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Considering that 90% of startups fail, I'd say those figures are even too optimistic. It's more like: 95% will fail, 4% will become stable projects that throw

Considering that 90% of startups fail, I'd say those figures are even too optimistic. It's more like: 95% will fail, 4% will become stable projects that throw out enough cash to support their developer (plus a team of 2 - 4), 0.99% will become venture-scale companies, and 0.01% will grow to Google/Microsoft/Apple-scale.

sakex 3y ago
0.01% is very optimistic too I think. It could very well be 0%. The reason Google /Microsoft/Apple got to that scale is because incumbent corporations like IBM let them do so, totally missing the bandwagon on the Internet, personal computing and mobile. I seriously doubt Google/Microsoft/Apple will let small startups get to their scale without a fight (or aggressive buyouts.)
- Kye 3y ago
  Big corporations don't miss disruptive trends. They crush any internal efforts to capture them out of fear of compromising the main profit lines and end up missing out. IBM didn't miss the bandwagon on mobile, Internet, or personal computing. The IBM PC was what everyone outside a few niche companies copied. IBM Simon beat the iPhone by over a decade and probably could have been significant with a few iterations. Almost every modem used to connect to the early commercial internet slotted into an IBM clone. They built the wagon, but every time they had to make a choice on how to proceed, they chose poorly.
  - sakex 3y ago
    Fair point. But don't you think that companies today have learned from the mistakes of the past? Also they have way more cash for aggressively buying out disruptors.
    - Kye 3y ago
      Google: Invented the transformer, but didn't do much with it. Google Assistant probably uses this tech and has been around, but it was ChatGPT that took the world by storm. Bard was useless at launch, and doesn't seem much better today. Google's recent history is littered with heralded launches and unceremonious closures shortly after. Time will tell if they can turn it around. Microsoft spent a long time resting on its laurels before starting to innovate again, but then they fell back into their old ways. Every smart move is hampered by the continuing need to subsume innovation to serve a desktop OS monopoly with declining relevance. LLMs are headed away from the silos that birthed the revolution toward on-board purpose-built LLMs that are entirely within the user's control, so Copilot's days are numbered. Even integrated GPUs will have enough power and memory to run the better LLMs in 5-10 years. Apple: back to selling overpriced PCs. Bringing SOCs in from mobile to the desktop is an interesting move, but Microsoft and Windows PCs are likely to beat them on price and features once that world catches up. They're in for a period of mistaking profit growth for innovation the way all big companies do. The pivot to services will be fraught, hindered by corporate inertia, and possibly kill the company. They've had on-board ML cores in all their mobile devices for years, and the best they could do was Siri.
jacquesm 3y ago
> 0.99% will become venture-scale companies, and 0.01% will grow to Google/Microsoft/Apple-scale The only relevant question for VCs is whether or not that top 1% has already launched or not. If they have they're too late. If they haven't then continued investing in AI makes sense from their perspective. Given the feeding frenzy it looks as though the general consensus is that that 1% hasn't launched yet (nor an appreciable fraction of it). In other words, VC analysts are expecting one or more key breakthroughs are still in the pipeline, and given how broad the investments are they haven't a clue as to where those breakthroughs will happen. I'm privy to some of these conversations (but in a European context) and even though I think that in principle they are right I'm not necessarily bullish on the idea that the larger part of that 1% is still to come. What GPT-5 will do when it is released will determine to what degree free money will still be thrown at AI start-ups, if it underwhelms I expect this source of funding to be reduced fairly quickly. It's the .com boom all over again: everybody wants to get on the train but nobody has any idea where the train is going to. But in the very long term (beyond the horizon defined by the typical VC cycle) the impact will be massive.

sakex 3y ago

0.01% is very optimistic too I think. It could very well be 0%. The reason Google /Microsoft/Apple got to that scale is because incumbent corporations like IBM let them do so, totally missing the bandwagon on the Internet, personal computing and mobile. I seriously doubt Google/Microsoft/Apple will let small startups get to their scale without a fight (or aggressive buyouts.)

Kye 3y ago
Big corporations don't miss disruptive trends. They crush any internal efforts to capture them out of fear of compromising the main profit lines and end up missing out. IBM didn't miss the bandwagon on mobile, Internet, or personal computing. The IBM PC was what everyone outside a few niche companies copied. IBM Simon beat the iPhone by over a decade and probably could have been significant with a few iterations. Almost every modem used to connect to the early commercial internet slotted into an IBM clone. They built the wagon, but every time they had to make a choice on how to proceed, they chose poorly.
- sakex 3y ago
  Fair point. But don't you think that companies today have learned from the mistakes of the past? Also they have way more cash for aggressively buying out disruptors.
  - Kye 3y ago
    Google: Invented the transformer, but didn't do much with it. Google Assistant probably uses this tech and has been around, but it was ChatGPT that took the world by storm. Bard was useless at launch, and doesn't seem much better today. Google's recent history is littered with heralded launches and unceremonious closures shortly after. Time will tell if they can turn it around. Microsoft spent a long time resting on its laurels before starting to innovate again, but then they fell back into their old ways. Every smart move is hampered by the continuing need to subsume innovation to serve a desktop OS monopoly with declining relevance. LLMs are headed away from the silos that birthed the revolution toward on-board purpose-built LLMs that are entirely within the user's control, so Copilot's days are numbered. Even integrated GPUs will have enough power and memory to run the better LLMs in 5-10 years. Apple: back to selling overpriced PCs. Bringing SOCs in from mobile to the desktop is an interesting move, but Microsoft and Windows PCs are likely to beat them on price and features once that world catches up. They're in for a period of mistaking profit growth for innovation the way all big companies do. The pivot to services will be fraught, hindered by corporate inertia, and possibly kill the company. They've had on-board ML cores in all their mobile devices for years, and the best they could do was Siri.

jacquesm 3y ago

> 0.99% will become venture-scale companies, and 0.01% will grow to Google/Microsoft/Apple-scale The only relevant question for VCs is whether or not that top 1% has already launched or not. If they have they're too late. If they haven't then continued investing in AI makes sense from their perspective. Given the feeding frenzy it looks as though the general consensus is that that 1% hasn't launched yet (nor an appreciable fraction of it). In other words, VC analysts are expecting one or more key breakthroughs are still in the pipeline, and given how broad the investments are they haven't a clue as to where those breakthroughs will happen. I'm privy to some of these conversations (but in a European context) and even though I think that in principle they are right I'm not necessarily bullish on the idea that the larger part of that 1% is still to come. What GPT-5 will do when it is released will determine to what degree free money will still be thrown at AI start-ups, if it underwhelms I expect this source of funding to be reduced fairly quickly. It's the .com boom all over again: everybody wants to get on the train but nobody has any idea where the train is going to. But in the very long term (beyond the horizon defined by the typical VC cycle) the impact will be massive.