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Why There Aren't More Googles (2008)

paulgraham.com

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

#111

Post by goatherders »

dkersten wrote: post #93
JohnJamesRambo wrote: post #85

Earlier quoted context omitted.

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.

No evidence this is "usually" true. It is sometimes true. It is also sometimes true that the acquired company thrives.

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

#112

Post by minikites »

socmedia99 wrote: post #97
rexreed wrote: 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; unifyin…

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

But if the success of a billionaire isn't entirely related to their singular genius and effort, what does that mean for me and my chances of success? It's uncomfortable to think about that so instead I'll pretend it really is only about their singular genius and effort and that means I can get there too some day. :)

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

#113

Post by alexashka »

JohnJamesRambo wrote: post #85
rexreed wrote: 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 future of humanity depends on tech people making tiny principled stands like this over and over.

No it doesn't.

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

#114

Post by rexreed »

goatherders wrote: post #111
dkersten wrote: post #93

Earlier quoted context omitted.

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.

No evidence this is "usually" true. It is sometimes true. It is also sometimes true that the acquired company thrives.

The deadpool of acquired companies runs very, very deep.

While it might not necessarily be true of 50%+ of companies that are acquired go into the deadpool, it's common enough that an acquisition of a company's product that you use should cause you at least to make sure you have some sort of strategy to deal with a potential deadpool situation. Maybe it's not a guaranteed probability, but it is indeed very likely.

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

#115

Post by ineedasername »

minikites wrote: post #90
JohnJamesRambo wrote: post #85

Earlier quoted context omitted.

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…

>I know the money is so alluring It's the only motivation. Why do you think wealthy and high income people fight so hard against repaying the society that educated them and provided the infrastructure to allow their business to flourish?

It's because most people want to believe that their success is due to their own specialness rather than some mix of luck and prior circumstances.

I forget where it came from-- I thin Warren Buffet but I can't source it now-- but there's a sort of thought experiment or anecdote about this: Give everyone in the US a dollar. Then randomly choose half the country and have them give their dollar to a specific person in the other half. Repeat this process with the remaining people until there's only 340 people that each have a million dollars, then talk to those 340 people: You'll have 340 stories of how they personally overcame the odds and beat out everyone else to become a millionaire

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

#116

Post by [deleted] »

dasil003 wrote: post #107
ineedasername wrote: post #106

Earlier quoted context omitted.

Sure, but we're talking about probability here. Established enterprise products from large companies usually have a published roadmap and guaranteed support period years in advance. It may be a mediocre product, but a business knows Oracle isn't going to kill off their ERP system any time soon, and also knows the minimum sunset date for all versions and can plan updates & upgrades accordingly.

If Oracle ERP is your standard it might be hard to get anything modern. Thought experiment, for which product are you more confident about its longevity: Google Voice or Basecamp?

[deleted]

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

#117

Post by PaulHoule »

benlivengood wrote: post #4
adamsmith wrote: post #2

> I've tried to explain this to VC firms. Instead of making one $2 million investment, make five $400k investments. Would that mean sitting on too many boards? Don't sit on their boards. Would that mean too much due diligence? Do less. If you're investing at a tenth the valuation, you only have to be a tenth as sure. This turned out to be absolutely right, and the That said with the benefit of more hindsight I think…

> 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…

I think supermarkets are well run because they are highly competitive and you go every week so if you see it as a prisoner's dilemma where they "fulfill the brand promise" or "don't fulfill the brand promise" they get punished then they don't fulfill it so they have a reason to fulfill it.

Thus Amazon is going to have a really tough time in that sector, but other parts of the retail sector tend to have you come into the door infrequently enough or are in uncompetitive markets so that they don't get punished for failing.

It's too common for people to blame the victim here, or say that people are asking too much but that's just plain wrong.

Some examples:

* That time I went to K-Mart to buy three numerals for my mailbox but they didn't have the "2" in stock.

* That time my wife bought a bra at Target that had a nice print but had a completely nonsensical design that wouldn't be comfortable on anyone

* Buying clothes at Target can be really hit or miss. I bought a shirt there once that was great but so often I find things that don't really fit, are poorly constructed, I can't stand the style.

* Same with shoes at WalMart. At best you might go there and find a $20 shoe that is similar to an $100 shoe from Brooks, not quite as good, but certainly not five times worse. Sometimes they only have crap

* Inevitably in the early spring I still need cold weather equipment such as electric space heaters (sometimes desperately, as in to keep animals alive) but Home Depot, Agway and all of those other stores quit stocking it.

* Small storeowners decide they won't get any customers in their last hour so they go home early; so they've decided that the customers that do come will go to a big box store next time

* Years ago Staples used to stock only junk brands for cordless phones and similar things (e.g. vtech); today Amazon pushes no-name products from Chinese suppliers which are occasionally excellent but often junk

A common factor in those failures is that the stores don't get feedback. K-Mart never knew they lost the sale of a "4" and "7" because they didn't get "2". The small storekeeper doesn't realize that "nobody will come in" is a self-fulfilling prophecy, etc.

People also discount the idea that "the customer is always right" to normalize bad behaviors such as not stocking space heaters when you need one right now for your chicken house -- somehow it is my fault for needing heat at the end of the cold season instead of the beginning.

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

#118

Post by ineedasername »

adamsmith wrote: post #2

> I've tried to explain this to VC firms. Instead of making one $2 million investment, make five $400k investments. Would that mean sitting on too many boards? Don't sit on their boards. Would that mean too much due diligence? Do less. If you're investing at a tenth the valuation, you only have to be a tenth as sure. This turned out to be absolutely right, and the That said with the benefit of more hindsight I think…

Yes, thought I think the smaller $ amounts have also been helped along by reduced startup costs. Heck, a startup can literally get $100,000 of AWS credit for free. In manufacturing terms that's like getting the factory for free, you just have to configure the assembly line to build your specific product. So $400,000 will go a lot further these days than it would have 20 years ago.

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

#120

Post by NineStarPoint »

BlueTemplar wrote: post #57
mtgx wrote: post #29

Earlier quoted context omitted.

As in they buy them out. There should be a more laws preventing this from happening for large corporations. We now see that Google Search is turning more and more to AI. Perhaps if Google didn't buy DeepMind, but some other smaller competitor did, they could've turned that into an advantage against Google. Either way, it was a loss for the market for DeepMind to be bought by Google instead of forcing Google to come-u…

No, companies that have billions in profit have grown too big : they can just use regulatory capture to ward off real threats. The only thing that can be done is to prevent them from getting that big (economic incentives ? limited company life ?) or to shut them down completely (which needs enough popular support for a politician to do this kind of a risky move).

Regulatory capture only works if we vote in people who let them do it. It’s not a much different issue to enforcement of rules that stop companies from getting too big or shut them down. The same thing that does or doesn’t let regulatory capture happen also stands in the way of any other government attempt to control the companies.
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