9 ms·

Congratulations on the investment. The return is nothing short of spectacular. It's a truly excellent example of execution and timing. But the point that keeps

by cletus 15y ago

Congratulations on the investment. The return is nothing short of spectacular. It's a truly excellent example of execution and timing. But the point that keeps resurfacing in my mind is SpaceX. SpaceX, from nothing, created a low-earth orbit delivery system that is revolutionizing satellite launches and (soon) the cost of getting men into space... for less than the price that a bunch of people can send photos to each other with cheesy filters [1]. It would be difficult to overstate the impact Elon Musk has had, is having and will have on humanity (and no this isn't hyperbole) through SpaceX (and maybe even Tesla). And it didn't even require, relate to or is connected with some bullshit social network. I'm also reminded of Steve Yegge's OSCON talk [2] from some months back. The computer power we have available now is stunning. used for the right purposes it could fundamentally change humanity for the good, whether that be in bioinformatics or whatever, is hard to overstate. Yet we're using all this power and the brightest minds on the planet... to send cat pictures. It's actually reached the point that when I get unsolicited recruitment email or read about some new startup on HN that I tune out as soon as I see the word "social". There's something astoundingly depressing about all this. EDIt: I should add that my issue isn't that the founders and investors sought wealth. I don't begrudge them that at all. Not by any means am I anti-capitalist. Bill Gates, as one example, is doing huge amounts of good with his accrued wealth. The issue is more on what society values. [1]: http://news.ycombinator.com/item?id=3857904 http://news.ycombinator.com/item?id=3857904 [2]: http://www.youtube.com/watch?v=vKmQW_Nkfk8 http://www.youtube.com/watch?v=vKmQW_Nkfk8

sethbannon 15y ago
I agree. It's quite sad that some of the best and brightest minds of our time are spending their days working to increase revenue per click of advertisements. We could achieve so much more if our focus shifted towards more meaningful endeavors. I am, however, encouraged by the recent rise of impact entrepreneurship, where for-profit ventures tackle large societal problems. It's something we certainly need to see more of.
- cletus 15y ago
  Actually on advertising I will have to respectfully disagree. This may be controversial but: My opinion is that Internet advertising has done an inordinate amount of good for the world. Advertising has allowed the creation of amazing services that are free to use. Let's imagine a world where search or GMail might otherwise cost you $20/month (completely made up number) to use. You could afford that right? Even if you could you may not pay for it (people are remarkably fickle when it comes to paid services). That's not a lot of money. But what about to the poor or those in developing countries to whom $20/month is a significant amount of money? They get the same service you do because of advertising. Consider that the next time a text ad at the top of Google otherwise offends your (and I'm talking the general "you" rather than you specifically) aesthetic sensibilities.
  - losvedir 15y ago
    > But what about to the poor or those in developing countries to whom $20/month is a significant amount of money? They get the same service you do because of advertising. Well they're not paying for the service directly, but surely the advertisers want something for their money. And inflated material desires with excessive spending can certainly keep the poor poor, in a way that a fixed $n/month expense can't. That said, advertising which directs your expenditures to more appropriate places is morally fine by me. If I search for "buy a basketball" and some start-up is able to expose me to a better, cheaper basketball than that seems useful. However, if that same query returns ads for Nike shoes, Kobe Bryant jerseys, and the All-NBA-All-The-Time cable channel, then that's bad for society, I think. The canonical example I use for myself is grocery store coupons. I purposely ignore them. While intuitively it seems I could save money by redirecting my purchases to things that are on sale, I use my meta-intuition to know that more than likely it will convince me to buy some category or brand of good (now or on a future trip) that I wouldn't have otherwise purchased. Consequently, I see coupons as net money-losers. I see ads in the same way. While it may get me this service for free, I imagine it planting seeds of desire in my mind for various other goods/services, such that I end up paying more over the course of my life than I would have if I just paid for the service in the first place and didn't see the ads.
dbul 15y ago
It would be difficult to overstate the impact Elon Musk has had, is having and will have on humanity I can't count how many times I've seen this debate. I think last week there was a thread debating the triviality of web apps and similarly mentioned Musk. Elon Musk may very well have developed a cat picture social network to gain the wealth required to fund his companies, but he instead worked on X.com/PayPal. Do you really believe Musk would be where he is today if he didn't gain considerable wealth from that venture? He'd likely be drawing rockets in a sketchbook while working as VP of Advertising at Google. The Instagram founders are only wealthy enough at this point to have great credit, who knows what great investments they could make post-close? I'm a fan of taking the simplest, reasonable route to wealth, then investing in something of greater importance, something that critics would agree improves humanity.
- Schwolop 15y ago
  I'm a fan of taking the simplest, reasonable route to wealth, then investing in something of greater importance, something that critics would agree improves humanity. I agree with this, and have been talking to people about it under the moniker of "deferred altruism". My hypothesis is that someone who continually gives his time and/or money to worthy causes over his entire life may end up being cumulatively less world changing than someone who spends half her life making money, then switches to philanthropy or world changing ideas later. The canonical examples are Elon Musk and Bill Gates, but of course there must be thousands of examples where the risk doesn't pay off, and the deferred altruist ends up unable to contribute much at all. Perhaps I'm just finding a way of justifying being miserly now, but I certainly intend to pay it back in cash if I'm successful, or in time if I'm not.
  - AVTizzle 15y ago
    "...someone who continually gives his time and/or money to worthy causes over his entire life may end up being cumulatively less world changing than someone who spends half her life making money, then switches to philanthropy or world changing ideas later." Couldn't have said this better myself. Thank you :)
poorpointofview 15y ago
SpaceX did not come from nothing. The science, technology and infrastructure that enabled SpaceX to exist was created by tax payer funded programs. I'm not saying he's not a great guy. I'm just saying he's standing on the shoulders of giants. The taxes paid by people sending cat pictures funds the infrastructure that enables SpaceX to exist.
- andrewfelix 15y ago
  When the OP stated something from nothing I think he/she meant tangible 'things' from investment and research(ie. rockets). As opposed to Instagram which is a form of communication and entertainment that will forever exist within a software context. Instagram also stood on the shoulders of giants.
rodly 15y ago
I agree wholeheartedly with your comments on SpaceX and Elon Musk. What I don't understand is how you're relating SpaceX to the Instagram acquisition. "Yet we're using all this power and the brightest minds on the planet... to send cat pictures." So you're suggesting we have a problem because intelligent people don't always find the "right" ways to contribute to society? I think you should be directing your anger at those who spend their time sending cat pictures, rather than those who enable millions of people to do so simultaneously.
pg 15y ago
If it makes you feel any better, there's nothing new about this situation. One could just as well complain in the 1930s about the money and effort that were going into popular films instead of whatever other more virtuous project. This case actually sounds like a fairly mild one. Instagram didn't have many employees, so only a few people were diverted from curing cancer to sending cat pictures.
- cperciva 15y ago
  only a few people were diverted from curing cancer to sending cat pictures Pre-acquisition, sure. But how many people will see the instagram acquisition and decide to give up on curing cancer to help people send cat pictures instead?
  - Mz 15y ago
    Burned out (and homeless) in San Diego says: I am completely ready to make that (type of) switch, and it has nothing whatsoever to do with any company being acquired. Most people don't really want to get well. They want a better drug. I am currently seriously planning to burn my health site to the ground and start something shallow and hopefully profitable, like an astrology site. Not kidding at all.
    - larrys 15y ago
      "hopefully profitable, like an astrology site" Instagram founders can probably afford to fund some medical research or establish a chair or even a medical center like many wealthy business people end up doing. There are many ways to help the world if you find a good way to make money.
      - Mz 15y ago
        I have cystic fibrosis, as does my 24 year old son. We have figured out how to get ourselves well. It has left me deeply in debt and homeless. And damn few people have any interest in what I have done. I get called a liar and snake oil salesman. At the moment, I don't feel like getting rich so I can make the world a better place. I feel like getting rich and then telling the world to go fuck itself should the world suddenly reverse position and find my story of recovery fascinating just because I have found fame and fortune. Add "bitter" to my list of descriptors.
zach 15y ago
So yeah, there's a gold rush. They're great for economic expansion but kind of suck when it comes to depth of achievement. Right now, there's a lot of low-hanging fruit in the ability of technological innovators to positively affect the everyday lives of normal people in lots of small but personally significant ways. If you consider that goal bullshit, then yes, I imagine the current economic environment is astoundingly depressing. Yes, there are many amazing opportunities higher up the tree, and yeah, it seems like there aren't enough multibillionaires to take the risks to chase them, and counterbalance all the "easy stuff" people are chasing. My point is this gold-rush-like era will pass. California got started that way, after all. I bet people were pretty frickin' sick of all the n00bs and posers moving to the West Coast with crazy/stupid dreams of getting rich. It probably seemed depressing to have every single week bring more idiots panning creeks. But three generations later, California was manufacturing a command module to put men on the moon. The expansion that started in the gold rush led to agriculture, movies and technology. And now things are cycling around in some ways. But if you're serious about progress, you have to be patient at times.
is74 15y ago
Also keep in mind that there is a big difference between a billion dollars in the hands of someone as capable as Elon Musk (who also happens to invest all of his time and creativity), and a billion dollars in the hands of a random investor. The latter won't come close to the former in terms of returns.
jimmyvanhalen 15y ago
Elon Musk's first start up was called Zip2. Only after selling Zip2 was he able to co-found Paypal, Tesla, SpaceX, etc. if it werent for Zip2, a online publishing company (which could've been used posting cat pictures), there wouldn't be a Paypal, Tesla or SpaceX.
caycep 15y ago
then again: -the wealth Bill Gates is using was generated (in part) by software intended to create office memos and clip art. -much of the computing power mentioned above to change humanity for good comes from infrastructure designed to sell twilight novels and, yes, send cat pictures... the invisible hand at work...
lifeformed 15y ago
What makes you think that "all the best and brightest minds" in this world are capable and motivated to work on the most noble tasks? If they had the passion for it they'd be doing it. If they don't have the passion for it, they wouldn't be any good at it. Frankly, I personally have no interest in learning how to cure cancer. I have no interest for biology or formalized scientific research. I do have a passion for creating technology for people to enjoy. Does that mean my values are wrong? Should all people be pursuing what society deems the "noblest goal"?
- gizzlon 15y ago
  But humans are not born with a "passion to do X" and then live their entire lives in a vacuum. If it was seen as a quick way to build wealth and fame, I'm sure more people would be passionate about curing cancer.
deleted 15y ago
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deleted 15y ago
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harscoat 15y ago
"Social" gave us evolutionary fitness. Does that mean that it could have a compounded effect bigger (inclusive) impact than "revolutionizing satelite launches"?... You can see Instagram as sending "cat pictures" or pure gossip(^)... or as improving our "theory of mind" (a window into people's mind, their beliefs & desire). http://en.wikipedia.org/wiki/Theory_of_mind http://en.wikipedia.org/wiki/Theory_of_mind http://www.sciencedirect.com/science/article/pii/S1364661308000892 http://www.sciencedirect.com/science/article/pii/S1364661308... ^http://www.thepsychologist.org.uk/archive/archive_home.cfm?volumeID=22&editionID=171&ArticleID=1454 http://www.thepsychologist.org.uk/archive/archive_home.cfm?v...
tonyjwang 15y ago
Elon Musk first made his money in Paypal and then funded SpaceX. I think Krieger and Systrom will have exciting world-changing projects in the pipeline too. Oddly, I think the most influential path to curing cancer is making a lot of money, gaining lots of power, and having more control to allocate societal resources.
AGorilla 15y ago
I wonder if making it easier for millions of people to have quicker access to larger social graphs isn't the cultural equivalent of curing cancer or privatized space travel. The effects may not be measurable but lives are undeniably enriched by easing the flow of communication. Even if it's just cat pictures (what's wrong with cats?)
madhancr 15y ago
agree with your sentiment. but, this is not surprising. VCs talk about 7 sins and not curing cancer

by cletus 15y ago

sethbannon 15y ago

I agree. It's quite sad that some of the best and brightest minds of our time are spending their days working to increase revenue per click of advertisements. We could achieve so much more if our focus shifted towards more meaningful endeavors. I am, however, encouraged by the recent rise of impact entrepreneurship, where for-profit ventures tackle large societal problems. It's something we certainly need to see more of.

cletus 15y ago
Actually on advertising I will have to respectfully disagree. This may be controversial but: My opinion is that Internet advertising has done an inordinate amount of good for the world. Advertising has allowed the creation of amazing services that are free to use. Let's imagine a world where search or GMail might otherwise cost you $20/month (completely made up number) to use. You could afford that right? Even if you could you may not pay for it (people are remarkably fickle when it comes to paid services). That's not a lot of money. But what about to the poor or those in developing countries to whom $20/month is a significant amount of money? They get the same service you do because of advertising. Consider that the next time a text ad at the top of Google otherwise offends your (and I'm talking the general "you" rather than you specifically) aesthetic sensibilities.
- losvedir 15y ago
  > But what about to the poor or those in developing countries to whom $20/month is a significant amount of money? They get the same service you do because of advertising. Well they're not paying for the service directly, but surely the advertisers want something for their money. And inflated material desires with excessive spending can certainly keep the poor poor, in a way that a fixed $n/month expense can't. That said, advertising which directs your expenditures to more appropriate places is morally fine by me. If I search for "buy a basketball" and some start-up is able to expose me to a better, cheaper basketball than that seems useful. However, if that same query returns ads for Nike shoes, Kobe Bryant jerseys, and the All-NBA-All-The-Time cable channel, then that's bad for society, I think. The canonical example I use for myself is grocery store coupons. I purposely ignore them. While intuitively it seems I could save money by redirecting my purchases to things that are on sale, I use my meta-intuition to know that more than likely it will convince me to buy some category or brand of good (now or on a future trip) that I wouldn't have otherwise purchased. Consequently, I see coupons as net money-losers. I see ads in the same way. While it may get me this service for free, I imagine it planting seeds of desire in my mind for various other goods/services, such that I end up paying more over the course of my life than I would have if I just paid for the service in the first place and didn't see the ads.

dbul 15y ago

It would be difficult to overstate the impact Elon Musk has had, is having and will have on humanity I can't count how many times I've seen this debate. I think last week there was a thread debating the triviality of web apps and similarly mentioned Musk. Elon Musk may very well have developed a cat picture social network to gain the wealth required to fund his companies, but he instead worked on X.com/PayPal. Do you really believe Musk would be where he is today if he didn't gain considerable wealth from that venture? He'd likely be drawing rockets in a sketchbook while working as VP of Advertising at Google. The Instagram founders are only wealthy enough at this point to have great credit, who knows what great investments they could make post-close? I'm a fan of taking the simplest, reasonable route to wealth, then investing in something of greater importance, something that critics would agree improves humanity.

Schwolop 15y ago
I'm a fan of taking the simplest, reasonable route to wealth, then investing in something of greater importance, something that critics would agree improves humanity. I agree with this, and have been talking to people about it under the moniker of "deferred altruism". My hypothesis is that someone who continually gives his time and/or money to worthy causes over his entire life may end up being cumulatively less world changing than someone who spends half her life making money, then switches to philanthropy or world changing ideas later. The canonical examples are Elon Musk and Bill Gates, but of course there must be thousands of examples where the risk doesn't pay off, and the deferred altruist ends up unable to contribute much at all. Perhaps I'm just finding a way of justifying being miserly now, but I certainly intend to pay it back in cash if I'm successful, or in time if I'm not.
- AVTizzle 15y ago
  "...someone who continually gives his time and/or money to worthy causes over his entire life may end up being cumulatively less world changing than someone who spends half her life making money, then switches to philanthropy or world changing ideas later." Couldn't have said this better myself. Thank you :)

poorpointofview 15y ago

SpaceX did not come from nothing. The science, technology and infrastructure that enabled SpaceX to exist was created by tax payer funded programs. I'm not saying he's not a great guy. I'm just saying he's standing on the shoulders of giants. The taxes paid by people sending cat pictures funds the infrastructure that enables SpaceX to exist.

andrewfelix 15y ago
When the OP stated something from nothing I think he/she meant tangible 'things' from investment and research(ie. rockets). As opposed to Instagram which is a form of communication and entertainment that will forever exist within a software context. Instagram also stood on the shoulders of giants.

rodly 15y ago

I agree wholeheartedly with your comments on SpaceX and Elon Musk. What I don't understand is how you're relating SpaceX to the Instagram acquisition. "Yet we're using all this power and the brightest minds on the planet... to send cat pictures." So you're suggesting we have a problem because intelligent people don't always find the "right" ways to contribute to society? I think you should be directing your anger at those who spend their time sending cat pictures, rather than those who enable millions of people to do so simultaneously.

pg 15y ago

If it makes you feel any better, there's nothing new about this situation. One could just as well complain in the 1930s about the money and effort that were going into popular films instead of whatever other more virtuous project. This case actually sounds like a fairly mild one. Instagram didn't have many employees, so only a few people were diverted from curing cancer to sending cat pictures.

cperciva 15y ago
only a few people were diverted from curing cancer to sending cat pictures Pre-acquisition, sure. But how many people will see the instagram acquisition and decide to give up on curing cancer to help people send cat pictures instead?
- Mz 15y ago
  Burned out (and homeless) in San Diego says: I am completely ready to make that (type of) switch, and it has nothing whatsoever to do with any company being acquired. Most people don't really want to get well. They want a better drug. I am currently seriously planning to burn my health site to the ground and start something shallow and hopefully profitable, like an astrology site. Not kidding at all.
  - larrys 15y ago
    "hopefully profitable, like an astrology site" Instagram founders can probably afford to fund some medical research or establish a chair or even a medical center like many wealthy business people end up doing. There are many ways to help the world if you find a good way to make money.
    - Mz 15y ago
      I have cystic fibrosis, as does my 24 year old son. We have figured out how to get ourselves well. It has left me deeply in debt and homeless. And damn few people have any interest in what I have done. I get called a liar and snake oil salesman. At the moment, I don't feel like getting rich so I can make the world a better place. I feel like getting rich and then telling the world to go fuck itself should the world suddenly reverse position and find my story of recovery fascinating just because I have found fame and fortune. Add "bitter" to my list of descriptors.

zach 15y ago

So yeah, there's a gold rush. They're great for economic expansion but kind of suck when it comes to depth of achievement. Right now, there's a lot of low-hanging fruit in the ability of technological innovators to positively affect the everyday lives of normal people in lots of small but personally significant ways. If you consider that goal bullshit, then yes, I imagine the current economic environment is astoundingly depressing. Yes, there are many amazing opportunities higher up the tree, and yeah, it seems like there aren't enough multibillionaires to take the risks to chase them, and counterbalance all the "easy stuff" people are chasing. My point is this gold-rush-like era will pass. California got started that way, after all. I bet people were pretty frickin' sick of all the n00bs and posers moving to the West Coast with crazy/stupid dreams of getting rich. It probably seemed depressing to have every single week bring more idiots panning creeks. But three generations later, California was manufacturing a command module to put men on the moon. The expansion that started in the gold rush led to agriculture, movies and technology. And now things are cycling around in some ways. But if you're serious about progress, you have to be patient at times.

is74 15y ago

Also keep in mind that there is a big difference between a billion dollars in the hands of someone as capable as Elon Musk (who also happens to invest all of his time and creativity), and a billion dollars in the hands of a random investor. The latter won't come close to the former in terms of returns.

jimmyvanhalen 15y ago

Elon Musk's first start up was called Zip2. Only after selling Zip2 was he able to co-found Paypal, Tesla, SpaceX, etc. if it werent for Zip2, a online publishing company (which could've been used posting cat pictures), there wouldn't be a Paypal, Tesla or SpaceX.

caycep 15y ago

then again: -the wealth Bill Gates is using was generated (in part) by software intended to create office memos and clip art. -much of the computing power mentioned above to change humanity for good comes from infrastructure designed to sell twilight novels and, yes, send cat pictures... the invisible hand at work...

lifeformed 15y ago

What makes you think that "all the best and brightest minds" in this world are capable and motivated to work on the most noble tasks? If they had the passion for it they'd be doing it. If they don't have the passion for it, they wouldn't be any good at it. Frankly, I personally have no interest in learning how to cure cancer. I have no interest for biology or formalized scientific research. I do have a passion for creating technology for people to enjoy. Does that mean my values are wrong? Should all people be pursuing what society deems the "noblest goal"?

gizzlon 15y ago
But humans are not born with a "passion to do X" and then live their entire lives in a vacuum. If it was seen as a quick way to build wealth and fame, I'm sure more people would be passionate about curing cancer.

deleted 15y ago

[deleted]

deleted 15y ago

[deleted]

harscoat 15y ago

"Social" gave us evolutionary fitness. Does that mean that it could have a compounded effect bigger (inclusive) impact than "revolutionizing satelite launches"?... You can see Instagram as sending "cat pictures" or pure gossip(^)... or as improving our "theory of mind" (a window into people's mind, their beliefs & desire). http://en.wikipedia.org/wiki/Theory_of_mind http://en.wikipedia.org/wiki/Theory_of_mind http://www.sciencedirect.com/science/article/pii/S1364661308000892 http://www.sciencedirect.com/science/article/pii/S1364661308... ^http://www.thepsychologist.org.uk/archive/archive_home.cfm?volumeID=22&editionID=171&ArticleID=1454 http://www.thepsychologist.org.uk/archive/archive_home.cfm?v...

tonyjwang 15y ago

Elon Musk first made his money in Paypal and then funded SpaceX. I think Krieger and Systrom will have exciting world-changing projects in the pipeline too. Oddly, I think the most influential path to curing cancer is making a lot of money, gaining lots of power, and having more control to allocate societal resources.

AGorilla 15y ago

I wonder if making it easier for millions of people to have quicker access to larger social graphs isn't the cultural equivalent of curing cancer or privatized space travel. The effects may not be measurable but lives are undeniably enriched by easing the flow of communication. Even if it's just cat pictures (what's wrong with cats?)

madhancr 15y ago

agree with your sentiment. but, this is not surprising. VCs talk about 7 sins and not curing cancer