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Y Combinator's Altman: What I Worry About in Business [video]

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Re: Y Combinator's Altman: What I Worry About in Business [video]

#41

Post by lambdasquirrel »

dperfect wrote: post #17
firasd wrote: post #10

Great quote about ‘Unicorns’ (lightly edited from verbal form): “I looked through the list of companies that have an over a billion dollar valuation recently, and more than half, I think, were valued between like a billion and 1.5 billion, and something like a quarter were valued exactly at a billion. So people are clearly obsessed with getting to this mark, and they are willing to put all sorts of weird structure on…

Maybe Benford's Law[1] has something to do with the distribution being skewed toward the $1 billion mark (at least in part). [1] https://en.wikipedia.org/wiki/Benford%27s_law

Actually, I'm pretty sure it proves he's right. In these distributions, the percentages matter a lot. I think the mentioned figures were upwards of 50% for startups in the 1-2 Billion valuation range? That's a fairly nontrivial difference from the expected 30%.

Is there a real stats person around here? I bet that if you plugged in the numbers into the formulas in "Statistical Tests" in the link that you gave, it would pretty much show that Sam is right. When I punched in the numbers and ran the Chi-Square test, it seemed kind of off. :P

https://docs.google.com/spreadsheets/d/1FoSfPvRSLK04ySAfjEqE...

Re: Y Combinator's Altman: What I Worry About in Business [video]

#42

Post by eCa »

on_ wrote: post #21
seiji wrote: post #15

Earlier quoted context omitted.

How is it not dumb? It's an arbitrary number of digits in base 10 numerals. Perhaps your point would be better addressed during your next regularly scheduled Bloomberg interview?

> How is it not dumb? Because PLS Logistics Services does ~$100m a year more than dropbox (PLS rev is $515.6m) and has a growth rate of 42% and no one has ever heard of it. Dropbox was reportedly valued at $10 billion in November 2014, when it raised $350 million in its Series C[0]. You can plot the failure of the company on a graph inversely proportional to moores law, and yet they are "crushing it". So with less li…

> Because PLS Logistics Services does ~$100m a year more than dropbox (PLS rev is $515.6m) and has a growth rate of 42% and no one has ever heard of it.

The business version of "nobody goes there anymore, it's too crowded".

(But yes, I hadn't heard of them.)

Re: Y Combinator's Altman: What I Worry About in Business [video]

#43

Post by jaoued »

My view is that the ones, who first hand know will succeed are the founders and co. (even if they sometime doubt)... Investors, etc..., on the other hand, once they invest will always put the right spin and word to fullfill the prophecy. Before they invest, most of of them have no clue, hence invest in large numbers of startup projects with the hope, at least one of each portfolio will make boom for the entire portfolio.

"Prediction is very difficult, especially if it's about the future." dixit Niels Bohr.

Good interview from Sam though.

Re: Y Combinator's Altman: What I Worry About in Business [video]

#44

Post by [deleted] »

firasd wrote: post #10

Great quote about ‘Unicorns’ (lightly edited from verbal form): “I looked through the list of companies that have an over a billion dollar valuation recently, and more than half, I think, were valued between like a billion and 1.5 billion, and something like a quarter were valued exactly at a billion. So people are clearly obsessed with getting to this mark, and they are willing to put all sorts of weird structure on…

[deleted]

Re: Y Combinator's Altman: What I Worry About in Business [video]

#45

Post by peterjancelis »

vasilipupkin wrote: post #20

Great interview, but my advice for Sam would be to drop the use of "like". I think it makes him sound a little bit like a high school student :)

I also hate the overuse of the word 'like' but didn't notice it here until you mentioned it. It was fine.

Re: Y Combinator's Altman: What I Worry About in Business [video]

#46

Post by ThomPete »

seiji wrote: post #13
ThomPete wrote: post #5

Earlier quoted context omitted.

I am not actually sure why people have so much against the Samwer brothers. Have they done anything particularly despicable? I know their model is to copy any potential idea coming out of the US which I don't understand the issue with. One thing they really did well was to have a structure that makes it easy for them to localize any company. I hear the work environment is hard but so is it many other places. Or maybe…

copy any potential idea coming out of the US which I don't understand the issue with. Except, they don't just copy the idea, they copy the entire products and companies wholesale (interface, API, UI, user interaction model). How is that not bad?

So when italian restaurants copy each other it's bad?

Not sure I understand the issue.

Re: Y Combinator's Altman: What I Worry About in Business [video]

#47

Post by wpietri »

lmm wrote: post #39
wpietri wrote: post #29

Earlier quoted context omitted.

Personally, I despise them because they're parasites. I'm also not a big fan of, say, tapeworms. Sure, I don't doubt that tapeworms are also miracles of evolution. And sure, I guess even tapeworms have to eat. But at the end of the day, they're still parasites, and I still think they're repulsive. Ugh.

All businesses take things from those that have come before. These guys make money because they're providing a valuable service.

The problem isn't that they borrow ideas from others; it's that they do it in such volume and with such little creativity of their own. Zynga faced similar criticism:

http://www.forbes.com/sites/insertcoin/2012/08/08/a-photo-re...

Both companies do of course make money. But that doesn't entitle them to respect, just money.

Re: Y Combinator's Altman: What I Worry About in Business [video]

#48

Post by ThomPete »

peterjancelis wrote: post #36
seiji wrote: post #13

Earlier quoted context omitted.

copy any potential idea coming out of the US which I don't understand the issue with. Except, they don't just copy the idea, they copy the entire products and companies wholesale (interface, API, UI, user interaction model). How is that not bad?

I love how everybody in Silicon Valley claims ideas don't matter, only execution does, then hate on the company that is taking that maxim to its ultimate conclusion.

Exactly!

Re: Y Combinator's Altman: What I Worry About in Business [video]

#49

Post by on_ »

wpietri wrote: post #47
lmm wrote: post #39

Earlier quoted context omitted.

All businesses take things from those that have come before. These guys make money because they're providing a valuable service.

The problem isn't that they borrow ideas from others; it's that they do it in such volume and with such little creativity of their own. Zynga faced similar criticism: http://www.forbes.com/sites/insertcoin/2012/08/08/a-photo-re... Both companies do of course make money. But that doesn't entitle them to respect, just money.

They really drive home a few points often overlooked:

Business fundamentals are really important, while not the only thing, that are a critical aspect of longevity.

Ideas are less important than execution.

Porter's 5 forces model provides some basic criteria for evaluating competition. If you provide something easy to copy and the barriers to entry are low, it could be a good idea but not a great business. In one of Sam Altman's lectures the "when to expand internationally" question is brought up. I don't want to misqoute it, so I won't. The context might have been the Samwer bros, but he gives some good insight.

Re: Y Combinator's Altman: What I Worry About in Business [video]

#50

Post by ThomPete »

wpietri wrote: post #47
lmm wrote: post #39

Earlier quoted context omitted.

All businesses take things from those that have come before. These guys make money because they're providing a valuable service.

The problem isn't that they borrow ideas from others; it's that they do it in such volume and with such little creativity of their own. Zynga faced similar criticism: http://www.forbes.com/sites/insertcoin/2012/08/08/a-photo-re... Both companies do of course make money. But that doesn't entitle them to respect, just money.

So ideas do matter after all? Not just execution?

Again an italian restaurant opening up on the blog right next to another isn't going to complain that someone steals their idea even though they sell more or less the same products.

Furthermore Rocket Internet takes ideas that haven't yet come to Europe. People do that all the time just very few have been so successful as the Samwer Brothers.

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