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Black Swan Farming

paulgraham.com

221–230 of 321 posts

Re: Black Swan Farming

#221

Earlier quoted context omitted.

Having people pick over every detail of what I write is something I like about HN -- it forces me to think more carefully about what I'm saying, and on a few occasions (tptacek, I'm looking at you) has even prompted me to go back and write further blog posts about specific points. Of course, my blog posts don't get nearly as much attention as your essays, and I don't have the problem of having people try to draw atte…

I can't tell here if you're just off-hand mentioning something you like about HN, or if you're also suggesting that it's something other people should like too. Your posts are more technical in nature, and can benefit from debate. Other people might write things that are more personal, or opinion, or thinking-aloud, and while a little bit of good-natured feedback from trusted people might be appreciated, lots of nitp…

I can't tell here if you're just off-hand mentioning something you like about HN, or if you're also suggesting that it's something other people should like too.

The point I was trying to make was that I would be disappointed if what pg clearly saw as a problem was "fixed", because for me it's a feature.

Re: Black Swan Farming

#222

Earlier quoted context omitted.

You're missing my point -- I was objecting to the "(at least among the innumerate)" bit. It would hurt YC's reputation among everybody who matters , whether innumerate or not, if 70% of YC companies didn't survive past Demo Day.

Hence the "at least", no?

Maybe this is just idiomatic, but when I see "it is thought (at least by people with property foo) that...", I read the parenthetical comment as meaning "people without property foo don't think this way".

Re: Black Swan Farming

#223
post #195

Earlier quoted context omitted.

Is it really that counter-intuitive, though? A sample of two "rock stars" doesn't seem to be enough to draw conclusions from it. For instance, whereas Airbnb can admittedly be seen as a questionable idea (but not outright bad), Dropbox (the idea, before implementation) sounds like a very good idea. Maybe not a $7b idea, but still very good. Of course, among the YC funded startups, there may be a lot of ideas that sou…

Dropbox (the idea, before implementation) sounds like a very good idea. Maybe not a $7b idea, but still very good I don't think so. My first encounter with DropBox was very similar to my first encounter with Google... but it was "Oh look - another way to share files" rather than "Oh look - another search engine". Or indeed many, many people's reaction to the release of the first iPod ("Oh look - another mp3 player").…

Although I predicted the iPod would fail (...!!), I strongly disagree with you about Dropbox.

I dreamed about something like Dropbox before Dropbox existed; I always have had many different machines that needed to be "synchronized" by hand. I carried around hard drives, and Iomega disks and whatnot, and used "Beyond compare" to sync all of those and it was a nightmare.

The recommendation model of Dropox had nothing to do with me adopting it -- I didn't receive a recommendation and didn't send any. But I was very excited when I was first able to use it, and still find it amazing.

Re: Black Swan Farming

#224

Earlier quoted context omitted.

I was attacked strongly for no good reason. Basically this UID was ruined because I am now an enemy of the HN mods. In the future, they wouldn't let me comment in positive terms about apple pie. The main reason for the attack was clear: I was commenting on how venture capital could do better, and that is a sensitive subject on HN. Further, the VC community is wildly arrogant and just insists on pretending to be the s…

0) It's very nice to see you change your position. First, "you did nothing wrong". Then, after I pointed out that you did, indeed, do something wrong, turns out you did it because "you were attacked strongly". This is a common behavior in elementary school, and not an acceptable mode of conduct in adult age, especially from a technical Ph.D. 1) There are plenty of people on HN who don't bow down before VCs. See patio…

My first comment on this thread was down voted to -4 quickly. That post did nothing seriously wrong on the HN rules. Since only a few users are able to down vote, that down voting had to be heavily or entirely from HN mods.

For more evidence, the down voting was well before any responding comments. That is chicken sh!t behavior from the mods.

So I was attacked, and not for anything I did wrong. Then I responded and defended myself and called names, and that was justified.

For your claim that later I violated the HN rules and, thus, engaged in childish behavior, here is a close analogy: It's against the law to hit someone on the street. But if you do hit someone, then they may hit you back just in self defense, and then they are not violating the law. All I did was to defend myself against a wildly unjustified attack.

It was the HN mods who misbehaved and started the fight, not me.

For my writing, it's clear enough and well organized, for a technical Ph.D. or anyone else. But most blog comments are just really short with little content. Many of my posts to HN have had some content.

And my main post here was of length comparable with the PG post I was responding to.

For making my posts shorter, responses on this thread have shown that even when I explain carefully, number points, give headings, give examples, provide summaries, etc., still many readers don't get it. In part the problem was mentioned by PG in his post -- people can willfully respond critically. Then, as PG mentioned, it can be good to have written enough to be able to point to the part of an original post they just didn't read.

In being so critical of me, you are just doing a playground thing of joining with the majority to form a gang to attack me as a group. It's mob behavior. The posts have not been at all thoughtful about what PG talked about and I responded about on evaluating projects and, instead, have just been gang hostility.

So why was I down voted? Not for length, some use of all caps, some use of sarcasm to try to raise interest and avoid being boring. No, I was down voted because I presumed to mention research to venture capital and, thus, rubbed the ego the wrong way on the VC community and, thus, also the HN mods.

If you don't want to read what I write, then don't.

But HN and I are done. HN is run by some nasty people, and I've had enough. PG has already indicated that he believes that HN has become too big to be easy to manage.

In particular, my UID is dead: The HN mods are angry with me, hostile, making me a target of gang hostility, and down voting just anything, e.g., my little line on the strong law of large numbers and utility functions you responded to.

The shame here is HN's. I'm leaving nothing of value.

But on leaving HN, sure, it's run by some nasty people. That's the shame of HN, YC, and PG.

Re: Black Swan Farming

#225

Earlier quoted context omitted.

You mentioning rock stars make me wonder if being a scout for a record label is similar. A band that's going to define a new genre or movement will sound nothing like anything currently popular, so it seems you have to identify the things that sound nothing like what's popular but that sound like what will be popular. Publishers, from what I can tell, have the same problem. One thing that I'm struck by is how many no…

With self publishing now, it is likely that unpopular works will persist. Over time there is more of a chance that anything great that was passed over will eventually find it's audience. Whereas in the past that stuff that didn't get published may have only existed as a single or few copies and was eventually lost to the passage of time.

That would be great, but it assumes a writer with marketing and promotion skills. Even if a large potential audience exists for a book, reaching that audience can be very difficult, which is a big part of the value large publishers offer.

Re: Black Swan Farming

#226

Earlier quoted context omitted.

I can't tell here if you're just off-hand mentioning something you like about HN, or if you're also suggesting that it's something other people should like too. Your posts are more technical in nature, and can benefit from debate. Other people might write things that are more personal, or opinion, or thinking-aloud, and while a little bit of good-natured feedback from trusted people might be appreciated, lots of nitp…

I can't tell here if you're just off-hand mentioning something you like about HN, or if you're also suggesting that it's something other people should like too. The point I was trying to make was that I would be disappointed if what pg clearly saw as a problem was "fixed", because for me it's a feature.

For you it is, for others it is not. You would be disappointed, others would be contented.

(I'm not picking on you btw, I have a tremendous amount of respect for you. But I don't think your desire for debate on what you write is suitable justification for other people putting up with the same, especially when it's discouraging them from writing.)

Re: Black Swan Farming

#227

Earlier quoted context omitted.

"That quote was the sketchiest part of the article for me, because the same math was used to justify the subprime mortgage bubble." Except that YC doesn't do this. They aren't funding 10x more startups and pg says he avoids finding out how many get funded afterwards because it's the wrong thing to optimize for. To put it another way, there are a lot of ways to bring down post-Demoday funding to 30% and most of them a…

Perhaps I'm misunderstanding this, but: "We'd have to be willing to fund 10x more startups than they would." I guess that if currently nearly all of your startups are getting VC funding, there are two ways to end up funding 10x more startups than VCs: 1.) Make the VCs fund 10x fewer startups or 2.) Fund 10x more startups yourself. (Or various combinations, of course.) #1 seemed absurd to me, so I read the thought exp…

Either you are or I am. ;)

"We'd have to be willing to fund 10x more startups than they would."

The contracted 'we would' is key. They WOULD have to be willing to do that IF they were going to pursue that goal. They aren't. He's positing the idea that if they were properly optimized for the black swans then they would see a much lower funding rate. Not that they should aim for a low funding rate for it's own sake. But, as he discusses, actually performing such an optimization is hard, not to mention the fact that making money isn't their only reason for running YC.

Re: Black Swan Farming

#228
post #12

The counter-intuitive nature of startup investing is a big part of what makes it so interesting to me. In most aspects of life, we are trained to avoid risk and only pursue "good ideas" (e.g. try to be a lawyer, not a rock star). With startups, I get to focus on things that are probably bad ideas, but possibly great ideas. It's not for everyone, but for those of us who love chasing dreams, it can be a great adventure…

Peter Thiel recently talked a little about this[1] counter-intutive phenomena (that pg states as that effectively all the returns are concentrated in a few big winners ): One intuition is that people do not believe in a power law distribution. They intuitively don’t believe that returns could be that uneven. So when you have an up round with a big increase in valuation, many or even most VCs tend to believe that the…

That actually makes a lot of sense. Ive been having some of the same thoughts, as almost all the profits from my own portfolio is from Apple stock, even though i also own, Amazon, Tesla, Arm and so on.

Perhaps thats why index investing is so succesfull, because you get the benefit of the outliers.. the bad ideas, or long shots, that suddenly skyrocket..

Re: Black Swan Farming

#229
I'm not a VC, but I don't see how most successful startups seemed like bad ideas. Google was entering a crowded field, but the field sucked (still does, actually) and Google was obviously superior early on. As for Paypal, do you remember mailing checks after winning Ebay auctions back in the 90s? As for Youtube, do you remember what it was like to share videos in 2004? Enough said. Dropbox was about unbreaking broken informal filesharing via email that everybody did at the time, an obvious improvement. Evernote was to Dropbox what notes were to files (I still have an ancient set of emails with every address, employers address, etc I've ever had, and it's extremely awkward). And did anyone else think it was odd to pay outrageous sums of money to make international phone calls when you could IM anywhere for the cost of an internet connection before Skype existed? Or that it was odd to have to buy a bundle of cable channels to watch shows at times chosen by someone other than yourself over the same internet connection your cable modem used (before Hulu and Netflix, that is)?

I wanted all of those services before they existed, which to me says that they never seemed to be bad ideas, unless you were unduly afraid of implementation/regulatory difficulties. It may not have been obvious which competitor was going to win, but it seemed likely without the benefit of hindsight that somebody would.

Facebook and Twitter seemed like fundamentally bad ideas to me at the time (in fact, they still do, but the world appears to disagree), and I just don't get instagram, but those are the exceptions that prove the rule.

Re: Black Swan Farming

#230
The important question is, can this be changed? Several processes involving randomness generates power law but with appropriate understanding and interference, these processes can yield either less drastic function or a bigger constant. The challenge is to understand exactly where, how and why our intuition fails and correct for that.
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