6 ms·

I'm going to go out on a limb and say that SV tends not to understand most of the non-tech markets it aims to disrupt, and instead gets occasional success by ei

I'm going to go out on a limb and say that SV tends not to understand most of the non-tech markets it aims to disrupt, and instead gets occasional success by either completely ignoring/sidestepping regulations and protections (ex. Airbnb for short-term rentals) or by throwing so much investor money at undercutting incumbents that the natural market dynamics are temporarily skewed (ex. WeWork for office leasing). Innovation in most industries tends to come from people with deep expertise and team skillsets that extend far beyond software.

api 6y ago
I'd add that these successes only happen in markets that are so stagnant and moribund that they're easy to disrupt. Hotel and especially taxis strike me as those. Every trip in a regular taxi I've had in the past decade has been followed by a thought of "never again." Agriculture is a hyper-competitive low-margin market, and I have never gotten the impression that this industry is stagnant or incompetent. Those are the areas where disruption by outsiders isn't going to work.
- huffmsa 6y ago
  Correct. Taxi logistics had been stagnant for a long time. Human dispatchers and operators. Farming is constantly improving yields and optimizing. It might look stagnant to outsiders but it's a meat grinder. In one of my college classes, all of the "business" majors looked down on the farm kid who'd show up to class with blood on his boots during hunting season. Then he'd give presentation after presentation / example of how his farm is using GPS coordinated UAVs to survey the crops and drive the tractors, and all sorts of other technology deployments that the kids in boat shoes had zero comprehension of.
  - reaperducer 6y ago
    Taxi logistics had been stagnant for a long time. Human dispatchers and operators. Taxis in Chicago had an app even before Uber and Lyft. I think it was called Halo, or something like that.
- freeopinion 6y ago
  I don't disagree with your comment in general. But, just like everywhere else, ag is a very wide umbrella. There are niches which are ripe. For instance, it is telling that you can drill deep into the earth, pump a liquid to the surface, process it, transport it a significant distance to an expensive port, pump it into giant floating tankers, sail those around the world, suck the payload back out and pipe it to additional processing plants, pipe it across a continent, refine it into relatively finished product, pipe it hundreds of more miles to a depot, pump it into tankers, transport it to underground tanks, then pump it back up to sell to customers. You can imagine how much a product would cost per gallon. Then, as a customer, walk inside to pay for the product you just pumped and snag a gallon of milk. Guess which gallon is more expensive? Put the milk back on the shelf and drive to your neighbour's house. Walk around to the back porch where they sell their milk out of an old fridge. Um, no, they don't sell it. That would be illegal. They just happen to have a fridge full of milk that people keep stealing. But the thieves have a conscience. They keep stuffing money into the tin can next to the fridge. Because in the U.S. it is legal to sell a product with a big label that says, "WARNING: THIS PRODUCT WILL KILL YOU." Unless that product is milk. Plenty of people have figured out how to sell milk cheaper than gasoline. But they are restricted by regulation. You may well agree with the protections those regulations provide. But it might also look to you like the same problem as taxi cartels.
  - a_c_s 6y ago
    Right, but that isn't a conspiracy but rather because raw milk is risky: research says 1 in 6 people who drink it get sick, and of those who do 20% had serious complications. https://www.livescience.com/41883-raw-milk-1-in-6-get-sick.html https://www.livescience.com/41883-raw-milk-1-in-6-get-sick.h...
    - mpfundstein 6y ago
      right. we all know how "reliable" those studies are...
    - freeopinion 6y ago
      As opposed to, say, cigarettes? Which are legal. Your link does not actually support your claim that 1 in 6 people who drink raw milk get sick from drinking the milk. If anything, it indicates that only 1 in 6 drinkers get sick at all. There doesn't seem to be a control group (or any real kind of science here), but if 1 in 3 people who don't drink raw milk get sick this might merit some follow-up studies. Perhaps raw milk lowers your risk of illness. It would be silly to make a statement either way from the information contained in your link.
simonkafan 6y ago
I don't want to sound like an old man yelling at playing kids but sometimes I feel that SC startups are like a horde of locusts flying over a well-functioning industry, pretending to improve it positively but all they do is destroy the competition - with the help of VC funds that allow them to survive for years without a positive cashflow.
- dehrmann 6y ago
  Not sure I'd call the pre-Uber taxi system well-functioning, and in a lot of cases, Uber and Lyft have increased competition.
scottLobster 6y ago
Because for some time now SV has been more about money and business than innovation. VCs for the most part want a massive return on investment to fit their business model and won't settle for niche businesses that promise only reasonable profits, no matter how technically innovative they may be or what they might lead to down the road. On the other side housing prices are through the roof, so good luck affording a garage/basement to bootstrap something in unless you're already indoctrinated into the VC/FAANG culture and successful within it, in which case you're naturally bias towards perpetuating more of the same. For this reason SV is a software-to-software-integration (not software in general IMO) innovation hub. Software scales easily, requires no physical property to build things on and can return massive profits. SV excels at building software to accelerate other software. Building software to accelerate physical situations or specific communities that don't exist in the valley requires expertise that must be acquired outside of the valley and doesn't thrive in the valley. In ag terms SV is a monoculture of software-to-software integration solutions that generally doesn't play well with other crops, with all the efficiencies and drawbacks therein.
ponker 6y ago
But I think the effect is pronounced in agriculture because of the stereotype that rural = Trump voter = poor moron. I think that few people in SV have a true grasp of the amount of intelligence, electrical and mechanical domain knowledge, and vast wealth in agriculture. There are gobs of farmers worth $10m+, it’s just that in their communities, farmland is higher status than Ferraris or Arcteryx, so they stick with their F-250s and overalls and invest their money into more farmland, growing ever wealthier and more efficient.
- kungtotte 6y ago
  Not to mention that a big tractor or combine harvester costs more than an average Ferrari or Lamborghini (unless you happen to buy a Lamborghini tractor I guess ;)). Looking now I could find a used New Holland combine from 2005 for $71000 USD. That money gets you a used 2000-ish Ferrari 360. And the combine makes you more money after you buy it.
  - vangelis 6y ago
    If you're not leveraged to the hilt paying for that combine!
dfee 6y ago
Your comment helped me realize my alternate opinion - what I think is healthy about the SV ecosystem. Changing the term, "natural market dynamics" to "regulatory captured markets", we get: > or by throwing so much investor money at undercutting incumbents that the [regulatory captured markets] are temporarily skewed And, taking my sibling comment from @simonkafan, let's change his term "well-functioning industry" to "regulatory captured industry": > I feel that SC startups are like a horde of locusts flying over a [regulatory captured industry], pretending to improve it positively but all they do is destroy the competition Consider, for a second, Uber and Lyft. Was the taxi industry well functioning? Did it have natural market dynamics? Definitely, assuming you acknowledge the predicate that the industry players are effectively cartels who control regulations.
- devalgo 6y ago
  Also consider that Uber is unprofitable, has no real path to profitability, pays its drivers poorly and overcharges users. How is that healthy? It seemingly has failed in every possible way as a business yet people continuously prop it up as something to be envied or respected.
  - spaced-out 6y ago
    Uber service is profitable, they're just spending a lot of money on R&D for new stuff.
  - dfee 6y ago
    Your point makes sense. But, it largely chooses to be unprofitable (outside of corona times). I’m not sure that it pays its drivers more poorly than the taxi industry, and I’m not sure that users overpay. Do note, though, that both of those points imply “healthy economics / markets” (dynamic pricing on both sides).
    - devalgo 6y ago
      The profitability claim doesn't have a lot of merit for me. Uber is already priced at a level that many people don't accept, to become profitable they will likely have to charge prices that would drive massive sections of their userbase away. The assumption that somehow that they will be able to charge much more and lose no users makes no sense to me.
BiteCode_dev 6y ago
Sometimes, being a total outsider will see things other people cannot.
sharadov 6y ago
You forgot "money", you know how we are going to solve this problem, by throwing a lot of money at it. Case in point - Softbank

api 6y ago

I'd add that these successes only happen in markets that are so stagnant and moribund that they're easy to disrupt. Hotel and especially taxis strike me as those. Every trip in a regular taxi I've had in the past decade has been followed by a thought of "never again." Agriculture is a hyper-competitive low-margin market, and I have never gotten the impression that this industry is stagnant or incompetent. Those are the areas where disruption by outsiders isn't going to work.

huffmsa 6y ago
Correct. Taxi logistics had been stagnant for a long time. Human dispatchers and operators. Farming is constantly improving yields and optimizing. It might look stagnant to outsiders but it's a meat grinder. In one of my college classes, all of the "business" majors looked down on the farm kid who'd show up to class with blood on his boots during hunting season. Then he'd give presentation after presentation / example of how his farm is using GPS coordinated UAVs to survey the crops and drive the tractors, and all sorts of other technology deployments that the kids in boat shoes had zero comprehension of.
- reaperducer 6y ago
  Taxi logistics had been stagnant for a long time. Human dispatchers and operators. Taxis in Chicago had an app even before Uber and Lyft. I think it was called Halo, or something like that.
freeopinion 6y ago
I don't disagree with your comment in general. But, just like everywhere else, ag is a very wide umbrella. There are niches which are ripe. For instance, it is telling that you can drill deep into the earth, pump a liquid to the surface, process it, transport it a significant distance to an expensive port, pump it into giant floating tankers, sail those around the world, suck the payload back out and pipe it to additional processing plants, pipe it across a continent, refine it into relatively finished product, pipe it hundreds of more miles to a depot, pump it into tankers, transport it to underground tanks, then pump it back up to sell to customers. You can imagine how much a product would cost per gallon. Then, as a customer, walk inside to pay for the product you just pumped and snag a gallon of milk. Guess which gallon is more expensive? Put the milk back on the shelf and drive to your neighbour's house. Walk around to the back porch where they sell their milk out of an old fridge. Um, no, they don't sell it. That would be illegal. They just happen to have a fridge full of milk that people keep stealing. But the thieves have a conscience. They keep stuffing money into the tin can next to the fridge. Because in the U.S. it is legal to sell a product with a big label that says, "WARNING: THIS PRODUCT WILL KILL YOU." Unless that product is milk. Plenty of people have figured out how to sell milk cheaper than gasoline. But they are restricted by regulation. You may well agree with the protections those regulations provide. But it might also look to you like the same problem as taxi cartels.
- a_c_s 6y ago
  Right, but that isn't a conspiracy but rather because raw milk is risky: research says 1 in 6 people who drink it get sick, and of those who do 20% had serious complications. https://www.livescience.com/41883-raw-milk-1-in-6-get-sick.html https://www.livescience.com/41883-raw-milk-1-in-6-get-sick.h...
  - mpfundstein 6y ago
    right. we all know how "reliable" those studies are...
  - freeopinion 6y ago
    As opposed to, say, cigarettes? Which are legal. Your link does not actually support your claim that 1 in 6 people who drink raw milk get sick from drinking the milk. If anything, it indicates that only 1 in 6 drinkers get sick at all. There doesn't seem to be a control group (or any real kind of science here), but if 1 in 3 people who don't drink raw milk get sick this might merit some follow-up studies. Perhaps raw milk lowers your risk of illness. It would be silly to make a statement either way from the information contained in your link.

simonkafan 6y ago

I don't want to sound like an old man yelling at playing kids but sometimes I feel that SC startups are like a horde of locusts flying over a well-functioning industry, pretending to improve it positively but all they do is destroy the competition - with the help of VC funds that allow them to survive for years without a positive cashflow.

dehrmann 6y ago
Not sure I'd call the pre-Uber taxi system well-functioning, and in a lot of cases, Uber and Lyft have increased competition.

scottLobster 6y ago

Because for some time now SV has been more about money and business than innovation. VCs for the most part want a massive return on investment to fit their business model and won't settle for niche businesses that promise only reasonable profits, no matter how technically innovative they may be or what they might lead to down the road. On the other side housing prices are through the roof, so good luck affording a garage/basement to bootstrap something in unless you're already indoctrinated into the VC/FAANG culture and successful within it, in which case you're naturally bias towards perpetuating more of the same. For this reason SV is a software-to-software-integration (not software in general IMO) innovation hub. Software scales easily, requires no physical property to build things on and can return massive profits. SV excels at building software to accelerate other software. Building software to accelerate physical situations or specific communities that don't exist in the valley requires expertise that must be acquired outside of the valley and doesn't thrive in the valley. In ag terms SV is a monoculture of software-to-software integration solutions that generally doesn't play well with other crops, with all the efficiencies and drawbacks therein.

ponker 6y ago

But I think the effect is pronounced in agriculture because of the stereotype that rural = Trump voter = poor moron. I think that few people in SV have a true grasp of the amount of intelligence, electrical and mechanical domain knowledge, and vast wealth in agriculture. There are gobs of farmers worth $10m+, it’s just that in their communities, farmland is higher status than Ferraris or Arcteryx, so they stick with their F-250s and overalls and invest their money into more farmland, growing ever wealthier and more efficient.

kungtotte 6y ago
Not to mention that a big tractor or combine harvester costs more than an average Ferrari or Lamborghini (unless you happen to buy a Lamborghini tractor I guess ;)). Looking now I could find a used New Holland combine from 2005 for $71000 USD. That money gets you a used 2000-ish Ferrari 360. And the combine makes you more money after you buy it.
- vangelis 6y ago
  If you're not leveraged to the hilt paying for that combine!

dfee 6y ago

Your comment helped me realize my alternate opinion - what I think is healthy about the SV ecosystem. Changing the term, "natural market dynamics" to "regulatory captured markets", we get: > or by throwing so much investor money at undercutting incumbents that the [regulatory captured markets] are temporarily skewed And, taking my sibling comment from @simonkafan, let's change his term "well-functioning industry" to "regulatory captured industry": > I feel that SC startups are like a horde of locusts flying over a [regulatory captured industry], pretending to improve it positively but all they do is destroy the competition Consider, for a second, Uber and Lyft. Was the taxi industry well functioning? Did it have natural market dynamics? Definitely, assuming you acknowledge the predicate that the industry players are effectively cartels who control regulations.

devalgo 6y ago
Also consider that Uber is unprofitable, has no real path to profitability, pays its drivers poorly and overcharges users. How is that healthy? It seemingly has failed in every possible way as a business yet people continuously prop it up as something to be envied or respected.
- spaced-out 6y ago
  Uber service is profitable, they're just spending a lot of money on R&D for new stuff.
- dfee 6y ago
  Your point makes sense. But, it largely chooses to be unprofitable (outside of corona times). I’m not sure that it pays its drivers more poorly than the taxi industry, and I’m not sure that users overpay. Do note, though, that both of those points imply “healthy economics / markets” (dynamic pricing on both sides).
  - devalgo 6y ago
    The profitability claim doesn't have a lot of merit for me. Uber is already priced at a level that many people don't accept, to become profitable they will likely have to charge prices that would drive massive sections of their userbase away. The assumption that somehow that they will be able to charge much more and lose no users makes no sense to me.

BiteCode_dev 6y ago

Sometimes, being a total outsider will see things other people cannot.

sharadov 6y ago

You forgot "money", you know how we are going to solve this problem, by throwing a lot of money at it. Case in point - Softbank