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Why There Aren't More Googles (2008)

paulgraham.com

91–100 of 169 posts

Re: Why There Aren't More Googles (2008)

#91

Using a different definition of Google than TFA : We have discussed recently a huge issue preventing new Google-like web crawling competitors from emerging : If you're not GAFAM(-like), and so aren't whitelisted, then anti-spam/DDoS filters like Cloudflare will simply prevent your crawler from working !

I've been working on a project that involves executing web crawling on a responsible scale but this has concerned me when I ramp to wider/regular fetching how will it be received by the web distribution mafia. I recall last time i set up my own mail server that it was very hard to do it in such a manner that emails from it were not automatically listed as spam

>web distribution mafia [...] set up my own mail server

One of the tragedies of the tech powerhouses is that their decision making that effects the rest of us is often thinly-veiled power tripping that they've convinced themselves is for the good of everyone. When in reality, they just haven't delivered good enough software to eliminate the problem entirely.

It's like a large scale version of a bad corporate computer security team. They can't quite design all the inconveniences out of their "solutions." Which is normally fine (after all what software and/or human-managed process is perfect the first time?), but out of a refusal to admit to their limitations they've convinced themselves that bureaucratic interactions with them to get day-to-day work done are necessary and important features of the design.

There are genuinely technical challenges with no good technical solution, so political ones are employed. But sometimes you start getting too many middle managers that think the answer to every problem that requires systems thinking is just more self-assured tough-talking or "we could make more money by NOT fixing this." And then suddenly all the nice properties of the system slowly start disappearing or have conditional access gates.

Re: Why There Aren't More Googles (2008)

#92
>Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain.

Well, this is obvious in hindsight. The same logic applies saying "Tip for YC: when you turn down a startup, consider letting them in, because there's a good chance startup will later become a unicorn".

This is not a strawman argument because is there really a "good chance" when you consider the odds of startups and the value distribution.

Re: Why There Aren't More Googles (2008)

#93
post #83

> Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain. There's no evidence that this is the case. Indeed, after founders are acquired their fierce competitive spirit and drive often starts to dissolve once the founders have gotten their exit and the teams run into the inevitable corporate realities that e…

I know lots of founders will read this, please for the good of humanity stop being acquired. I know the money is so alluring, but how much is your soul worth and will that money make you happy? The future of humanity depends on tech people making tiny principled stands like this over and over. Don’t believe the lies spewing out from the acquiring company. Nothing will ever be the same again and your product will be e…

The risk of a startup being acquired has also prevented me from buying startup's products, both personally and for my employers, because chances are the "great news, we got acquired" is anything but great news for the actual customers. That announcement is usually the sign to start looking for alternatives.

Re: Why There Aren't More Googles (2008)

#94

Earlier quoted context omitted.

> That said with the benefit of more hindsight I think the reason there are no more Googles is that FAANG has a stronghold on the largest technology markets. And the FAANGs are willing to pay very large amounts of cash to acquire promising startups. EDIT: Also why is it that the majority of the large tech companies are essentially marketplaces? Is there really that much friction in traditional markets (physical goods…

> Also why is it that the majority of the large tech companies are essentially marketplaces? They're not. Non marketplaces: Apple, Microsoft, Huawei, SAP, TSMC, ARM, Intel, Samsung, SK, Cisco, Nvidia, AMD, IBM, Texas Instruments, Salesforce, Oracle, ASML, NXP, Netflix, Zoom, Dell, VMWare, Adobe, Applied Materials, Broadcom, Micron, Qualcomm, Intuit, Foxconn, Snapchat, Ant Financial, PayPal, Square, Stripe, Fiserv, Er…

Many of those are hardware/network companies. They don't necessarily fall into the type of startups being funded now or going forward. Companies like Cisco are important but they represent the past.

Apple, Nintendo is a mix.

Paypal, stripe, square are products for marketplaces.

Netflix is a pass to a movie marketplace. Same for spotify. Groupon is a marketplace.

Re: Why There Aren't More Googles (2008)

#96
A 2020 version of this might be "why there aren't more Teslas."

Elon's might be a rare cat, but he's probably not one in eight billion. At this point, changing the world with a new FB or Google is more about dislodging monopolies then it is about innovation. Meanwhile, a promising startup in this space would find it quite easy to get big/late stage funding because of acquisitions.

A "tesla" will have a hard time getting funded for precisely the reasons laid out by paul.

The difference though, is that manufacturing is actually capital intensive. Google & Facebook needed investors to cover rent and salaries for a few years. Making lots of bets isn't as viable. You do actually need to make good bets.

Meanwhile, in the google/fb space it is now more true that acquisitions and monopoly dynamics are a major hindrance to "more googles." Investors certainly aren't shy to make these investments. Investments in Teslas are depressed by conservativism and ability to pick winners.

Re: Why There Aren't More Googles (2008)

#97
post #83

> Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain. There's no evidence that this is the case. Indeed, after founders are acquired their fierce competitive spirit and drive often starts to dissolve once the founders have gotten their exit and the teams run into the inevitable corporate realities that e…

Half-truths and wishful thinking are the fuel of VC and speculative economics

Paul Graham is one in 7 billion who stands out among billions of lesser educated.

He’s not a savant. His biggest success is early mover in a tech enabled society.

That’s not visionary, that’s following the social meme and being there at the right time.

Visionary in contemporary society means coming up with the next big thing itself; unifying scientific theories. Not seeing half-truths of reality in cherry picked stat bubbles of finance. There’s been no prediction of relevance just repeated habit

Billionaires are nothing more than gamblers who are propped up by monopolized politics.

Re: Why There Aren't More Googles (2008)

#98
post #83

> Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain. There's no evidence that this is the case. Indeed, after founders are acquired their fierce competitive spirit and drive often starts to dissolve once the founders have gotten their exit and the teams run into the inevitable corporate realities that e…

It makes a lot more sense from a 2008 perspective. Google IPOed in 2004 for 2-3% of its current market cap. The tech monopoly dynamic wasn't where it is now.

Also, he turned out to be right. Acquisition prices (eg fb acquisition of whatsapp, IG, etc) went up. Investors made a lot more small bets. A lot of "new Googles" got made. That may be played out already, but this is 12 years later.

Re: Why There Aren't More Googles (2008)

#99
post #39

No. The reason there are few FANGS is that they are platform businesses, and the value of their services is proportional (or more?) to the size of their user bases. This means winner-takes-all. There were others, but they did not grow users as fast, so they lost. Another thing to point out is that while search and ads is Google's revenue, with chrome, gmail, android, etc they are achieving a form of lock-in. If anyon…

There literally are more FAANGs than there were in 2008, when he wrote this.

Even Google itself was much smaller than it is now. A google's in a 2008 sense would not qualify as a new FAANG in 2020 terms.

Re: Why There Aren't More Googles (2008)

#100
post #86

Isn't it also that Google/FB/Apple just buy all the startups that could conceivably threaten them. Even the ones where the founders did hold out for a lot of money they just buy them anyway. Like WhatsApp (they got about $22 billion in the end!)

Now, I have no idea how this actually works, but everyone seems to be implying that startups don't have a say in whether they at all want to be acquired, regardless of the price. I don't understand why are there no companies that refuse any acquisition offers because they want to retain their independence.

I think there must be some degree of fear - for example Snapchat refused Facebook and now Facebook has copied every single thing Snapchat has done.

But it also must be pretty tempting when someone dangles millions (or billions) of dollars in front of you. You could easily just sell, and then go whatever you want with the rest of your life, do whatever good you intended to do elsewhere.

Or maybe you believe the hype and think you could fulfil your mission better with the might of a tech giant behind you.

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