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Q&A: Foul-Mouthed Blogger Ted Dziuba Tells Why Most Startups Fail

28 points by nickb 19y ago

edw519 19y ago
"Under the surface, there's nothing noteworthy going on." So what? It's about time for some of these bloggers to stop dealing with details and start focusing on issues. The promise of a good web app is not how pretty it is on the surface or how much technology is under the hood, but the value it provides solving someone's problem. (By the way, his filthy language scores 0 points with serious business people. If I want to listen to know-it-alls spewing forth f-words, I'd just go to any <local bar>.)
- derefr 19y ago
  Fixed: "The promise of a speech is not how clean the language is on the surface or how much thought is under the hood, but the value it provides solving someone's problem." Seriously, people who swear still have good ideas. Filtering them out before you can critically evaluate them is the mark of an idealist unsuited to the pragmatism of real business.
  - edw519 19y ago
    "Filtering them out before you can critically evaluate them is the mark of an idealist unsuited to the pragmatism of real business." On what planet? Toilet mouth is the quickest way to demonstrate that you are not to be taken seriously in business. No need to filter. Just move along and talk with a professional, not an idiot.
    - Goladus 19y ago
      What about wearing white-collared shirts and neckties? Beards? Comfortable shoes?
jamiequint 19y ago
And digg is some sort of super incredible technology? what about facebook in the beginning when "under the surface [there was not much] noteworthy going on." This guy is a loser, although any press is good press I guess.
pg 19y ago
It's strange they're surprised he's only 23. It doesn't surprise me. The facile "you suck" is the hallmark of the Beavis and Butthead 15 year olds on Digg.
- neilc 19y ago
  Have you read any of the uncov reviews? Most of the sites they are making fun of deserve the abuse, IMO. I think the wide-eyed optimism of most Web 2.0 coverage justifies at least one more critical perspective.
  - davidw 19y ago
    You can be critical in an intelligent way, or you can simply avoid talking about things that you don't like. No need to fling mud at them.
    - neilc 19y ago
      I think uncov is critical in a reasonably intelligent way -- albeit they use humor, rather than sombre critical analysis. The things that uncov typically makes fun of startups for -- being derivative, lacking interesting technology, not providing value to users, not having a workable business model, etc. -- are substantive criticisms.
      - tokipin 19y ago
        sounds like a maddox wannabe imo
  - pg 19y ago
    Enough to get the formula. Rush Limbaugh uses the same one. But oddly enough Limbaugh is the more intellectually honest of the two, because he's not attacking things where the right strategy is to launch with a minimal version 1.
- teddziuba 19y ago
  yeah paul graham, you really showed me. internet is pretty serious business!
nickb 19y ago
"TD: We want to build machine programs that can learn things from information that's out there on the web. In the first application we'll come out with, you tell us things that you're interested in, and we'll continuously go out and find stuff on the internet that's related to that. There's a positive feedback loop where you tell us what you like and don't, so the machine gets progressively better in learning what you like." That's extremely ambitious. I've seen so many implementations of what he's talking about and the results have always been abysmal. Biggest problem for these systems is that you need a lot (and I mean a LOT) of training data to start making predictions/recommendations that make any sense. Their scope also seems way too broad.
- artlung 19y ago
  nickb -- I have no idea if they know what they're doing, but I believe they've got the kind of large datasets you're talking about. On their <a href="http://blog.persai.com/ http://blog.persai.com/">http://blog.persai.com/</a&#62 http://blog.persai.com/</a> blog they describe their collection of several hundred thousand RSS feed. I'm curious to see what they come up with.
  - nickb 19y ago
    artlung, you need ranked data, not just raw feeds.
brett 19y ago
Uncov seems like a risky idea for a group who are about to launch a startup themselves. Sure it gets them press, but they also inherit ill will and an audience looking to call them on it when their product doesn't live up to their rhetoric.
- chuckHoffman 19y ago
  You talk as if uncov is some kind of calculated move to get them press for persai. This kind of thinking pretty much forgets the fact that people usually start sites like uncov as a hobby, or as they would put it, "for the lulz." They probably had no idea they'd be even as popular as they are now. The amount of attention it's getting now only suggests that maybe they have a pretty good point.
  - brett 19y ago
    I definitely didn't mean to suggest that I think they did Uncov in a calculated move for press. I don't doubt that it arose organically as you suggest. I just think it goes to show that doing something like Uncov can be short sighted. I'm not really sure that attention is a good indicator of having a good point. Bill O'Reilly gets a lot of attention. It's not necessarily because he is making good points.
    - chuckHoffman 19y ago
      Maybe not in your opinion, but certainly in somebody's.
- imakethings 19y ago
  Its not a web 2.0 startup and I think thats the point of Persai. Persai from what I hear is going to be fairly void of the things that make up the 2.0 web dance. Its be a web application that actually does something of value for the user. Another web application I admire is Amigo created by the folks at Carsonified (was known as Carson Systems). Instead of spooging loads of ajax everywhere and calling them platforms and technologies, actually build something someone can use.
davidw 19y ago
/me points to the Teddy Roosevelt quote again: http://news.ycombinator.com/item?id=66782 http://news.ycombinator.com/item?id=66782
eusman 19y ago
he talks too much shitting other companies when instead he should concentrate on his startup... by the way his idea is already implemented by others: www.feeds2.com "All these companies will keep getting bought up, but the acquirers are not going to see great returns." gettting acquired without the potential of revenue? show us these dump acquirers, others would be interested too! he sais he likes companies like Joost, that have real technology behind them. Yeah, it also has 100 employees.
- hello_moto 19y ago
  I'm sure he is concentrating on his startup. What's wrong if he took a short break to write Uncov article? So what if his idea has already implemented? Google's idea had been implemented by others as well. Just that Google does it better. It's possible that his startup might do it better. I kind of agree with you that he has no solid data on these "dumb buyers" but I think the word "acquired" should be swapped with "invested". There are a lot of web 2.0 companies that don't have strong revenue but got a lot of money via investment. Let me ask you back, can you give example of web 2.0 companies with strong revenue record? The best deal I've seen so far was Flickr's 30-40 million dollars. The rest seem to be over valued. What's wrong with Joost and 100 employees? If Joost really needs 100 employees, be it. They have a solid product compare to most of YCombinator companies out there. By the way, out of 50 YComb companies out there, I only use Reddit.
  - eusman 19y ago
    I like Joost. You got that one wrong. It's natural investments may turn out wrong. Especially when expectations are larger than the potential, which is what happens.. He can do whatever he wants with his free time. I don't care. But telling everyone that is pointless if you don't solve a computer science problem, he is really illusionating himself. And raising his recomendation engine as the ultimate computer science problem is really ridicilus. I will put it this way: It was said during the International Symposium in Computer Architecture this year, although, i'd be mistaken who said it. I think it was put something like this to the crowd: "We asked teenagers to tell us what is the most significant discovery. Their answer? YouTube That's what happened, we've gone so far with technology that we neglected what is important to the people."
jraines 19y ago
I'm fond of the quote "If you're bored, it's your fault." I think it must apply triple to someone working at Google. I'm guessing he was eased out for surfing /b/ too much.
tychay 19y ago
I'd defend you Ted, but I'm too busy laughing. http://terrychay.com/blog/article/ycombinator-xobni-party.shtml http://terrychay.com/blog/article/ycombinator-xobni-party.sh...
DaniFong 19y ago
It's like he's thinking the same thoughts I have, except he's not afraid to be mean about it. O.o
asdflkj 19y ago
"All these companies will keep getting bought up, but the acquirers are not going to see great returns." This struck me as the thing we don't talk about here--not unlike certain topics you don't talk about with old German people. Is there data on how much revenue startups bring to companies that buy them? Another way to approach this issue: if startups are capable of revenues that justify the enormous amounts that BigCos are paying for them these days, why is there such focus on having an exit? If startups are so much better at solving problems than BigCos, why can't they solve the problem of pulling in revenue better, too? This is not meant to refute the antecedent. It's an actual question that I'd be glad to hear someone answer. Some startups do end up with healthy revenue, but you'll notice that their expected source of revenue was obvious from the start. Not so with most YC startups.
- nostrademons 19y ago
  Risk mitigation. Most large tech companies don't purchase startups for the revenue they bring in. They purchase them because they are deathly afraid that some startup will become the next big thing that renders their revenue stream obsolete. It's happened often enough that big companies have reason to be concerned: think of how the computer world would look different if IBM had bought Microsoft instead of licensing their software, or if Yahoo had bought Google when it was an early-stage startup. If you look at the > $1B acquisitions, almost all (except Skype) have been for companies that fundamentally threaten a large company's business model. If Google hadn't bought YouTube, Viacom's lawsuit against it might have set a precedent that literally puts Google out of business. If EBay hadn't bought PayPal, it would've opened the door to a payment service that wasn't controlled by Ebay yet was frequented by all of EBay's customers; it's not a huge leap for Paypal to start offering its own listings then. Startup founders have the opposite risk profile: their wealth is all tied up in one company, so if they don't take over the big company's market, they get nothing. Most founders would rather take their $40M payout and diversify. So basically it comes down to risk aversion. Say that a startup has a 1% chance of displacing the big company (worth $100B for the sake of argumentation), and a 99% chance of eventually failing. For a big company, 1% is far too large a chance of losing everything, particularly when they have the cash & stock to avert the possibility entirely. For a founder, $1B is a helluva lot of money, and far better than a 1% chance at being the richest man in the world yet a 99% chance of nothing. There's also a moral hazard issue, in that the people actually responsible for footing the bill are stockholders, yet the company executives have a far stronger incentive to not look bad by botching an acquisition than to save $1B. Many money managers hate acquisitions, because it's by far the favorite way to destroy shareholder value. But few CEOs will be replaced for making too many acquisitions, while it's almost guaranteed that they will be replaced if they fail to make the acquisition that becomes a major competitor. A pithy way to put it might be "Big companies are driven by fear, yet startups are driven by greed." That gives both of them incentives to agree on an acquisition price higher than fair market value.
ereldon 19y ago
the funny thing here is that ted is the prototypical candidate for ycombinator: - technical skill: math degree, radrails - belief in tech meritocracy - ambition to solve a hard problem thats why ted's criticisms hurt so bad -- he is slamming his peers. at least give uncov some credit for both brains and balls. life without these guys would be more status quo, which is not what any of us want.
- pg 19y ago
  We don't consider only technical ability. Character and judgement also count.
Harj 19y ago
"If the business is every widget under the sun conglomerated into this giant application, there's no real technology there. There's no noteworthy computer-science problem being solved." try to solve computer-science problems is a reason why startups fail. it doesn't matter if there's no "real" technnology - the thing could be built in lego bricks as long as it solves a USER pain it's irrelvant.

28 points by nickb 19y ago

"Under the surface, there's nothing noteworthy going on." So what? It's about time for some of these bloggers to stop dealing with details and start focusing on issues. The promise of a good web app is not how pretty it is on the surface or how much technology is under the hood, but the value it provides solving someone's problem. (By the way, his filthy language scores 0 points with serious business people. If I want to listen to know-it-alls spewing forth f-words, I'd just go to any <local bar>.)

derefr 19y ago
Fixed: "The promise of a speech is not how clean the language is on the surface or how much thought is under the hood, but the value it provides solving someone's problem." Seriously, people who swear still have good ideas. Filtering them out before you can critically evaluate them is the mark of an idealist unsuited to the pragmatism of real business.
- edw519 19y ago
  "Filtering them out before you can critically evaluate them is the mark of an idealist unsuited to the pragmatism of real business." On what planet? Toilet mouth is the quickest way to demonstrate that you are not to be taken seriously in business. No need to filter. Just move along and talk with a professional, not an idiot.
  - Goladus 19y ago
    What about wearing white-collared shirts and neckties? Beards? Comfortable shoes?

jamiequint 19y ago

And digg is some sort of super incredible technology? what about facebook in the beginning when "under the surface [there was not much] noteworthy going on." This guy is a loser, although any press is good press I guess.

pg 19y ago

It's strange they're surprised he's only 23. It doesn't surprise me. The facile "you suck" is the hallmark of the Beavis and Butthead 15 year olds on Digg.

neilc 19y ago
Have you read any of the uncov reviews? Most of the sites they are making fun of deserve the abuse, IMO. I think the wide-eyed optimism of most Web 2.0 coverage justifies at least one more critical perspective.
- davidw 19y ago
  You can be critical in an intelligent way, or you can simply avoid talking about things that you don't like. No need to fling mud at them.
  - neilc 19y ago
    I think uncov is critical in a reasonably intelligent way -- albeit they use humor, rather than sombre critical analysis. The things that uncov typically makes fun of startups for -- being derivative, lacking interesting technology, not providing value to users, not having a workable business model, etc. -- are substantive criticisms.
    - tokipin 19y ago
      sounds like a maddox wannabe imo
- pg 19y ago
  Enough to get the formula. Rush Limbaugh uses the same one. But oddly enough Limbaugh is the more intellectually honest of the two, because he's not attacking things where the right strategy is to launch with a minimal version 1.
teddziuba 19y ago
yeah paul graham, you really showed me. internet is pretty serious business!

nickb 19y ago

"TD: We want to build machine programs that can learn things from information that's out there on the web. In the first application we'll come out with, you tell us things that you're interested in, and we'll continuously go out and find stuff on the internet that's related to that. There's a positive feedback loop where you tell us what you like and don't, so the machine gets progressively better in learning what you like." That's extremely ambitious. I've seen so many implementations of what he's talking about and the results have always been abysmal. Biggest problem for these systems is that you need a lot (and I mean a LOT) of training data to start making predictions/recommendations that make any sense. Their scope also seems way too broad.

artlung 19y ago
nickb -- I have no idea if they know what they're doing, but I believe they've got the kind of large datasets you're talking about. On their <a href="http://blog.persai.com/ http://blog.persai.com/">http://blog.persai.com/</a&#62 http://blog.persai.com/</a> blog they describe their collection of several hundred thousand RSS feed. I'm curious to see what they come up with.
- nickb 19y ago
  artlung, you need ranked data, not just raw feeds.

brett 19y ago

Uncov seems like a risky idea for a group who are about to launch a startup themselves. Sure it gets them press, but they also inherit ill will and an audience looking to call them on it when their product doesn't live up to their rhetoric.

chuckHoffman 19y ago
You talk as if uncov is some kind of calculated move to get them press for persai. This kind of thinking pretty much forgets the fact that people usually start sites like uncov as a hobby, or as they would put it, "for the lulz." They probably had no idea they'd be even as popular as they are now. The amount of attention it's getting now only suggests that maybe they have a pretty good point.
- brett 19y ago
  I definitely didn't mean to suggest that I think they did Uncov in a calculated move for press. I don't doubt that it arose organically as you suggest. I just think it goes to show that doing something like Uncov can be short sighted. I'm not really sure that attention is a good indicator of having a good point. Bill O'Reilly gets a lot of attention. It's not necessarily because he is making good points.
  - chuckHoffman 19y ago
    Maybe not in your opinion, but certainly in somebody's.
imakethings 19y ago
Its not a web 2.0 startup and I think thats the point of Persai. Persai from what I hear is going to be fairly void of the things that make up the 2.0 web dance. Its be a web application that actually does something of value for the user. Another web application I admire is Amigo created by the folks at Carsonified (was known as Carson Systems). Instead of spooging loads of ajax everywhere and calling them platforms and technologies, actually build something someone can use.

davidw 19y ago

/me points to the Teddy Roosevelt quote again: http://news.ycombinator.com/item?id=66782 http://news.ycombinator.com/item?id=66782

eusman 19y ago

he talks too much shitting other companies when instead he should concentrate on his startup... by the way his idea is already implemented by others: www.feeds2.com "All these companies will keep getting bought up, but the acquirers are not going to see great returns." gettting acquired without the potential of revenue? show us these dump acquirers, others would be interested too! he sais he likes companies like Joost, that have real technology behind them. Yeah, it also has 100 employees.

hello_moto 19y ago
I'm sure he is concentrating on his startup. What's wrong if he took a short break to write Uncov article? So what if his idea has already implemented? Google's idea had been implemented by others as well. Just that Google does it better. It's possible that his startup might do it better. I kind of agree with you that he has no solid data on these "dumb buyers" but I think the word "acquired" should be swapped with "invested". There are a lot of web 2.0 companies that don't have strong revenue but got a lot of money via investment. Let me ask you back, can you give example of web 2.0 companies with strong revenue record? The best deal I've seen so far was Flickr's 30-40 million dollars. The rest seem to be over valued. What's wrong with Joost and 100 employees? If Joost really needs 100 employees, be it. They have a solid product compare to most of YCombinator companies out there. By the way, out of 50 YComb companies out there, I only use Reddit.
- eusman 19y ago
  I like Joost. You got that one wrong. It's natural investments may turn out wrong. Especially when expectations are larger than the potential, which is what happens.. He can do whatever he wants with his free time. I don't care. But telling everyone that is pointless if you don't solve a computer science problem, he is really illusionating himself. And raising his recomendation engine as the ultimate computer science problem is really ridicilus. I will put it this way: It was said during the International Symposium in Computer Architecture this year, although, i'd be mistaken who said it. I think it was put something like this to the crowd: "We asked teenagers to tell us what is the most significant discovery. Their answer? YouTube That's what happened, we've gone so far with technology that we neglected what is important to the people."

jraines 19y ago

I'm fond of the quote "If you're bored, it's your fault." I think it must apply triple to someone working at Google. I'm guessing he was eased out for surfing /b/ too much.

tychay 19y ago

I'd defend you Ted, but I'm too busy laughing. http://terrychay.com/blog/article/ycombinator-xobni-party.shtml http://terrychay.com/blog/article/ycombinator-xobni-party.sh...

DaniFong 19y ago

It's like he's thinking the same thoughts I have, except he's not afraid to be mean about it. O.o

asdflkj 19y ago

"All these companies will keep getting bought up, but the acquirers are not going to see great returns." This struck me as the thing we don't talk about here--not unlike certain topics you don't talk about with old German people. Is there data on how much revenue startups bring to companies that buy them? Another way to approach this issue: if startups are capable of revenues that justify the enormous amounts that BigCos are paying for them these days, why is there such focus on having an exit? If startups are so much better at solving problems than BigCos, why can't they solve the problem of pulling in revenue better, too? This is not meant to refute the antecedent. It's an actual question that I'd be glad to hear someone answer. Some startups do end up with healthy revenue, but you'll notice that their expected source of revenue was obvious from the start. Not so with most YC startups.

nostrademons 19y ago
Risk mitigation. Most large tech companies don't purchase startups for the revenue they bring in. They purchase them because they are deathly afraid that some startup will become the next big thing that renders their revenue stream obsolete. It's happened often enough that big companies have reason to be concerned: think of how the computer world would look different if IBM had bought Microsoft instead of licensing their software, or if Yahoo had bought Google when it was an early-stage startup. If you look at the > $1B acquisitions, almost all (except Skype) have been for companies that fundamentally threaten a large company's business model. If Google hadn't bought YouTube, Viacom's lawsuit against it might have set a precedent that literally puts Google out of business. If EBay hadn't bought PayPal, it would've opened the door to a payment service that wasn't controlled by Ebay yet was frequented by all of EBay's customers; it's not a huge leap for Paypal to start offering its own listings then. Startup founders have the opposite risk profile: their wealth is all tied up in one company, so if they don't take over the big company's market, they get nothing. Most founders would rather take their $40M payout and diversify. So basically it comes down to risk aversion. Say that a startup has a 1% chance of displacing the big company (worth $100B for the sake of argumentation), and a 99% chance of eventually failing. For a big company, 1% is far too large a chance of losing everything, particularly when they have the cash & stock to avert the possibility entirely. For a founder, $1B is a helluva lot of money, and far better than a 1% chance at being the richest man in the world yet a 99% chance of nothing. There's also a moral hazard issue, in that the people actually responsible for footing the bill are stockholders, yet the company executives have a far stronger incentive to not look bad by botching an acquisition than to save $1B. Many money managers hate acquisitions, because it's by far the favorite way to destroy shareholder value. But few CEOs will be replaced for making too many acquisitions, while it's almost guaranteed that they will be replaced if they fail to make the acquisition that becomes a major competitor. A pithy way to put it might be "Big companies are driven by fear, yet startups are driven by greed." That gives both of them incentives to agree on an acquisition price higher than fair market value.

ereldon 19y ago

the funny thing here is that ted is the prototypical candidate for ycombinator: - technical skill: math degree, radrails - belief in tech meritocracy - ambition to solve a hard problem thats why ted's criticisms hurt so bad -- he is slamming his peers. at least give uncov some credit for both brains and balls. life without these guys would be more status quo, which is not what any of us want.

pg 19y ago
We don't consider only technical ability. Character and judgement also count.

Harj 19y ago

"If the business is every widget under the sun conglomerated into this giant application, there's no real technology there. There's no noteworthy computer-science problem being solved." try to solve computer-science problems is a reason why startups fail. it doesn't matter if there's no "real" technnology - the thing could be built in lego bricks as long as it solves a USER pain it's irrelvant.