. A few starting points we could look at, # of people banned and reach of said content, auction price of ad inventory that is temporally or visually adjacent to inflammatory speech, etc. It wouldn't be an exact science, but curious if it’s 10% or 70%. I fundamentally agree that ad-driven revenue models have perverted many business models for content-driven sites (UGC or publishing). Many of the examples are publisher driven, are there any market examples of (perhaps small) UGC content sites that don’t rely on either selling personal information, or an ad-driven model?

139 points by prawn 8y ago

While I agree with the general sentiment of the author (and the same general message comes up quite often on HN), I have two issues with the article: 1) It seems to equate "investors" with "VCs", who need big returns or quick losses to make their overall portfolio numbers work. Angel investors don't necessarily fall into this category, nor do more traditional funding sources. Thus, I think the expressed opinion should more be that blindly chasing VC money to fund a business that can't actually turn a legitimate profit on its own is bad, rather than that taking investor money in general is bad. 2) There's an implicit challenge briefly touched on at the very end of the article. If you have a project of love that gets popular quickly, it could literally bankrupt you if you tried to keep it alive on your own. Scaled hosting services aren't free, nor are community support, requested new features, compatibility updates, API costs, etc. etc. It's entirely possible that you could start a side project and then have to shut it down when it starts getting traction because keeping it alive and not-shitty would take more time than it's worth if you're not going to turn it into a venture-funded business.

yeahitslikethat 8y ago
Charge more. Delegate.
TeMPOraL 8y ago
RE 2), I think the article pretty clearly implies your project of love should pay its own costs. Once your users pay more than they cost you, scaling problem disappears - in fact, economies of scale are your friend here.
- mdorazio 8y ago
  I didn't read that implication at all. Many projects of love are free with no revenue model at all, or maybe some random ads to offset costs (not cover them), otherwise it's unlikely people would even start using it in the first place. Going from that to a paid/subsidized model strong enough to cover actual development, hosting, etc. is a tall order.
  - JohnFen 8y ago
    > Many projects of love are free with no revenue model at all Yes. I myself have several different ongoing projects. Some of them are in no way intended to be businesses and intentionally have no revenue model at all. Those are free for everyone and will always be (at least until/unless I tire of them and pass them along to someone else). Others are intended to generate some sort of revenue -- with a couple, I only want them to cover their own costs, with others, I want to see them make a profit. Those are not free. There is room for both types of project.
JohnFen 8y ago
> It seems to equate "investors" with "VCs" I agree, it does appear that the author made this error. It's a common one, though. I think it would benefit everyone, including VCs, if people were more aware that venture capital is only one type of investing out of a wider pantheon of investing. Each type has its own advantages and disadvantages and the wise entrepreneurs and investors alike should judge the different types of investment strategies according to what most aligns with their goals.

smag 8y ago

This editorial makes sense: once a company takes outside investment that demands outsized returns not in 10 years, but tomorrow, founders and employees will feel pressure to take larger risks and act in ways that might not be moral or ethical. VC-backing is definitely a factor in fraud, anti-competitive tactics, and unethical behavior. But what's the alternative to VC-backing? Doesn't seem possible for everything to be bootstrapped.

yeahitslikethat 8y ago
It is. Happens all the time. What are you really after?
- kikoreis 8y ago
  Are you really arguing that everything can be bootstrapped without up front investment? I know many things can, but equally many cannot in non geological time.
  - mcphage 8y ago
    > many cannot in non geological time Are the things that can't be bootstrapped actually worth doing?
    - JohnFen 8y ago
      Yes, for many. There are many things that are worthwhile but can't be done without a substantial amount of money up front. Most software doesn't fall into this category, but a lot of hardware and services do.
    - throwaway-571 8y ago
      Teranos could have been worth it if it hadn’t been a scam. If you can lower the cost of insulin that would be boon to humanity, but good luck bootstrapping that. Better glucose monitor. Lots of medical thing are worth it from an ethical point of view but not bootstrap-able.
  - 8y ago

jl2718 8y ago

This is interesting, but it probably works the opposite way. Twitter et al makes celebrities out of people who seek moral outrage. In this way they overplay their righteousness, but the effect is exactly the same as amplifying the offending message itself: more ad revenue. Interesting hack of our society’s moral norms. I’m not saying it’s wrong to be offended, but if you are, somebody’s probably getting paid for it.

ptah 8y ago
fine display of mental gymnastics

xyzzy123 8y ago

The truly scary idea is that there’s no conspiracy of capital even. What if the advertising dollars aren’t evil, what if we can’t blame them? What if the problem is that garbage and trash fires are just what people want, and the ad dollars just follow the success? I like the idea that there’s some kind of... imbalance? mis-structure to blame? That it’s somebody’s fault or the system is wrong somehow.

pryelluw 8y ago
It's pretty naive to try and think that people are not the issue. They are. Advertising simply exploits the flaw.
- deleted 8y ago
  [deleted]
- deleted 8y ago
  [deleted]
- throwaway-571 8y ago
  Advertising is people too. It’s people all the way down. We decided child labor was morally unacceptable, so why not advertising?
  - pryelluw 8y ago
    Id say comparing advertising with child labor proves how biases distort perception.
    - JohnFen 8y ago
      I think you missed his point. What I heard him saying is that in the past, other commonly accepted practices were eventually deemed unacceptable and ended. There's no reason the currently accepted practices of the advertising industry can't follow a similar trajectory.

powerslacker 8y ago

> ...the fact is, hate speech is profitable. It’s killing our society and our planet... Source? Hate speech has been part of every major society since at least the time of the Egyptians. The opposite could easily be true. Hate speech might be an integral part of society. Its also not very profitable. That's why companies police their own content. No reasonable company wants their advertisement associated with the Klan. As for hate speech's effect on the planet -- I don't think the Earth cares who hates who.

DigiMortal 8y ago
When I see a quote like that from the article - "it's killing our society and our planet" ...no it's not. This is nothing new and the planet is fine, but the people are fucked! (George Carlin)
cheerlessbog 8y ago
By a broader definition it makes sense. People insulting and mocking each other, talking past other. Even the president.. Did we used to do that IRL in the 70's and 80's?
- JohnFen 8y ago
  > Did we used to do that IRL in the 70's and 80's? Some did, and the vast majority of the population viewed those people as extremists and/or nutcases to be avoided.
- citrablue 8y ago
  Humans used to resort to physical violence as well as name calling. Rome had a series of senators brutally murdered in session, even before Cesar. Andrew Jackson used to physically attack opponents. The whole Aaron Burr story. My unsupport theory is that we've pacified to the point where anyone can say anything without getting beat up or killed, which allows people to push the envelope. I'm not suggesting we should go back to violence, but i think the lack of direct violence in a person-to-person setting have enabled more and more wild speech.

gregoryexe 8y ago

lost me at hate speech is killing our planet

the_gastropod 8y ago
How much climate denialism would you estimate is rooted in little more than a hatred for "globalists" and "the elite"? E.g., https://en.wikipedia.org/wiki/Global_warming_conspiracy_theory https://en.wikipedia.org/wiki/Global_warming_conspiracy_theo...

jppope 8y ago

Enjoyable read. I don't feel like anyone ever addresses the fact that the initial web was modeled after academia, and yet most people were really just looking for a place to share their identity. The (free) companies stepped in to make the web accessible to them. We're all angry at the broken promise of what the web could be and yet most people I know have shuttered their accounts in the negative nether regions of the internet. Facebook is a ghost town. Twitter was one presidential election from going under. Instagram is thriving because there's little direct communication (or hate communication). And things are starting to happen again for the decentralized web. People are blogging again on their own sites (including ditching medium). Github has been a boon for collaboration and now is starting to help open science. New social media platforms are popping up too (e.g. Mastadon). how will it shake out? no clue... but I do think that it will shake out for the better.

gambler 8y ago
>We're all angry at the broken promise of what the web could be Most users enjoyed the web in 200X. It wasn't a broken promise. It worked. Then there was a concerted Web 2.0 campaign[1] that pushed in the direction of "harnessing the collective intelligence". Well, Twitter is what "collective intelligence" looks like in real life. [1] Remember this? https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.html https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.ht...
aswanson 8y ago
Instagram is thriving because there's little direct communication Laughing at the fact that the best medium is the one where people dont talk to each other.

deleted 8y ago

[deleted]

gambler 8y ago

>"You can cloak this basic economic trade-off in fifty layers of bullshit—say you believe in freedom of speech, or that the antidote to bad speech is more speech—but the fact is, hate speech is profitable." May I point out that this happens to be a major talking point of some big media outlets right now? The same outlets, BTW, that mindlessly cheered on Facebook/Twitter/etc. as late as 2013.

willemave 8y ago

It seems like it’d be possible to quantify what % of views derive from enflaming content. A few starting points we could look at, # of people banned and reach of said content, auction price of ad inventory that is temporally or visually adjacent to inflammatory speech, etc. It wouldn't be an exact science, but curious if it’s 10% or 70%. I fundamentally agree that ad-driven revenue models have perverted many business models for content-driven sites (UGC or publishing). Many of the examples are publisher driven, are there any market examples of (perhaps small) UGC content sites that don’t rely on either selling personal information, or an ad-driven model?