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The solutions proposed here are to increase the number of startups by increasing government spending/taxation and increasing extension of credit/financing. How

by temphn 15y ago

The solutions proposed here are to increase the number of startups by increasing government spending/taxation and increasing extension of credit/financing. However, if the goal is to have more startups that are "the envy of the world", then increasing the number is not necessarily the way to do this. We need to stop harassing those startups that do become successful. Startups by their nature are disruptive in the common sense of the term, and will violate the cozy arrangements made between established businesses and governments. Two recent examples: http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-with-2k-bookings-a-night-but-many-listings-may-be-illegal/ http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-wi... http://venturebeat.com/2010/10/26/ubercab-ryan-graves-cease-and-desit/ http://venturebeat.com/2010/10/26/ubercab-ryan-graves-cease-... Of course, on a larger scale the government is now harassing Google with antitrust, even though Google is being nipped at the heels by Facebook. The government also denied the Blockbuster/Hollywood merger in the mid 2000s (http://www.washingtonpost.com/wp-dyn/articles/A2310-2005Mar25.html http://www.washingtonpost.com/wp-dyn/articles/A2310-2005Mar2...) on antitrust grounds. Of course, just a few years later these "trusts" were blown up by Netflix, which is itself being blown up by Amazon and iTunes. To have more successes, we need to stop the dynamic in which government goes after successes and tries to destroy them. What we don't need are government policies that encourage more marginal entrepreneurs to jump into the pool.

dylangs1030 15y ago
That is an issue of extremely successful startups making their predecessors "irrelevant." Google eradicated the market and became a de facto monopoly for searching anything on the internet. Netflix entirely dissolved physical movie stores. On the flip side, Gamefly, a similar venture, has not done this - people still buy video games from stores instead of renting them or downloading them. I agree that some of the problem is the government being a "trust buster" - however, some of it is simply the faultless way the market works. The government makes blanket anti-trust policies which are universal enough that, when one company revolutionizes an industry to the point that it's the only one of its kind, it's caught by policy without really having any bad intentions. Unfortunately this is happening to Google.
- majika 15y ago
  http://en.wikipedia.org/wiki/Monopoly http://en.wikipedia.org/wiki/Monopoly Google does not have a monopoly on search. It's just the dominant player. That said, I do think there's reason for concern about how Google is marketing and integrating their products.
  - dylangs1030 15y ago
    Well, that's why I said de facto monopoly. Legally, no, it has no monopoly. But the point was that it's made other search engines largely irrelevant. With the exception of Bing, you generally can't think of many search engines these days. And Bing only rose to that level (still hasn't beaten Google) through massive ad campaigns and corporate partnership endorsements.
    - majika 15y ago
      Google has made other search engines largely irrelevant because it's so good. That is of no concern to me or the US antitrust investigators. What would be concerning if Google started making it harder for other search engines to come along and challenge its position by offering a better service. Google has done no such thing. It's as easy to challenge Google as it ever was. What's of concern to me and the US policy makers is how Google is using its position as the dominant search engine to market its other products. Do you see the difference?
      - ippisl 15y ago
        Google does do stuff that makes it harder for other companies to compete. bundling many search services and information gathering services(which by their nature help search and the ad ecosystem) might be better for the consumer(and sometimes worse, i.e., privacy, market concentration) but becomes a huge competitive barrier because a competitor has to offer all those services , not part of them. Are all those bundling moves are best for the consumer ? maybe not. Is google buying ITA - the flight comparison service gives value to people, instead of google recommending you a great flight search when you search for a flight , and letting providers compete among themselves ? or even showing data from flight search providers directly on the page? i'm not sure it's helpful for the consumer, and it would probably decrease competition in the flight comparison services, or maybe even kill the competition totally. Is it a legal monopoly, and break anti-trust laws ? i dunno. But don't mistake the law with the reality.
FD3SA 15y ago
Unfortunately, there is a simple yet sinister explanation for the government's interference with extremely successful startups. Startups can only become massively successful by stealing market share from established companies. As you've stated, this has the effect of angering the cozy quid pro quo relationship between established companies and governments. The root of this problem lies in the inevitable merger of the corporate and political classes. As the lines between these two entities blur, disruption through innovation will increasingly be hindered by new legislation. Corporations and governments are both interested in one thing: maintaining power. Corporations through monopoly, and governments through engineering votes. Until this unholy alliance is broken, innovation will only become more cumbersome.
majika 15y ago
I don't see why simply being a startup should give you permission to flaunt the law for whatever reason you deem necessary to be profitable. IMHO, the law usually exists for a reason. I care about antitrust violations, or data privacy violations. If New York requires hotels to be licensed - which I think is a fair requirement - then I don't see why Airbnb patrons should be exempt from that law. This view will probably be unpopular on HN. I don't suggest that the US government stop "harassing" startups because ... they're startups, and economy economy economy. I think you need to find a way to spur wealth creation while still having some rule of law in the country. Tax breaks, government-sponsored venture capital, and immigration incentives are a great way to do that.
- forrestthewoods 15y ago
  The New York law was passed in July and is, shockingly, sponsored by hotel associations. Laws like that don't exist to protect anyone except those with deep financial interests.
  - majika 15y ago
    Whoever wants to associate themselves with the law doesn't invalidate the merits of the law itself. I think there is validity to the idea that venues that provide accommodation should be licensed and certified by the government to ensure quality, safety, and accessibility standards. Do you disagree?
    - temphn 15y ago
      Yes, disagree. Yelp reviews, Google search results, and a million distributed reviewers provide a far more robust evaluation system for quality, safety, and accessibility than a centralized, single-point-of-failure government system. Quality: Zagat's star ratings are superior to anything a .gov agency has produced. Safety: Chicago Crime Maps is superior to anything the Chicago PD has produced. Among other things, a mild tweak can accomodate self reports rather than just things that the police got around to filing (police officers have a number of incentives to understate crime). Accessibility: Google Maps ftw. Will tell you if accessible by car, train, foot, bike. Government agencies can't go out of business (no downside) and have zero incentive to do an amazing job (no upside). It is no surprise that this produces DMV/TSA style mediocrity.
Hyena 15y ago
Ant-trust has been on the books so long that the truly ominous examples are simply beyond the pale. For example, Verizon buying out cable companies then locking out Netflix. Or the cellphone providers colluding to divide the market amongst themselves, granting each a safe market share. Level 3 making demands on all of them after buying out some content. Etc. Generally, though, you're going to be SOL on government regulation as technology's main problem. There really isn't much, especially vis-a-vis more lucrative industries like oil. Wal-Mart probably has more regulatory compliance issues than the entire tech world.

by temphn 15y ago

dylangs1030 15y ago

That is an issue of extremely successful startups making their predecessors "irrelevant." Google eradicated the market and became a de facto monopoly for searching anything on the internet. Netflix entirely dissolved physical movie stores. On the flip side, Gamefly, a similar venture, has not done this - people still buy video games from stores instead of renting them or downloading them. I agree that some of the problem is the government being a "trust buster" - however, some of it is simply the faultless way the market works. The government makes blanket anti-trust policies which are universal enough that, when one company revolutionizes an industry to the point that it's the only one of its kind, it's caught by policy without really having any bad intentions. Unfortunately this is happening to Google.

majika 15y ago
http://en.wikipedia.org/wiki/Monopoly http://en.wikipedia.org/wiki/Monopoly Google does not have a monopoly on search. It's just the dominant player. That said, I do think there's reason for concern about how Google is marketing and integrating their products.
- dylangs1030 15y ago
  Well, that's why I said de facto monopoly. Legally, no, it has no monopoly. But the point was that it's made other search engines largely irrelevant. With the exception of Bing, you generally can't think of many search engines these days. And Bing only rose to that level (still hasn't beaten Google) through massive ad campaigns and corporate partnership endorsements.
  - majika 15y ago
    Google has made other search engines largely irrelevant because it's so good. That is of no concern to me or the US antitrust investigators. What would be concerning if Google started making it harder for other search engines to come along and challenge its position by offering a better service. Google has done no such thing. It's as easy to challenge Google as it ever was. What's of concern to me and the US policy makers is how Google is using its position as the dominant search engine to market its other products. Do you see the difference?
    - ippisl 15y ago
      Google does do stuff that makes it harder for other companies to compete. bundling many search services and information gathering services(which by their nature help search and the ad ecosystem) might be better for the consumer(and sometimes worse, i.e., privacy, market concentration) but becomes a huge competitive barrier because a competitor has to offer all those services , not part of them. Are all those bundling moves are best for the consumer ? maybe not. Is google buying ITA - the flight comparison service gives value to people, instead of google recommending you a great flight search when you search for a flight , and letting providers compete among themselves ? or even showing data from flight search providers directly on the page? i'm not sure it's helpful for the consumer, and it would probably decrease competition in the flight comparison services, or maybe even kill the competition totally. Is it a legal monopoly, and break anti-trust laws ? i dunno. But don't mistake the law with the reality.

FD3SA 15y ago

Unfortunately, there is a simple yet sinister explanation for the government's interference with extremely successful startups. Startups can only become massively successful by stealing market share from established companies. As you've stated, this has the effect of angering the cozy quid pro quo relationship between established companies and governments. The root of this problem lies in the inevitable merger of the corporate and political classes. As the lines between these two entities blur, disruption through innovation will increasingly be hindered by new legislation. Corporations and governments are both interested in one thing: maintaining power. Corporations through monopoly, and governments through engineering votes. Until this unholy alliance is broken, innovation will only become more cumbersome.

majika 15y ago

I don't see why simply being a startup should give you permission to flaunt the law for whatever reason you deem necessary to be profitable. IMHO, the law usually exists for a reason. I care about antitrust violations, or data privacy violations. If New York requires hotels to be licensed - which I think is a fair requirement - then I don't see why Airbnb patrons should be exempt from that law. This view will probably be unpopular on HN. I don't suggest that the US government stop "harassing" startups because ... they're startups, and economy economy economy. I think you need to find a way to spur wealth creation while still having some rule of law in the country. Tax breaks, government-sponsored venture capital, and immigration incentives are a great way to do that.

forrestthewoods 15y ago
The New York law was passed in July and is, shockingly, sponsored by hotel associations. Laws like that don't exist to protect anyone except those with deep financial interests.
- majika 15y ago
  Whoever wants to associate themselves with the law doesn't invalidate the merits of the law itself. I think there is validity to the idea that venues that provide accommodation should be licensed and certified by the government to ensure quality, safety, and accessibility standards. Do you disagree?
  - temphn 15y ago
    Yes, disagree. Yelp reviews, Google search results, and a million distributed reviewers provide a far more robust evaluation system for quality, safety, and accessibility than a centralized, single-point-of-failure government system. Quality: Zagat's star ratings are superior to anything a .gov agency has produced. Safety: Chicago Crime Maps is superior to anything the Chicago PD has produced. Among other things, a mild tweak can accomodate self reports rather than just things that the police got around to filing (police officers have a number of incentives to understate crime). Accessibility: Google Maps ftw. Will tell you if accessible by car, train, foot, bike. Government agencies can't go out of business (no downside) and have zero incentive to do an amazing job (no upside). It is no surprise that this produces DMV/TSA style mediocrity.

Hyena 15y ago

Ant-trust has been on the books so long that the truly ominous examples are simply beyond the pale. For example, Verizon buying out cable companies then locking out Netflix. Or the cellphone providers colluding to divide the market amongst themselves, granting each a safe market share. Level 3 making demands on all of them after buying out some content. Etc. Generally, though, you're going to be SOL on government regulation as technology's main problem. There really isn't much, especially vis-a-vis more lucrative industries like oil. Wal-Mart probably has more regulatory compliance issues than the entire tech world.