“Halt and Catch Fire” Captures the Emotional Intensity of Tech Startups

July 7, 2014 / / No Comments

“Halt And Catch Fire” takes flak from critics for being melodramatic, yet it captures the real emotional intensity of actual tech startups well. Joe, Cameron, Gordon, and Bos are all accurate archetypes. I know dozens of each. They must come together to do great things. Can’t alone.

Tonight’s episode was the best since the pilot. Without spoiling it, the key is that both Cameron and Gordon are right- real tension at heart of many startups. Again without spoiling it, the final question asked by Cameron’s new program is still at the heart of our industry 30 years later.

The show also shows why founders often don’t start a 2nd company, or sometimes even talk to former partners after a company is over. It’s too intense. Finally, show is dead on about the overwhelming market power of IBM at that time. Seeds of collapse had already been planted but no one knew.

Source: Tweets – 1,2,3,4,5,6

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The Reverse Rules of New Technology

July 7, 2014 / / 1 Comment

Cleaned-up tweetstorm on “the reverse rules of new technology” — expressed ironically! — and labeled as such 🙂

One thing we know about new gadgets: They can be judged based on their first versions since that’s what they’ll look like forever. #irony

Each new technology arrives into the world with the perfect universal use case pre-identified. If it doesn’t, it flops and dies forever. #irony

Any new technology needs immediate widespread cultural acceptance. If it’s just used by nerds early on, it’ll never go mainstream. #irony

New technology products must be immediately cash-flow profitable; otherwise you have clear evidence the idea was stupid from the start. #irony

Any new tech product that isn’t immediately affordable for everyone will never decline in price and will just exacerbate inequality. #irony

Any new tech must immediately provide immense utility to the world or shame on you for not “solving big problems”. #irony HT @commagere

Source – Tweets: 1,2,3,4,5,6,7

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Gallup Survey Shows Low Confidence Levels In Large Centralized Institutions

July 1, 2014 / / 1 Comment

Gallup surveys on confidence in institutions are endlessly interesting.

High-trust US institutions (above or near 50%): Military, small business, police, churches.

Low-trust US institutions: Medical system, Supreme Court, Presidency, public schools, banks.

Almost-no-trust US institutions (<25%): Justice system, newspapers, organized labor, big business, Internet news, TV news, Congress.

The conventional glass-half-empty argument is the terrible erosion of trust and competency in key institutions, decline, and fall of the United States. An alternate glass-half-full argument: Large centralized institutions *shouldn’t* be highly trusted: monopolies/oligopolies let people down. A lack of trust in institutions motivates construction of competitive alternatives better attuned to we the people. Large centralized institutions were 20th century; flexible, responsive, accountable organizations for 21st century.

I don’t think the answers are at all straightforward. But I think this debate is going to inform a lot of the next 30 years of politics. It will be interesting to see how many large centralized institutions can win those arguments starting with such low confidence levels.

[tweet https://twitter.com/pmarca/status/483789403408441344 “align=center”] [tweet https://twitter.com/pmarca/status/483790083590352896 “align=center”] [tweet https://twitter.com/pmarca/status/483790189404246016 “align=center”]

Source Tweets: 1,2,3,4,5,6,7,8,9,10

Tweetstorm Addendum to Unbundling Series

July 1, 2014 / / No Comments

Late night tweetstorm addendum to earlier series on unbundling and rebundling: Younger followers asked me to expand on DEC/Sun/Microsoft unbundling: older history, therefore useful to study as precedent for our time.

Once upon a time (1950s-1960s), businesses mostly bought computers from IBM, and IBM also bundled in all the software & services you’d need. IBM bundled offerings were extremely expensive, while demand for computers spread to departments and smaller businesses who had less money. So DEC unbundled the computer itself from the total bundle and sold it for less money to customers who could then write their own software.

But a DEC computer itself was a bundle of proprietary components: VAX hardware, VMS operating system, RDB database, etc. In the 80’s, Sun came along & sold a similar power computer to DEC’s for 1/4 the cost w/unbundled components: Unix OS + Motorola chips.

DEC responded by going upmarket and becoming more like IBM; Sun and other Unix workstation vendors chewed through their market + grew it more. Critical point: At the point when DEC started to tip over, its integrated offering was as close to perfect as our industry will ever see.

Ask people who were working then (like me) and they’ll tell you to this day that they miss VAX/VMS and how productive they could be on it. Meanwhile Microsoft and Intel came along and fully implemented the unbundled low-cost computer, first PCs and then Windows-based servers.

Sun responded to Microsoft/Intel by rebundling: Rebuilding itself in DEC’s image with Sparc chip, Solaris OS — proprietary HW+SW stack. Again, Sun got close to perfection as an integrated system when it unbundled Microsoft+Intel and Linux+Intel went broad and forced the sale of the company.

Picking up thread with Microsoft: Microsoft has spent last 15 years rebundling, rebuilding itself in DEC’s image much like Sun. Now + HW! Once again, bundled Microsoft stack very close to perfect just as it comes under attack from next unbundling wave: mobile + cloud.

Fascinating twist: Under new leadership, Microsoft 2014 now committed to unbundling — full app + cloud support for iOS, Android, Linux! Microsoft is taking new unbundling strategy offensively vs new titans who are bundling as fast as possible! Apple, Google, Amazon, Oracle.

The point? I don’t know much about what our industry will look like in 50 years, but I’m quite confident these same dynamics will apply.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18

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The Flip Side of Unbundling

June 28, 2014 / / No Comments

The flip side of unbundling: Later on, the unbundlers tend to try to rebundle in the image of whatever they unbundled. So Yahoo adds an ISP, and Google adds email/IM/sports-scores/stock-quotes. Twitter changes its user profile page to look more like Facebook 🙂

Sun unbundled DEC with commodity components, then re-bundled into a proprietary computing stack just like DEC w/Solaris, Sparc, etc. Microsoft likewise unbundled DEC minicomputers w/PC OS + tools, then rebundled into DEC-like integrated stack now including hardware (!).

Paraphrasing Harvey Dent: “You either die a hero or you live long enough to see yourself become the company you first competed with.” And then sometimes the rebundlers realize what they’re doing and try to reverse course. E.g. Microsoft building apps for iOS & Android. And thus the cycle of life repeats with yet more unbundling :-).

Source: Tweets – 1,2,3,4,5,6,7,8

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Unbundling Tech

June 28, 2014 / / No Comments

A story of unbundling in the tech industry: 20 years of consumer Internet evolution.

Once upon a time there was AOL, which was a completely integrated Internet access/information/communication service. Then Yahoo came along and unbundled the information/communication parts like email/IM/sports-scores/stock-quotes from the access service. One of the things you could do on Yahoo was search, then Google came along and unbundled that.

You can search for anything on Google, including people; Facebook came along with a much better way to just search for people. Three things you can do on Facebook are messaging, photo sharing, and status updates; therefore Whatsapp, Instagram, and Twitter. And yes, Yo unbundles the creation & existence of a message from the contents of a message, unbundling Whatsapp and Twitter :-).

Ev Williams (@ev) is the modern genius of this concept–playing out in our industry continuously since the 1950’s. The part people often miss is that you can get extremely powerful second/third order effects at each step with his pattern. The entrepreneurs generally have a pretty good sense of this when they’re doing it, but it doesn’t become clear to others until later. This is a pattern what we love to fund: unbundle X from Y, but then use the liberation of X as leverage to do amazing new things with X. And the howls of press and analyst outrage at the apparent stupidity of each unbundling are very helpful for keeping valuations down :-).

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Harvard Business School Publishes New Study On The Interplay Between Diversity and Success In VC Investing

June 27, 2014 / / No Comments

The Harvard Business School has published a new study on the interplay between diversity and success in venture capital investing in startups.

The more ethnic and educational affinity there is between two venture capitalists investing in a firm, the less likely the firm will succeed. Venture capitalists have a strong tendency to team with other venture capitalists whose ethnic and educational backgrounds are similar.

 

Two VCs from the same undergraduate school are 34.4 percent more likely to collaborate and increase by 39.2 percent if of the same ethnicity.

 

The odds of success of an invested company go down 17% if two VCs worked at the same company; -19% if the same undergrad school; -20% if the same ethnicity. The lack of success among similar investors seemed to lie in the decisions that *followed* the investment due to ‘groupthink’.

Side note: Last names of the three researchers who wrote the paper — Gompers, Xuan and Mukharlyamov.

[tweet https://twitter.com/pmarca/status/482586642205536256 align=”center”] [tweet https://twitter.com/pmarca/status/482587132297363456 align=”center”] [tweet https://twitter.com/pmarca/status/482587270424182784 align=”center”] [tweet https://twitter.com/pmarca/status/482587429883236352 align=”center”]

 

Source Tweets: 1,2,3,4,5,6,7

Nerds

June 24, 2014 / / No Comments

Come on, Silicon Valley, you can do better than this

1950’s + 1960’s + 1970’s + 1980’s + early 1990’s view of computer technology = “Nerds!”

Late 1990’s view of computer technology = “Everyone will get rich!”

2001’s view of computer technology = “The nerds screwed us!”

2003’s view of computer technology = “We knew those nerds were wrong all along!”

2009’s view of computer technology = “Those nerds are completely out of ideas!”

2013’s view of computer technology = “Those nerds and all their crazy ideas are going to destroy all the jobs!”

And now = “Those nerds are completely out of ideas again, and now they’re having sex too!”

Stay tuned for more updates from our favorite show, “As The Nerds Turn” :-).

Source – tweets: 1,2,3,4,5,6,7,8

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Quirky to Reinvent American Manufacturing and Consumer Products

June 23, 2014 / / No Comments

Equally big news of the day: our company Quirky is spinning out the “Internet of things” platform Wink as standalone company!

Quirky, with its partners including GE and Home Depot, is reinventing American manufacturing of consumer products. Now Wink will provide a standard software layer across all of Quirky’s products plus many others including GE, Honeywell, and Philips.

Quirky partner Home Depot “now sells 600 smart-home products, six times as many as it did two years ago.” The revolution is happening now. Important to note this isn’t just about toys for rich people; it’s about energy conservation, water conservation, security, and safety.

Source: Tweets – 1,2,3,4,5

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Udacity Is Opening Up Higher Education To Far More People

June 23, 2014 / / No Comments

We are very proud of portfolio company for going straight after opening up higher education to far more people.

For $200 a month, teach anyone basic programming skills for entry-level position at AT&T as a data analyst, iOS applications designer, etc. Harnessing the web to provide effective schooling to the many young Americans for whom college has become a distant, unaffordable dream. We are trying to widen the pipeline,’ said AT&T’s Charlene Lake. ‘This is designed by business for specific skills needed in business.

 

Education still offers children from disadvantaged families their best chance at climbing the ladder of success. One reason for enormous payoff from college degree (2x payoff vs 1979) is that too few young Americans ever earn one. Peter Lubbers, who runs MOOC developer training for Google says, ‘We want all the techniques we know about to get out to the market. The ‘NanoDegree’ offers a set of skills that can be clearly applied to a job–a chunk of knowledge and immediate motivation to acquire it.

 

Could offer a plausible path to young men/women who may not have time, money or skill to make it through 4-year or even 2-year degree. US students in bottom quarter of income distribution: college graduation rates only 9%, from 5% 20 years ago.” Not *nearly* high enough.

[tweet https://twitter.com/TheLejait/status/480464613180321792 align=”center”] [tweet https://twitter.com/rdoddala/status/480464919826280448 align=”center”] [tweet https://twitter.com/ValaAfshar/status/480465350564532225 align=”center”] [tweet https://twitter.com/DAllison24/status/480465936395169792 align=”center”] [tweet https://twitter.com/johndodds/status/480466845355745280 align=”center”]

Source Tweets: 1,2,3,4,5,6,7,8,9,10