It's not "castigating" or criticising potential users. It's advising founders not to waste resources attracting large numbers of visitors who are unlikely to be potential users, and instead do the hard work to attract and retain users who will actually value your product.
I made this mistake multiple times back in early 2010s "virality hacking" days, and man it was a painful and costly learning experience.
I don't read it that way. The hypothetical author here didn't "waste" any resources to make a viral video--it happened by chance. He got an influx of users from someone else's viral video, but he decided those people are "shitty" users because they didn't stick around and buy his product.
That doesn't strike me as maximizing long-term users; that strikes me as getting free publicity and being pissed off that it didn't attract the kind of customers you wanted.
I don’t think it’s just a UK thing, or that it’s much easier to start a hardware startup in the USA.
I think it’s more that the bar for getting a hardware startup off the ground is much higher than a software startup - everywhere in the world.
Personally I’ve been trying to self-fund and bootstrap a hardware startup (based in Australia but I’m reasonably well connected in Silicon Valley as I’m a YC alum). I’ve had plenty of early success and validation of all my market theses, but it’s super hard to get any investors interested. Plenty say “exciting” and want to chat. All lose interest when you start talking funding needs and path to market.
In a world in which investors and other startup industry contacts are accustomed to seeing a bootstrapped SaaS app showing signs of growth and revenue just a few months in, with a hardware startup it’s just impossible to avoid looking like a failure by comparison - due to all the costs, delays and complications involved with getting an MVP to market. And because successful hardware startups are so scarce relative to software ones, it’s hard even to get any good advice; there’s just barely anyone around with good, relevant experience to share (and I already know many of the people who have built companies in this vertical in past decades, none of whom are in SV).
I’ve come to the conclusion that the only way to make it work is to start by achieving success as a software startup, then transition into hardware to later - but even then you’d have to convince investors that it’s worth the risk.
In short, the whole tech industry has been spoiled by easy SaaS wins over the past decade, and that’s all that most investors are willing to even consider.
The exceptions are “start-big and-get-huge-fast” plays like Groq - but the founders of that company were already highly credentialed and connected when they started, and even then vanishingly few investors are willing/able to fund new companies like that. That’s not the kind of thing young, unproven founders can pull off, anywhere.
>I’ve had plenty of early success and validation of all my market theses, but it’s super hard to get any investors interested. Plenty say “exciting” and want to chat. All lose interest when you start talking funding needs and path to market.
I started a non-tech food product company, and have found the exact same thing to be true in my line of work. It's odd.
Here's a conversation I recently had with a potential investor.
"You've got a years worth of sales to convince me you have found ideal PMF?"
Yes.
"You've found the resources you need to scale to the degree that I'd get a good return if sales continue to grow?"
Yes.
"You've built a small team with some industry vets, and have some great talent on your advisory board who know the ups and downs of building a brand and product in your chosen space?"
Yes.
"You've boostrapped your way to $100k in revenue, have developed a cult-like following in your local market and are seeking a small amount to be able to grow the product to a state-wide or nation-wide scale?"
Yes.
"How much do are you looking to raise?"
Not a lot by modern standards. A million dollars would last us several years
"Why should I invest in you? Your industry's traditional exit valuation isn't triple digit. Sorry"
Why the fuck did you come to me and ask for this meeting?
>In short, the whole tech industry has been spoiled by easy SaaS wins over the past decade, and that’s all that most investors are willing to even consider.
This needs to be echoed from the rooftops. And seen by a whole bunch of investors/VCs whose hubris has prevented them from investing in anything else.
> Alex: Developed AI drone swarms for disaster relief at 18. Graduated with top honours from Imperial. His job? Tweaking a single button's ergonomics on home appliances.
>These aren't outliers. They're a generation of engineering prodigies whose talents are being squandered.
Just the opposite can still be like a mirror image :\
When I was younger than that in the land of the dollar bill I had already made millions for our clients in financial services.
At the time of course the dollar and the pound sterling were still backed in a non-fiat way at about $2.5/£1 which people could count on for the long term.
Once everything went fiat, nobody could afford anything physical like they could before.
I didn't get out of high school until after 1971 so it was already far too late.
Then I went to the University to study hardware type things so I would have something to sell where concrete value was being added, not merely shuffled around or gradually extracted. The business school had a ridiculous cheating scandal and they weren't as good at math as I would have liked anyway.
But manufacturing momentum continued to dwindle with skyrocketing inflation and labor costs.
Regardless, I'm still not finished improving my abilities to create and/or make all kinds of things from mechanical hardware, electronics, chemicals and more, but only sold one physical product for a limited number of years in my employers' or my own company, which was a side product within a pure service provider. You can be prepared your whole life and still not get up to launching hardware as easily as you can with something having much less raw material cost.
Which is naturally the way it always was, but one day the costs just skyrocketed out of sight and beyond the reach of millions more technologists in a most insidious way, so no more manufacturing for you. And millions is a lot, that grew to include today's big slice containing almost all of the promising creatives who are capable of earth-shaking physical inventions who were fortunately not previously confined to such an exclusive (never be able to afford it again) club. If past progress would have been limited the same way, Bell Labs or NASA could never have even gotten off the ground in the 20th century. Does anybody today have any idea what places like this were supposed to be like in the 21st century? Hint; not less-capable of putting every other contender to shame, and certainly not smaller or non-existent. While still being dwarfed in size by the combined power of industrial research labs supporting domestic manufacturing.
I guess it's just remaining momentum continuing to slow from an era that was already bygone before I got out of college. Once inflation kicked in, average people couldn't afford to buy US-made products any more, manufacturers couldn't afford to keep making them, and it never got better. Reagan came along and it got even worse. Remember, the great mothballing of factories in the 20th century is only temporary until the value of the currency in average peoples' pockets comes back :\
If you want to be able to make anything you could possibly need, you need to already be making everything you already need.
Inflation in the 70s was caused by oil price shocks. Much of the physical economy relies on oil in an unhealthy way.
If you're looking for a culprit, I'd suggest a closer look at that.
Meanwhile industrialisation has been off-shored to China, which is now the tech and industrial powerhouse the US was in the 50s and 60s.
The former industrial centres in the US and UK were largely left to rot, because the people doing the offshoring simply didn't care about former workers. (In fact - in Thatcher's case, and probably Reagan's too - they actively hated them.)
Once you lose an industrial culture it's very hard to rebuild it. It's not just the factories, it's the investment, infrastructure, and education pipelines that feed them at all levels.
That's one thing I have been doing in real-time since the 1960's, you should have seen how bad it already was before the oil shock.
Oil shock was just the nail in the coffin.
I made sure I could do a lot of unique things with oil & gas ever since.
Would never have done that if things hadn't gotten so bad, I was into alternative energy.
Still spent most of my time with chemicals anyway, for one thing they aren't cheap enough to burn for fuel and that makes a big difference, even if many of them are more toxic than petroleum itself.
There's always been more money in oil though, because there's so god damned much of it :\
The largest problem I see is shipping times. If I need to download a new software "part" (library or other), the shipping time is the download time, nearly instant.
If I need new hardware pieces, its either next day shipping, a few days by air-freight or three weeks on a boat from china.
This limits prototype turnover time, and means iterating quick is much harder.
Finally you have the problem that hardware is expensive and an additional cost. A hardware startup has all the same costs as a software company but with the addition of hardware.
Parts are pretty much instant, pcb turn around times are 3 to 15 days depending on how complex they are.
Even in the bad old days of punch cards and priesthoods the turn around for software was faster.
I have a little pcb mill in the garage that I use for prototypes.
To this day I've not met another EE that knows what a voronoi mapping is, or why you'd want one. In a previous startup where I was the software engineer I got through more prototypes for the analogue signal paths in an afternoon than the two other EEs had in the previous week.
Only for simple pcb. If you are making multi-layer pcb with complex stacks, pcb manufacturing and soldering (with associated tooling setup, validation and so) are easily 2 months of turnaround
That’s a big part of it. But mostly it’s that your dev+deploy+evaluate cycle is so much slower. With web software you can write a feature or bug-fix and push to prod in minutes - and repeat that many times a day. With hardware each equivalent cycle is weeks or months (especially in my vertical - farms).
Some of us write software for embedded devices where a mistake in programning means a critical machine in a remote area needs someone to physically go there and thus spend months in test before we dare deploy. Some of us care about quality and won't allow a customer to see bugs thus even though we can deploy in seconds our reputation won't allow it. There is also software that bugs can kill people so again we won't deploy without evtensive testing - much of this is regulated and we would go to prison for deploying at will even if it works.
those who work in any of the above react in horror to stories of how the web deploys to production so fast. we know we are not perfect and don't understand how you would risk it.
In some shops this is solved by staggering scheduling so people work on several projects. Some aspects of HW can be simulated (think analog with SPICE-likes, or logic level like the chip designers and FPGA users do) so this reduce the need to iterate every time in hardware.
A lot of the iteration work can also be done on the board you received. You don't have to wait for your new board to see if those additional decoupling capacitors will do something, you add them on your current board by hand... You would be amazed at how far rewiring can go, sometimes entire BGAs are removed, installed dead-bug style and each pin wired by hand.
It's because hardware developers don't take the software side seriously and either assume they can just do it themselves or don't think it's worth a decent salary
It's always somebody's fault, and I haven't analyzed it that closely. But empirically, the priority of software is to finish the previous project, while hardware moves ahead. We don't touch production code. Some of us (myself) write our own test scripts. Very little hardware runs without some kind of computation happening. When one of my designs goes on the shelf, I want it to be provably reproducible and tested.
We definitely value software, and the devs are our friends. It's not such a huge place that we're totally isolated from one another.
The pace is not really parts supply constrained in my experience. It just takes much longer to build and validate even relatively modest design changes.
Investors are generally wanting to see little existing competition so that’s not really the issue.
They’re more concerned with factors that will cause the company to self-destruct. Running out of money before hitting PMF and growth is the most common failure mode for any startup, and is much more likely with any hardware startup, due to the dramatically slower iteration times.
There's very good simulation tools available but scrappy startups can rarely afford them. You also need to people who know how to use the tools appropriately.
UK ignited the First Industrial Revolution. It's sad to see that UK has slipped to number 16 or lower when it came to the market share of global manufacturing. And the problem is not to just UK, but to pretty much all the developed countries. Many nations and people have benefited greatly from globalization, but I have to ask: is it worth it if the cost is forfeiting my own country's manufacturing know-how and supply chains? And yes, I'm fully aware of the theory of comparative advantages, but in the meantime, but manufacturing can still bring great income to many families and nations still compete and even go to wars with each other, right?
When I was a kid (80s) I knew old boys with lathes and mills and pillar drills at the bottom of the garden. They were the last generation, I think, of a tradition rooted in the Victorian era which informally transferred a lot of knowledge from one generation to the next.
My pet theory is that their disappearance is tied closely to the cost of land. I see US-based hardware hobbyists' shops on YouTube, and I think "I couldn't even afford to build a shed that big". The tools themselves are often actually pretty cheap second hand at auction, because the demand is so low, but I live on the back of a postage stamp in comparison with those guys.
(Another possibility is simply that software ate the world.)
Blame the Thatcher Revolution and the sell-off of the council housing estates. Councils used to actually make money from housing, however, the revenue went back into building more homes, so more revenue. Rents were not extortionate or subsidised, however, if you were on benefits then you would get your rent covered.
The council housing provided an option at a base price, private landlords could not compete if they also had to pay for the mortgage, at a time when interest rates were a lot higher.
Once the council housing was sold off, there was no longer this base price, unless you wanted to spend five years on the list for a housing association, as in the privatised council housing estate.
This change meant that the best place for your money was in property. Property was no longer a near-depreciating asset, house price inflation went through the roof, but was not part of the inflation index.
Since then the economy has been that of rent-seeking. There is no point making stuff as you might as well sell the premises to a developer to convert into luxury flats, which then get bought by rent-seekers and rented out to people that would have had a full-feature council house in previous times.
When a rent-seeker has income from one property, they can remortgage to buy another, then use leverage to buy more and more.
Rent-seeking is not adding anything to the economy, no product is made. However, rent-seekers vote Conservative.
In an economy where everyone has to pay more for the parasites that are the rent-seekers, the cost of labour goes up. This is just because people need more money to pay to have a roof over their head, not because they want gold taps.
This is the root cause of the decline of the West, you are probably old enough to remember how this capital from rent-seeking spread out from London to even the slowest seaside town. Wherever it went, businesses stopped making stuff and started importing instead. Once that business of making stuff has gone, it never comes back.
The real value is in making stuff even though there is plenty of profit in retail, 'no product is made'. Furthermore, it is not possible to stop someone from doing the same as you, buying widgets from China, marking them up and flogging them with an English manual.
In the USA the situation is the same in the big cities. In the flyover states there is a different Ponzi scheme afoot, with vast tracts of suburbia built but without the long-term tax base to maintain the roads and other infrastructure indefinitely. So long as there is cheap oil and the dollar is the reserve currency, it all works with printing money, with the world taking the inflation hit, not the USA.
The sheds you see full of toys are not in New York, they will be somewhere such as Florida or Texas.
The US outsourced its manufacturing to China in the name of comparative advantage. Bob bakes bread, Alice grow apples. Everyone is better off because of specialization.
In Thomas Friedman's latest nyt column, he refers to China's manufacturing dominance as a play to de-industrializing other countries. It may just be globalization is incompatible with political realities.
Or… Bob makes bread, Alice grows flowers. Alice needs bread; Bob likes flowers but can go without if he wants to. Who’s going to come off worse if they have an argument?
On the other hand, long-term planning is susceptible to disruption and unforeseen events, and when we have long-term government plans they have a way of taking on a life of their own and defending themselves even if they have outlived their usefulness.
> These populations are more than large enough to specialize in everything.
My impression is that population size is not very relevant in the math of trade specialization profit. It's still more profitable to play on relative strengths and weaknesses. You can find other things to worry about like security (from droughts and earthquakes perhaps), or political or strategic desires. In particular, trade is likely beneficial even when local production would be cheaper than remote production - just because there are other things that can be done localy and even stronger (like phone games or advertising-oriented browser feature destruction /s).
Why would European population of almost a billion people need to specialize on anything? What would it even specialize on. What does that world need that there need to be 10% or the world working on it?
>In particular, trade is likely beneficial even when local production would be cheaper than remote production - just because there are other things that can be done localy and even stronger
This only matters if you can not do both. If your population is large the amount of things which it can do especially good can easily be exhausted before you run out of people.
I don't even see how you can specialize. What does China specialize in? (Before answering, think about the things which China is not trying to produce or the services it is not trying to perform. Can you name even one?)
"Specialize" is not quite the right word. In trade economics (from the very crudest level), trade is beneficial to BOTH parties EVEN when etc etc etc. i.e. higher profit. It's really hard to beat trade.
It's not that anyone needs to specialize as in "otherwise it won't work". It's that it's more profitable and so people will tend to prefer that plus some extra money in their pocket.
And it's not specialize as in only do wine, cheese and perfume and nothing else. It's systematically favor some things that you are relatively better at than others, and trade for the others (not even 100%, you can export some plastic parts and import some similar plastic parts at the same time). Even if the other country could themselves be better at it. So for France, engineering of all kinds, wine, cheese, perfume, meds, etc but also any manufacturing that by chance has gotten and remained strong (say, like airplanes, some electrical equipment, whatever else that really any other country also could possibly manufacture).
I do not think that Europe or the US even could specialize in anything. The population is so large that for every good and service needed there is a group of people who are specializing in it right now.
What single good/service is not at all produced in Europe. Which single good/service is not produced in China?
At the scale of 1B people specialization becomes meaningless. You can't even accomplish it if you wanted to. All you could do is letting one of your industries get out competed by some other power.
I feel we are talking past each other so I will leave it at that.
The specialization you ... expect? is irrelevant.
Business jets are not produced in China, large efficient passenger jets are not produced in China, printed silk scarves branded Hermes, silent diesel electric submarines for export are not produced in China. (See what I did there?) And that's irrelevant to why trade exists.
Even an up-to-the-minute super competitive manufacturer has no incentive (except political and some risk-aversion) to do everything in-house or in one country. It does have incentives to trade with other countries and other companies. Even if it possibly had the machines and low cost employees on hand and already trained to do that, from an economics point of view it should (in the long term), sell some production units, focus on the others and trade for the difference.
>Business jets are not produced in China, large efficient passenger jets are not produced in China, printed silk scarves branded Hermes, silent diesel electric submarines for export are not produced in China. (See what I did there?) And that's irrelevant to why trade exists.
Literally every single one of these is false. China is producing every single one of these things.
Ironically to UK probably make that mistake first. A lot of manufacturing moved to Hong Kong, which was a British Territory until 1997. During the reform of the Chinese economy, Hong Kong invested in factories on the mainland. Then of course it was handed back to their jurisdiction.
UK probably made that mistake first by moving lots of manufacturing to their colonies, like North America and later the US. The UK said the same thing the western world said about China: they built low-level low-quality stuff, and we focused on the high-value manufacturing. But guess what? Smart people are everywhere, and ambitious people will not build "low-quality stuff" forever. Sooner or later, those who sweat on factory floors will have more know-how than those who enjoy draw boxes in a cushy office. Indeed, those who know only how to draw boxes will soon find that even their boxes, no matter how pretty, will not be relevant.
comparative advantage is disproven at this point, because economists are failed math majors who don't account for the innovation flywheel effect and general network effects. Silicon Valley software industry happened because of the proximity to the existing hardware industry there. Same thing for other forms of manufacturing and the US gave it away in the name of short term profits
Even the Americans can't manage economic isolation. It takes a global civilisation to build a smartphone. We might have been able to get closer to it by being in the EU, but now we're on our own on that one.
Realistically in order to prosper the UK needs to join up as part of a "greater NAFTA" trade bloc. But the UK no longer has anything that the USA needs so they'll have to make major concessions to get a deal done.
I realize it's an outdated stereotype but man it says nothing good about America when the UK won't join up because it would compromise the quality of available foods.
When you're starving you eat what's available regardless of how appetizing it looks. The UK isn't starving yet, but how long can they hold out? And has NAFTA ruined Canadian or Mexican food?
Apparently I was being a little too subtle. I meant starving for free trade relationships and participation in a larger economic bloc, not literally starving from lack of food. The point is that UK will have to join up with someone else eventually; they lack the scale to go it alone.
That's not entirely true (about global civilization being needed). Any nominally developped but not too wasteful country or even just California could do it. It's just that that ship has sailed and we collectively decided a long time ago NOT to go that way. Recovering from these choices would take a lot of time and a lot of money that we would rather spend on railroads to and from nowhere (California). Sarcasm aside, americans, europeans, japan in particular are not ready to pay the price for that - even while they could totally afford it. They are busy paying the price for lots of other things and can't be bothered.
Yeah, I do recognize that. I just wish that the US could have a healthy mixture of light and heavy industry, so that the cost building any mission critical systems will not go through the roof, and so that we will be able t build anything domestically if we want. Even though it's likely a pipe dream now, but at least the US can do so for the WW II and after WW II for quite some time.
That ship sailed. It's like the other comment said - China embraces manufacturing to make other countries inept at it. It's not only that American precision engineering is mostly at parity with China, it's that manufacturing anywhere else is a waste of money. When unibody aluminum Macbook cases are machined, they never are machined in America. They're sold to Americans, marketed as an American company, but your device (even at the markup Apple charges) cannot be made economically in America, period.
In a broader sense, I'd say that America is headed down the same road the UK is too. We expect people to pay hand-over-fist for our tech talent that isn't any better than what you can get in Pakistan or China. Our hard markets are getting bearish, our leadership wants to de-globalize, and American tech wants to maintain global control without acquiescing to local governance.
America had the economic lead before WWI and after WWII, but now we've bet the farm on our ability to market bullshit. America's national economy cannot survive if the App Store and ChatGPT are our premier exports.
This to me is a super interesting example. Nobody but nobody NEEDS a unibody aluminum anything. But it's cool, light, beautiful - and sells great - so it's what gets produced even when the only place that makes sense for that is China. The Macbook could temporarily return to more manageable production - like plastic - and the world would not end.
It's a commercialized and well-distributed example. You could replace it with any other machined commodity - engine blocks, turbojets, ablative shielding, toilet seats, you name it. The industries have all moved in the same direction and have no hope of ever coming back. Capitalism fought authoritarian subsidy, and capitalism lost.
> Capitalism fought authoritarian subsidy, and capitalism lost.
If we are going to blame something I would think it's the chinese enthusiasm for capitalist business development.
It's not the chinese State Owned Enterprises that earn american contracts, mostly. Not to mention Foxconn being a taiwanese company that earned that business in the US to begin with (and only later moved it to mainland china.)
> That’s not the kind of thing young, unproven founders can pull off, anywhere.
The UK, with a comprehensive social safety net, should be more willing to take small risks. I know it's now what happens, but it'd be important to understand why something that should be actually isn't.
I think that needs to be qualified heavily — salaries in the UK are much lower both in nominal and PPP terms, so there's much less opportunity to build one's own safety net, and the NHS is overwhelmingly focused on providing care for the elderly. To a young(ish) startup founder, the presence of the NHS and UC makes little to no difference.
The startup founder in the UK needn't worry about a bad cycling accident (happened to a friend in his thirties), an early cancer (colleague in her thirties) or losing their job just before a baby is born (friend in his thirties).
Why not? If you are a startup founder you might have significant capital invested and be in debt. The government will not pay your companies bills while you are unable to work.
I think a VC funding you is a much better security against any of these events than health insurance being forcibly deducted from your pay.
>Those 3 events can easily saddle someone with 100k of debt. Surely you can understand how that might hamper an up and coming entrepreneur.
That is the case in the UK as well. If you have a start up in which you have invested capital and suddenly can't work anymore that is a huge financial disaster. The state is not going to fund your business while you recover in hospital.
Also the medical debt is something you would only have if you weren't insured. Both US and UK have health insurance, the only difference is that in the UK you have to pay for it, in the US you don't.
In any case having a well funded startup is a far better safety net than a forced insurance.
This is true. People associate a safety net with healthcare, but young and healthy startup founders are more worried about making rent or mortgage payments if their startup should fail.
Maybe a good way to incentivize more risky entrepreneurs is to provide a better safety net. I would, however, caution against making it too perfect (and I hate myself for saying that, because I would prefer people worked on whatever brings them happiness, not money) - part of the drive for Americans (and the reason they risk so much on it) is the need to accumulate as much capital as possible as soon as possible, because they know they won't enjoy any sort of safety net when they grow old.
Let me rephrase — in the UK we have a generous and expanding safety net, for the elderly, voted for by the elderly, and paid for at great expense by the working population.
Maybe there are talking about the "triple lock" in the UK. The triple lock mean the pensions will rise to ether match the rate of inflation, average earnings or 2.%, whichever is the highest so eventually it will be unsustainable.
Just to chime in and say that bootstrapping does work in this domain, I say that as someone who's had a few friends go down that route, but yes, it's really tough.
There's also people I know who built small scale solutions and then managed to push that into funding and funnily enough a Kickstarter as well though I don't think he'd recommend anyone follow that route.
Interested in your opinion on crowd-funding as a way of raising initial capital - ie cut out professional investors and go direct to potential customers?
I've seen it work once, but it was hard over the long term: LIFX (smart light globes) [1], which was launched on Kickstarter in 2012 by people working from the same co-working space and accelerator I was involved with then (so I kinda had a backstage view on it).
Products like that work if there's natural consumer appeal built into the product, that you can convey in a video that gets people excited imagining how much better their life would be. That's what motivates pre-purchasing and also sharing/virality. That's why the LIFX Kickstarter campaign worked. But even with the $1.3M crowdfunding, they needed a lot more funds from investors; the crowdfunding just helped with initial funding and to prove demand.
Still, that company didn't turn out to be a big success. It was hard/slow to get the product into production and shipped to consumers – it took 2-3 years I think. Established lighting vendors like Phillips were quick to get competing products into major retail stores. Along the way the company seemed to have a lot of internal drama, and investors became disenchanted. The company was acquired in about 2019 [2], then that company went bust, then the LIFX assets were acquired again in 2022 [3].
So, from its early signs of huge potential success, it ends up being a cautionary tale and another case study that investors can look at as a reason not to invest in hardware startups.
Another cautionary tale is the "Coolest Cooler" [4], which ended up in a lawsuit [5]. I heard someone mention that a factory they engaged in China held them to ransom (staff went "on strike" in the middle of production) but I don't know details beyond what's been reported.
These cases demonstrate all the ways these kinds of projects can go wrong, and are much harder to turn around than a software project in which you can be building your product to maintain customer satisfaction and growth day-by-day.
And even still, this approach only works for gimmicky consumer products, not B2B products that are more likely to work commercially in the long term.
Edit: Also remember Pebble (watch) which was a huge Kickstarter hit and seemed like a successful company for a few years after that, then suddenly went bust.
I guess the worry for startup's there is if you too close then they might 'steal' - however big companies are typically quite keen on upholding IP laws - they use their venture arms to spread their bets - partial stakes ( and inside knowledge ) on a whole array of startups.
The worry is not so much that they’ll steal your IP (good legal protection can prevent that), but those kinds of corporate VC funds are generally looking to invest in things that fit in with their own corporate strategy and plan. The investment is a bit of a “try before you buy” before eventually acquiring the company and making the product part of their own offering.
That can be a good path if you’re making something that one of these companies would want to acquire and an acquisition by such a company is an appealing outcome for you.
But it’s not going to help you if you want to be an independent company and brand that can do things the way you want long term.
Would it be fair to say that the "unicorn" effect is a lot harder to achieve as well? If VC rely on 1 out of N startups doing well then that 1 success needs to achieve over N-fold returns just to break even.
On the other hand I have no trouble coming up with examples of hardware companies that did well: Apple, Nvidia, Intel... but those time scales are titanic.
Not sure they are great examples. Intel is going through a lot of pain now (but it's been very successful in the past). Apple was in a terrible situation before its reverse acquisition by NeXT (NeXT paid one Steve Jobs for all of Apple and got $400 million in change). Nvidia got insanely lucky with Bitcoin, then with AI. Its original plan was to make 3D accelerators for gamers and, maybe, engineering workstations.
All of them were a couple wrong decisions away from doom multiple times.
Think Commodore, who made one of the most popular computers ever, only to be mismanaged into the ground.
Luck and timing obviously play huge roles. But I like to think that as an industry we no longer frequently make mistakes quite as outright stupid as Commodore management did. There are at least some generally understood tech industry best practices which prevent decisions like that when there is serious money at stake.
Nvidia outsourced their manufacturing, as did a lot of similar startups from the 90s. Even back then, VCs didn't want to invest in hardware companies that were going to actually build their own hardware because that's expensive, they wanted companies that designed their products in the USA and had them manufactured by other fabs.
Nvidia got lucky by building a product that just happened to be amazingly well suited to a technology that would emerge 20 years after they were founded. Credit where it's due, they developed CUDA and gave universities gobs of cash/hardware to train students to leverage CUDA for machine learning and later, AI. But if not for AI, Nvidia would still be a video card designer with a market cap of maybe 5% of its current valuation.
It's difficult to call them a hardware company in the sense that Intel is. They only do designs of hardware, and a lot of their value comes from the software they designed to leverage their hardware in ways beyond their initial purpose.
It's funny that you didn't mention Dell, Lenovo, Sony, or even Microsoft and Nintendo which both make their money off the software than the hardware, but are also companies that produce and selling hardware.
They also all got started several decades ago when there were huge new blue ocean opportunities to pursue and much less competition for capital. And other many competitors have failed along the way. (Remember Amiga, Wang, Gateway, many others from the 80s and 90s).
The main issue now is competition for capital: the majority of tech investors regard software startups as much safer paths to huge returns. Whether they’re right or wrong in any individual case is a separate issue; they’re playing the percentages.
Yep, look at RISC-V, the most promising hardware is from the USA. It is not yet on the latest silicon process, but with the latest GPU, I guess we could run the latest games, until the game devs recompile and QA a bit their games (obviously on elf/linux)
Most promising by what definition? And what subset of applications/markets are you considering?
In the microcontroller space, China is leading on RISC-V. EspressIf, WCH, et.c are already shipping units at scale. Of course these are low value chips, but the volumes are large. The combined shipments for microcontrollers are in tens of billions of units annually. The technology choices in the space changes slowly (32 bit over 8/16bit is quite recent...), but over the next 10 years RISC-V looks poised to take a decent chunk.
I don't know much about the details about how it got started (i.e., how much Palmer Luckey self-funded it in the early stages) but the fact that he'd already built/sold Oculus was always going to make it easier to open doors and close funding deals (even if the politics/FB drama was a complication).
Also, building tech for the US military has some advantages. You have one customer with very high stakes and very deep pockets. Obviously it's hard to get started and you need to be building something that's uniquely useful and valuable for defence purposes, but once you achieve that, once you're in the door of the military industry, you're on pretty solid ground, and that's attractive to investors. The one hardware company i know in Australia that's doing well is also making defence tech.
It's much harder if all your potential customers (in my case, farmers) are small family businesses spread thinly in non-urban areas all over the world. Investors know that makes distrubuition much more challenging.
The thing is that major live sport is now the only category that is successful in the broadcast TV market. Without that, many (most?) broadcast networks may as well shut down. We saw the best evidence of that recently in Australia when the Foxtel pay TV company was sold to European sports streaming service DAZN.
Foxtel has dozens of channels including the “agenda-setting” Sky News but in the end only its major sports rights deals (which it’s been bidding up and losing money on for years) held any value.
One day we’ll all accept that broadcast TV is dead and everyone can just have a personalized content feed streamed to them, but for as long as broadcast TV license holders keep up the fight, it’s going to be a frustrating endeavor trying to see the sports we want, wherever we are.
It’s weird how invisible tennis is on television in Europe.
I was traveling in Spain and Italy last year when Roland Garros was on, which included major highlights like Nadal’s (likely) last ever match there and strong performances from European players like Alcaraz, Sinner, Tsitsipas and Zverev (indeed almost all of the current top ten men are European).
But it was only on the pay channel EuroSport, which many homes (and thus Airbnbs) don’t seem to have, and was only available for us in one upmarket hotel in Spain we stayed in for an indulgence for one night.
So the tournament promoters may be making the calculation that if the current TV rights holders aren’t ultimately getting many eyeballs watching their events, they need to do other things to build/maintain the profile of the sport with a view to one day offering it only via the internet (particularly if broadcast TV continues to decline and the networks can no longer afford large rights deals).
In the Netherlands we have moved on from using tax payer money for live sports.
Public broadcasting shouldn't piss away millions on TV rights when the free market can do it.
Taxpayer-funded TV stations aren’t showing major commercial sport in Australia or anywhere else, really.
If it’s not exclusive to pay television, it’s on free-to-air commercial networks. These are fully private companies that pay a large license fee to use spectrum, and fund their purchase of the sports broadcasting rights by selling advertising (usually at peak rates as these events are very popular).
In Australia, all four of the Grand Slam tennis tournaments are shown on free-to-air commercial TV. No taxpayer funding whatsoever but easily accessible to everyone.
I'll share a perspective as someone who doesn't really have a dog in the fight (For the record, I'm over 20 years into my career but don't fear losing roles/income/status due to AI, and am using it in my projects and can see plenty of ways I could benefit from it):
Lots of people on HN have been in tech for many years or a few decades and have seen several hype waves come and go, including ones involving AI. Plenty of us understand the technology that underlies current AI tech (even if we couldn't have built it ourselves). Some of us have spent plenty of time researching or contemplating nature of consciousness and the philosophy of mind, and see predictions/presumptions of human-like intelligence emerging from GPUs as at least a little silly. Plenty of us have come to know what it looks like when people are making grandiose claims – which they deeply believe to be true – particularly when great status and power seems within reach.
We can at-once happily recognise that contemporary LLMs are highly impressive and powerful, and the efforts of the researchers are brilliant and commendable, whilst also noting that these technologies have major pitfalls and limitations, and no obvious ways to resolve them.
The "blew past the Turing Test" claim is overblown, because we all know that an LLM-based product can seem human-like for much of the time, but then start generating crazy nonsense any moment. A human that behaves like that can cause millions of dollars in business losses, or planes to crash, and all kinds of other costs and harms. Human workers are evaluated on their ability to perform at a high-level on a consistent and predictable basis. By that measure, LLMs are nowhere near good enough for critical applications yet (even if they may be better than many humans at certain things, much of the time).
The claims that LLMs will just keep improving at an accelerating rate until they don't make mistakes anymore are fair enough to make, but until we see solid evidence that it's happening and details of the technology breakthroughs that will make it happen, people are within their rights to reserve judgement.
One of the comments "I've been watching the price of BTC rise pretty steadily in the last few days but I can't bring myself to believe that this price range is in any way sustainable. $4 per bitcoin? ..."
YC will fund anyone who is building a company that looks like it could be highly successful.
There's one case I'm thinking of now where someone was as critical of YC (both the org and individual leaders) as anyone could possibly be, in a highly public and sustained way, and their startup later got funded by YC.
What in the article (sentence or paragraph) contradicts what I wrote?
The article is about how YC defended one of its funded companies against a legal attack. It doesn’t say anything about YC refusing to fund someone who criticized it.
> Y Combinator was the sort of unforgiving power player that remembered the names of investors who had crossed portfolio companies in the past, *or who had disseminated unflattering portraits of YC*, and blacklisted them from any YC dealings, or from the minds of YC founders
If you said something unflattering about YC once and got uninvited from demo day, that's on you. But being black listed from ever investing in any YC-backed startup even if you reach out to founders directly is taking things too far. And potentially an antitrust issue. Cabals are illegal, after all.
The quoted book was being purposefully colorful and inflammatory for literary effect, but it still doesn’t make any claims of investors being “blacklisted” just because they said something unflattering about YC. (“Disseminating unflattering portraits” implies some kind of organised campaign to damage YC, and I have no idea if that really happened or if it’s just part of the colorful/exaggerated writing).
The only cases I know of where an investor was banished from Demo Day/YC’s network was for acting in bad faith towards founders. If YC banished investors who had a track record of being great to founders, they would be doing a disservice to founders, and therefore acting against YC’s own interests.
That aside, my original comment doesn’t contradict anything in the article (I can’t speak for the entire book - honestly when I tried reading it I couldn’t get past the first few pages).
