5 ms·

Stop Building Apps and Start Disrupting Industries

50 points by badboyboyce 15y ago

thinkcomp 15y ago
I agree with the sentiment here completely, but sadly, there's almost zero support for true disruption these days from Silicon Valley. FaceCash disrupts the credit card companies and banks. Not a single VC has offered a term sheet to date. (I'm not necessarily upset about this, but it's an interesting fact.) Students would generally rather work for Facebook or Google where they can make more money in a summer. Industry conferences don't want to hear from the people working on the hardest problems; they want to hear from the people who have made the most money. There are some real systemic problems here that, if they don't eventually get worked out, will end up keeping us locked into a steadily declining system in a number of industries.
- revorad 15y ago
  I don't know enough details about your or Square's technology and business, but every time I see you complain about how no one supports true disruption and even the cool new startups are doing the same old thing, I remember this video by Sean Murphy on technology adoption: http://www.youtube.com/watch?v=_4h68mrzuwc http://www.youtube.com/watch?v=_4h68mrzuwc I hope it will help you and you will take my comment as constructive criticism.
  - thinkcomp 15y ago
    It's a good video and an interesting graphical representation of the problem I hadn't seen before. It also helps explain why so many startups work on small issues rather than large ones. Thanks for sharing it! Unfortunately, what it doesn't explain is the hidden cost that such an approach has, when repeated indefinitely, on the greater context of the Valley's infrastructure and incentive structure. Investors today simply are not rewarding risk.
    - revorad 15y ago
      I hope you will find someone to back your daring innovations. Godspeed!
- phlux 15y ago
  No offense, Aaron, but I would be interested to know what VCs may think about you given your public opinion and battle with Facebook. E.g. I would be very interested to know if you had been blacklisted or black-sheeped at least, given your history and vocal public statements on matters. Personally, I am rooting for your success - I jsut really want to know what back-room whispers may be saying about you, and people like you, who dont blindly worship the facebook.
swombat 15y ago
snip
- mikekarnj 15y ago
  The derivatives market is an arbitrary market where money just moves from one place to another. Real engineers build things like bridges and websites. Bankers build dreams and leverage the shit out of it to put the whole country in debt. http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405 http://www.rollingstone.com/politics/news/the-great-american...
  - swombat 15y ago
    snip
  - bdunbar 15y ago
    Real engineers build things like bridges and websites. Bankers build dreams and leverage the shit out of it to put the whole country in debt. Without banking you can't have infrastructure: no financing, no cement, no salaries, one can't acquire land. Shorter: you can't boot strap a bridge.
- acangiano 15y ago
  This definitely fails the HN commenting guidelines. I agree that the OP is wrong on this point, but calling him an idiot doesn't add anything to this discussion. If you felt so strongly against his point, you should illustrate why he is so wrong with your comment. Don't just insult him.
  - swombat 15y ago
    Ok, fine, the insult was not necessary, but I flagged the post for being a piece of trash that I hope never to see the like of on HN. The OP is not deserving of a reply on the basis of this post. It is uninformed tripe that belongs on the reddit/r/teabaggers forum or some such lowly place. How this kind of trash gets 24 points is beyond me. Who are the people upvoting this? I will also add that the account which submitted this is only 2 hours old, obviously created just to submit this piece of crap. Smells like spam to me.
ekidd 15y ago
If you're a small team with limited runway, you can't simply decide to disrupt an entire industry. That's a huge undertaking, and a hopelessly vague one. What you can do is bite off a small piece of the problem, find some customers who really want to give you money, and iterate. Once you have a proven track record and solid revenues, you can aim higher. Once upon a time, VCs didn't insist on taking baby steps, and would fund people who wanted to "revolutionize the grocery industry." That led to disasters like Webvan, and the first dotcom crash. For a good history of how Webvan bit off more than it could chew, see Four Steps to the Epiphany. For some online overviews, see: http://articles.sfgate.com/2001-07-12/technology/17606161_1_webvan-kozmo-delivery http://articles.sfgate.com/2001-07-12/technology/17606161_1_... http://www.beyondvc.com/2010/10/dont-build-an-empire-overnight-lessons-from-freshdirect-and-webvan.html http://www.beyondvc.com/2010/10/dont-build-an-empire-overnig... Today, you're still allowed to dream big. But you're expected to start small, and build from there.
- mikekarnj 15y ago
  I agree. All companies should dream big and then break it down into actionable and realistic steps.
nhebb 15y ago
There are complete industries built on creating zero value for the world (investment banking). Maybe he's watched one too many Oliver Stone movies, but I don't think he understands the importance of investment banking. While SV VC's provide capital to startups on a comparatively small scale, investment banks provide capital to businesses on a much larger scale. Love 'em or hate 'em, they do provide a much needed service to our economy.
- deleted 15y ago
  [deleted]
- silverlake 15y ago
  Depends on the area. Many banks act as middlemen for OTC trades that could and should be on an exchange. They purposely scuttle public exchanges because it would eliminate their lucrative fees.
EGreg 15y ago
Stop building apps and start building platforms which can eventually disrupt industries.
tzm 15y ago
Disruption is a fundamental change of the business model, economics and user experience.
synnik 15y ago
Disruption needs to be driven from industry knowledge. Certainly technology will be the major enabler of disruption, and may be the catalyst to disruptive ideas, but it industry insiders know where to make the changes and how to achieve acceptance. So raising your hand and offering to build the tech is not the hard part. The hard part is finding those insiders who know every detail of the industry, but do not buy into the status quo.
- dablue 15y ago
  Those who know will not make the change. Even worse, they will actively prevent change from happening. They will milk whatever they are holding on to for as long as they can. It's those who accidentally stumble upon newly discovered knowledge that will make the change...
fjw 15y ago
I appreciate his sentiment and especially his motivation, but I'm not entirely sure everyone who is setting out to build an app must make the strict distinction between changing the world and not changing it. This borders on being an either/or fallacy - who's to say that you can't just build something for personal enjoyment and THEN watch it grow bigger and change the world?
nhangen 15y ago
The argument is largely subjective. For one person, making the world a better place is achieved by spending more time with the family to raise good kids that can improve upon their parent's success and keep building. To others, it's creating something like Paypal or Square. To another, it's Kiva. Lastly, as another commenter said, you need money and time. You can buy time with more money, so let's say you just need money. Apps can be used to get that money.
dreamdu5t 15y ago
If you want real disruption, you're not likely to find funding for it.

50 points by badboyboyce 15y ago

I agree with the sentiment here completely, but sadly, there's almost zero support for true disruption these days from Silicon Valley. FaceCash disrupts the credit card companies and banks. Not a single VC has offered a term sheet to date. (I'm not necessarily upset about this, but it's an interesting fact.) Students would generally rather work for Facebook or Google where they can make more money in a summer. Industry conferences don't want to hear from the people working on the hardest problems; they want to hear from the people who have made the most money. There are some real systemic problems here that, if they don't eventually get worked out, will end up keeping us locked into a steadily declining system in a number of industries.

revorad 15y ago
I don't know enough details about your or Square's technology and business, but every time I see you complain about how no one supports true disruption and even the cool new startups are doing the same old thing, I remember this video by Sean Murphy on technology adoption: http://www.youtube.com/watch?v=_4h68mrzuwc http://www.youtube.com/watch?v=_4h68mrzuwc I hope it will help you and you will take my comment as constructive criticism.
- thinkcomp 15y ago
  It's a good video and an interesting graphical representation of the problem I hadn't seen before. It also helps explain why so many startups work on small issues rather than large ones. Thanks for sharing it! Unfortunately, what it doesn't explain is the hidden cost that such an approach has, when repeated indefinitely, on the greater context of the Valley's infrastructure and incentive structure. Investors today simply are not rewarding risk.
  - revorad 15y ago
    I hope you will find someone to back your daring innovations. Godspeed!
phlux 15y ago
No offense, Aaron, but I would be interested to know what VCs may think about you given your public opinion and battle with Facebook. E.g. I would be very interested to know if you had been blacklisted or black-sheeped at least, given your history and vocal public statements on matters. Personally, I am rooting for your success - I jsut really want to know what back-room whispers may be saying about you, and people like you, who dont blindly worship the facebook.

swombat 15y ago

snip

mikekarnj 15y ago
The derivatives market is an arbitrary market where money just moves from one place to another. Real engineers build things like bridges and websites. Bankers build dreams and leverage the shit out of it to put the whole country in debt. http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405 http://www.rollingstone.com/politics/news/the-great-american...
- swombat 15y ago
  snip
- bdunbar 15y ago
  Real engineers build things like bridges and websites. Bankers build dreams and leverage the shit out of it to put the whole country in debt. Without banking you can't have infrastructure: no financing, no cement, no salaries, one can't acquire land. Shorter: you can't boot strap a bridge.
acangiano 15y ago
This definitely fails the HN commenting guidelines. I agree that the OP is wrong on this point, but calling him an idiot doesn't add anything to this discussion. If you felt so strongly against his point, you should illustrate why he is so wrong with your comment. Don't just insult him.
- swombat 15y ago
  Ok, fine, the insult was not necessary, but I flagged the post for being a piece of trash that I hope never to see the like of on HN. The OP is not deserving of a reply on the basis of this post. It is uninformed tripe that belongs on the reddit/r/teabaggers forum or some such lowly place. How this kind of trash gets 24 points is beyond me. Who are the people upvoting this? I will also add that the account which submitted this is only 2 hours old, obviously created just to submit this piece of crap. Smells like spam to me.

ekidd 15y ago

If you're a small team with limited runway, you can't simply decide to disrupt an entire industry. That's a huge undertaking, and a hopelessly vague one. What you can do is bite off a small piece of the problem, find some customers who really want to give you money, and iterate. Once you have a proven track record and solid revenues, you can aim higher. Once upon a time, VCs didn't insist on taking baby steps, and would fund people who wanted to "revolutionize the grocery industry." That led to disasters like Webvan, and the first dotcom crash. For a good history of how Webvan bit off more than it could chew, see Four Steps to the Epiphany. For some online overviews, see: http://articles.sfgate.com/2001-07-12/technology/17606161_1_webvan-kozmo-delivery http://articles.sfgate.com/2001-07-12/technology/17606161_1_... http://www.beyondvc.com/2010/10/dont-build-an-empire-overnight-lessons-from-freshdirect-and-webvan.html http://www.beyondvc.com/2010/10/dont-build-an-empire-overnig... Today, you're still allowed to dream big. But you're expected to start small, and build from there.

mikekarnj 15y ago
I agree. All companies should dream big and then break it down into actionable and realistic steps.

nhebb 15y ago

There are complete industries built on creating zero value for the world (investment banking). Maybe he's watched one too many Oliver Stone movies, but I don't think he understands the importance of investment banking. While SV VC's provide capital to startups on a comparatively small scale, investment banks provide capital to businesses on a much larger scale. Love 'em or hate 'em, they do provide a much needed service to our economy.

deleted 15y ago
[deleted]
silverlake 15y ago
Depends on the area. Many banks act as middlemen for OTC trades that could and should be on an exchange. They purposely scuttle public exchanges because it would eliminate their lucrative fees.

EGreg 15y ago

Stop building apps and start building platforms which can eventually disrupt industries.

tzm 15y ago

Disruption is a fundamental change of the business model, economics and user experience.

synnik 15y ago

Disruption needs to be driven from industry knowledge. Certainly technology will be the major enabler of disruption, and may be the catalyst to disruptive ideas, but it industry insiders know where to make the changes and how to achieve acceptance. So raising your hand and offering to build the tech is not the hard part. The hard part is finding those insiders who know every detail of the industry, but do not buy into the status quo.

dablue 15y ago
Those who know will not make the change. Even worse, they will actively prevent change from happening. They will milk whatever they are holding on to for as long as they can. It's those who accidentally stumble upon newly discovered knowledge that will make the change...

fjw 15y ago

I appreciate his sentiment and especially his motivation, but I'm not entirely sure everyone who is setting out to build an app must make the strict distinction between changing the world and not changing it. This borders on being an either/or fallacy - who's to say that you can't just build something for personal enjoyment and THEN watch it grow bigger and change the world?

nhangen 15y ago

The argument is largely subjective. For one person, making the world a better place is achieved by spending more time with the family to raise good kids that can improve upon their parent's success and keep building. To others, it's creating something like Paypal or Square. To another, it's Kiva. Lastly, as another commenter said, you need money and time. You can buy time with more money, so let's say you just need money. Apps can be used to get that money.

dreamdu5t 15y ago

If you want real disruption, you're not likely to find funding for it.