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“A solution in search of a problem” is a low-rates phenomenon

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Re: “A solution in search of a problem” is a low-rates phenomenon

#71

Post by acdha »

Sohcahtoa82 wrote: post #61
malfist wrote: post #2

I thought this article had a good rule on how to differentiate dead end "solution in search of a problem" inventions and ones that might be successful. > whether the technology does something that would be useful if everyone had it, but is relatively useless at small scale I've often told my partner a lot of his "smart home" devices are solutions in search of problems. It seems to ride this line. Probably why despite…

I'm baffled at what purpose there is to voice-activated lights. Light switches are always at the entrance to a room. If I'm entering or exiting a room, I turn the light on or off as I pass the switch. This is going to be much faster than "Alexa, turn the computer room lights off" on my way out and then waiting to make sure it understood me. The only exception is my front porch light. I usually leave it off, but turn…

I think a lot of this comes back to the way everyone has been focused on building huge mainstream businesses for a long time. Many IoT devices are useful to many people but not at the scale companies like Amazon or Google want — people with vision or mobility impairments, for example, find voice control far more useful than other people but that isn’t a huge market and many of them are low income. Parents with babies probably use voice controls more than they used to but that only lasts so long and then becomes a problem until they protect the ability to have Alexa order more LEGO sets - and not anything people are jumping to subscribe to.

There could probably be a medium-sized business model which works but not the kind of hyper-scale vision that SV has favored. Apple seems to have the best balance putting the smarts in devices you were already buying for other reasons, and being able to concentrate more than one promotion cycle out which Google struggles with.

Re: “A solution in search of a problem” is a low-rates phenomenon

#72

Post by satvikpendem »

obblekk wrote: post #24

I really dislike these takes on low interest rates. As far back as the 70s (when interest rates were 8-15%), there have been random business ideas being started and shutdown (pet rocks, every airline ever, etc.). We don't remember those because they shutdown 40 years ago. Today, we only see the successful ones that survived (walmart, fedex, etc.). There's a legit question: why have long term interests declined over t…

Pet rocks were actually quite profitable, the creator made a few million dollars if I recall correctly. Contrast that to unprofitable ventures today, like food delivery companies or Twitter.

Re: “A solution in search of a problem” is a low-rates phenomenon

#73

Post by nottorp »

electroly wrote: post #8
black_puppydog wrote: post #5

> [...] products that ultimately turned out to be dead ends, like the Palm Pilot [...] Huh? I never had a Pilot, but from everything I've read about it (and how people who did have one describe it) it was quite amazing, and arguably the predecessor of the smartphone, no? I get that the product line is dead, but the concept was very much viable...

I had several Palm devices. As I recall there was a fairly long gap between the death of PDAs and the birth of smartphones. I certainly did not replace my Palm with a smartphone; I replaced it with nothing, and then years later I got a smartphone. Most of the things that are amazing about smartphones were not present on my Palm IIIe, FWIW.

No post body was provided.

Re: “A solution in search of a problem” is a low-rates phenomenon

#74

Post by Brian_K_White »

ipsi wrote: post #14
electroly wrote: post #8

Earlier quoted context omitted.

I had several Palm devices. As I recall there was a fairly long gap between the death of PDAs and the birth of smartphones. I certainly did not replace my Palm with a smartphone; I replaced it with nothing, and then years later I got a smartphone. Most of the things that are amazing about smartphones were not present on my Palm IIIe, FWIW.

> there was a fairly long gap between the death of PDAs and the birth of smartphones. Only if you define the birth of smartphones as starting with Android/iPhone. Palm released their own smartphones using the same OS as their PDAs (the Treo line) prior to that, and Microsoft had Windows Mobile plus a bundle of third-party manufacturers. Plus Blackberry had been around the whole time, too. Looking it up, it seems that…

Try Sammsung SPH-i300 from 2001

Even before that was a Kyocera but that was really nothing like an iphone and not that great to use. It was probably first or close to it, but took a couple other iterations to get good.

That Samsung was awesome though. I loved that thing even though I did and still do miss having a real keyboard, so that was actually not an aspect I loved, but it sure was slick and the universe of apps provided any funky functionality I wanted, because the apps could actually integrate with the phone and hardware. For instance out of the box the dialer was not that well integrated with anything else like the address book. But a guy sold an app that did that awesomely. That phone with that app installed pulled things together into the next level usefulness that we all take for granted as obvious now.

Re: “A solution in search of a problem” is a low-rates phenomenon

#75

Post by mym1990 »

epicureanideal wrote: post #63
mym1990 wrote: post #46

Earlier quoted context omitted.

The case for decrease of human talent(however you quantify that kind of metric, if it is even true) likely has little to do with population growth, and rather the quality of education that can be provided to a broad population.

Or to the reduced incentives available to most of the population. The very rich are accumulating more and even the upper middle class are struggling, and it might take decades of work to build up enough capital to start a small business, while someone with the right connections and half the talent is handed money for little effort.

Reduced incentives for what?

Re: “A solution in search of a problem” is a low-rates phenomenon

#76

Post by __derek__ »

Sohcahtoa82 wrote: post #61
malfist wrote: post #2

I thought this article had a good rule on how to differentiate dead end "solution in search of a problem" inventions and ones that might be successful. > whether the technology does something that would be useful if everyone had it, but is relatively useless at small scale I've often told my partner a lot of his "smart home" devices are solutions in search of problems. It seems to ride this line. Probably why despite…

I'm baffled at what purpose there is to voice-activated lights. Light switches are always at the entrance to a room. If I'm entering or exiting a room, I turn the light on or off as I pass the switch. This is going to be much faster than "Alexa, turn the computer room lights off" on my way out and then waiting to make sure it understood me. The only exception is my front porch light. I usually leave it off, but turn…

> Light switches are always at the entrance to a room.

Not necessarily. Open layouts have taken the office and residential markets by storm over the last two decades. Many "rooms" don't have well-defined boundaries, so it's common not to have a switch everywhere someone might enter.

Re: “A solution in search of a problem” is a low-rates phenomenon

#77

Post by FooBarBizBazz »

prottog wrote: post #66
obblekk wrote: post #24

I really dislike these takes on low interest rates. As far back as the 70s (when interest rates were 8-15%), there have been random business ideas being started and shutdown (pet rocks, every airline ever, etc.). We don't remember those because they shutdown 40 years ago. Today, we only see the successful ones that survived (walmart, fedex, etc.). There's a legit question: why have long term interests declined over t…

> why have long term interests declined over the past 500 years, accelerating in the past 50-100 years The cost of money (that is, interest) is based on two things: the time value of money, which is the concept that an amount of money is worth more now than the same amount of money later (above and beyond inflation); and the default risk, that you may not get back some or all of the money that you lent out. As the wo…

> the time value of money also decreased over time, as the quickening of the pace of technological advances meant that lenders could expect more returns over a shorter amount of time.

Isn't this backwards?

In a world where money has no time-value, a world where a dollar today is the same as a dollar tomorrow, and the same as a dollar five years from now, then, if there's no default risk, you can pay me back the same dollar I gave you, without interest. Zero interest rates.

In a world where everything changes rapidly and I might need money now, I'm going to demand a lot of interest before I'll lend you my cash. Because I'm incurring a lot of opportunity cost by parting with it.

If this were a reinforcement learning problem, we might specify a discount factor. If that discount factor were near one, then we'd have a long time horizon. If it were closer to zero, then we'd have a short time horizon.

I'd think that low interest rates would go together with a static, unchanging environment, in which money has very little time-value.

I do agree, however, with your earlier sentence:

> As the world became more stable over time, the default risk also lessened over time

Re: “A solution in search of a problem” is a low-rates phenomenon

#78

Post by Mezzie »

xyzelement wrote: post #35
mberning wrote: post #31

Earlier quoted context omitted.

Homes and cars are simply out of control. People are getting mortgage sized loans just to buy a family car. Something which will become worthless over 10 years of use. Getting a mortgage on a home is now a non-starter for a huge swath of the population. I suppose I can somewhat understand the price of homes going up. It's a durable item that, if reasonably maintained, has an unlimited useful life. A car on the other…

// People are getting mortgage sized loans just to buy a family car I mean... That's insane hyperbole right? Below you are talking about $30k cars, in what universe does that approach "mortgage sized"?

It's actually difficult to get mortgages for that small an amount. There were lots of properties here (MI) in that price range post 2008 and my dad ended up buying a house with a credit card because it was easier than trying to get a mortgage for that amount.

Re: “A solution in search of a problem” is a low-rates phenomenon

#79

Post by wolfram74 »

mym1990 wrote: post #75
epicureanideal wrote: post #63

Earlier quoted context omitted.

Or to the reduced incentives available to most of the population. The very rich are accumulating more and even the upper middle class are struggling, and it might take decades of work to build up enough capital to start a small business, while someone with the right connections and half the talent is handed money for little effort.

Reduced incentives for what?

What's the point in generating value if it's all being captured by the capital holding class?

Re: “A solution in search of a problem” is a low-rates phenomenon

#80

Post by alfalfasprout »

ak_111 wrote: post #22

I am wondering how much of the excessive (even to the point of lunacy) funding of stupid ideas in tech is due to a low-rate macro environment as opposed to a spray-and-pray gold rush that naturally gets triggered whenever someone hits gold in an area. After all it is hard to argue that AdSense, iPhones and AWS are not hugely profitable paradigm-shift innovations that would thrive in even the harshest macro environmen…

The thing is too... the spray and pray approach does work. The success of VCs is based very much on spray and pray at the end of the day.

The other thing people are forgetting is that many "unicorns" that are unprofitable do have a road to profitability. But the investor sentiment over the last 5-10 years has been to push companies to grow vs. try to become profitable fast at a smaller scale.

At the end of the day, one reason I suspect tech won't retreat in dominance is that the rate of return on capital is extremely high even when you factor in top end compensation for employees.

The change I do predict is that we'll return quickly to a "grow fast, fail fast" world where investors will be less willing to ride out investments that don't have a clear path to monetization in the future. Monetization will likely be emphasized from the get-go for founders. It won't be an after thought. In the past few years, some ridiculously dumb ideas were getting $5-10mm investments shortly after seed stage. I suspect that era is done for a while.

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