Earlier quoted context omitted.
> I don't know how he came up with that By looking at history. If you look lists of the most valuable startups the vast majority of them didn't have any trouble raising money. In fact, I can only think of a single recent (last 10 years) counterexample.
Alternatively, this just shows that it's hard to build the NBT without funding.
Things I wish someone had told me before I started angel investing
101–110 of 231 posts
Re: Things I wish someone had told me before I started angel investing
#102Earlier quoted context omitted.
Alternatively, this just shows that it's hard to build the NBT without funding.
The causality definitely runs both ways. If a company is perceived as an NBT, and that results in investors piling on, then the company is that much more likely to actually become an NBT. That's one of the reasons investors like to pile on: just because a prophecy is self-fulfilling doesn't make it any less accurate (just the opposite in fact).
Re: Things I wish someone had told me before I started angel investing
#103Earlier quoted context omitted.
Something specific, or just unethical behavior in general?
Not "in general", but there is a long list of unethical behaviors that, sadly, can contribute to success. Selling snake oil. Abusing monopolies. Flat-out lying. However, it's not good to go to the other extreme. I've seen companies fail because the CEO bent over too far backwards to be ethical and as a result let people walk all over him. One of the qualities that seems to be required in a successful founder is a wil…
The problem with this vague advice is it leaves it to the reader to interpret what is and isn't ok. And readers are notoriously bad at this.
Re: Things I wish someone had told me before I started angel investing
#104Earlier quoted context omitted.
Try being the only one without a pile of patents on important tech in a patent war. Offensive use of patents + piles of money from market share and their own lock-in are among the reasons newer, big players are holding off older ones in the patent suits designed to eliminate competition with older ones. Originally, I thought I could just avoid what was patented until I learned how vague and ridiculous they are. Plus,…
You have an unusual set of ethics there. What you're describing for patents is not violating patent law , and I doubt you'd find many people in the tech industry who would equate potentially infringing someone's patent to adopting source code you don't own into your product in a copyright-infringing way.
The law says I can't reproduce what's in a patent without permission/license from the patent-holder. The law also says that your intent doesn't matter: unknowingly infringing is also a violation but with less penalties. The big players defining markets or entering mature ones file patents on as much of them as possible to maximize chance new competition will infringe on one of their claims. They also acquire companies for their patents. So, newcomers often have to violate patent law or pay some large amount to a bunch of companies just to get their product in the market if keeping it legal.
Or they just build, grab market share, and pretend patents don't exist. That's how almost all of them make it. The alternative is endlessly Googling patent databases about almost everything your business is doing in tech. I say good luck to a startup or SME trying to do that.
"You have an unusual set of ethics there."
The above advice was given to me by people who create patents for big companies. They said it's what their employers do. It's not my ethics so much as the only option that works without putting one player in a defensive, weak situation. That player still might get hit by NPE's, though. Whatever isn't deterred will involve a big payout to patent-holder or a bigger payout to lawyers that, if defense fails, results in an even bigger payout to patent holder.
"I doubt you'd find many people in the tech industry who would equate potentially infringing someone's patent to adopting source code you don't own into your product in a copyright-infringing way."
In their minds, that might be true. It wouldn't surprise me given that patent provisions aren't in a number of FOSS licenses. In legal reality, they're both a monopoly on a something that require a license to legally use. Thanks to bribery of politicians, the game is also rigged in favor of patent-holders and big incumbents most of the time.
Re: Things I wish someone had told me before I started angel investing
#105There is a small cadre of people who actually have what it takes to successfully build an NBT, and experienced investors are pretty good at recognizing them. I really do question this. The "problem of induction"[1] comes into play when you start talking about pattern matching and learning from "experience". That is, there's no guarantee that the future will look like the past. Before Zuckerberg was Zuckerberg, I wond…
Re: Things I wish someone had told me before I started angel investing
#106Earlier quoted context omitted.
I recall seeing a comment by Paul Graham somewhere to the effect that Zuckerberg set off his "founder detector" very strongly. This was after Zuckerberg was successful, admittedly, but it at least gives some suggestion that someone skilled at recognizing founders would have seen his potential.
Unless you saw something else, he was making a joke about having his own biases, not that he could identify Zuckerberg due to keen founder detection instincts: > And Graham knew that he had his own biases. “I can be tricked by anyone who looks like Mark Zuckerberg. There was a guy once who we funded who was terrible. I said: ‘How could he be bad? He looks like Zuckerberg!’ ” http://www.paulgraham.com/tricked.html
Re: Things I wish someone had told me before I started angel investing
#107> But the cool kids don't beg. The cool kids — the ones who really know what they're doing and have the best chances of succeeding — decide who they allow to invest in their companies. The company I was an early employee of (that ended up being a "unicorn") was not a cool kid, and we certainly were begging people to invest both at the angel stage and (especially) the series A stage. And those people got a really real…
OP didn't claim that the cool kids always succeed, or that the uncool kids never succeed. Just that they have higher odds.
we already have one person chime in with a counterexample (the person you replied to) and that is a very common experience. No, experienced investors are not pretty good at recognizing them. It's hilariously wrong to claim they are.
Re: Things I wish someone had told me before I started angel investing
#108While the points Ron raises are really good, there is another source of investing error which is "generals fighting the last war" effect. As an Angel investor you are drawn towards founders and companies that resemble you and your experiences. This is almost certainly going to lead you astray as conditions will have changed and everyone's experiences are so limited.
I was actually thinking of mentioning this, but there is a very strong counter-example: Google. One of the reasons Google went unnoticed for as long as it did (both Excite and Yahoo passed on opportunities to buy it for In fact, I think this is one of the reasons so many people are trying to re-invent Facebook. If Google could re-invent Excite and Facebook could re-invent MySpace (and Reddit could re-invent Digg) the…
I think the difference with Facebook is the network effect and that it is run by Zuckerberg. What ever failings Mark has a CEO he has one amazing strength which is a single minded focus to let no competitor to Facebook rise. As he has shown time and time again he will buy you out or outspend if you have any possibility of being a competitor.
Re: Things I wish someone had told me before I started angel investing
#109Earlier quoted context omitted.
Not "in general", but there is a long list of unethical behaviors that, sadly, can contribute to success. Selling snake oil. Abusing monopolies. Flat-out lying. However, it's not good to go to the other extreme. I've seen companies fail because the CEO bent over too far backwards to be ethical and as a result let people walk all over him. One of the qualities that seems to be required in a successful founder is a wil…
Anyone who defends Uber's behavior is shouted down. Are Uber's actions an example of necessary assholish behavior? In particular their Hell application for tracking Lyfts, which required using Lyft's APIs? The problem with this vague advice is it leaves it to the reader to interpret what is and isn't ok. And readers are notoriously bad at this.
No, I don't think so. But I have a conflict of interest here because in 2008 I made my own attempt at starting an Uber-like thing (I called it iCab). It failed before launch because we were unable to get any of the local cab companies to work with us. The idea of using black cars never occurred to us, so Travis gets props for that. I think he's gone way too far towards the dark side. But on the other hand, he succeeded where I failed so take that into account when deciding how much weight to give my opinion.
> The problem with this vague advice
Well, the problem is more fundamental than that: it's a judgement call, one which always depends on a totality of the circumstances at the time. I can't give you a formula for how to decide how ass-holey to be, just as I can't give you a formula for making any of the other myriad decisions it takes to successfully build a successful company. If I could do that, I'd be running my own successful company instead of wasting time hobnobbing on HN.
Re: Things I wish someone had told me before I started angel investing
#110Earlier quoted context omitted.
I was actually thinking of mentioning this, but there is a very strong counter-example: Google. One of the reasons Google went unnoticed for as long as it did (both Excite and Yahoo passed on opportunities to buy it for In fact, I think this is one of the reasons so many people are trying to re-invent Facebook. If Google could re-invent Excite and Facebook could re-invent MySpace (and Reddit could re-invent Digg) the…
Actually the "fighting the last war” effect was the reason everyone passed on Google. Almost all the VCs (and other companies) thought the search war and been fought and won five years before. Rather than looking at Google from an unbiased viewpoint (that Google was the first to solve search), they saw it as the 17th competitor in a mature market. I think the difference with Facebook is the network effect and that it…
Yes, that was exactly the point I was trying to make: Google is a counter-example to the theory that you should not fight the last war. (On the other hand, it is also a positive example, because no one has been able to displace Google despite there being no shortage of attempts.)