PG, In part you are correct, but you are making some huge mistakes and, in a saying from my past, are "straining over gnats and forgetting elephants". > That's made harder by the fact that the best startup ideas seem at first like bad ideas. I've written about this before: if a good idea were obviously good, someone else would already have done it. That's likely true from what you and Silicon Valley see, but that's j…
I'm sympathetic to what you are saying, but the DoD bit is the worst part of your argument. The DoD wasn't trying to profitably conduct (or fund) research.
Your point does not contradict what I wrote and is hardly even relevant.
Also I was totally clear that venture capital might not want to fund research. Instead my point, my recommendation, was that venture capital should consider and evaluate research that has already been done. But in information technology, Sand Hill Road will NOT do that. A-H won't do it. Menlo won't do it. KP won't do it. Sequoia won't do it. Founders's Fund won't do it. Silicon Valley will NOT evaluate research. PERIOD. No wonder their returns suck.
For the DoD, actually, if do some arithmetic on something like ROI, their deployments and even their research look good, MUCH better than Silicon Valley.
Let's take a simple example: If read Richard Rhodes, the atomic bomb project, The Manhattan Project, cost about $3 billion. And there was a LOT of duplication and failed directions. But apparently the Bomb saved about 1 million US casualties by avoiding invading the islands of Japan. So, we're talking $3000 per casualty. We're talking a financial bargain.
Want to do some ROI calculation on, say, GPS? How about the ROI of GPS and laser guided bombs? So, roughly get one bomb to do the work of some power of 10 bombs without GPS and laser guidance.
Want to do some ROI on, say, packet communications networks, i.e., the Internet, and just for the DoD uses?
Again, yet again, my point was that DoD has shown in rock solid terms for over 70 years that research can provide astoundingly powerful solutions to important practical problems. So, in my 'algorithm', the key in Step 2 is just such research, and the DoD has shown that such research is possible.
Just what part of this simple argument is too difficult to understand?
Look, guys, I know that it's possible to dream of typing in some Java, Python, C++, etc. for a social, mobile, sharing, app and hope to get rich. But, PG's essay explained how tough it is to evaluate such work early on, and the averages along Sand Hill Road just SUCK.
But the DoD has done well in essentially my three steps for 70+ years.
Gotta tell you, in broad parts of our economy and technology, what YC and SV use as project evaluations won't pass either the giggle or sniff tests. Instead, projects in applied science and engineering receive careful, detailed evaluation early on and, when a passing grade is given, execute with high success. We're talking dams, bridges, tall buildings, airplanes, and much more. Net, the evaluation techniques of SV are back in the paper airplane days.