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Winter Is Probably Coming Soon

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Re: Winter Is Probably Coming Soon

#71

Post by nostrademons »

no_future wrote: post #66
mbesto wrote: post #56

Earlier quoted context omitted.

> Can somebody explain to me why every startup company(or at least every one that articles are written about) feels the need to raise as much VC as possible ASAP? 1. It pays the bills. 2. Raising money is a strong signal of success both from a personal entrepreneur perspective and for the success of the team (whether you disagree with that notion or not, it's simply true). Whether that translate to success is a diffe…

>Heh, if it's that easy then, ummm, go build it? I did not mean to say that I could build a product like these to demean or belittle them in any way. The vision, ideas and UX execution behind them were clearly thought up by inspired and talented people. What I mean to say is that from a purely technical standpoint, they would be trivially easy to build, so I don't see why you would need to raise millions to pay for "…

So, I think it's very reasonable that 1 or 2 completely non-technical cofounders can team up and learn RoR or Django and put a product together on Heroku or AppEngine.

The problem is that they're competing with all the other completely non-technical cofounders who can do the same thing.

Most of the viable large-scale CRUD apps have already been picked clean. Much of what remains is niche software (eg. lifestyle SaaS businesses) or very non-obvious (eg. Facebook - it was technically trivial when it started, but it also wasn't obvious that there was a viable business in social networking until Zuckerburg went and built it). My prediction is that a lot of the startups that succeed over the next few years will involve some key technology that requires technical skill and domain knowledge to produce.

Re: Winter Is Probably Coming Soon

#72

Post by cdent »

jjoonathan wrote: post #58
cdent wrote: post #55

Earlier quoted context omitted.

Capitalism is cancer.

Capitalism, like cancer, can't be avoided. Economics is more like the laws of physics than a game of Monopoly: you can't really opt out of it because it simply describes the way things "want to" work (people competing for scarce resources). Unlike cancer, I suspect that if we're sufficiently clever we can figure out a way to manage the symptoms in perpetuity.

So you think some "we" can be clever enough to manage economics but some "we" (perhaps same, perhaps different) can't be clever enough to manage cancer. Bummer.

Re: Winter Is Probably Coming Soon

#73

Post by mbesto »

no_future wrote: post #66
mbesto wrote: post #56

Earlier quoted context omitted.

> Can somebody explain to me why every startup company(or at least every one that articles are written about) feels the need to raise as much VC as possible ASAP? 1. It pays the bills. 2. Raising money is a strong signal of success both from a personal entrepreneur perspective and for the success of the team (whether you disagree with that notion or not, it's simply true). Whether that translate to success is a diffe…

>Heh, if it's that easy then, ummm, go build it? I did not mean to say that I could build a product like these to demean or belittle them in any way. The vision, ideas and UX execution behind them were clearly thought up by inspired and talented people. What I mean to say is that from a purely technical standpoint, they would be trivially easy to build, so I don't see why you would need to raise millions to pay for "…

> Why pay $230k a year for a "scalability/reliability engineer", when I could pay exponentially less to Google or AWS and not have to worry about anything?

I think you're massively undervaluing the complexity of systems at scale. Let me give you a more concrete example. In Facebook and LinkedIn there is a feature that says "You may know this person". It's a small box in the upper right corner and looks like the smallest feature ever. But the underlying complexity of building such a feature is easily millions of dollars worth of man hours. Just that small feature has probably single-handedly grown those companies by > 1x factor. You don't get that simply by "throwing it at AWS".

I appreciate your enthusiasm for this topic, but I think the lens at which you see the startup world is being blurred by media and survivor bias. There is so much under the tip of the iceberg that 99% of the people here will never see.

Re: Winter Is Probably Coming Soon

#74

Post by mbesto »

dasil003 wrote: post #68
surfearth wrote: post #65

Earlier quoted context omitted.

The majority of funding for the VC industry does not come from the super rich, but rather endowments, pensions, and other forms of institutional capital. These institutions do have many other markets where they invest their capital, most of which are more attractive on a risk-adjusted basis when taking into consideration the illiquid nature of venture capital as well as the high fees.

You sound like you know a lot more about the VC industry than me, but if what you say is true, why is there still so much VC money flowing?

VC (the VC money you and I all see on TC every day) is just one asset class of many. In most funds, it usually represents consistently giving high returns this 10% might increase over time. But for now, VC is largely regarded as "high risk, high return". Generally speaking, VC and hedge funds are TERRIBLE places to put your money, but funds still put money into them because it spreads their whole portfolio risk.

Re: Winter Is Probably Coming Soon

#75

Post by no_future »

mbesto wrote: post #73
no_future wrote: post #66

Earlier quoted context omitted.

>Heh, if it's that easy then, ummm, go build it? I did not mean to say that I could build a product like these to demean or belittle them in any way. The vision, ideas and UX execution behind them were clearly thought up by inspired and talented people. What I mean to say is that from a purely technical standpoint, they would be trivially easy to build, so I don't see why you would need to raise millions to pay for "…

> Why pay $230k a year for a "scalability/reliability engineer", when I could pay exponentially less to Google or AWS and not have to worry about anything? I think you're massively undervaluing the complexity of systems at scale. Let me give you a more concrete example. In Facebook and LinkedIn there is a feature that says "You may know this person". It's a small box in the upper right corner and looks like the small…

I have to disagree with you here. Elasticsearch has a "more like this" feature built into it, which would give you pretty much the desired functionality you're describing that Facebook and LinkedIn have. It's a free and open source technology that I've installed and maintained on my servers. All you have to do is feed it some JSON, which you can modify as you choose to bias it to your exact specifications. Google and AWS offer cloud search and database features which already have this type of functionality implemented for you - all you have to do is wire it to your app. I'm not saying that these problems were trivial to solve in the first place, but THEY HAVE ALREADY BEEN SOLVED BY GOOGLE AND AMAZON AND FACEBOOK AND A MILLION OTHER COMPANIES' ENGINEERS, and made available to you in a nice and easy to use package with a bow on top.

See here: https://cloud.google.com/products/bigquery/ https://cloud.google.com/products/cloud-datastore/ http://aws.amazon.com/cloudsearch/

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