Black Swan Farming • Hacker News Board

Re: Black Swan Farming

#231

Post by adrianhoward » Mon, Sep 10, 2012, 9:25 AM UTC

bambax wrote: post #223

adrianhoward wrote: post #202

Earlier quoted context omitted.

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 t…

DropBox is awesome - and I use it myself :-)

Before I used it DropBox was just another file sharing/syncing software. One of a whole stack of 'em that all seemed to suck in one way or another.

I'm sure that they all promised that they would be bringing cloud file storage to the masses as part of the initial pitch.... and I tried them all because, like you, I wanted this service before any of 'em existed.

Why did DropBox win and all of those others failed (or, at least, didn't succeed so wildly)? Why was it obvious to investors that DropBox was going to win, and the others "fail"?

Re: Black Swan Farming

#232

Post by gmac » Mon, Sep 10, 2012, 9:26 AM UTC

Estragon wrote: post #207

bambax wrote: 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…

Frankly, I still don't understand why everyone's so excited about dropbox.

For me, Dropbox beautifully solves four hard problems:

1. Keeping all my documents in sync between several computers, so that I can pick up work on any one of them at any time

2. Off-site incremental backup

3. Sharing and working on a set of project files with non-technically-minded collaborators

4. Sending and receiving large files

Moreover, it just sits there quietly solving problems 1 - 3 day-in, day-out, and I never have to think about it.

Re: Black Swan Farming

#233

Post by rsheridan6 » Mon, Sep 10, 2012, 9:32 AM UTC

hasenj wrote: post #171

Am I the only one to notice that both AirBnB and DropBox actually have a viable business model and a real way to make money? I think this would be a good metric. I mean think about it, if you're a startup and your only strategy is to burn money making an awesome product that's free, how on earth are you going to return 1000x on investment?

I have no idea, but isn't that exactly what Facebook and Google did?

Re: Black Swan Farming

#234

Post by rsheridan6 » Mon, Sep 10, 2012, 9:39 AM UTC

sidman wrote: post #65

So it seems for investors, the big winners are simply based on luck, there is no logical factor that you can easily pick out that will give you a better chance of winning accept for possibly experience over a number of years that allows you to pick the features of a successful startup that initially doesn't look like they are going to be successful (maybe a glimmer in the founders eyes, something that isn't completel…

I think there is a way to improve your chance of winning big - don't invest in startups that serve niche markets. Look at this list of YC companies from last summer: http://www.quora.com/Who-are-the-Summer-2011-Y-Combinator-co...

Don't you think you can you pick out some that had zero chance of becoming massive-scale homeruns, because they served sort of a niche market? There are none that were obviously (to me, or apparently to pg and co) going to be unprofitable, but if you want the next Facebook, you're not going to get it by investing in, say, Codecademy, which, as laudable as its goals are, only appeals to newbie coders, who are a tiny slice of the population.

Re: Black Swan Farming

#235

Post by Tichy » Mon, Sep 10, 2012, 9:43 AM UTC

My takeaway seems to be don't apply to YC unless my startup has the potential to become a billion dollar company.

Re: Black Swan Farming

#236

Post by playhard » Mon, Sep 10, 2012, 9:49 AM UTC

paul wrote: 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…

Brilliant. From the heart.

Re: Black Swan Farming

#237

Post by hasenj » Mon, Sep 10, 2012, 9:49 AM UTC

rsheridan6 wrote: post #233

hasenj wrote: post #171

Am I the only one to notice that both AirBnB and DropBox actually have a viable business model and a real way to make money? I think this would be a good metric. I mean think about it, if you're a startup and your only strategy is to burn money making an awesome product that's free, how on earth are you going to return 1000x on investment?

I have no idea, but isn't that exactly what Facebook and Google did?

Facebook (AFAIK) is not quite profitable yet, but it does have a business model: selling ads. The same business model that Google used, and the same business model that the TV industry has been using (very successfully) for decades.

If you build a company with no business model other than hoping for a nice exit (usually as a talent acquisition) there's no chance that you can give your investors 1000x returns. This should be obvious.

Re: Black Swan Farming

#238

Post by dschobel » Mon, Sep 10, 2012, 9:52 AM UTC

Gustomaximus wrote: post #137

gersh wrote: post #108

Earlier quoted context omitted.

So, if you randomly decided which startups to invest in, would you be more successful? Can you really predict anything? If you randomly invested in 100 startups, would your returns be better than your screening process? Can you test this?

They do something similar with equity trades. They get professionals and public entrants to select stocks and include a 'dartboard'. From my limited reading experience the dartboard rarely wins implying people do add value, but it would be interesting if someone could find a history (I didn't with a quick Google). In Australia one news paper includes an Astrologer which I find amusing. With start-ups I think it would…

Link: http://www.automaticfinances.com/monkey-stock-picking/

On October 7, 1998 the Journal presented the results of the 100th dartboard contest. So who won the most contests and by how much? The pros won 61 of the 100 contests versus the darts. That's better than the 50% that would be expected in an efficient market.

Re: Black Swan Farming

#239

Post by richardw » Mon, Sep 10, 2012, 10:11 AM UTC

pg wrote: post #59

thaumaturgy wrote: post #55

Earlier quoted context omitted.

Off-topic, but something I've been chewing on lately: what's it like to have your every written (or spoken!) word analyzed by a bunch of people? Esp. people that you end up having some form of contact with. It seems like it would be difficult to just have a public conversation about a topic. Do you think about that much when you write?

It's pretty grim. I think that's one of the reasons I write fewer essays now. After I wrote this one, I had to go back and armor it by pre-empting anything I could imagine anyone willfully misunderstanding to use as a weapon in comment threads. The whole of footnote 1 is such armor for example. I essentially anticipated all the "No, what I said was" type comments I'd have had to make on HN and just included them in t…

Two thoughts.

1, that's terrible. So many benefit from the ability to read (and interact with) your opinions. It's so much more valuable than a random once-off Reddit AMA. It's a shame the value is reduced through the actions of a few.

2, this community attracts young smart people, exactly those who might want to match wits with you. Some of it is valuable, some is just annoying. I'm reminded of the niceness value in discussion; if everyone was nice about it, maybe you wouldn't feel as apprehensive or besieged and we could still have a good debate to extract the maximum benefit.

In the end, I hope you find some way to care less about the opinions, because what you do and write about are so valuable. In the spirit of "If you aren't writing enough wrong stuff, maybe you're being too cautious."

Re: Black Swan Farming

#240

Post by barking » Mon, Sep 10, 2012, 10:19 AM UTC

I can't think of any reasons why Dropbox would have 'seemed like a bad idea'. OTOH I can't understand why it's so valuable either because 1)it seems pretty vulnerable to being replaced by something smarter. 2)I think there must be a lot of people like me who keep their storage below the free 2GB limit.