The problem with startups building hard tech is it takes a long time to fail. Failures that take decades doesn't work in the startup model. Image working on a fusion reactor. It might take 25 years to fail. The failure may not be that your idea doesn't work, but because some other kind of reactor comes along that is a better business (ie, cheaper). At this point, you are now a world class expert at a technology that is not economically viable. But, you can't transfer that knowledge, or at least most of it. You are also now 50 years old, give or take. You don't have 25 years to work on the next hard problem. You certainly don't have time to fail again. Back in the day when lots of people worked on hard technology, they were paid well to work on the problem; their life time earnings did not depend on creating a viable business. Because of that, they usually earned a pension, too. Because if you failed, you could retire comfortably, or, at least have enough to choose a second career that didn't pay as well. That model doesn't work for startups.
Former fusion startup founder here. This is a very good point. My startup took 6 years to fail and much of our competition at the time is still at it 20 years later.
There are a number of things which are also impedance mismatches between the typical SV startup mode and hard startups. One of these is the failure path. When an adtech startup fails, the founders just go get well-paying jobs at a FAANG, or at least that what the perception appears to be. When your fusion startup goes bust, you... get evicted and live in your car for a while. There's no on-ramp for failed founders back into the industry. Heck, if its a hard startup, there may be no industry yet to go back to. So, you have to go find something else to do to pay the bills. The personal cost of failure can be much higher than typical startups. "Our incredible journey" for hard startups is more like, "Well, none of us died".
Another thing which doesn't mix well between the typical SV expectations and hard startups is that all the things which VCs think are advantages to being located in SV are generally disadvantages to people working on hard problems. Doing web software with ads? Lots of people to recruit in the Valley. Doing nuclear fusion... is there anyone doing nuclear fusion in the Valley? How do they afford to live when competing with all that cheap ad money? Perhaps I should locate on Madison Avenue, it has the same "advantages".
Then there is the typical way that VCs filter, starting with step one, "Know someone who can introduce you". That's a lot easier when you are in the same location, working in similar industries. It's a poor filter when most of the people working on a problem live far away, doing stuff very different from everyone you know. There are far fewer serial entrepreneurs when the failure time is measured in decades, so networking is more difficult.
I'm happy to see VCs try to return to working on hard problems. The Valley used to be good at that, before they became a center of the advertising industry. But Valley VCs need to read their history. In the late 1950s/early 1960s, New York was the center of finance and advertising. The idea that somewhere out in the wilds of California would become a center of a new industry with its own finance ecosystem was crazy. But everyone in the early Valley knew what those East Coast people were like. The Valley is now the new East Coast people, the new Madison Avenue. Doing a hard startup in the Valley now is like trying to start Intel in 1960 New York. Hard startups are hard enough, without trying to do that.
That came up recently in connection with a VR-related startup. They've been working for years, and they just canned the project and laid off about 60 people.
It's all in-house code. So now the people laid off have to find new jobs. They don't have any of the buzzwords resume scanners want. Heroku? No. React? No. Unreal Engine? No. Unity? No. SpatialOS? No. WebAsm? No. Kubernetes? No. Docker? No. AWS? No. Javascript? No. Go? No. Rust? No? Android? No. IOS? No. Mobile? No. Tensorflow? No? C++? Yes. Maybe they can get a job fixing legacy C++ applications. Going to a company that has its own in-house technology is a real career risk today.
Meh, I've worked 15 years almost entirely at companies using almost entirely in-house technology. Maybe it's because I don't interview for web-tech roles, but I really have never had any problems getting opportunities, and I don't think I'm unique. I think buzzwords are less relevant if you have any amount of specialist skills or significant experience.
For instance, I constantly head hunted for jobs with Unreal Engine and/or Unity, and the fact that I haven't used them significantly doesn't really affect that much.
I agree with this. It's true that there may be less liquidity in the market outside of web tech stuff, but it's not all jobs. There are plenty of companies looking for people with either a) specialist skills which aren't web or b) good engineer skills generally (agnostic as to specific tech)
To counter your experience, mine (in London) was almost exactly what Animats described. I worked on the same application for a decade, we introduced new tech when appropriate, but we also stuck with the fundamentals we chose right at the start simply because they weren't broken. That did mean, however, that when I came to looking for a new role I was _way_ behind other candidates.
Adding my anecdata for London, yeah, if you haven't been tracking the bleeding edge of JS framework and node insanities, people will mark you down because everyone* is looking for "full stack devs".
* Unless you want to do Perl maintenance or C++ for fintech, I suppose.
This defaults to the assumption we are still talking about computing / programming skills and domain knowledge related to that. As another poster mentioned, do you think you would be constantly headhunted if you had a very narrow skillset in something more niche like nuclear fusion?
The lens of the HN community is technology == computer science, when the main tool you have is a hammer. Everything looks like a nail.
I used to work on an in-house framework. The trick is to write like "used proprietary JS framework xyz.js, a framework similar to react.js". The scanners will still pick it up.
And of course to keep an eye on the ecosystem. Honestly, if you're a decent developer, learning something you're not familiar (e.g. React) takes a day at best to get at a good enough level to be productive at a new job. It's just a different way to cough up HTML in the end.
> Maybe they can get a job fixing legacy C++ applications.
There's big money in that - those legacy applications are vital to the functioning of big corporations. Specialising in large in-house C++ applications obviously doesn't help develop a career in trendy webdev (and nor should it), but it absolutely gives you some good options.
Facebook and Google hire tons of C++ programmers. Despite what you may think, the back-end of the internet runs on C++.
Also: If you've done VR development, you have marketable skills. Unreal Engine is C++, and learning the specifics of the engine isn't particularly hard. If you're willing to work under the low salaries and often poor management found in the gaming industry, that shouldn't be too much of a barrier.
There's also gaming-adjacent companies, like Epic, Unity, Roblox, Twitch, and so on.
Being attractive to buzzword scanners is a more important career risk. I'd rather be rejected by those automatic systems so I pay more attention to offers from real people that know me from the industry.
TBH I always thought there should be a calculus for this - value a job for its opportunities, location, stated skill levels required, technologies=marketability etc.
How do you maintain momentum at these kinds of time scales?
When I ran engineering at a startup, I tried to structure things such that we deliver something worthwhile at some kind of predictable cadence. It's the best set-up for everyone: the employees feel like they've accomplished someting, the investors feel like there's progress being made. With software this is pretty easy to do (and even so, people often fail to do it).
But with a "hard" startup the gap between concrete deliverables can be years, and while you could put together some intermediate milestones, they'd probably feel contrived. How do you keep people engaged over long timescales like that?
That's a good question. My first thought was, "We didn't". But that's really just pessimistic memories speaking. My second thought was, "A perpetual state of stress and fear!". Also pessimistic memories, but closer to the truth.
In reality, we had initial seed funding for about a year. We had a number of goals we had established, including vacuum chamber, getting the ion source running, first beam, first neutrons. We fell way behind in the first six months because I made the stupid decision to try to build a duoplasmatron ion source to save money. This cost us about 4 months to make a shitty ion source that was full of leaks and barely usable. Luckily the experienced electrical engineer came up with an RF ion source bought used that did the job well enough. We actually ended up meeting all of our 1st year goals in just over a year if I recall correctly.
By that time the money was running out, so DFJ basically extended the funding by issuing us convertible debt in 3 month increments. Every three months we would have a set of goals mutually agreed upon by the board, which was two of us and Tim Draper. This was pretty stressful for us, as we were living paycheck to paycheck and we had no idea if we didn't meet a goal if Draper would pull the plug. Tim was never anything but supportive but we understood the point of milestones. That is also when things got technically difficult, as everything we had done before was using existing techniques but when we went off-the-map things slowed down a lot.
That went on for about 3 years. Basically the same dynamic as software guys tend to see in the classic death-march sprint. I blame leadership (myself).
Eventually we ran up against some hard limits that wouldn't work with our design. We faced a choice between making an expensive bet on a supersized ion source (an inelegant brute force solution, which I know now would not have worked) or a new risky design (which also would not have worked). Tim was in favor of the brute force design, because he saw that as money being the barrier. I had my doubts about the brute force design, and I didn't want to waste the money on something that would only fix one of the 3 major problems we faced. I tried building the long-shot design. Then a piece of plastic got into the main turbopump and it ate itself. The 2000 market crash happened. Everything fell apart.
Fusion used to be aiming at being better than fission, because that was the default post-fossil energy source.
But now renewables are cheaper than that. So the competition has gotten better since then, and continues to improve rapidly, and it's not clear fusion can ever get cheap enough to compete with them.
Another argument is that fusion reactors will require robots to maintain them (even the aneutronic ones will become too radioactive for hands on maintenance). But if you require robots that can do that, why not just develop and sell those robots, which would be generally useful?
People say that about molten salt fission reactors too. The maintenance robots will need maintenance robots. Just sell the robots.
Lots of people still in fission and fusion are assuming trouble with renewables related to intermittency, land use, grid integration, EROI, raw materials, etc. might arise as we approach deep decarb. If that doesn't happen, wonderful! If it does, then it may be nice to have some low-carbon atomic power stations on hand or in work to diversify the risk.
It's basically the nuclear Pascal's wager.
With a big risk like climate change, there's room for investors who choose to take an interest in nuclear.
Fossil fuels still power the vast majority of the world. It's not yet clear that we're out of that woods.
For instance, Japan just announced that they're building 33 new coal plants to replace their atomic power stations. How on earth does one reconcile this with the game-over-renewables-are-already-cheaper-than-everything popular narrative?
> Lots of people still in fission and fusion are assuming trouble with renewables related to intermittency, land use, grid integration, EROI, raw materials
That's whistling past the graveyard, I think. Land use is demonstrably not a problem. Grid integration has long history of naysayers drawing a line in the sand and renewables blowing past it. EROI is just fine and getting better. Raw materials are also not a problem (lies that solar uses rare earths notwithstanding).
Intermittency remains an issue, but it looks easier to solve than making fission (or, to an even greater extent, fusion) practical. Combinations of storage, transmission and dispatch technologies are likely to get us to 100% renewable at a cost fission will have trouble matching, especially if industrial users of thermal energy (which is highly storable) can be brought on board.
Of course there are peer reviewed studies that agree and disagree with everything you say here. It's just a question of how how reliable the peer-reviewed studies on each side are at this point. This strengthens my point that it's ok for some investors to look into improving nuclear.
It's also extremely popular to say that 100% renewables are a done deal because it's such a great story and feeling.
Most serious deep-decarb clean-energy publications I've seen suggest energy costs go up by $30-50/MWh at deep decarb levels. At those levels, current nuclear already competes. People looking at LCOE today (where the rock-bottom wind/solar numbers depend completely on the hugely-fossil grid for backup and intermittency but hide the carbon emissions with impunity) tend to completely miss this point, their bias that wind/solar are cheaper already being confirmed.
You can calculate how much power is needed based on past data. That part is complicated, but not really unreliable, although of course the demand may look different in 20 years.
And yes, we're going to need extra longer-term storage, but less than you'd think (IIRC up to 10% for a large grid).
Nobody knows the cost of that storage. You can calculate an upper bound by using today's prices, but once these things actually come in demand, new ideas are going to spring up and the prices are probably going to fall, just like it did for PV and wind turbines.
It seems to me that investing in nuclear tech today is a really risky proposition.
Given the uncertainties and low worldwide penetration of low-carbon anything, I think there's a reasonable case to be made for the opposite conclusion: it may be risky to not invest in nuclear.
Obviously this conclusion is far less popular.
Fortunately investing in various clean energy tech is not a zero sum game because of various investor's predilection to invest in one sector or the other but often not both.
Knowing very little about the topic, I recently saw an article talking about how the first wave of wind turbine blades was starting to be decommissioned, and running into difficulties with what to do with them. While they're no longer useful on the tower, since they're designed to withstand incredible forces, it's difficult to destroy, recycle, or otherwise dispose of them, and indicated they're ending up in storage.
Do you happen to know more about this particular phenomenon and what the end game is for that? Granted, this is likely less of a concern than the waste that coal creates, or the long term storage of spent nuclear fuel. I'm just curious about it.
I asked a person from one of the biggest wind manufacturers on earth that on Monday evening at an energy networking event. At the moment they plan to either put then all in landfills or chop then up and burn them.
We all agreed that the people will likely not worry about this nearly as much as they worry about burying vastly less but vastly more hazardous spent nuclear fuel (even though spent nuclear fuel in actual fact has a sound safe geological story).
I wouldn't say 100%, best case economically is somewhere closer to 60% unless you build huge hydropower. With that, 100% is feasible.
That said, do you know what's the highest uptake (in percentage power capacity) of renewables not including hydroelectric nor biofuels in your country?
Here in Poland it is laughably low. Germany is not doing much better either. So "we theoretically could" does not mean we will.
No, you can get to 100%. A key is hydrogen (or perhaps ammonia) to handle rare long lulls in production. The round trip efficiency on that is lousy, but the capital cost is low (which is more important for that segment). A simple cycle gas turbine plant is only 5% of the cost of a nuclear plant of the same rated power.
If the climate change situation was really as dire as we're being told, we'd have nuclear coming out of our ears by now, and nothing whatsoever would be able to stop it. It doesn't have to be ultra-expensive if it's not bespoke every time you build it. The investment into fusion would also be 10x what it is today, and we'd already have a viable version of it, after a Manhattan-project style, do-or-die effort.
What's puzzling to me is why the opposite seems to be happening: some parts of the world shut down completely carbon neutral stuff and build things that are going to emit gigatons of CO2 for decades to come.
If we are to reach point of no return (or worse, have already reached it), the focus should be on building such an abundance of energy generation capacity that it would not only replace all carbon-emitting energy generation, but also help power atmospheric carbon capture at a scale that we'd need to avert the climate disaster.
>If the climate change situation was really as dire as we're being told, we'd have nuclear coming out of our ears by now, and nothing whatsoever would be able to stop it. It doesn't have to be ultra-expensive if it's not bespoke every time you build it. The investment into fusion would also be 10x what it is today, and we'd already have a viable version of it, after a Manhattan-project style, do-or-die effort.
This assumes that behind the business and political worlds we actually personally participate in, there is some ultra-rational global they with long time preferences and everyone's collective best interests at heart. Why would "they" allow all this new coal construction?
There is no "they". There is only "us". When you see your local congressman or MP or mayor speak and think, "what a dunce", as you well might, you need to remember that there is no hidden "adult in the room" who really runs things. This is it. Nobody will come and protect us from our collective decisions.
You are assuming your lack of agency extends to people much higher than you in society, without evidence and against my experience (leaders in organizations have different views -- about their organization's purpose, for example -- than the people under them, views they only share with other leaders, or free agents, if they even ever do share them).
I'd say there are multiple adults in the room, and they sometimes fight, sometimes form alliances. They often do not care what you think is rational, your tribe's word for "good", because they are not of your tribe. Some have long time preferences but "collective best interests" to them means "civilization still stands somewhere on the planet".
Well, "throwaway92384", I am not assuming any such thing. I personally know a number of people who are or have been MPs in the UK and the Netherlands, senior civil servants as well as many people in leadership roles in the private sector. I don't think this makes me particularly special incidentally, the same thing is true for many people who are actively engaged in policymaking.
My comment is based on extensive professional and social interactions with other people in leadership roles. It is very frequently the case that such people, including government ministers simply don't have as much independent power of action as you think.
The original parent comment said that if things were really so bad, then something would be done with the implication that since not much is being done, things cannot be so bad. Since we are not mass-building PWRs and running five parallel crash fusion programmes, it must follow that someone has examined the evidence and decided that the problem of climate change is not so bad and therefore we are not doing those things.
The problem with this view is the assumption that there is a someone or a group of someones who sit back, review IPCC reports and then have the ability to collectively compel the political leaders of the world to act rationally. If there was such a group then their lack of action would indicate that they had made a rational decision not to act.
My point is that there are no such people. The powerless enjoy the fantasy of conspiracy because it means that all it would take to solve our problems is some kind of board room coup of the Majestic 12 standing committee.
The reality is that everyone in the system has to act within their roles in the system. Executives at oil companies will say that they wouldn't mind a carbon tax, as long as it was equally applied to all companies. That's logical as they would continue to have a level playing field with the other oil producers and it will take years for us to get off oil as a species anyway. Oh but they don't have the power to pass an oil tax, that's for government.
Politicians in smaller countries will say, they would love to pass such a tax but unfortunately it needs to be global or it will just erode their competitive advantage without reducing emissions. Only if large trading blocs like the EU and US united on enforcing such a system could it be done.
American politicians might say that they personally would love to but they'd need a majority in the Senate, the House, and the right person in the White House.
None of these people are being disingenuous, they all have an accurate view of the limits of their own power within the system. My point is that there is no "outside the system" which can update the system to work better for large collective action problems or force a solution. It's cogs in the machine all the way up. Even the power of Donald Trump, as leader of by far the world's most powerful nation has substantial limits to his freedom of action.
But there _are_ "such people". The wealthy elite, to be exact. They can order the government to do as they please. If the situation is dire, and their collective several trillion dollars are going to go up in smoke in their lifetime, you can bet they'd ram whatever programs they like through the government to avert that. Take the progressive icon such as Jeff Bezos. $120 billion fortune, trillion-dollar company employing 800K people. All of this is entirely dependent (presumably) on the world order not collapsing by the end of the century. And it's not like the guy is illiterate or anything - he's into space exploration and building hundred thousand year clocks. The amount he pledges to fight climate change? Less than 10% of his wealth. Comparably wealthy Gates, who can't shut up about climate change, spends relatively little on it in his philanthropic efforts. Barack Obama, who should be supremely informed on the topic, bought a property near the ocean for $12M. I refuse to believe that these three people in particular are uninformed. I also refuse to believe that they wouldn't be able to effect change if they really wanted to. And by "change" I don't mean just speaking from a podium like you see them do all the time. I mean real, actual change: fund programs, push sensible stuff through the government, etc, etc.
The rational conclusion I make from all this: the rumors of our impending demise have been greatly exaggerated, if all people with means and influence do to avert it is read bullshit from a teleprompter every now and then.
While I accept your point that very wealthy people do not appear to be acting rationally if uncontrolled climate change will cause as much damage as the forecasts assume, I have two counterpoints:
1) People do act irrationally, even well informed people.
2) I don't actually agree that "they can order the government to do as they please". Saudi Arabia killed one of Bezos' employees and hacked into his phone. What has he been able to compel the US government (headed by someone who hates him) to do about it? Barack Obama did attempt to change US policy on climate change and was not able to because no single person has the ability to move US policy that way.
Khashoggi wasn't Bezos' employee. Even if he were, he'd be one of almost a million people he employs directly or indirectly.
From reading the report it's debatable Bezos' phone was hacked at all. The report seems to be more to provide plausible deniability to whatever Sanchez's relative that leaked Jeff's dick pics to the press.
> If the climate change situation was really as dire as we're being told, we'd have nuclear coming out of our ears by now, and nothing whatsoever would be able to stop it.
The problem is that people aren't necessarily great at investing for the long term, especially if they think they'll be dead by the time the benefits arise.
> What's puzzling to me is why the opposite seems to be happening: some parts of the world shut down completely carbon neutral stuff and build things that are going to emit gigatons of CO2 for decades to come.
A lot of this tbh is probably because of infighting between renewables and nuclear.
Fusion seems like a bit of a black box to throw money into which isn't appreciated. Throw too little and you don't get there. Throw enough and you don't know when you'll get there.
Fission solves a lot of problems but nobody likes it in their back yeard and some countries have gotten a scare of it (japan, germany,etc) It also takes a very long time to build a new planet and there's many people saying gov should invest more in solar/wind/etc instead whilst we're in a time where a lot of nuclear plants are reaching their planned life time or have had it extended for a long time. Hell I think only the UK is planning a new one which is sad to see.
Most renewables aren't viable for base load power. Nuclear is viable only for base load power. Realistically they are competing for different parts of the power utilization and shouldn't be infighting at all. You want nuclear for the amount of power that's always on the grid. You want renewables to be able to handle spiking. The hard part of renewables now is the unpredictable output from varying winds and levels of sunlight. The cost problem is solved. If someone could come up with a way to make renewables very consistent in power output they'd blow nuclear out of the water. One of the reasons hydroelectric is so effective is the amount of water going over a suitable waterfall has a viable minimum (it might sometimes increase after rains but even in dry periods it has a predictable power level).
They are both competing for the "inflexible" part of the power supply. They step on each others toes, and do not work well together. A grid with a lot of renewables will have the price of power driven to near zero too often for nuclear to survive.
Not sure why this was downvoted. It's the truth. The two don't (or at least shouldn't) really compete, they (and especially solar) are almost exactly complementary to each other.
CO2 has a logarithmic effect on temps. Doubling the current PPM will have half as much of an effect. I don't think the situation is dire or critical at all. It's mild. And people instinctively believe this even if they overtly signal that they don't.
Hindsight is always twenty-twenty but would it have been possible to create products along the way that would have made enough money to have a longer or maybe even infinite runway? Would such an approach have flown with the VCs?
I am thinking about something like creating an own ion source first, keep building and selling these and using the money to tackle the next problem. Then tackle the next problem. And so on.
Two examples of different hard engineering problems being approached in different ways:
Compare Blue Origin's and SpaceX' approach to developing reusable rockets. Blue Origin is financed by Mr. Bezos. If Bezos stopped that (certainly not intentionally but a bus factor of 1 is bad anyways), Blue Origin would be left with no sustainable business from what we can tell. I am convinced that in the worst case a defense contractor would happily buy in but for the company as a whole it might be over. SpaceX was developing reusable rockets by creating rockets (hard but not as hard as going directly to reusable rockets) first and selling services (that's even better than selling products) to customers to finance the development. They were even using already paid for rocket launches for their experimental landing attempts. That's a lot cheaper than having to pay multiple for a rocket just to see it blow up on landing (or reentry or sometime in between).
The same could be said about Tesla, Waymo and self-driving. Waymo has to reach full self-driving (FSD) to start making money. If they fail, they company is dead or also needs to be sold. If Tesla fails to reach FSD? That would suck, they would have to pay back the customers who bought the FSD package early, maybe deal with a class-action lawsuit because of this and but they could carry on selling cars nevertheless.
Might be a non-answer, but I think this really depends on how much leverage you have in pulling engineering + product culture levers.
In my experience, you need to first define a small set of north star metrics that lead to the promised land, which could be years, if not a decade away. Ideally, this should not be more than 3 so there's focus in the long term. If you define this well, everybody will understand the significance of it and be aligned to hit those objectives. Any increase, exponential or not, is progress the team should feel proud of. This is 80% of the "selling" for long time scale projects.
Once you've done that, all other initiatives should focus on improving only these metrics. Generally speaking, very aggressive milestones and keeping that momentum going, while not punishing teams for missing targets will move the needle faster than the other way round.
I know nothing about businesses like these, but I assume that the people who need to be engaged with the idea and work know that things come at a slow pace and are fine with it.
It's different than getting someone who wants to see results every day. In that type of work, progress is measured differently.
> The Valley is now the new East Coast people, the new Madison Avenue. Doing a hard startup in the Valley now is like trying to start Intel in 1960 New York. Hard startups are hard enough, without trying to do that.
I think places like Detroit are promising for this. Lots of cheap real-estate, a local history of technical skills, and serious problems to solve (urban farming for example).
Also due to the internet age, developing nations are also pretty promising for their lack of regulation, and extremely cheap location. But have other serious problems (like availability of smart trained talent).
Detroit has deep, fundamental problems. the weather, the utilities, the failed neighborhoods. You can cut costs significantly just by moving to San Diego and not have to explain to prospective applicants why living in a windswept frozen wasteland half the year is appealing.
San Diego has deep, fundamental problems. the cost of living, the homelessness, the failed neighborhoods. You can cut costs significantly just by moving to Detroit and not have to explain to prospective applicants why living in a feces-riddled yet expensive nightmare is appealing.
San Diego is one of the best places to live in the US. Cost of living, homelessness, and failed neighborhoods are no worse in San Diego than in Seattle or Austin. Benefits are perfect weather, proximity to Silicon Valley VCs, recruiting from the University of California system, and a willingness from talent to relocate to join your startup.
Everywhere has challenges. Attracting real talent in the midwest is challenging. Cost of living in industry hubs is also challenging. There's no perfect location to start a startup.
Source: 7 years at startups in the midwest, the south, Seattle, and now San Diego.
I think you missed the point. The valley used to be (still is actually) a windswept burning desert half the year. Which is part of what makes its 60's self comparable to Detroit.
Sorry, but for all of Valley's problems, the above characterization couldn't be more wrong. You might be thinking of a part of California east of I-5, but Valley as it pertains to the tech hub couldn't be more pleasant from the climate perspective.
Growing [X] amount of produce locally would provide a much-needed source of cheap produce and/or revenue to the local community. There's also general health benefits of the added greenery consuming excess CO2. Even better, captured rain runoff goes back into the soil sooner rather than becoming further concentrated with toxic chemicals before it reenters the ecosystem.
Food deserts are a non-problem arising almost entirely from lack of demand for healthy produce.
> Neighborhood Food Outlets, Diet, and Obesity Among California Adults, 2007 and 2009
> Food outlets within walking distance (≤1.0 mile) were not strongly associated with dietary intake, BMI, or probabilities of a BMI of 25.0 or more or a BMI of 30.0 or more.
> The Geography of Poverty and Nutrition: Food Deserts and Food Choices Across the United States
> Using a structural demand model, we find that exposing low-income households to the same availability and prices experienced by high-income households reduces nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand.
The most energy and carbon efficient way of providing produce is to grow it where it’s easiest to do so and transport it to where there are consumers who want to buy it.
> There's also general health benefits of the added greenery consuming excess CO2.
Added greenery only consumes excess carbon dioxide if you harvest it and bury it in a very, very deep hole, where neither sun nor oxygen can reach it. Otherwise, it only briefly buffers some amount of carbon.
If it increases total biomass, then it does on average sequester that additional biomass. And even if you burn it, well, the next crop will sequester it again.
The main problem with burning fossil fuels is that we dug them up out of the ground, rather than take them from replenishing sources that draw CO2 out of the atmosphere.
It perhaps increases the amount of biomass in circulation - but then again, probably not, as it displaces other food (it's not like the western world is facing food shortages at the moment). It doesn't meaningfully affect anything, given that the problem we have is exponential emissions increase.
The best argument for extra consumable plants would be if they displaced carbon-positive farming. Then, all that carbon added to the circulation would subtract from emissions growth.
Hmm... I've been in the valley over 20 years now and I never worked at an "adtech" company.
In fact I very much prefer a company where customers pay for the services we deliver - something they want, as opposed to something the user typically does not want: Ads.
Gosh, a lot of what you are talking about sounds like what it is like to finish a PhD that doesn't have a future in academia as well. Sometimes I feel like a failure for choosing software engineering, but I should probably be grateful I have that option.
You're putting a lot of emphasis on ads, but lots of major SV companies have nothing to do with ads... Netflix, Uber, Apple, for example. Maybe you mean "software companies"?
Those are the notable outliers though, most of the B2C Bigtechs are adtech companies: Google, Facebook, Twitter, Snapshat etc. Those adtechs are the cancer of our century.
The B2C business is fortunately more product oriented.
I wonder, was it an honest attempt? After 20 years, you certainly have nothing to hide. I mean, did they expect it to work, or they were just having fun working on a hard problem they loved working on, for someone else's money?
There are a few examples of government agencies which can make many parallel bets, on the understanding that most will fail but a few may pay off big. But, by "a few examples", I actually just mean DARPA. I'm sure there are others, not many though.
Politics does not work well with "most of these projects failed". It's too easy of a target. Anything that failed, is an easy target for a congressman to take aim at as being "wasted", because in some sense that particular investment was wasted, in the same sense that every insurance payment is wasted except for the one right before you need insurance.
But, the logic behind "many long-shot bets in parallel" is inherently more difficult to explain in the political arena, which is why I think VC may actually be better at some of these kinds of things.
The NIH budget is about $40B, 90 percent of which goes to research via about 50,000 extramural grants and the NIH’s own intramural research program. Very little of this is expected to “work” in the sense that it produces an immediate improvement in human health. Same goes for the NSF. The DoE, NASA, and DoD also fund plenty of research beyond the ARPAs (DARPA, IARPA, HSARPA, etc).
The ARPA programs are outliers in that they’re more likely to take larger risks in exchange for bigger rewards, while the NIH (etc) are more incremental. Nevertheless, it’s not true that these programs try to avoid ‘failures’ at all costs.
> But, the logic behind "many long-shot bets in parallel" is inherently more difficult to explain in the political arena, which is why I think VC may actually be better at some of these kinds of things
This does not mean the VC will actually be better at the task (producing better basic research results), but that it is more realistically going to get the funding in the current climate.
If you look at what's worked for computing in the past -- where the real qualitative changes came from, in terms of basic research -- you have ARPA, PARC, and Bell Labs. They all had the following in common:
- Long-term time horizons of 5-10 years minimum;
- Lots of funding with few strings attached
- Funded people, not projects
- Operated in a given context, but goals were vague (enough freedom to play)
Any funding model that is sensitive to the pressures of quarterly earnings reports is not going to be able to do any of this. Which is precisely why most of the improvements in computing since the early 80s have come as side effects from quantitative improvements like speed, memory, cost, etc.
The current computing culture, and especially the funding model behind it, will not give us the big new inventions we hope for.
NASA is the obvious next example. They pay for a lot of esoteric stuff that once made they don't actually end up needing - but having paid the startup costs - end up contributing to other fields.
I think FEMA also does similar things though at a much less parallel (but a higher volume).
Most of the "regulate and promote an industry" (a dumb idea for structuring them but I digress) agencies also do this. The NRC for example does a lot of research on storing and recycling nuclear waste, but also on new nuclear technologies.
And other military agencies aren't worth leaving out. The army core of engineers pushes a lot of contractors to deliver unique solutions that end up getting resold, see the concrete barriers in Iraq.
NASA had, at one time, a "cheaper, smaller, faster" strategy, which they then abandoned the first time it resulted in a mission failure. If they had the 90% failure rate of many VC's, betting on lots of 100x but only 10% of the time startups, they would have been shut down.
>But, the logic behind "many long-shot bets in parallel" is inherently more difficult to explain in the political arena, which is why I think VC may actually be better at some of these kinds of things.
VC backed rockets have already taken longer to take a human to orbit than government money took to take a human to the moon. This is on top of the fact that they have had 60 years of technological improvement.
Simply put VC and capitalism in general is great for giving you turds rolled in glitter, less for building the sewage system to flush the turds out.
The safety culture and degree of acceptable risk is somewhat different now, from when we were sure we'd get nuked by the Russians in a month. (And also still thought smoking was healthy.)
You are comparing a different time in the US to now. I dont think this is a fair comparison, everything takes longer now -- buildings, bridges, tunnels. I'm amazed to hear how quickly subways in NYC were built -- these days it takes a decade to build a handful of stops.
Even the Stanford/Cisco people were thinking "multiprotocol gateway" back then. Much of the push for TCP/IP came from the buy side. I did my networking work when I was at a big aerospace company, and we wanted everything to talk to everything else. Not have DECNET<->SNA<->XNS<->X.25<->TP4 gateways trying to interconvert. The vendors all pushed their proprietary systems.
Even Berkeley didn't get it at first. Early Berkeley TCP/IP only talked to other Berkeley TCP/IP systems. They had to be beaten on to get interoperability to work. 4.3BSD shipped with broken sequence number arithmetic that only talked to itself until we fixed that.
This was back when big buyers had more clout than software vendors. It's hard to do that today.
Wouldn't TCP/IP run on token ring? My understanding that token ring is at the same layer as Ethernet, and thus wouldn't exactly be a competitor for TCP/IP.
People like to forget. It helps pretend government research and alliances always produce the best outcomes.
Your example may be a bit too old. Even novell netware, token ring etc won't ring a bell to many people.
Try a simpler one instead: Do you guys remember about the various wireless standards before Wifi?
The Orinocos and the Intel 2011 PCMCIA were IIRC among the first ones of the 802.11b - quickly eclipsing everything else.
Also, what about DECT from about the same period? Some companies (mostly in Europe) tried to make an equivalent of Wifi, but using DECT modems. Some devices even made it to the market!
> It helps pretend government research and alliances always produce the best outcomes.
Well, at least on this case government research did produce the best outcome. By far. So far no comparison even makes sense, and people don't even remember there were other attempts.
So you mean, when something fit their narrative (here: government research is better) people forget about other attempts? And counter examples in similar domains (here: wifi) are also dismissed?
You're talking about the product of standards committees there, not startups. Standards committees are sort of "We're doing this so no one company owns/controls this basic tech, so we can all build new and interoperable products with the basic tech and make money!"
The importance of government research is waning. Most academics vying for government funding are in various states of despair. The blow up in the size of universities and the number of PhDs etc has created a lot of competition with perverse incentives. In biotech, nothing interesting gets done without very early private investment (pharma mainly, some VCs).
"Our router can route an astonishing 2,000 packets per second! No other router can offer you this sort of performance! Blockchain. Go ahead. Ask our competitors if they can match this. You'll find their jaw drops and that they'll tell you that this level of performance shouldn't even be possible on commodity hardware! Our experts hand-tuned the multi-billion parameter neural nets our product uses. The competition wouldn't even dream of putting neural nets of this scale into their routers. That's how far ahead we are on this. You can't get this sort of performance from anyone else in the business!"
Your Email: ( )
[ Yes, contact me and tell me MORE! ]
That made me chuckle. I cringe at exaggerated, buzz-wordy, vague sales-copy as much as the other person, but isn't it shown to work (by Apple et al)? I'd be interested if you or anyone else have examples of to-the-point landing pages / sales-copy with zero exaggeration and gimmicks.
I liked the WhatsApp's back in the day [0], but they had a lot going for them and didn't need any extraordinary claims. MissiveApp [1] is another one that feels comfortable, to me.
I saw a controversy recently in an open-source project where someone who packaged up the implementation with a friendly GUI was making thousands a month on Patreon, while none of that was going to the people who actually implemented the hard technical parts.
Credit for these technologies can seem similar - the government does all the basic research (through universities etc), funds the development of the tech through grants and the like, and Silicon Valley just does the customer-facing part and picks up all the credit.
Well, TCP/IP was the military version: the international government version was the misbegotten OSI protocol stack (yes, before it was in irrelevant model on every IT certification exam, OSI was an actual collection of protocol standards), so governments can produce pretty nasty technologies too.
Snark aside, that is a good point. Erlang is a nice language and it was developed as a pretty short-term project to fill a specific need. In fact, you might even argue it is a nice language because it was developed as a pretty short-term project to fill a specific need.
Sadly academia for a while now has been subject to the same short-term funding concerns as businesses but without the same flexibility and options for generating that funding.
I was thinking the exact same thing. Research in academia, research labs, and even in some business environments used to be able to focus on and tackle big problems.
These days, funding agencies/sponsors are incorporating more and more business mentality into the research process and focusing on concepts like "sustainability" etc. with short turn around.
You can't expect short term results on difficult problems. If they were easy, they'd have already been solved.
> At this point, you are now a world class expert at a technology that is not economically viable. But, you can't transfer that knowledge, or at least most of it. You are also now 50 years old, give or take.
> Back in the day when lots of people worked on hard technology, they were paid well to work on the problem
is the model closer to "tenured research scientist" rather than "startup founder or employee"?
It's 1/2 way between. Back in the day all the big "tech" firms had long term R&D. You could spend years working on tech with no commercial viability as long as you could keep making better demos. You were most likely an employee with a PhD and a pension.
But then wall street started demanding quarterly growth and they all cut their R&D departments.
> At this point, you are now a world class expert at a technology that is not economically viable. But, you can't transfer that knowledge, or at least most of it.
I strongly suspect that anyone who can become a world class tech expert to the point where they can push at the boundaries of what's possible has transferable skills.
Now, that's a different statement from "can get hired on transferable skills," at least depending on the capacity of hiring insights in the industry at large. But I figure it needs to be said lest we reinforce the problem.
> The problem with startups building hard tech is it takes a long time to fail
No, not really: you know pretty much from the outset if a venture will fail because nobody knows how to do it. Altman has staked his career on an idea that is guaranteed to fail, for example. There is no step-1 towards a definable goal. Not even sure there is a real goal!
There is no example of a "hard startup" like this in the history of the human race. Only silly con valley hubris could imagine a different outcome than total failure. This sort of thing is what governments are for.
There are some problems that just aren't amenable to the startup approach. The Manhattan Project wasn't three guys in a garage living on ramen noodles for a year. Neither was the Apollo program. Some problems just require huge amounts of people, money and time to crack -- and even then, as you correctly note, there's no guarantee you'll actually be the one to crack them. (Ask the Germans who worked on their A-bomb project, or the Russians who worked on their moon shot.)
The problem is that, when you're a VC, the only model you have to apply to problems is the startup model. And when all you have is a hammer, etc.
Nintendo was selling playing cards, Facebook was a student only network, Google wanted to index the whole world, SpaceX sends rockets in space and Uber's founder wanted to get a cab. Hard or soft, there is no rule of thumb.
This model of making incremental progress still exists, it's called research. Startups couldnt be further from the optimal tools to solve those kinds of problems. In my mind, startups are for problems that can be solved by plugging mature tech A into less mature tech B and turning the crank. If someone's first priority is to make the world a better place and expand human knowledge, they should stay away from the business world.
This is an interesting perspective, but not one I found to be broadly shared by the dozens of VCs that I interacted with during fundraising. That we were doing a hard thing, despite having an experienced, capable, and "battle tested" founding team, as well as early revenue that was nothing to sneeze at, was very often a knock against us. Early on, it was kind of hard not to take this a bit personally, but that quickly gave way to shrewd calculating reality.
I think this is a perspective that's afforded to the VCs who have either the pockets or the connections to carry out the strategy that's called out in the OP. Namely, that the startup is probably going to need a lot of money to get to clear product-market fit/readiness before being able to really scale.
For the throngs of early-stage VCs out there who can't write Million Dollar checks more than a couple times a year, there's a built-in risk aversion to going after something "deep tech" shaped because they literally can't afford it.
What worked for us at the end of the day was essentially having larger, later-stage funds who'd been exposed to or burned by the problems we're solving go to bat for us, and also to find very focused & targeted VCs whose thesis about the future of the world aligned very strongly with ours. We're very happy with where things ended up.
One conflating problem I observed during fundraising was that as it became clear that finding thesis alignment was essential, many VCs go out of their way to appear very generic in their thesis. Though others are great about being very specific. When you find a fund that invests in say biotech, they're often really up front about that in numerous obvious ways from their website, to the background of their partners, to their investment portfolio. As a founder not explicitly targeting biotech it is then easy to filter out.
However, when it's not so cut and dry (I assume because many VCs want as much deal flow as possible), it actually makes the problem worse for both parties. Founders waste time targeting VCs that don't make much sense, and VCs waste time talking to founders that don't make much sense, but there's a natural tension because you're both living & dying based on matchmaking with each other, and so it feels like you're doing something really irresponsible by clearly signaling and constraining ahead of time who you'll talk to. Because, "What if...?"
I learned a ton from the process. It's a really odd knowledge base to have that's useful in almost no other situation.
Interesting thoughts. Since you apparently have significant experience raising VC funding, I'm curious about your opinion on the following (others, of course, are welcome to chime in). If you were working on a deep tech (science-based) startup and considered using venture capital, would you prefer pitching your idea(s) to VCs, who happen to have relevant domain expertise (most likely, as their educational background) due to potentially being enthusiastic about relevant domain and problems as well as having better understanding of an industry and having some (additional) connections or, on the contrary, avoid such VCs as potentially being "biased" and/or having less enthusiasm / belief in probability of solving relevant problems and, subsequently, the success of the venture? (For the purpose of this question, assume that the market need is validated.)
You want to pitch to VCs who you can get to believe you're solving a real problem that exists (or will obviously exist) in the market, the solution to that problem that you're providing scales super-linearly when money is added to the pot (i.e. is a product, not a service), and that the actual market opportunity is huge in total Dollars.
It helps then if they're familiar-ish with the markets you're addressing so they'll be aware of some of the challenges and sizing considerations (we talked to many, many VCs who just had no idea how big markets were outside the ones they were familiar with, like the enormity of the "Operational Technology" market compared to the IT market), and also that you can clearly articulate what you're making is an actual repeatable product to sell.
The most important thing to remember is that VCs want to make money, your ideas are just a path to making money, so your #1 job is to show them how they're going to make lots of money, not show them how clever your ideas are.
I appreciate you sharing your opinion. So, essentially, you don't seem to think that potential cons of approaching VCs with domain knowledge that I mentioned above (inherent "bias" and lack of belief in possibility of certain solutions) outweigh relevant potential pros. Regarding other aspects, I certainly realize VCs' market size and financial upside considerations.
It could present issues if you're speaking to a particularly disagreeable VC, but you're unlikely to convince that person anyway. They've decided they've got an axe to grind and they're going to use you as the grindstone.
If you're in a situation where you're having to overcome objections in your pitch, most of the time you've already lost, and you should just move on. The goal for your pitch is to figure out how to sidestep or head off at the pass any of the objections you've heard before.
Understood, thank you. I agree with your points. However, just to clarify, the basis for my original question is whether it is possible to predict VCs' "(dis)agreeableness", based on their domain expertise or lack thereof. I appreciate your opinion and look forward to hearing more thoughts from this community.
Fair enough. Keeping this in mind, I think that I should do my best to refocus on working more on validating my ideas as opposed to over-analyzing potential funding issues that might or might not happen down the road. :-)
Thank you for sharing your thoughts. What you're saying definitely makes sense. However, the question is whether one should prefer or avoid such, considering my assumptions on relevant pros and cons (in other words, it's a question about fundraising process optimization).
I will venture a guess that you'd do better pitching people with domain experience, particularly if their fund targets your domain. I have never pitched a hard science startup but I believe it's generally true that people prefer to invest in things they know and understand. It has certainly been true of my fundraising efforts in niche markets.
I very much appreciate your advice as well as being first to provide feedback. Pretty much the same rationale was my original thought as well, but I want to hear a variety of opinions. Let's see what other people might think and/or argue about this aspect.
Finding the right VC can be quite challenging, and pairing up with the wrong VC can kill you. It's a real problem and nobody - that I'm aware of - has solved this in a way that it works repeatedly and reproducible.
Before I started Submotion, I did a fairly thorough analysis of what kind of startup I wanted to create.
I decided that I wanted to create something that
- was B2B. Consumers are fickle, things can explode but they can also go out of style just as fast. It's more sexy and makes for better smalltalk but my assessment is that they are much more difficult to grow predictably.
- targets SME's. I am somewhat extroverted for a developer, but I will never be the type who goes golfing with CEO's to close deals. Million-dollar deals is not my game, I will go for higher numbers of small ones.
- targets tech-savy businesses. Because I speak their language, I understand their needs and I stay in the loop of their world out of curiosity, not because I need to keep up with my industry.
The problem is neither hard nor easy, by the definitions of this article. It's deterministic; there's just a bunch of work to be done. I'm doing it. It's slowly evolving. This is definitely a reflection of me being 40 when I started it, it's somewhat boring but that suits me perfectly :-)
My apologies, I dislike it myself when people do that. SME's are indeed Small and Medium Enterprises. For my particular case, I am targeting companies with around 50-250 people.
Oh I am not doing any SEO either. I am still writing emails and making calls, just not the kind that start a 6-month long sales process ending with cigars :-)
I have a question: at a previous startup we emailed and called small and micro businesses in NY-SF-LA to sell an SMS marketing service. Kinda like messagebird but not for developers. Basically a web app to be able to send a list of numbers an sms with one tap, in an automated fashion.
Out of 4000emails/calls, which were not pushy at all and focused on understanding their needs, no one ended up paying ($3.6k/y).
I guess it does! :-) I'm not blogging very consistently at the moment but I do seem to have a lot of ideas lately so maybe I should try and get back into the groove.
If you are comfortable with this approach you should have a great future ahead. Most engineers would hate that approach although that’s where the money is.
Once you decided what kind of startup you want to make, how did you actually find a problem that fits that criteria? That's the part where I'm stuck now.
I've heard (or read) someone say that every Excel sheet is a startup waiting to be made. Submotion very literally replaces Excel or Google Sheets for people to the point where I am considering making the UI more spreadsheet-like.
It was hard for me too. I happened to consult for a company where someone got fired and was disgruntled about it. They hadn't had all of their accounts closed and went and did damage. It occurred to me that this must be something a lot of companies struggle with and so I decided to try it out. I spent two months just writing and calling people before I felt confident enough that this was a real problem.
So try and think of places you have worked or the place where you work if such a place exists. What kind of time consuming and tedious processes do they have that could be optimized? Could you talk to someone there about that?
Hell, that sounds like my reasoning. Can you mind read?
But seriously, I agree that this is the way to go. Add low fixed costs and you can have a very healthy, very profitable company. And if the business model scales reasonably well even a potential VC ready startup with the need for VCs. Can't think of a better strategy to become, and stay, my own boss.
Growing slowly but steadily :-) We don't have product/market fit yet and we are just one of at least 5 companies trying to figure out what this new category of "SaaS Management" actually means, so we'll see where we all end up.
Counterpoint: If you're looking for a life-changing outcome you probably shouldn't work on a hard startup until after you've already saved some money working somewhere else -- like at least spend two years somewhere stable so you can get approved for a mortgage. Investors in hard startups are often more like patrons who don't really understand the tech in which they are investing. They probably got their first taste at money from selling a software app and then invested that money in other "easy" software startups until they had enough money to patronize your quantum computing project. Think of the clout they are generating from magnanimously throwing money at PhDs they've convinced to waste their lives in a field that will never produce practical outcomes. When there's an economic downturn, the investor will still be rich, just not enough to continue patronizing your project. The PhDs may scrape by somehow or eventually be overcome by the existential dread that they should have worked on something with fewer hurdles and higher probability of success so they pivot to work on a location sharing app or venture capital investing.
I feel like the money quote was buried in the postscript.
> Another solution to this problem is to think about startups that can become quite successful with less than ten people. As compensation packages from the giant tech companies continue to increase, I suspect this will become a trend.
As cash comp at big public companies grow and the future value of startup options plummet, we need to start thinking about different ways to start businesses, and this feels like the right solution to me. Starting a company with 10 competent people that I enjoy being around and targeting $5-10mm in revenue sounds perfect. Maybe $10mm isn't reasonable, but even if we hit 1/4th of that amount, it's still plenty to support a small company.
These days - and assuming you think the high salary trend will continue unabated for years to come - working at a big tech company will guarantee you a very comfortable lifestyle in perpetuity. No startup can offer the same risk/reward trade-off.
But if you do want to start a company and have a high chance of becoming modestly rich, there is no shame in working on a niche problem that doesn't require piles of capital. If you grind away long enough, you can have a slowly growing, profitable business that makes you very comfortable.
That’s not exactly what he is aiming for; the quote is most likely related to Instagram which reached a $1bn valuation with ~10 people. A lifestyle business is worthless to VC (and unsustainable if it decides to take VC money).
Slowly I having my doubts about that. At least for early stage and angle investment. Investors need a 10x exit. Now imagine an early stage investment of 250k in a small business that grows to 10 million revenue. Healthy, because it is a lifestyle business not geared towards hyper growth. Assuming the company is profitable and cash positive, buying back the investor for 2.5 million through a bank loan is a reasonable thing.
But that hints at an interesting problem. 250k is angle and seed, not traditional VCs. And there seems to be so much desperate money out there in the current "no interest for your bank account" times that there simply aren't enough small businesses like that strategy to work. Hence VCs, hyper growth, and, ultimately, things like SoftBank.
I think one problem is opportunity cost for the VC. Arguably, they have to spend as much time on diligence for that .25MM investment as for a 10MM one. Put another way, to deploy a $125MM fund, you’d have to do 500 of these microinvestments.
Not just the diligence. Also the time post investment to mentor the founders and deal with various problems that crop up over the year. No startup older than a year or two that hasn't seen at least one major crisis that could have killed the company (and in many cases it does).
VC investors look aim for 12% return, approx 3x over 10 years. But returns are hugely variable (power law?), so returns heavily dependent on one winner e.g. one success at 30x out of 10 investments gives 3x.
Your numbers don't work unless you can get 10x returns on 3 out of 10 investments (which seems unlikely).
You got it right: VCs are not interested in that 250k investment, and you forgot the time component - they want that 10x over a relatively short period (<5-10 years) that the small business is unlikely to achieve. Plus there is nobody to sell to if it’s not a growth stock, publicly traded, and no incentive to buy back the shares. The company will be pushed harder and to invest in growth strategies that make it not-a-lifestyle-business anymore, i.e. a startup.
You cannot have it both ways, and why would you even need a huge lump of cash for a business that is already sustainable? Traditional loans are a much safer source of funding for that.
Why would a company bother buying back the investment? Surely there’s not much reason to do that unless the terms of the investment were different than what is common today.
Side note, but I've noticed how less/fewer confusion has ceased being considered a grammatical error. Interesting since pg has previously stated how important good writing is, and the YC app contained the same error.
It was never actually a grammatical error. The idea that it was "in fact arose as an incorrect generalization of a personal preference expressed by a grammarian in 1770." [1] Less has been used for countable things at least as far back as Alfred the Great in 888 CE [1], i.e. before English was English.
Case in point: Whole Foods in the pre-Amazon, MacKay era had "Ten Items or Fewer" signage at checkstands. A few weeks after the sale, it was "Ten Items or Less".
Is 2.5mm really viable for 10 people within SF Bay Area? That would mean compensation would be around $250k per person (not including payroll taxes, office rent, and whatever else cuts into that). That's distant from the compensation packages being given out by Big N.
I would take a pay cut if it meant working with a high talent concentration team that was small enough to be agile end to end in the full sales -> ops -> product/dev -> support cycle.
But that's a unicorn. You don't find a unicorn, you stumble upon it one day and miss the opportunity because you can't rationalize the fact that you actually saw a mythical creature.
It doesn’t have to be a unicorn. Maybe it’s incumbent on the rational participants in this community to figure out a way to do what you’re describing. New business models can be even more valuable inventions than new technologies. Perhaps VC has run its course for business and engineering ICs who don’t have preexisting wealth.
Big N isn't a startup. The risk to reward ratio between RSUs and first stage equity/options is very different. The environment is very different. Everything is different. I guess you could try to compare compensation between the two, but it's not a true comparison.
I worked for a startup that got funded in that ballpark. There were seven of us. We sat at a couple folding tables at an incubator for six months or so, and used a vacant space (no power, no heat) to build and test our hardware. We eventually moved into a bigger incubator with more office and lab space, then our own office.
We weren't in SF. Location matters less every day, and you have to make sure the higher costs associated with various locations make sense. It's pretty amazing where you can find a machine shop that can make prototypes for you if you need it. Cloud service providers will give startups $10k/mo or so in free time to start with to get you hooked, so you need very little infrastructure.
It is possible to run for a while without a huge initial round if you've already confirmed there's a market, have built relationships with potential customers, and have a team who understands what they're getting into, and is motivated to delivering the first few milestones, whatever they are.
Why does it need to be in the Bay Area? Or any expensive city for that matter? An EBITDA of $2.5mm in the Rust belt for instance is more than successful and would retain and satisfy top talent in the area.
Does the biggest compensation package even attract the best talent? Or does it just attract the obsessively competitive to burn out in style?
It might be easier to convince a VC to give you a few million for salaries than to find 10 world-class developers currently looking for a new job in a rust belt city.
I appreciate your comment, but I don’t really know where to start with it since it’s so far off the mark.
1. A start up would start with fewer people and less money. It would most likely be started by people who can live cheaply and/or people who have money from other sources like work or family. Founders typically don’t make anything early, but once the revenue starts rolling in, they can pay themselves and others.
2. Assuming you are referring to a business making 2.5mm, that’s plenty for a smaller team (e.g., 5). Not everyone will be a high-paid tech professional, and the founders will probably be the highest paid folks in sales and tech (at least in this structure). If you’ve got 2-3 founders growing a non-VC tech business making 2.5mm a year, and they can’t make it work, they’ve got big structural issues that they need to address.
3. Outside of the Bay Area or NYC, 10 people on 2.5 mm would be very doable.
Bootstrapped small businesses are as old as dirt. If you aren't going to scale, why do you need venture funding?
Venture funded startups may prove to have been a temporary kind of business made possible by the technological frontier of first the personal computer and then the internet.
If a new computing platform comes along the VC model will keep chugging, because you've gotta plant that flag as fast as possible.
I see the diminishing value of working for startups as a sign of the maturity of the internet. Rather than try to swim against the current, it's probably better to find a new shoreline. And inventing that new platform is a very hard problem.
There are three things in my view which you can theoretically use for recruiting at a small company. Sorry, I don't have personal experience using them, I am just making observations:
- I recently heard of a company offering a publicly announced 4 day workweek and being able to recruit very good talent. I am not sure if Big Tech can make it a public policy.
- You can point out that there is a much smaller need to be politically correct. For example, it is extremely un-PC to be openly supporting Trump in big tech today, and anyone who says otherwise is just lying to you. I know someone very closely who works in one of the big tech companies and I can tell you that he is wrapped in a very strange bubble. For example, he was 100% convinced that Trump will be impeached and booted out of office before his term completed. Now he has stopped talking about the impeachment altogether. It is actually hilarious.
- the "cult" problem. Sooner or later, everyone who defends their big tech job will be referred to as acting like a cult member [1]. I am not sure how a small company can run into the cult problem.
[1] Like this person:
"Remember, what Facebook is doing has never been done before. There are going to be mistakes."
It’s odd (read: motivated by self-interest) that he didn’t make any attempt to establish the failure rate of these startups and the distribution of outcomes for employees.
Further, he didn’t even argue for a referendum on equity comp. He’s blatantly peddling the same broken model of “sell them your fugazzi so they can’t tell their talent is being plundered for (founder/investor) economic gain”. It’s downright insulting. I’d like to read Altman’s thoughts on making the cap table transparent to startup employees. I’m sure it’d be a riot.
So why is Altman saying any of this? Because he relies on the portfolio model. He doesn’t care if 99 companies fail and the employees within them end up with squat as long as the 100th is an earth-shattering home run. And he needs the world to start taking more massive risks on YC’s behalf, so they can keep making piles of bank. This is the incentive structure dictating EVERY single VC’s calculus. No one should ever listen to them without understanding this. Incentives. Incentives. Incentives.
The “mission” doesn’t matter to a rational person, for a very simple reason: the opportunity cost is the significant amount of wealth (reliably made somewhere like Google) that will afford you the cushion to do whatever you want later in life.
These guys need to get real. The highest EV play is to first get wealthy and THEN do what you want. And it doesn’t even have to take that long (most competent engineers could be there by age 35-40).
Don’t fall for their “mission” nonsense. It’s a monstrous lie designed to keep funneling tremendous amounts of money to the people at the top.
It's shocking how few people understand this, and how good YC is at painting the narrative that this isn't the case.
My roommate, after reading all of pg's essays and learning the YC mantra, came to the conclusion that they don't care about making money, and just want to do good for the world. That is the picture they paint to get smart people to work on problems that are most likely going to fail. YC knows what they are doing.
Is it really so crazy that people might care about more things than money when considering what to work on?
If I were given the opportunity to go back in time and work at Bell Labs or Xerox PARC, I would probably do so even if paid no money at all. This seems rational to me, both in terms of how much knowledge I could accumulate and just the self-actualization of working on such interesting problems. I imagine the calculation for early employees at start-ups is similar.
A mission and a reasonable distribution of equity with fair terms do not need to be mutually exclusive, that's how I read the original comment.
If the C-levels are still getting massive chunks of equity with tiny strike prices while you get 0.01% and a 90-day post-termination exercise window and a massive AMT bill, then this talk of a "mission" is vacuous and likely a diversion from the fact that you as the employee are being under-compensated.
Saying that a VC-funded startup can provide the same experience as Bell Labs or Xerox Parc is a tremendous false equivalency. Some exceptions might resemble those R&D behemoths. Most will not because VC - with its attendant growth expectations - is antithetical to “tinkering” (a great word another commenter here used).
And good luck picking the exceptions as a potential employee when every such startup has a reality distortion field. I can assure you you’re more likely to end up somewhere run by an Elizabeth Holmes type, who can sell you a compelling narrative that will ultimately flatline. Employees have no window into the reality of a startup from the outside. Very often they don’t get to see that much more on the inside either.
> Don’t fall for their “mission” nonsense. It’s a monstrous lie designed to keep funneling tremendous amounts of money to the people at the top.
100% For some reason, it is so easy to believe in it but the fun part will eventually come in a form of VC asking where is the money. "When someone says "I am not doing it for the money" he (she) is doing it only for the money." - Nassim Nicholas Taleb.
My opinion is that it is some form of common sense going around in societies that contains binary statements like money = root of evil or save humanity = a good deed. Reality is full of nuances though.
From history, the best businesses always have a good business model first and "mission" always was only a nice side effect.
> "When someone says "I am not doing it for the money" he (she) is doing it only for the money." - Nassim Nicholas Taleb.
This is silly. Artists and creatives aren't doing it for the money. Social workers aren't doing it for the money. Teachers aren't doing it for th money ... etc. Passion => irrationality. Or different goals, like sense of purpose vs. money.
> Don’t fall for their “mission” nonsense. It’s a monstrous lie designed to keep funneling tremendous amounts of money to the people at the top.
100%. I've recently run into this with companies peddling that they're "mission-driven", as if that's somehow a replacement for compensating their employees appropriately. If it's a for-profit company then this "mission-driven" term is absolutely nonsense because the cap tables prove the people at the top with the large chunks of equity aren't foregoing any compensation to achieve this "mission".
I'm a little curious to see if this distinction might provide a competitive advantage to public benefit corporations. Objectively, I believe there's some literature to back up that a person's belief and interest in the work they're doing plays a role in their likelihood to work at an organization [1] (tangentially, I imagine that this has played a role in the success of Elon Musk's companies).
If we axiomatically say that talent plays a significant role in a company's success, and that top talent cares about the mission of the company that they work for, it follows that a company that puts it money where its mouth is (so to speak) wrt to a corporate governance structure that seems to place that mission at least in the neighborhood of parity with profit motive, they might be able to leverage that as a competitive advantage. Of course, whether that initial assumption is correct is up for debate, as is whether a PBC structure affords enough to move the needle on perceived mission-alignment.
I think people downvote you because you attack their dream that they are "special" (snowflake syndrome, geek version) and will somehow succeed even if on average startups DO crash and burn.
You don't seem to be mean, just maybe a little blunt, but it changes nothing: In my experience on HN as in anywhere in the world, people hate to be told then reminded of their failures ("I told you so!"). Because truth hurt.
You are trying to give them the truth in one simple post, while YC and co are selling a dream in an expansive application process (in terms of time, effort, equity lost etc)
Sorry, but you just can't compete.
> The highest EV play is to first get wealthy and THEN do what you want
Exactly. Shut up and work for a while, then when you take risks, do it on your own schedule and bankroll. If
you are as good as you think you are, certainly profits will come raining! And you will be the only one collecting with a very large bucket. If it's just a "small" acquisition (say 6 digits, something that a fund would find a sad outcome), you will be extremely happy and be ready to try again with your new fuel and hopes- thanks again to your large bucket.
Still, there is a place for things like YC: when your idea blows out of proportion and you know that it will die if it can't grow fast enough. But it's an exception, not a rule.
Than again, why I am bothering, you can't tell anything to people who don't want to listen.
About the "mission"? I disagree with you. Maybe that's what getting you downvoted. We all have one! Mine is to maximize my lifetime wealth while doing things that I enjoy because they match my morality. I think most people have a variant of this one - and, no lie, it is designed to keep funneling money to oneself!
I agree with most of this post. But there's one part he's wrong about. The most precious commodity is not talent. As he said "That year, probably over 1,000 photo sharing startups were funded". That means, when that original photo sharing startup was hiring, it could have filled every position x1000 times, if they could find all those candidates. That's an indication of a vast oversupply of talent.
The most precious commodity is Opportunity: Market opportunity.
And, I know, human desires are endless. But, (legally) solvable problems are not endless, they're currently in very very short supply. this is why we end up with start ups like juicero. out of desperation, entrepreneurs are forced to take on problems that aren't really problems because all the real problems are blocked by legislation/legality/monopoly: education, housing, transportation, medical insurance.
...or maybe there are an infinite number of boring problems out there to solve but that's why they aren't solved, cause they're boring. On the other hand, juicero is exciting.
But seriously, most entrepreneurs are too within their own bubble to know about the problems to solve that are outside their sphere. And there an endless number of them.
Consider this: every day on ProductHunt, we see dozens if not hundred new apps pumped out. How many of those succeed? Not very many. Why?
Each and every one of those apps was designed to solve a problem. So, why is there so little demand? It's because users already have another app/spreadsheet/website/solution/process that does something too similar and because their existing solution is good enough.
The fact that so many apps are being produced and fail to see traction is an indication of massive oversupply of solutions and talent. It's just too easy to produce yet another app, and so everyone does. this inevitably, must lead to an oversupply of solutions.
You're exactly right. Outside of deep deep tech (e.g. self-driving cars), you'd have to really, REALLY dig deep to find one or two startups that failed because of lack of technical talent.
Now consider how many startups failed because of lack of customer demand - nearly all of them.
This isn't just an indicator of an oversupply of talent, it also suggests an oversupply of capital. Cheap money lets you find talent, but it doesn't guarantee a path to a profitable business.
You are wrongly correlating apps launched on ProductHunt to be representative of all problems being solved. If I were to describe one word for ProductHunt launches, then it would be "sensationalist". Most of the apps being launched there are moreso trying to go viral than solving a profound and/or boring problem. The YC launches are probably more representative of the landscape and most of them have never had a ProductHunt launch.
I don't see this at all as related to oversupply of solutions and talent. It's a darwinian structural feature of many of these domains that a very small number of winners will beat out all other solutions, and if the problem is valuable a large number of candidates will compete for the chance to be a winner.
Likewise with talent, roles are not fungible. If I'm engineer #5 at one of 100 photo-sharing startups that's a totally different proposition to being engineer #500 at one large photosharing company. A different sort of candidate is going for that second role and you actually need somewhat different personality and skills. That implies a really different competitive dynamic as well.
I think you need a different kind of talent to build the "hard startups" he's talking about. Sure, there are a million folks who can throw together a CRUD photo-sharing app, especially with the improvements in cloud services and development frameworks in the last decade. If you want to build an AR headset, maybe there's a few dozen people with the right expertise to make it happen.
What bothers me about Sam Altman's writing is the following:
1) He talks about X, X being an observation with survivorship bias painted all over it, but Sam Altman asserts as if it is true. Stop writing with authority over unsubstantiated claims - you can only be humble and say "Perhaps X is true because of my observations, take it with a grain salt".
2) Statements like "Easy startups are easy to start but hard to make successful." are fluffy with no real substance. I might as well read "How to become a millionaire" books.
3) Completely obvious observations: "Then talk about that big vision and work relentlessly towards it, but always have a reasonable next step." You might as well say "When you are embarking on a startup endeavor, make sure it is successful". I can't help but exclaim "No shit!".
IMO these articles and blog posts offer zero advice of substance. I despise them very much. There is nothing to learn from it, this is like grocery store aisle tabloid version of the Silicon Valley.
The first point on your list is something that I come back fairly frequently when reading through blog posts like this, or (for example) listening to things like TED talks. I understand that there's a need to stand behind any given thesis, but it seems to me that there is often a lack of distinction between "I'm claiming this to be true primarily based on my experience" and "I'm claiming this to be true based on widely-accepted external factors, like peer-reviewed papers, industry standards, statistically-significant trends, etc.".
When people don't meaningfully differentiate between those two positions while communicating, it passes the burden of deciding which claims fall into which category onto the reader. And since I'm then unable to distinguish if the writer themself recognizes that difference, I find myself less easily able to give any of their claims the benefit of the doubt. That isn't a recipe for taking their advice or conclusions to heart.
I think you summarized it better than I could. When stating facts, be assertive and provide source. When stating opinions, state them as opinions, not facts.
As a reader, I wanna chuck the whole thing out of the window.
This is pretty common place - Harari's Sapiens suffers from this behavior excessively - I cannot read it and I don't understand why people like this book so much. Full of unsubstantiated claims.
I appreciate you saying that. I haven't read Sapiens, but since we're on HN, I figure it's worth mentioning that I think Paul Graham's writing wanders into this territory a lot. Hackers and Painters has been sitting only half-read on my shelf for a long time because I got too frustrated with it to continue for that exact reason.
But "reasonable next step" isn't so obvious! Often one can toil away at their hard startup for years without a product with customers. The "reasonable next step" here would be to first build a related product in the space that doesn't yet solve the hard problem but helps establish your brand and revenue streams.
You know, I take most articles like this as a signal to say, “hey I’m still alive”, rather than to dispense some secret knowledge. There’s no need to take it too seriously.
Something that really bugs me about this is the lack of examples where this succeeds. In my mind, a good one is Intel. To that end, how many microprocessor startups actually ended up succeeding at the same working on some fundamental and challenging things? Also, the thing about hard startups is there is a lot of luck involved. Counter to what the author is saying, you do need a degree or some level of measurable expertise to start a hard startup, because not only do you need the expertise, you also need the credibility to get people to work with you and you need that solid team to get funding.
The reality is, many "hard" startups actually were things birthed by experts in a field that got lucky enough to have the right expertise at the right time, but also managed to derisk many aspects of the business by being experts.
> Counter to what the author is saying, you do need a degree or some level of measurable expertise to start a hard startup, because not only do you need the expertise, you also need the credibility to get people to work with you and you need that solid team to get funding.
Interestingly, this criterion causes Microsoft to be in the "Easy Startup" column. (Facebook too, but that seems more correct.)
The Elizabeth Holmes example is also interesting to consider. Lack of degree in a hard field was no barrier to raising a ton of money.
> In my mind, a good one is Intel. To that end, how many microprocessor startups actually ended up succeeding at the same working on some fundamental and challenging things?
Nit: Intel's first products were memory, not CPUs.
Elizabeth was doing a degree in a hard field and had the credibility of her supervisor to lean on, plus a whole host of questionable motivations from those who invested in Theranos. Funny enough, the degreeless founder in a hard startup turned out to be a fraud.
He didn't say easy startups couldn't be successful - just that Insta had to stand up to several orders of magnitude more competition than a 'hard' startup was/would have been.
As a matter of survivorship bias, it would be shocking if there wasn't some surviving 'easy' photo-sharing startup. But looking at it prospectively, I think his point was: you could be fending off 9 competitors rather than 999 competitors, not knowing in advance if you're going to be the 1 survivor.
I find these 'Valley Koans' popularised in the last long while to be a little troublesome.
Things like 0->1->n
Do things that don't scale
Andreesen Horowitz bit on 'The Good Ideas That Seem Bad'
Paul G's essays.
They all have nice little nuggets of wisdom, but what the almost always lack are good examples and concrete evidence.
Funny that many HN comments are better researched than a lot of these 'Deep Thoughts'.
Since these guys have access to startup data like nobody else, golly, wouldn't it be nice to see examples and break-downs?
i.e. here's 1000 YC startups, and how they categorise in terms of 'hard/simple' problems. Here's their trajectory. Here's some mitigating factors etc..
The reason I write this is because of my flinch on this note from Sam. He's worth listening to, absolutely, but that doesn't mean we can't disagree.
The problem with his thesis is that YC makes all their money from very regular businesses.
There is no 'magic' to Stripe. It's a really great product that did mostly what previous products did, with a much cleaner API that devs loved. This is not koolaid/AI kind of stuff. For pragmatically minded people, yes, it does seem like it could 'really help change the world', but really ... it's not sexy.
AirBnB because it's more consumer, yes, I can see some koolaid about 'sharing' etc. but again I don't think it's in the category of 'tough problems'.
So many of the big YC companies are solving regular kinds of business problems, in big market places.
The 'heady' startup would be 'Cruise' but that was an odd man out for a few reasons.
All the things it would seem to me that Engineers would really like to solve are not quite on that top list. The 'coolest tech' YC startups aren't really the big hits.
The biggest "deep problem"-type leaps in the past few decades have been due to innovations in technological infrastructure: the advent of the internet, GPS, and smartphone for example. All three innovations benefited from the positive externalities of government funding, as well as routine R&D and large corporations. The entities that collectively solved those hard problems only captured a fraction of the profits/benefits of their innovations.
The quickest route to success for a "hard problem" startup is to see the obvious Next Big Thing that is still in early adoption phases, and find the best way to translate it to the broader market. I know, that's not solving a hard problem in the same sense as the OP, but I think it's an underrated strategy with a quicker feedback loop and higher likelihood of success.
What's the Next Big Thing? One of them is AR combined with AI, cloud-computing, and 5G for real-time rendering of 3D objects. That will enable so many incredible things. Imagine the most profitable possibilities, for software, peripherals, physical objects that play a part in the new physical-digital realm, etc...and start hacking now. By the time AR devices are mainstream, you'll be ready to profit immensely while everyone else is scrambling to learn the fundamentals of AR.
VR is fairly mediocre right now. Of course, you know it will get better. However, do you think you correctly predict the magnitude and speed of that change? It's fairly likely that VR will be very, very good in the next ten years. If you're ready for that scenario, you can strike gold.
Self-driving cars are another Next Big Thing. Right now all the attention is on Velodyne, Waymo, etc...and those are promising companies. However, there's plenty of room for startups in that space. Anticipate how self-driving cars will change the world, and profit off of that change. That can make you rich.
I'd rather ride the tsunami of new technologies than try to capture the energy from late-stage ambient tidal waves (such as making another camera app, or a niche ERP tool for enterprise). On the other side of the spectrum, it's noble to try to invent the Next Big Thing yourself, but the odds are against you even if you're extremely smart. You might be just as likely to stumble into the Next Big Thing doing routine work at a big company.
"If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded, even if you don’t have a degree or much experience."
I encourage anyone to give hard startups a shot, but there are tons of PhDs/Postdocs out there who would make amazing founders -- they should make the leap! Often feels to me like recent undergraduates get more encouragement to launch startups than recent PhDs/postdocs -- which is a weird miss especially when it comes to hard startups where PhDs have the advantage of deep understanding of a hard field.
I'm currently in the research phase for an idea using algae/other plants that sequester CO2 rapidly and continue to have questions, which lead to more questions. Thankfully there is a ton of research that has been done, which makes diving into the topic easy. But having someone to work with that has a PhD/postdoc in this area could help build the idea faster.
How can I meet someone with a PhD/postdoc in a specific field? Should I just browse ASU for PhD students or look at specific universities and areas.
I suggest you look at algae that live in highly alkaline lakes, like soda lakes in Africa. The high pH means the water scrubs CO2 from the air, which is then available (as carbonate and bicarbonate) for the algae to use.
(Mass transfer is an underappreciated limit on photosynthesis. A corn field in still air becomes CO2 limited pretty quickly in bright sunlight.)
Yeah look at research group websites at major research universities that are working in your area of interest. The students are usually listed on the lab website. They’d love to be emailed.
It's a field that has many startups and government basic research for decades. Power plant flue gas seems to be the primary feedstock people are interested today.
A colleague of mine more than a decade ago started a company in the alternative energy space with very interesting yet extremely difficult and unproven technology. It took them a decade to find out that the performance of the technology was not quite good enough to be commercially successful.
He burned perhaps a third of his working life grinding away on something that won't succeed - perhaps at all. Yes, there is some chance of a base hit OEM deal for a very niche application of the technology. But it's definitely not making anyone rich after so many years.
Hard startups are exciting and fun, but unless you are already rich, it may not be worth the risk. Comparatively, you could spin up and fail five times at an "easy tech" startup and perhaps have a greater overall chance of winning the one time that you need to win to make it all worthwhile.
VCs are incentivized to see more hard startups start. As a founder, I agree you don't want to be doing it, unless you life goal aligns with it or you are already rich.
Long-term-committed founders are indeed a big advantage to a business.
If you're committed to investing 20 years of your time into a startup, then you're self-funding a multi-$million Series A, just in terms of market value of your time.
Investors who spot a commited founder and buy in at pre-seed valuation are getting a deal.
Just 10 years ago the dominant message was, startups today are lucky that they are easy and cheap to spin up. It makes testing hypothesis easy. That brought in a flood of small angel and seed investors with thousands of bonkers ideas.
When I think of hard startups, I think of FitBit, GoPro, or even Oculus. Yet, all those companies did was prove that people want fitness trackers or smart cameras, or screens wrapped around eyes.
Those companies early employees were all specialized PhD employees with very specific skill-sets. You aren't going to go to an 8 week bootcamp and come out able to contribute meaningful to the research needed to pull off those products. Sam is right, yes, you will have an enthusiastic group of people knocking on the door to work there, but the bar is exceptionally high to hire the people you need to be successful.
Google, Facebook, Amazon, Microsoft, Apple, AMD, Nvidia, etc, they are all paying top salaries with great perks to work on hard problems with the resources to be successful. Want to build custom servers, Amazon has a dedicated Gravitron engineering team and internal customers salivating at deploying them. Microsoft is currently already shipping AR glasses with a cohort of trained developers already able to write software for them. Apple, well, there's a rumor they are building an ARM laptop, and we know only Apple will be able to shift the industry in that direction. No hard startup could do that. On and on...
Anyway, not trying to be cynical, but I do think the problem is deeper and VCs will need to give huge initial rounds, with really long several years runways, just to bring in the talent needed to compete against the established players. Then, these hard startups need to be prepared for the sea of copycats who will swoop in for free after all the hard research was done.
Silicon Valley loves to shine its turds. And they love to believe their own stink about how much they're disrupting and changing the world. And yet the most funded startups are just car services and rooms-for-rent and song-sharing-apps and the next social media whatever. When the top 10 SV funded startups are solving really big problems, then I'll start believing this nonsense.
The geographic location of the company or the money? These aren't the same thing.
* There's a lot more biotech in Boston than SV
* There's even more biotech in Pennsylvania
* Battery tech companies are all over the country
* There's a ton of space tech in Texas and Mississippi. Yes, Mississippi. And Florida.
* Telecom? Look outside the US for strength
* Cybersecurity? Maryland. Virgnia. and Israel.
* AI? Literally every major country in the world.
* Advanced materials? So many places.
Increasingly SV has less and less to offer. Maybe raw money, but I thought companies were looking for smart money, not dumb money.
I would be curious what people think today's most obvious schelps or hard problems are? Nuclear Fission as in OPs post is cool, but Im thinking more along the lines of something a team of competent developers could do.
I feel like one of the hardest problems in tech is making search engine that credibly competes with Google.
It's not just because the tech is hard (and it is), but also because they have some of the strongest network effects, user lock-in, and distribution deals.
It sounds almost dumb/crazy for people to try, but there is a newer effort from Europe that I saw on HN recently (i.e. they've been working for ~5 years and are just starting to publicize). And I think PG has mentioned it a few times -- i.e. encouraged people to take on Google :)
BTW I think "schleps" are different than "hard startups". I think schleps are about raw effort where you kind of "know" you'll succeed at the end. It seems like most companies are hard because you don't know if what you're building will succeed, even if you build it.
"It sounds almost dumb/crazy for people to try..."
Timely comment. I hesitantly shared a "Show HN" this morning for an early search engine I have been working on.
I almost feel silly when I tell people about it because I realize it is such a crazy idea. It's obviously nowhere even close to being a competitor to anyone today, but I figure why not.
I have been lucky with two prior highly vertical startups, so I decided that my next project would involve asymmetric risk.
My guess is that the company that beats Google will be the one that lets users create and monetize their own multifarious search engines that each has an editorial slant and an aptitude in a specific area.
Essentially, Google is CBS/NBC/ABC and their value is based on their name being the destination. They’ll be taken down a peg by a YouSearch (née YouTube).
Although Google, like CBS/NBC/ABC, will still exist they’ll just lose half the market (the middle tail).
What I’m describing is a technical challenge, but not like Nuclear 2.0 is a technical challenge. You could create an MVP for a niche market in a year or so. I think it’s mostly just hard work, doing marketing, understanding early adopters, doing the tech support, having a good feature-request-to-patch pipeline, managing investor expectations, etc... all the normal grunt work of a startup.
The search doesn’t even have to be that good if you can search psychological spaces Google could never prioritize.
I thought so but Duck Duck Go did ok going for a niche with a privacy focus. I know they don't really compete with Google but it shows you can start niche wise and potentially build.
A startup working on Schelp might not necessarily be working on a very hard problem but more of a tedious problem, or one that doesn't sound that interesting/exciting to most people (like fixing payments).
> If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded, even if you don’t have a degree or much experience.
Is this actually true? I have plenty of "hard startups" that I would love to work on. But these hard startups require far more investments and manpower, even to get to the MVP stage. As someone with minimal prior-startup-success and investor-contacts, I get the impression that no one is going to bet significant sums on me and my unproven idea. Am I wrong?
Solving hard problems is the trap of the genius. I know.
We want a simpler world, but create complex software to do that. All we are doing is moving the complexity under the rug somewhere else. The complexity is still there, warts and all.
Doing something mundane over a large surface area (quantity being the hard vector) is better than solving a really difficult problem that has little reach in terms of real-world value.
The complexity in my own startup is its multi-layered nature, solving multiple problems for multiple levels of ability. I'm still aware of the fail aspect, but one layer will succeed. I know this. I have a 10 year challenge, but sooner is better. I know for a fact what i'm doing isn't being done out in the wild apart from a couple of sporadic os projects badly implemented and a couple of small commercial ventures that kind-of work. On different products on different levels.
If you're going to put your eggs into one basket, make it the basket of n dimensions.
I am on a similar arc, attacking a multi-facet problem space and assuming some % of facets will fail. Would love to chat with someone on a similar path. Email me if you are interested in that!
> Few recruiting messages are as powerful (when true) as “the world needs this, it won’t happen any time soon if we don’t do it, and we are much less likely to succeed if you don’t join.”
This line would work on me if it the founder(s) and I were in the same boat. But when you have 20% and you won't even tell me what percent of the company my X shares are worth, your pitch only makes me thing "I'm less likely to be rich if you don't slave away for a really long time (and I might be a few million if we're modestly successful, and in that scenario you probably won't get anything)". When startup equity distribution becomes more like a pirate ship, where everybody gets X, and the captain gets 2X, then I'll buy into the "we're all in this together" pitch.
I've got a lineup of hardware with specific industry use cases. Right now, I'm the designer, hardware engineer, software engineer, and more. And right now, Only have around $2k of my own money in it, with possibly more on its way from grants and funds. All equity is ours.
Unpopular opinion: Silicon Valley is in the beginning stages of a period of decline. There's lots of great entrepreneurial activity elsewhere, and for building these sorts of "hard startups", the truth is that SF and SV are not the best places to do it. People and rent simply cost too much, and the venture scene lacks depth in these areas.
I disagree, having worked both outside and in the Bay Area.
The network effects are unparalleled. We're paid far better (my salary nearly doubled when I moved to the Bay, my rent didn't). It's far easier to find quality talent and freelancers for startups than elsewhere.
But most importantly, the money and culture is here. Raising money outside of the VC scene here is orders of magnitude more difficult and you get far less for the time you spend.
And I could go on about how places I've been (South Florida, Chicago, Research Triad, etc) all claim to want to be the "next Silicon Valley" but they won't. Partly because SV didn't become the "next" anything, it garnered a unique culture that funded massive amounts of innovation, and anyone chasing a trend is too late. But mostly because the money and tech people in those cities are too cowardly to do anything truly innovative, by and large. There are outliers, of course. But frankly there's not a lot interesting going on anywhere outside the Bay and it pays way, way worse.
Not for the sort of "hard tech" that Samalt is talking about here. Those network effects aren't as prevalent for those working with nuclear fusion, or space tech, or advanced materials, or battery technology.
Yes, you can find lots of brogrammers cranking away at the next advanced app using React, etc. in the Silicon Valley / SF / Bay area and get paid better there for doing that sort of thing. For that, Silicon Valley has the tech in spades.
But if you want to start an advanced lightning company, for example, the Research Triangle (not Triad) that you refer to above is the place to do it. It's the home of CREE and many other LED innovators. Not Silicon Valley.
> for the most part talented people want to work on something they find meaningful
Is this really true? I would hope so but apparently the definition of meaningful is different for everyone. From my point of view funding and talent has been allocated poorly in recent years.
I think most people are pretty good at retroactively creating a narrative around whatever they find themselves doing to imbue it with meaning and purpose.
I think most people do want to work on something meaningful, but few start with the purpose and then pursue that.
Then given the difficulty of actually getting into what you want (either access restrictions via things like admission, the randomness of technical interviews, or the thing you want not being very lucrative) - you're better off doing what you can until you have the money to be free. Unless you can tolerate lots of risk, don't worry that much about having a family, or have some existing family wealth.
"Meaningful" is definitely a range and may not even entail just the company they work for. For example, if you work for a company's whose product you may not be overly passionate for, but your job is satisfactory to you and pays you well so your family can have a nice, comfortable life, I'd consider that meaningful.
There is also a distinction between "meaningful" and "most meaningful". If you believe enough if your company's end product and results, that will result in a certain level of meaningfulness for you, even if you aren't solving world hunger or curing cancer.
Another fairly common take on this is a preference for technical risk over business risk. For the VCs that are from the "real" technology era, there seems to be a distinct preference for "if you can solve the technical challenges, you'll mint gold" businesses over things like social networking which simply work or do not in a way that cannot be addressed by the addition of technical or business skill.
These companies tend to be very expensive and take 3Y or so to be tested on the market, so in a way they are not for people who want to follow the as-quick-as-possible MVP approach, but they also tend to have defensibility which your generic SaaS does not have.
I love the spirit of this, but I'm not sure this reflects reality as well.
There are some examples that come to mind (boom, openai), but I think many more examples that have a different impetus.
The most common successful impetus i.m.o is "tinkering"
Playing, solving something lightly, and realize it's taking off like crazy.
I think this can be a better light to follow, because it removes the pressure of thinking of the excellent idea out of the bat. Just play, show stuff to users, and see where it grows.
Examples of these kind of successes: Facebook, Instagram, Gmail, YCombinator, PG's first startup, etc
I find ycombinator to be acting completely ignorant of why and how it succeed. The whole notion that they can apply the techniques for an internet startup to hard things is bizarre. As the internet S curve comes to a close, new organizations should be built. Using ycombinator's name to launch unsuccessful startups is just asking to destroy Bs
I'm almost thinking hard startups shouldn't exist. If a startup is considered hard, what is making it hard. Probably ecosystem / infrastructure. Maybe a good approach would be to ask the founder why timeline is so long or will cost so much. Once they answer those questions, ask them to build an "easier" startup that will be able to sustain itself and can (eventually) partner with the "hard" startup, which will only be launched once it becomes easy.
And I'm not saying do something different. I'm saying the "easier" startup would be built as a means to enabling the hard startup.
>The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one.
I completely disagree. It has nothing to do with being "easy" or "hard". It has everything to do with the RIGHT people heading the team of RIGHT people. Put RIGHT people together and you can solve both easiest and hardest problems out there.
Companies fail a lot of times because wrong people with wrong or little experience make executive decisions that ultimately destroy these companies.
Poor managers cant build and keep good teams together. Poor managers ultimately erase companies chances to succeed.
Consider this: When facebook came on the scene and made it super easy for developers to publish apps, what happened? A bazillion people all the sudden jumped in and next thing you knew, within less than a year, there were 100K+ apps in the app store. That's because, it was easy to do so, too easy. And this leads to a ton of competition. Now, imagine for a second, it was much harder: let's say only a 100 engineers in the world knew how to do it, then there'd be far fewer apps in the app store and far fewer competition.
I get his point, but it’s not expressed well. It’s not “easier to succeed.” The chart effort/time has a different shape. Upfront effort is tremendous, and if you can get past that then it gets easier.
“When all you have is a hammer, everything looks like a nail.”
Seems like Sam Altman’s hammer is startup investing, so he tries to solve everythin... even the most challenging/ambitious problems through those means.
Doesn’t necessarily mean it’s a bad approach, but that seems to be his bias.
It’s worth having a more nuanced discussion. The current piece sounds more like cheerleading than advice.
I found Sam Altman's writing on quora and followed it off-and-on long, long before I found out "who he is." And his advice is so overly-positive and one-note that, honestly, I thought he was a snake oil salesman or self-help guru. I would never have guessed he was actually a VC / successful entrepreneur.
Frankly, his arguments and writing continue to sound like Self-Help Guru shined through the lens of SV VC to me. Nuance isn't really on the table.
I remain amazed until today about his progression. He founded a startup to solve a white upper middle class "problem", raised millions for that, was lucky to get a little bit more when he sold out his startup's users' data to the greater fool and now runs around and tries to get rich off other peoples creativity and sweat through the VC vehicle. When I learned that he actually founded OpenAI that org lost almost all appeal to me.
So yes, it might not be too much of a stretch to picture him as the embodiment of the current silicon valley mindset and all its tech-hybris and duplicity.
As opposed to what, being a financial engineer or wealth manager? Or maybe he should be a real entrepreneur and open up a well managed brand of gas stations? Or build a better kitchen utensil? Or maybe leverage political relationships for tax abatements for major real estate deals?
Vs pushing people to strive for grand ideas, restructuring the greatest accelerator in SV history towards big, bold ideas.
Optimism is arguably a form of error, just as pessimism is. And yet it is one of the most valuable qualities you can have when undertaking ambitious projects.
Also, when laying out your strategy, don't make the mistake of betting everything on the hard problem working quickly. Uber started as a taxi hailing service, not a self-driving taxi service, and that was the right plan.
Make a model that makes money now using low-risk tech/ops approaches so you have the money to build your flux capacitor to plug into the business you already built to unleash the phase II hard-tech-powered model.
Sometimes it is serendipity that makes the biggest breakthrough, though... see for example the Ebola drug now, this same evening, seeming effective against Coronavirus... you as a VC can neither plan for nor invest in any given lab or boutique consultancy worldwide... and the bigger and bigger hammer thrown at hard nuts is just another way, a very expensive one and possibly unsustainable by VC?
They tested that drug against Feline Infectious Peritonitis, and it was highly effective (turning a cat death sentence into a 80% cure rate), but decided not to commercialize for that because the market was too small. I bet they're kicking themselves now.
This is basically drivel. My personal motto is "we chose to go to the moon, not because it is easy, but because it is hard!" The trend of startup failures has nothing to do with the difficulty of the problem they were trying to solve, and everything to do with the fact that smart people can spot when a startup is just a copy of something else already successful.
Yes, startups doing photos sharing apps increased after Instagram was created. That's because most people are idiots and just won't realize they aren't going to disrupt a new industry. Venture capitalists also frequently invest in failures because they too are idiots.
The reason there are only 2 startups trying to do cold fusion energy is because nobody has any clue on how to make that happen, where as social media apps can be designed and built in an assembly line.
Yes, trying to invent a new industry is infinitely harder, but for the most part we all know that startups aren't going to invent successful cold fusion. Either someone will invent it by accident, or some chemist/physicist is going to figure it out as part of a think tank funded by either the government or by one of the existing fortune 50 companies.
Picking a hard problem to solve can't make it easier for your startup to succeed because the hard startups are basically trying to get retardedly lucky. There is no mythical group of employees who you can identify as being the group who will invent cold fusion, which is why these kinds of startups always fail. Funding one of them is throwing money away, where as funding a photo sharing app has a small chance of breaking even if they at least have a unique selling point.
This is true: If I'm going to take a 40-50% paycut (or more) then I better damn well believe in their goal and mission, enough that their 1% equity will be valuable to me. It's on an emotional level, not a practical one.
The set "easy problems iterated" is a subset of "hard problems" and I would argue a very small and uninteresting subset. Biotech, energy, next gen computing physics; I don't see any of those as iterating on a simple problem.
The problem with long term goals is that you've permanently screwed yourself if the goal is bad. With short term goals, you get unavoidable feedback quickly that keeps that from happening.
Im all-in on hard problems, but the startup echo system isn't. I have to self fund because I don't think there is funding available for projects that take time and don't have a fast ROI. To guild the kid of things that can disrupt the really big players: FAANG, big oil, Detroit, Boeing you need more time and need to solve harder problems. I find it curious that Elon Musk is such a hero in the startup world, when his companies had to be self funded for a long time because VCs don't want to invest in that kind of bets.
It would be nice if part of the ecosystem was structured more in terms of supporting founders who want to take on hard problems via way of dedicating their life to it. I'll provide my own perspective here in case anyone finds it interesting:
I've been working on my startup for 7 years now, and the damage it's done to my personal life and well-being has pretty much ground progress to a halt, with the exception of advances in thinking in certain areas, which has been nothing short of mind-blowing recently.
Of course, a large part of this is my own failure to plan instrumentally. Admittedly it's quite backwards to spend years planning the mid and high-levels first, then not have a solid plan to get from 0 to 1. Ending up there by accident is easier than you'd think.
Fortunately I now have a fully tractable, instrumental plan that goes from 0 to ripping the guts out of a couple FAANG-scale companies:
1. Get a well-paying engineering job I'll probably hate, because money, quality of life, and sanity all have instrumental value. Hopefully keep the fire alive during this period.
2. Work it for about two years, then raise a pre-seed round (at year 9!) to support myself for the next couple of years, while I embark on a formal pre-production phase, and possibly develop an up-to-date prototype/PoC.
3. Potentially a seed round totaling a few million. Hire a few key people and put together a refined prototype/pitch over the course of a year, for a Series A that no high-caliber VC with sufficient funds could refuse.
4. At year 12, raise a 100M+ Series A, with the caveat it's going to take about a decade to do properly, with further funding rounds along the way.
5. Complete the journey, or at least achieve the intended objectives, a decade later at year 22.
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I'm well aware that sounds insane, mostly was just a writing exercise to underscore the timescales involved. The funding requirements are high because it's basically a blueprint for something that will become an indispensable part of people's every day life, and it consists of multiple verticals all woven together, sharing a common technology. Thinking about how to do this precisely was not trivial and took years.
End of the day I'd rather be skipping to step two, but I'm ironically out of time at this point. Job it is.
In retrospect, a proper plan would have been this:
a) Work a job until financially comfortable.
b) Do a smaller-scale startup or two.
c) Then dream big.
Hindsight is of course 20/20, and I suspect isolation, desperation, being depressed, being uncomfortable—all those things breed a level of ideation you might otherwise not encounter. It ain't recommended, though at least perhaps there's a silver lining.
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For the most part, the tractability of the plan has only increased with time, not decreased, and I don't view competition or someone else figuring it out as a threat.
The biggest threat I face actually, is some of my talent pool may be aging out. Of the 50 or so people I've kept an eye on for years and basically dream of hiring on a daily basis, a few key people are in or approaching their 60s.
On the bright side, if anyone ever doubts how committed I am in the long-term, it should be easy enough to simply respond that I'm moving so slow the people I want to hire may end up retiring before I can hire them!
> Get a well-paying engineering job I'll probably hate, because money, quality of life, and sanity all have instrumental value. Hopefully keep the fire alive during this period.
Based on what I've observed and heard in discussions (both IRL and on HN), keeping the fire alive over the years is a significant challenge. One key ingredient to that is finding the right community/people for healthy feedback (both positive and negative, as appropriate, over years).
For sure. I'm fortunate to at least have a couple friends I can bounce anything off, even if it's just talking to myself sometimes.
As far as keeping the fire alive, I've had little trouble thus far. In fact, the fire's done nothing but increase in intensity for the most part. However when you have a lot of free time, that's perhaps natural.
Being too tired to do anything else outside of job and a long-overdue social/romantic life is a very real concern. The other side of that coin is grinding to a halt on startup progress because my personal life is in tatters. I suppose it's like anything else, where you make time for whatever is most important and practice effective time management.
Arguably the more ambition you have, the better your time management must be. Which is ironic because some of the best ideation and thinking in my experience has come from a lack of structure. Then again, no reason one can't schedule unstructured thinking time when needed.
Translation: the only startups willing to play YC’s sweatshop game are fruit flies; they want meatier deal flow. I doubt the founders of hard startups are that stupid.
> If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded
> The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one.
For white male founders, yes. For a lot of others, they don't believe you can do something hard. Speaking from numerous fundraising experiences in which I got continually asked crappy "how do I believe you can do this" and even "what would you do if I do [bad thing]" type questions instead of growth questions.
I realize I'll probably get downvoted not just on Sand Hill road but on HN as well, but I believe this does need to be said.
