Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

No science, no startups: The innovation engine we're switching off

steveblank.com

Post reply on HN
Print view View original

311–320 of 528 posts

Re: No science, no startups: The innovation engine we're switching off

#311

Post by khafra »

quantummagic wrote: post #277

Then fund science. Just because the government has done it previously doesn't mean it always has to be like that forever. Maybe if science depended on the average Joe actually having a living wage, enough to donate some directly to science, the incentive structures of our society would become more healthy than they currently are. Rich people, worrying about rich people jobs and outcomes, is getting a little tiresome.…

> Then fund science. Just because the government has done it previously doesn't mean it always has to be like that forever.

I do. I'm not one of these wealthy startup founders, just a guy earning a salary--but I've donated to foundations doing basic research many times; and even to individual researchers when they lost a grant but were doing work that I wanted to see the results of.

However, funding science in general this way is likely to miss a lot of value. Not everyone makes basic research a priority in their charitable giving. More importantly, not everyone has my impeccable research taste: not to sound elitist, but if the average American's priorities determined the directions for basic research, we'd have thousands of studies on why vaccines cause autism, an nothing on weird stuff like the medical potential of gila monster saliva.

Re: No science, no startups: The innovation engine we're switching off

#312

Post by vpribish »

kristianp wrote: post #280
aurareturn wrote: post #267

Earlier quoted context omitted.

Share buyback is the same as giving dividends - except the share holder doesn’t have to pay taxes until they sell. To the company, they spend the same amount on share buyback vs giving dividends. I don’t see how this argument holds up. Further more, while some might argue that corporate R&D is better due to being closer to the problem but it is private research and not shared with the world like university research i…

It's not exactly the same: if the company does buybacks and then loses value or goes bankrupt, shareholders never get the benefit of those buybacks.

depends how sophisticated the investor in the story is. it thay are perfect homo economicus they would have been selling some of those inflated shares to do what they would have done with the dividends

Re: No science, no startups: The innovation engine we're switching off

#313

Post by vpribish »

ActorNightly wrote: post #63
dkyc wrote: post #29

Earlier quoted context omitted.

It's not even clear that the premise is true. There's lots of 'research' done in the big tech companies. The biggest reason why companies don't seek to emulate "Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE", is probably that it reads like a list of textbox examples of "companies that failed to execute on their research findings", so clearly there was something wrong with this approach.

The bigger problem today is that there is simply nothing more left to research. Everything that is being worked on are at most optimizations, which allways have a dollar spent vs dollar returned amount on them.

you will look back on this and feel so silly.

Re: No science, no startups: The innovation engine we're switching off

#314

Post by noobermin »

SushiMon wrote: post #272

TBH, it makes sense for large incumbents to sell out science on the altar of politics because they are now will profit more from rent seeking than from innovation.

The gravy train will crash. Fortunately, given many of those who facilitated it will die within 20 years, and then that will be someone else's problem.

Re: No science, no startups: The innovation engine we're switching off

#315

Post by rester324 »

What pisses me off the most about this, is that CEOs still preach about how life-long learning is a must. Stop that fucking bullshit, will ya? If you as a CEO don't give a flying fuck to invest in knowledge, than you have no right to preach from that high horse of yours to do that myself.

edit: to clarify I am arguing against putting in the effort on my own expense which benefits the company because I need to foot the bill which the company should have, so I am not arguing against such self-improvement which obviously benefits me

Re: No science, no startups: The innovation engine we're switching off

#316

Post by ludicrousdispla »

twobitshifter wrote: post #48
terminalshort wrote: post #3

> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

> Jobs was always thinking Apple could do better with the money in R&D

Turns out Jobs was right, relevant article from 2006:

https://appleinsider.com/articles/06/01/16/apples_jobs_says_...

Re: No science, no startups: The innovation engine we're switching off

#317

Post by barchar »

helsinkiandrew wrote: post #73
twobitshifter wrote: post #48

Earlier quoted context omitted.

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

> Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. To be fair share owners also like the stock price to go higher, they also like dividends (and higher dividends would tend to drive the stock price higher too), but an X% increase in share price caused by buybacks is favoured over an X% dividend because it isn’t immediately taxed.

Dividends actually directly lower the stock price. Keep an eye on your portfolio when your holdings go ex-div -- the price falls because it no longer includes that cashflow.

Re: No science, no startups: The innovation engine we're switching off

#318

Post by ludicrousdispla »

MathMonkeyMan wrote: post #261
j2kun wrote: post #38

> Engineers design and build things on top of the discoveries of scientists I agree with a lot in this post, but I think it's also worth mentioning how this is a two-way street. Practical considerations often drive theory research as much as the other way around.

I like to imagine that thermodynamics happened because industrial metallurgy and boiler design advanced to the point where people started asking "what are the fundamental constraints?" There's a chance that it didn't actually happen that way, though. edit: I also heard that Louis Pasteur did work for breweries, answering the question "Why do some batches come out nasty while most are fine, given the same inputs?"

The history of steam engines would suggest that our understanding of thermodynamics developed out of a large base of first-hand experience. Same story for Calculus. And the t-statistic was developed by a QA guy (student) at Guinness.

Re: No science, no startups: The innovation engine we're switching off

#319

Post by barchar »

cgh wrote: post #104
helsinkiandrew wrote: post #73

Earlier quoted context omitted.

> Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. To be fair share owners also like the stock price to go higher, they also like dividends (and higher dividends would tend to drive the stock price higher too), but an X% increase in share price caused by buybacks is favoured over an X% dividend because it isn’t immediately taxed.

Also, I believe in the US ordinary dividends are taxed at the income tax rate which is much higher than the capital gains rate.

No, most dividends are "qualified" and taxed at the long term capital gains rate, assuming you've held the underlying for a decent amount of time.

Still, they're taxed, whereas buybacks allow the shareholders to control exactly when they take income.

Also buybacks will tend to select for frequently traded shares with high cost basis, further reducing total taxes and selecting for longer term shareholders. They really are just better than dividends in every way.

Re: No science, no startups: The innovation engine we're switching off

#320

Post by barchar »

triceratops wrote: post #74
bulletsvshumans wrote: post #58

Earlier quoted context omitted.

But dividends also result in a concrete financial reward for all shareholders, yes?

> all shareholders That's the key phrase, they benefit all shareholders. Buybacks on the other hand only benefit the following shareholders: 1. those with regularly vesting stock options and stock grants - basically employees. For non-tech companies especially, this only means high-ranking employees 2. those who intend to sell - that is, soon-to-be-ex shareholders 3. those who borrow against their stock - typically h…

Actually no, they have the same benefits as a dividend except they don't create a forced tax liability.

Stock grants can actually include dividends.

Even if you don't sell or borrow against it you benefit because you don't have that tax liability, and the money you woulda paid in taxes can continue to be invested.

Post reply on HN