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Jerry Neumann: Resignation Letter

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Re: Jerry Neumann: Resignation Letter

#41

Post by simoncion »

fragmede wrote: post #31
bbor wrote: post #26

Fantastically written article by someone who doesn’t realize (or articulate?) that they were part of a terribly unique, terribly exploitative movement that is reaching its natural conclusion. And, of course, I was lucky. Two of the fifty companies I backed are now among the 30 largest software companies in the world. And my IRR from inception has been consistently above 50% per year…for fifteen years. Of course, my s…

Earlier in the letter, he writes: > Two of the fifty companies I backed are now among the 30 largest software companies in the world. And my IRR from inception has been consistently above 50% per year…for fifteen years. But then he also writes: > Right now I have enough money to do what I want. I don’t have enough money that other people do what I want. I don't know Jerry Neumann's financial situation better than he…

> $50k would be enough to get the right someone to do what he wants for a couple of months.

It's entirely possible that whatever he wants done can't be done by a single someone in a couple of months. I expect that many things worth doing in the tech space are like that.

It's also possible that by "other people do what I want" he means "I'm able to buy politicians" and similar such things.

Re: Jerry Neumann: Resignation Letter

#42

Post by programjames »

gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

But most of the AI startups are just razoring a thin slice off a huge market. They're making robo-receptionists for the doctor's office, or integrating LLMs into your IDE. Very few are building new markets from scratch, like photonic neural networks or brain-computer interfaces.

Re: Jerry Neumann: Resignation Letter

#43

Post by programjames »

colejhudson wrote: post #21
gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

Suspect that a core reason for Jerry's PoV is that the dynamics of the (zeitgeist-related) software industry do not currently favor small teams. That's counter to the ethos of Silicon Valley and it's guy-in-a-garage mythology. Jerry would've been 14 around 1980, plus or minus a couple of years, which would've been in the heyday of personal computing. TRS-80s, Apple IIs, the IBM PC, its clones, etc. Then, and for the…

I feel like with building computers, the hardest part was building the technology. When it comes to AI, the hardest part seems to be building the surrounding infrastructure: getting hardware to run it, data to train it on, and hardware to store the data. There are some startups working on data collection and compute markets, but until those are polished there's a barrier keeping smaller teams from moving fast and making things.

Re: Jerry Neumann: Resignation Letter

#44

Post by eps »

If, like me, you've never heard of him -

> My day job was investing in early stage companies through Neu Venture Capital. I’ve also written a book with my friend Liz Zalman: Founder vs. Investor. And I teach entrepreneurship at Columbia University. I was a co-founder of venture-backed startup Root Markets, ran Omnicom Group’s venture capital division in the 1990s, and was once, long ago, a hardware design engineer on IBM’s S/390 series of mainframes where I designed a very small part of the central processor’s microcode execution engine, which is like the computer in the computer in the computer.

https://reactionwheel.net/about

Re: Jerry Neumann: Resignation Letter

#45

Post by Earw0rm »

gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

I'll give you 1998 (although it really started to pick up momentum a couple of years earlier - that was just the point on the exponential curve where it began to get noticed).

And I'll give you 2008, although while it's partly about the hardware, it's also about the pervasive and universal internet, the end of online as a separate "place" and just becoming part of the fabric of day-to-day life.

2013 and crypto, though? Sure, it's made a few (or maybe not so few) people very rich. In terms of day-to-day functionality though, NFTs were empty hype, and the only vaguely useful activity I've seen it used for was probably illegal (circumventing blocks in the global financial system) even if not necessarily immoral.

Re: Jerry Neumann: Resignation Letter

#46

Post by Earw0rm »

colejhudson wrote: post #21
gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

Suspect that a core reason for Jerry's PoV is that the dynamics of the (zeitgeist-related) software industry do not currently favor small teams. That's counter to the ethos of Silicon Valley and it's guy-in-a-garage mythology. Jerry would've been 14 around 1980, plus or minus a couple of years, which would've been in the heyday of personal computing. TRS-80s, Apple IIs, the IBM PC, its clones, etc. Then, and for the…

It's become less capital-light over time - look at the games industry for example, AAA titles cost as much as a Hollywood movie. It's about a eightfold increase in real dollars per decade - and that's despite having a lot of ready-made game engine tech to build on.

Yes, there's still little in the way of overhead/operating costs or cost of goods sold - once you get a product to market, if you can acquire customers it scales perfectly up to market saturation. But the capital barrier has slowly become huge, and that suppresses innovation.

(Interesting counterpoint - when a new market opens up with low capital requirements, iPhone App Store being a case in point, it saturates rapidly and then becomes a race to zero - much potential innovation gets lost in the noise, or the market deflates so quickly that indie innovators struggle to sustain themselves financially).

Re: Jerry Neumann: Resignation Letter

#47

Post by Earw0rm »

bbor wrote: post #27
gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

I would argue what has changed is structural, not technological. As our age continues to gild itself to further extremes everyday, I just don’t think there’s space to use small groups of optimistic hackers to bring bright new things to humanity through risk-prone startups. There’s too much on the line, too much accumulated power and inertia. LLM-powered cognitive systems are not going to be an iPhone moment that chan…

There's something in this.

Startup hackers in the 80s through to mid aughts were, on the one hand, playing _for real_, but on stakes that weren't absurdly high.

They were all-in, but while on the one hand they didn't have an enormous amount to lose, they weren't that screwed if they lost it.

What I'm seeing increasingly the last 15 years or so is hyper-privileged rich kids playing at start-ups, without the same total level of commitment - but then, I can hardly blame them, they've more to lose, and you're a lot more screwed if you lose it all in 2024. The sort of people that would have started companies 30 years ago either can't afford to take the risk at all, or stay at indie/hobby business level and make no attempt to scale.

Re: Jerry Neumann: Resignation Letter

#48

Post by pdimitar »

gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

> This is remarkable to me because I would say that right now is one of the most exciting times to invest ever.

You sidestepped their points and jumped straight to investment opportunities and iPhones and VR and LLMs. He actually said tech is not used to improve people's lives and that I have observed to be true during my 22+ years in the tech area.

What he said resonates strongly with many programmers who are working on the ground: the tech is not used for absolutely anything at all that tangibly and positively changes the world, companies just want to build strong moat and keep corporate customers with binding contracts -- and there's almost zero actual technical progress, too.

(Also, "older" in this case does not do what you think it does: it means they finally got a realistic view of the situation and are no longer looking through rose-tinted glasses. This is a good thing and shouldn't be a condemning factor, and your comment kind of makes it sound like you use it that way.)

---

Let me demonstrate my point.

Here's an investment idea: smartphone app that photographs your fridge (could use LIDAR as well, why not) and catalogues everything in it, and uses magic sauce to remind you when to stock back on items X or Y. Difficult, right? Who cares! I'd buy it, hell, I'd even subscribe for such a service. Let's go. Invest in it. Stick to it until it's perfect, no matter how long it takes and no matter how much financial losses it incurs until it's done.

Will you do it?

Re: Jerry Neumann: Resignation Letter

#49

Post by greesil »

pdimitar wrote: post #48
gwern wrote: post #11

> So why quit? Three reasons. First, I’ve felt for a few years now that the startups I’m seeing don’t seem so much like progress as just shopkeeping. This isn’t a dig: there’s money to be made razoring a thin slice off a huge market, and there’s certainly less risk in that than there is building a market from scratch. But it’s just not that interesting. The excitement I had as a 14-year old in 1979 trying to understa…

> This is remarkable to me because I would say that right now is one of the most exciting times to invest ever. You sidestepped their points and jumped straight to investment opportunities and iPhones and VR and LLMs. He actually said tech is not used to improve people's lives and that I have observed to be true during my 22+ years in the tech area. What he said resonates strongly with many programmers who are workin…

Arguably this is easier to do now with multimodal LLMs. I say this as someone who is skeptical of the hype around the utility of LLMs. But it can probably catalog your fridge. Was that worth boiling the oceans?

Re: Jerry Neumann: Resignation Letter

#50

Post by pdimitar »

greesil wrote: post #49
pdimitar wrote: post #48

Earlier quoted context omitted.

> This is remarkable to me because I would say that right now is one of the most exciting times to invest ever. You sidestepped their points and jumped straight to investment opportunities and iPhones and VR and LLMs. He actually said tech is not used to improve people's lives and that I have observed to be true during my 22+ years in the tech area. What he said resonates strongly with many programmers who are workin…

Arguably this is easier to do now with multimodal LLMs. I say this as someone who is skeptical of the hype around the utility of LLMs. But it can probably catalog your fridge. Was that worth boiling the oceans?

What's your point? That some actual improvements to the lives of people will accelerate climate change, and thus we should not pursue it?

If so, OK, let's find another way that doesn't consume 300+ watts per GPU for thousands of GPUs. Again, let's go -- let's see some actual technical progress.

But we don't have that. We're stuck. And that's what the original article says and I support its thesis.

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