What Microsoft is this the Altair Basic of?(paulgraham.com)
paulgraham.com
What Microsoft is this the Altair Basic of?
http://paulgraham.com/altair.html
176 comments
Read this:
* Bill Gates's memoir/vision book, The Road Ahead (1995)
* Paul Allen's memoir book, Idea Man: A Memoir by the Cofounder of Microsoft (2011)
Watch this:
* Pirates of Silicon Valley TV movie (funny but accurate, based on Triumph of the Nerds interviews)
* Triumph of the Nerds (TV docu, 1996, by R. Cringely)
* Nerds 2.0.1 (TV docu, 1998, by R. Cringely)
* Bill Gates's memoir/vision book, The Road Ahead (1995)
* Paul Allen's memoir book, Idea Man: A Memoir by the Cofounder of Microsoft (2011)
Watch this:
* Pirates of Silicon Valley TV movie (funny but accurate, based on Triumph of the Nerds interviews)
* Triumph of the Nerds (TV docu, 1996, by R. Cringely)
* Nerds 2.0.1 (TV docu, 1998, by R. Cringely)
Appreciate the "read / watch" recommendations, but to what specific end / meaning?
The early years of Microsoft, a history lesson.
The thing is, any of those early tech companies could have been an Apple or Microsoft. There was nothing special about Altair Basic. Other companies didn't because they made disastrous mistakes along the way - see "In Search of Stupidity" by Chapman.
Microsoft grew into a behemoth by making crucial decisions at several key turning points, and avoiding making disastrous mistakes.
Microsoft grew into a behemoth by making crucial decisions at several key turning points, and avoiding making disastrous mistakes.
With 20/20 hindsight it is easy to connect the dots that led to Microsoft's dominance of the PC industry. And although the Altair Basic may have led to it - it in itself was not enough to catapult them to their future success. Their big break came from their deal with IBM for the Operating System. And that deal was literally gifted to them due to a confluence of many factors - with luck playing a huge part in it.
In fact Gates directed IBM to approach Gary Kildall of Digital Research for the OS. But Kildall skipped the first meeting with IBM and his team at DR dilly-dallied on signing a standard NDA with IBM and could not reach an agreement. IBM went back to Gates for an answer for the OS. [1]
Had DR not dropped the ball on the IBM deal, the future would have been very different for Microsoft, and for DR and for the world. It is all of course counterfactual - but who knows - the world may have been running on CPM/2015, and Gates and Allen would have been running a successful PC software company - selling compilers and languages for it.
It Gates and Allen's ability to turn this fateful second chance into what we now know to be the deal of the century. In fact, Microsoft used this chance to sell QDOS (Quick and Dirty OS) - from a lone programmer (Dave Patterson) working across the lake in Seattle on a port of CP/M to 8086 - to IBM. IBM was not aware of this small company (Seattle Computer Products). Later it was found that QDOS literally "stole" CP/M code and function calls. DR sued but IBM settled the suit with DR by bundling CPM/86 with the PC - but selling it for $240 as opposed to $40 for PC DOS. CP/M never had a chance. And the rest as they say is history...
[1] http://en.wikipedia.org/wiki/Gary_Kildall
EDITS: typos
In fact Gates directed IBM to approach Gary Kildall of Digital Research for the OS. But Kildall skipped the first meeting with IBM and his team at DR dilly-dallied on signing a standard NDA with IBM and could not reach an agreement. IBM went back to Gates for an answer for the OS. [1]
Had DR not dropped the ball on the IBM deal, the future would have been very different for Microsoft, and for DR and for the world. It is all of course counterfactual - but who knows - the world may have been running on CPM/2015, and Gates and Allen would have been running a successful PC software company - selling compilers and languages for it.
It Gates and Allen's ability to turn this fateful second chance into what we now know to be the deal of the century. In fact, Microsoft used this chance to sell QDOS (Quick and Dirty OS) - from a lone programmer (Dave Patterson) working across the lake in Seattle on a port of CP/M to 8086 - to IBM. IBM was not aware of this small company (Seattle Computer Products). Later it was found that QDOS literally "stole" CP/M code and function calls. DR sued but IBM settled the suit with DR by bundling CPM/86 with the PC - but selling it for $240 as opposed to $40 for PC DOS. CP/M never had a chance. And the rest as they say is history...
[1] http://en.wikipedia.org/wiki/Gary_Kildall
EDITS: typos
> Often the founders themselves didn't know why their ideas
> were promising. They were attracted to these ideas by
> instinct, because they were living in the future and they
> sensed that something was missing.
It would be cool if PG could reveal whether he used this test, and what the answer was at the time, for any of the YC "big successes" (Which I'm defining as Airbnb, Dropbox, Stripe, Justin.TV/Twitch, Heroku and Reddit)
I still think Uber sounds lame. But really, aside from the survivor bias, is what PG trying to say, very similar to the YC interview question [paraphrasing] "what do you know that nobody else knows?".
That question lead us to be able to define the product we're currently working on, when we had spent months coming up with a good description and totally missed it. It actually helped me sell myself (and a few of the team members) on how big our idea could be.
My guess is that each example PG gives, the founders would have an answer to that question where they would say "we're [re-]defining an industry because..."
That question lead us to be able to define the product we're currently working on, when we had spent months coming up with a good description and totally missed it. It actually helped me sell myself (and a few of the team members) on how big our idea could be.
My guess is that each example PG gives, the founders would have an answer to that question where they would say "we're [re-]defining an industry because..."
This article shows beautifully how this is all just random. Of course it helps to be an enterprising person with an optimistic outlook. Failures are far too normal to be impressed by them.
But seriously, who is really able to tell which extravagant nice-to-have (or even too-ridiculous-to-be-wanted) will be next week's must-have? If there was a way to find that out, we finally would have understood humanity.
So cheers to all with above-average stats at guessing who will be the next big Dollar Sign.
But seriously, who is really able to tell which extravagant nice-to-have (or even too-ridiculous-to-be-wanted) will be next week's must-have? If there was a way to find that out, we finally would have understood humanity.
So cheers to all with above-average stats at guessing who will be the next big Dollar Sign.
The problem with advice like this is that it's not nearly as useful as it seems. The biggest problem here is that typically it takes a visionary to recognize a visionary in the early stages, before any of the vision has actually been realized. And that's only part of the equation, there's also talent, ability to execute well, and luck of course.
If you're a time traveler from the future, sure you bet on Bill and Paul, because you know how that turns out. But let's say you're a time traveler from an alternate timeline, or an alien from a more advanced planet, can you still tell who to bet on? Even if you had the knowledge to know how people would use computers in the future and what sorts of things would be most in demand, Microsoft wasn't necessarily the best bet way back in the Altair Basic era. Back then the obvious choice would have been Gary Kildall and Digital Research who had CP/M, a serious operating system that was light years ahead of the competition in the late '70s. It took several bizarre twists and turns for Microsoft to end up on top, but it was far from foreordained that they would. Other obvious competitors included Lotus and VisiCalc, folks who seemed poised to have strong offerings nestled in the bosom of a growing computer industry.
What Microsoft had that the others lacked was sticktoitiveness, adaptability, and business savvy. They were willing to do what ever it took to ride to the top, whereas other companies were satisfied with "merely" massive runaway success. And that showed up in surprising and non-intuitive ways. DR built CP/M from the ground up and invested heavily in making it the best they could. Microsoft bought a clone of CP/M that was written in 6 weeks for $75k because they needed an OS to deliver to IBM for the IBM PC, and they thought that was a reasonable business arrangement to be in. In no way does that sound like sound engineering or sound business strategy, but it turned out to be one of the most pivotal events in computing history. It was Microsoft's tenacity and their desire to make billions where others were content to make only billions that brought them to the top of the industry, things that weren't really obvious until after they happened.
For venture capitalists this problem isn't a big deal, because they can just play the lottery and invest in Digital Research as well as Microsoft and Lotus and all the reasonable bets. For people looking for "the next microsoft" to work at, the problem is much more difficult, if not fundamentally impossible.
If you're a time traveler from the future, sure you bet on Bill and Paul, because you know how that turns out. But let's say you're a time traveler from an alternate timeline, or an alien from a more advanced planet, can you still tell who to bet on? Even if you had the knowledge to know how people would use computers in the future and what sorts of things would be most in demand, Microsoft wasn't necessarily the best bet way back in the Altair Basic era. Back then the obvious choice would have been Gary Kildall and Digital Research who had CP/M, a serious operating system that was light years ahead of the competition in the late '70s. It took several bizarre twists and turns for Microsoft to end up on top, but it was far from foreordained that they would. Other obvious competitors included Lotus and VisiCalc, folks who seemed poised to have strong offerings nestled in the bosom of a growing computer industry.
What Microsoft had that the others lacked was sticktoitiveness, adaptability, and business savvy. They were willing to do what ever it took to ride to the top, whereas other companies were satisfied with "merely" massive runaway success. And that showed up in surprising and non-intuitive ways. DR built CP/M from the ground up and invested heavily in making it the best they could. Microsoft bought a clone of CP/M that was written in 6 weeks for $75k because they needed an OS to deliver to IBM for the IBM PC, and they thought that was a reasonable business arrangement to be in. In no way does that sound like sound engineering or sound business strategy, but it turned out to be one of the most pivotal events in computing history. It was Microsoft's tenacity and their desire to make billions where others were content to make only billions that brought them to the top of the industry, things that weren't really obvious until after they happened.
For venture capitalists this problem isn't a big deal, because they can just play the lottery and invest in Digital Research as well as Microsoft and Lotus and all the reasonable bets. For people looking for "the next microsoft" to work at, the problem is much more difficult, if not fundamentally impossible.
They made something easier, in a growing market.
Their big break was DOS. Getting offered to do an OS for the PC was luck, but they scrappily exploited it to the hilt: they didn't even have an OS; their license terms allowed them to sell to (future) clones; they sold it far cheaper than the competition.
Their big break was DOS. Getting offered to do an OS for the PC was luck, but they scrappily exploited it to the hilt: they didn't even have an OS; their license terms allowed them to sell to (future) clones; they sold it far cheaper than the competition.
There's some serious sharp shooter fallacy going in this article.
The bottom line is that most of the startups based on a lame idea are, indeed, lame. It's all too easy to focus on the ones that succeeded.
The bottom line is that most of the startups based on a lame idea are, indeed, lame. It's all too easy to focus on the ones that succeeded.
Perhaps as harder call is, which MS-DOS is this the CPM-86 of?
I think that the lesson you'd draw from many of these successes is something like this:
These ideas seemed "lame" for businesses because they were hobbyist projects, but done to excellence because of the passion that was behind them. Still, hobby + excellence doesn't always make a business. You need a lot of help, and that help can be hard to summon.
Of course, there are also counterexamples. If Evan Spiegel excels at anything, it's writing creepy emails to his frat brethren. He's clearly not a technologist, and that applies to most of the VC darlings in this round, which is why it's going to be horrible for a lot of people when the chickens come home to roost and these P&D fake-tech companies have no buyers. But enough about that...
Where there's confusion, I'd say, is at step #3. To what extent is excellence (even in something that seems "lame", insofar as being impossible to build a business on, like fixing web search) going to get noticed and draw enough backing to overcome the extreme "pointiness" (as opposed to well-roundedness) that comes with narrowly-focused excellence (which seems, to most, to be a hobby project at best and obsessive at worst). And what are the odds? I don't know what the answers are.
I did #1 and #2 when I optimized hand-luck out of a trick-taking game, Ambition. ( https://docs.google.com/document/d/1S7lsZKzHuuhoTb2Wj_L3zrhH... ) It's been published in a few gaming magazines (mostly abroad, as in Hungary and Japan) but generally hasn't caught on, and I doubt it'll ever make me rich. I guess you can say that step #3 isn't automatic. But I'm not sure that that's a bad thing. Excellence doesn't need to produce wealth to be valuable, and doing something to make money makes excellence almost impossible in practice, anyhow. (Excellent products can make money, but products that are optimized for money-making are rarely excellent, because value-creation and value-capture are separate disciplines and antagonistic toward one another at the highest levels of performance.)
One thing I admire about Paul Graham (despite differences) is that he does place a value on excellence, as you can see in his work on Lisp. He understands excellence as a virtue (which is admirable) and believes that the market will reward it (which is debatable; we agree that there is correlation but would disagree on its strength). For his part, he tried to make an excellent Lisp (Arc) and showed a strong aesthetic sense. It didn't catch on. Rich Hickey made a Lisp that was, at the time, uglier but because it ran on the butt-ugly JVM, and you had a lot of S-expressions that looked more like (.addEventListener thingy other-thingy) than (map (comp f g) list).
Eight years later, most of Clojure is beautiful (unless you peer into the innards) because of the work it has attracted. All I'm saying is that it's hard to predict who'll win. If it was 2006 and someone told you that in half a decade, the best Lisp would be on the JVM, you'd laugh in that person's face. And yet... that's what happened.
I think we can agree that excellence, because of the narrowness of focus it often (and not always, but often) requires, will lead a person to be thought "lame". (There is also the extremely slow process through which true excellence is recognized.) In 2006, many would've written Rich Hickey off as a barely-employed ex-musician trying to do the impossible (write a beautiful Lisp on top of the JVM) and unsellable (who'd buy it)? And yet Cognitect has shown that Clojure's excellence is sellable. From the statically typed world we seem similar slow uptake: Haskell's over 25 years old and just starting to be recognized as a practical language for "real programming". Full agreement exists on #1 and #2.
What about #3: the "????" term that leads from focused, diligent excellence to freely flowing money? Before Silicon Valley, I feel like Americans were more honest about the lack of a strong relationship between excellence and financial success. People understood the "starving artist" concept, and that writers of trash novels (e.g. Fifty Shades of Gray) would economically outperform people writing genuine literature. (That said, don't write off Tolkien, King, or Rowling just 'cause they do "genre lit"; they're fantastically skilled.) The problem with Silicon Valley exceptionalism is that these people believe that they've transcended the nonexistence of a causal arrow between excellence and financial success. That leads to a naive optimism at first, and later to a self-serving sense of "meritocracy" that's divorced from reality. The truth about item #3 in the above is that it's very random and we have almost no insight into how it actually works, and that's upsetting but I don't know what to do about it.
1. Find a specialty or niche that you care about.
2. Excel in it.
3. ????
4. Profit!
These ideas seemed "lame" for businesses because they were hobbyist projects, but done to excellence because of the passion that was behind them. Still, hobby + excellence doesn't always make a business. You need a lot of help, and that help can be hard to summon.
Of course, there are also counterexamples. If Evan Spiegel excels at anything, it's writing creepy emails to his frat brethren. He's clearly not a technologist, and that applies to most of the VC darlings in this round, which is why it's going to be horrible for a lot of people when the chickens come home to roost and these P&D fake-tech companies have no buyers. But enough about that...
Where there's confusion, I'd say, is at step #3. To what extent is excellence (even in something that seems "lame", insofar as being impossible to build a business on, like fixing web search) going to get noticed and draw enough backing to overcome the extreme "pointiness" (as opposed to well-roundedness) that comes with narrowly-focused excellence (which seems, to most, to be a hobby project at best and obsessive at worst). And what are the odds? I don't know what the answers are.
I did #1 and #2 when I optimized hand-luck out of a trick-taking game, Ambition. ( https://docs.google.com/document/d/1S7lsZKzHuuhoTb2Wj_L3zrhH... ) It's been published in a few gaming magazines (mostly abroad, as in Hungary and Japan) but generally hasn't caught on, and I doubt it'll ever make me rich. I guess you can say that step #3 isn't automatic. But I'm not sure that that's a bad thing. Excellence doesn't need to produce wealth to be valuable, and doing something to make money makes excellence almost impossible in practice, anyhow. (Excellent products can make money, but products that are optimized for money-making are rarely excellent, because value-creation and value-capture are separate disciplines and antagonistic toward one another at the highest levels of performance.)
One thing I admire about Paul Graham (despite differences) is that he does place a value on excellence, as you can see in his work on Lisp. He understands excellence as a virtue (which is admirable) and believes that the market will reward it (which is debatable; we agree that there is correlation but would disagree on its strength). For his part, he tried to make an excellent Lisp (Arc) and showed a strong aesthetic sense. It didn't catch on. Rich Hickey made a Lisp that was, at the time, uglier but because it ran on the butt-ugly JVM, and you had a lot of S-expressions that looked more like (.addEventListener thingy other-thingy) than (map (comp f g) list).
Eight years later, most of Clojure is beautiful (unless you peer into the innards) because of the work it has attracted. All I'm saying is that it's hard to predict who'll win. If it was 2006 and someone told you that in half a decade, the best Lisp would be on the JVM, you'd laugh in that person's face. And yet... that's what happened.
I think we can agree that excellence, because of the narrowness of focus it often (and not always, but often) requires, will lead a person to be thought "lame". (There is also the extremely slow process through which true excellence is recognized.) In 2006, many would've written Rich Hickey off as a barely-employed ex-musician trying to do the impossible (write a beautiful Lisp on top of the JVM) and unsellable (who'd buy it)? And yet Cognitect has shown that Clojure's excellence is sellable. From the statically typed world we seem similar slow uptake: Haskell's over 25 years old and just starting to be recognized as a practical language for "real programming". Full agreement exists on #1 and #2.
What about #3: the "????" term that leads from focused, diligent excellence to freely flowing money? Before Silicon Valley, I feel like Americans were more honest about the lack of a strong relationship between excellence and financial success. People understood the "starving artist" concept, and that writers of trash novels (e.g. Fifty Shades of Gray) would economically outperform people writing genuine literature. (That said, don't write off Tolkien, King, or Rowling just 'cause they do "genre lit"; they're fantastically skilled.) The problem with Silicon Valley exceptionalism is that these people believe that they've transcended the nonexistence of a causal arrow between excellence and financial success. That leads to a naive optimism at first, and later to a self-serving sense of "meritocracy" that's divorced from reality. The truth about item #3 in the above is that it's very random and we have almost no insight into how it actually works, and that's upsetting but I don't know what to do about it.
"lame" is an unfortunately ableist choice of words (it appears five times in the article and many times here the comments).
for information on why it's problematic try this: http://www.disabilityandrepresentation.com/2013/09/14/ableis...
for information on why it's problematic try this: http://www.disabilityandrepresentation.com/2013/09/14/ableis...
Did MS start out to just write BASIC for the Altair? Or if asked would they have said they were going to write software for computer users? The second phrasing doesn't sound so lame. And I imagine you can come up with a lame sounding subset for many companies.
Edit: I get the point that companies might have a larger scope and to look out for it but deliberately trying to come up with a lame tagline seems... Off? Did AirBNB really set out just to offer a single place with air mattresses? Like no plans?
Edit: I get the point that companies might have a larger scope and to look out for it but deliberately trying to come up with a lame tagline seems... Off? Did AirBNB really set out just to offer a single place with air mattresses? Like no plans?
I don't know for sure, but AirBNB had the weird domain name airbednbreakfast.com or something, and it still has pretty weird company name too. It's not really what you would choose for disrupting the hotel industry.
By decades of media coverage, "Microsoft" evokes images of a behemoth. But try to imagine what the name "Microsoft" must have sounded like -- it doesn't sound very ambitious. It sounds a little lame. If you planned to be the biggest company in the world, would you name your company "Microsoft"?
Microsoft was started when Gates was 20 or something. I think a lot of 20 year olds are just trying to make something interesting. Some are dreaming of taking over the world, but those are the types that probably don't actually do it.
I think you can see a similar thing with Linux. If you look at Linus's original mail announcing Linux, it doesn't sound like he has any goals to run on the majority of servers, mobile phones, many desktops, and tons of embedded devices.
He even insisted it would never be portable past i386!!!
I agree with pg that a lot of these people are living in the future and don't necessarily realize that they're going to be riding this hockey stick growth. Even if you're doing it, I'm sure it's hard to predict. There's hundreds of decisions and improvements you have to make along the way. There's no one idea or feature to implement to get that big.
By decades of media coverage, "Microsoft" evokes images of a behemoth. But try to imagine what the name "Microsoft" must have sounded like -- it doesn't sound very ambitious. It sounds a little lame. If you planned to be the biggest company in the world, would you name your company "Microsoft"?
Microsoft was started when Gates was 20 or something. I think a lot of 20 year olds are just trying to make something interesting. Some are dreaming of taking over the world, but those are the types that probably don't actually do it.
I think you can see a similar thing with Linux. If you look at Linus's original mail announcing Linux, it doesn't sound like he has any goals to run on the majority of servers, mobile phones, many desktops, and tons of embedded devices.
He even insisted it would never be portable past i386!!!
I agree with pg that a lot of these people are living in the future and don't necessarily realize that they're going to be riding this hockey stick growth. Even if you're doing it, I'm sure it's hard to predict. There's hundreds of decisions and improvements you have to make along the way. There's no one idea or feature to implement to get that big.
> But try to imagine what the name "Microsoft" must have sounded like -- it doesn't sound very ambitious. It sounds a little lame. If you planned to be the biggest company in the world, would you name your company "Microsoft"?
They certainly were no match for the ambitions of Intergalactic Digital Research.
They certainly were no match for the ambitions of Intergalactic Digital Research.
Ha! I didn't know Digital was originally called that. That's a beautiful irony.
http://www.digitalresearch.biz/HISZMSD.HTM
http://www.digitalresearch.biz/HISZMSD.HTM
What they said in 1976 was that they wanted to be "able to hire ten programmers and deluge the hobby market with good software." So more than BASIC, but without the notion that the computer software market would grow to encompass everyone.
The letter containing that statement is a key to understanding Microsoft's goals and their success (in particular the key innovation that people should pay for software). If you haven't read it, I recommend taking a look: http://www.lettersofnote.com/2009/10/most-of-you-steal-your-...
Reading that letter for the first time in years (and having worked on a commercial startup for the first time since)...
My main question is, how could Bill Gates afford the $40,000 of computer time? That's quite a lot of capital at the time.
My main question is, how could Bill Gates afford the $40,000 of computer time? That's quite a lot of capital at the time.
Because like the (vast) majority of very successful people he started from a position of financial independence and social connections that absolutely are far beyond the norm.
Becoming very financially successful is very much more about what family you were born into and fortune than it is about skill or talent, although the latter certainly still matter.
Becoming very financially successful is very much more about what family you were born into and fortune than it is about skill or talent, although the latter certainly still matter.
I thought that they wrote the BASIC interpreter using the machines in Harvard's computer lab.
Yes, they wrote an assembler/linker/simulator on old Harv-10. I was there bugging him late at night, asking why he was wasting his time on silly hobbyist machines when we had the whole Arpanet at our fingertips. (All 20-30 machines at that point.) ;/)
Even though lots of folks were using the -10 for commercial projects on the side, Harvard made him give all the Altair money back to avoid disciplinary action. Wasn't really fair.
So, yeah, some of us were blind at the time. In my defense, I did help Carl Helmers get Byte Magazine off the ground a year later or so, along with my high school buddy Dan Fylstra who went on to create VisiCorp to commercialize the original VisiCalc.
Even though lots of folks were using the -10 for commercial projects on the side, Harvard made him give all the Altair money back to avoid disciplinary action. Wasn't really fair.
So, yeah, some of us were blind at the time. In my defense, I did help Carl Helmers get Byte Magazine off the ground a year later or so, along with my high school buddy Dan Fylstra who went on to create VisiCorp to commercialize the original VisiCalc.
I think it's about the MVP - minimum viable product of the company. The first product which is going to bring in revenue and keep the lights on. You will obviously consolidate further and build a business plan around the MVP. Basic for Altair was Microsoft's MVP. Offering air mattresses was AirBNB's MVP.
Looking at Wikipedia, it appears they spent several months before launching their site, after getting a technical cofounder. So 3 people and 6 months, at least. I find it very hard to believe they did all that with the idea their MVP was renting out their flat.
It wasn't just renting out their flat, they let other people rent out their air mattresses (or couches) too.
Early on their idea was to be a "Bed and Breakfast", to the point where they required the hosts to cook breakfast for the guests.
Early on their idea was to be a "Bed and Breakfast", to the point where they required the hosts to cook breakfast for the guests.
>> Did MS start out to just write BASIC for the Altair?
Yes, in 1975. The DOS deal with IBM didn't come around until 1980, Excel showed up in 1982, Word in 1983, and Windows in 1984.
Yes, in 1975. The DOS deal with IBM didn't come around until 1980, Excel showed up in 1982, Word in 1983, and Windows in 1984.
This seems to me a clarification of the strategy PG proposed during a talk at PyCon 2012 and an essay called "frighteningly ambitious startup ideas". It is a great way to think about and frame how to judge startup ideas.
Mainly centering around high potential technology, overlooked ideas and opportunities that these startups can take advantage of.
My question becomes, and it seems PGs, how can you do this without the value of hindsight. One one hand, you could sit and reason why startup x or your startup idea is the Microsoft in this scenario. But you can also easily delude yourself.
Pebble, IMO, is shaping up alot like early Apple did. They are entering a competitive industry with a new product, facing a goliath and have a huge emphasis on their design & focus on developer. Which makes me believe history will repeat itself. That if we have the Apple for wearables, there should be, or soon, a Microsoft for wearables.
Just a thought, would love any point for/against.
For reference:
http://paulgraham.com/ambitious.html https://www.youtube.com/watch?v=R9ITLdmfdLI
Mainly centering around high potential technology, overlooked ideas and opportunities that these startups can take advantage of.
My question becomes, and it seems PGs, how can you do this without the value of hindsight. One one hand, you could sit and reason why startup x or your startup idea is the Microsoft in this scenario. But you can also easily delude yourself.
Pebble, IMO, is shaping up alot like early Apple did. They are entering a competitive industry with a new product, facing a goliath and have a huge emphasis on their design & focus on developer. Which makes me believe history will repeat itself. That if we have the Apple for wearables, there should be, or soon, a Microsoft for wearables.
Just a thought, would love any point for/against.
For reference:
http://paulgraham.com/ambitious.html https://www.youtube.com/watch?v=R9ITLdmfdLI
PG proposed during a talk at PyCon 2012
That was a great talk. Everybody should re-watch it. Even if just for the one off question "why does HN violate the HTTP spec by sending invalid line endings?" (Answer: "because it works for me!")
That was a great talk. Everybody should re-watch it. Even if just for the one off question "why does HN violate the HTTP spec by sending invalid line endings?" (Answer: "because it works for me!")
This reminds me of my experience with Microsoft very early in my career. Way back when MS was working on Windows 1.0, I was working for a start up company and we were developing network management software for SNA Networks and Mainframes. It was very advanced for the day and used a GUI but was done on Mainframe computers and terminals. The company sold out to IBM and I chose to take the money and run. A friend of mine referred me to MS because they needed people with graphics experience. So I met with one of the team leaders and went over and talked with them. At the time, Windows was very very primitive, they had not yet figured out how to make the windows overlap and re-paint (which we had figured out a long time before that). I actually felt sorry for them at the time because I just could not imagine how they would ever catch up with Apple, the Mac was just so much more advanced. It seemed to me like there was no doubt that they would be out of business in a few years completely replaced by Apple, it was just so obvious at the time to me. They offered me a job but it was less money in terms of salary than another offer I had from a Fortune 500 company, but at the time MS had a great stock option plan, but I felt that was worthless based on my brilliant analysis of their prospects. So I took the safe bet. I tell this story occasionally to younger people who are trying to decide about what to do in terms of career choices. Sometimes the wiser choice is to take the risk and follow the more exciting path. It is no guarantee of success, but neither is taking the safe choice. Do what excites you and put your energy into that. Just my view from the cheap seats.
> Sometimes the wiser choice is to take the risk and follow the more exciting path. It is no guarantee of success, but neither is taking the safe choice.
It's really just dumb luck. One thinks one can extract a lesson from this hindsight, but how was the situation that led to your decision any different than the 99 other startups that were just as lame but didn't make it?
> Do what excites you and put your energy into that.
Absolutely.
It's really just dumb luck. One thinks one can extract a lesson from this hindsight, but how was the situation that led to your decision any different than the 99 other startups that were just as lame but didn't make it?
> Do what excites you and put your energy into that.
Absolutely.
True true. But if it is all dumb luck, then what the F, do want you want. I guess that was my point.
It's not dumb luck. MS made a fortune from marketing and business politics, not from cool technology.
MS was never primarily a tech company, it was a sales-and-marketing-and-M&A company that happened to sell tech products.
So the 'Does this company have a future based on this product?' question is misleading.
The important question is - how are they marketing the product? What relationships do they have? What relationships are they building? What's the sales and marketing culture like?
MS are poster children for this. Time and again they've marketed the crap out of technically mediocre products with - mostly - great success.
AirBnb weren't exactly light on the marketing either. (Etc.)
MS was never primarily a tech company, it was a sales-and-marketing-and-M&A company that happened to sell tech products.
So the 'Does this company have a future based on this product?' question is misleading.
The important question is - how are they marketing the product? What relationships do they have? What relationships are they building? What's the sales and marketing culture like?
MS are poster children for this. Time and again they've marketed the crap out of technically mediocre products with - mostly - great success.
AirBnb weren't exactly light on the marketing either. (Etc.)
If you completely dismiss their product then you would have missed Microsoft because it's highly likely that at that point their marketing etc wasn't great. That's the trap the article is warning against.
The more expert you are at something the more likely you will dismiss things. PG recognises this bias and is trying to keep his mind open. You have fallen straight into your own trap which is narrow mindedness presenting itself to you as expertise.
They did have a product and they did go on to build many products. Many of them are far from crap and solved really difficult problems including running on all kinds of hardware, maintaining backward compatibility, rewriting their main OS from scratch. Microsoft is not Coca Cola. PG is trying to see that in other companies at a very early stage. (not giving him a free pass - I think he still has other blind spots that annoy me - I have many more no doubt)
edit: No doubt, it's probably that combination of being an expert at something but having a somewhat open mind that got PG started on his adventures in the first place.
The more expert you are at something the more likely you will dismiss things. PG recognises this bias and is trying to keep his mind open. You have fallen straight into your own trap which is narrow mindedness presenting itself to you as expertise.
They did have a product and they did go on to build many products. Many of them are far from crap and solved really difficult problems including running on all kinds of hardware, maintaining backward compatibility, rewriting their main OS from scratch. Microsoft is not Coca Cola. PG is trying to see that in other companies at a very early stage. (not giving him a free pass - I think he still has other blind spots that annoy me - I have many more no doubt)
edit: No doubt, it's probably that combination of being an expert at something but having a somewhat open mind that got PG started on his adventures in the first place.
I have no idea if I would have dismissed the product. In retrospect, MS BASIC had a 4K footprint which also included floating point. That certainly made it stand out from the competition.
But I wonder if an investor might have noted that Gates had an interest in aggressive market-building and income generation, as suggested in the scrappy and public fight with the tape sharers and the eventual battle between MITS and MS over royalties.
I wasn't paying attention at the time, but looking for similar patterns today - in, say, Uber - suggest that there's a clear interest in aggressive and cut-throat behaviour, which probably bodes well for future investment returns. (If that's your main interest in a tech company - it's not mine).
I certainly don't think MS were crap at everything. But there's also no denying that the user experience with many MS products was - and still is - shockingly bad.
Office and XP were good-enough, with a few nice tweaks. But you have to balance that against a long string of horrors (insecure VB macros, IE6, the ribbon, Win 8 tiles, Win 95 series bugs, and on and on.)
So historically, the focus has always been on sales and using legal and corporate lock-in to sell poor-to-good software.
It clearly hasn't been on creating state-of-the-art super-products and assuming that quality will sell itself.
So I think the point stands - look at business culture and management attitude to market building as a primary predictor. Product quality is not a predictor, as long as it's good enough.
Being slightly better than average doesn't hurt, but there's no commercial need to be a technical marvel.
But I wonder if an investor might have noted that Gates had an interest in aggressive market-building and income generation, as suggested in the scrappy and public fight with the tape sharers and the eventual battle between MITS and MS over royalties.
I wasn't paying attention at the time, but looking for similar patterns today - in, say, Uber - suggest that there's a clear interest in aggressive and cut-throat behaviour, which probably bodes well for future investment returns. (If that's your main interest in a tech company - it's not mine).
I certainly don't think MS were crap at everything. But there's also no denying that the user experience with many MS products was - and still is - shockingly bad.
Office and XP were good-enough, with a few nice tweaks. But you have to balance that against a long string of horrors (insecure VB macros, IE6, the ribbon, Win 8 tiles, Win 95 series bugs, and on and on.)
So historically, the focus has always been on sales and using legal and corporate lock-in to sell poor-to-good software.
It clearly hasn't been on creating state-of-the-art super-products and assuming that quality will sell itself.
So I think the point stands - look at business culture and management attitude to market building as a primary predictor. Product quality is not a predictor, as long as it's good enough.
Being slightly better than average doesn't hurt, but there's no commercial need to be a technical marvel.
> It's not dumb luck. MS made a fortune from marketing and business politics, not from cool technology.
MS was never primarily a tech company, it was a sales-and-marketing-and-M&A company that happened to sell tech products.
The Apple of the eighties.
The Apple of the eighties.
That's what I understood and wanted to reinforce :)
Did you want the MS job? I mean, I could figure out how to make things overlap without repainting, and I'm a 4-year-old child.
Could you draw overlapping things without repainting using 1985 technology?
That is, an IBM PC running at 4.77 MHz; with 128 KB of ram (or 640 KB if you're lucky). The OS would have been dos at something like version 2.x Some people[1] used Wordstar as their text editor.
You had limited multitasking -- TSRs maybe.
I'm not sure what programming language they used but possibly Microsoft C and assembly.
[1] http://www.charlespetzold.com/etc/windows1/
That is, an IBM PC running at 4.77 MHz; with 128 KB of ram (or 640 KB if you're lucky). The OS would have been dos at something like version 2.x Some people[1] used Wordstar as their text editor.
You had limited multitasking -- TSRs maybe.
I'm not sure what programming language they used but possibly Microsoft C and assembly.
[1] http://www.charlespetzold.com/etc/windows1/
To add a little more color to this, you had to be able to quickly repaint just a region of a window. And you don't have a bitmap of the window's current contents because that takes up RAM and you'd need CPU time to update a copy every time the window updates (slowing down any animations).
I don't know how it's handled these days, but when I was first playing around with Win32, you'd receive events telling you a region of your window was invalidated. You were expected to figure out what controls and images belonged in that region and just repaint those items because of the CPU load.
I don't know how it's handled these days, but when I was first playing around with Win32, you'd receive events telling you a region of your window was invalidated. You were expected to figure out what controls and images belonged in that region and just repaint those items because of the CPU load.
Yes, and it was trivial to do.
http://en.wikipedia.org/wiki/Graphical_Environment_Manager
pre-dated windows on the same HW !
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>but how was the situation that led to your decision any different than the 99 other startups that were just as lame but didn't make it?
Sometimes I think people look at where a company is, rather than it's direction, it's velocity.
Sometimes I think people look at where a company is, rather than it's direction, it's velocity.
I think this sort of illustrates the flaw in the reasoning of the original post. No one could have looked at Altair BASIC and seen Microsoft, because Microsoft didn't grow out of Altair BASIC. They grew out of canny marketing and business decisions and dumb luck. Their shitty software had nothing to do with it.
If someone can proverbially sell ice to Eskimos, it's not because ice is great stuff.
If someone can proverbially sell ice to Eskimos, it's not because ice is great stuff.
Great comment and awesome HN bio. Instantly made me feel good after a tough stretch. Thanks.
> A 58 year old hacker. 5 failed start ups, now work for a really really big company. eh, oh well.
> A 58 year old hacker. 5 failed start ups, now work for a really really big company. eh, oh well.
I took the risky choice twice and it didn't work out. I think it's just a gamble especially if you are an employee. As a founder you have more influence.
Whenever I get to berating myself for missed opportunities (probably biggest was turning town a job at FB in 2007) I try to also think of the right gambles I've avoided: turned town early positions at 2 failed search engines, turned down job at Yahoo in 2005, etc...
I find those smart choices don't come to mind as easily as the missed big opportunity choices, so I have to work to keep them in mind too.
I find those smart choices don't come to mind as easily as the missed big opportunity choices, so I have to work to keep them in mind too.
Whenever I entertain the "employee #N" daydream, I fantasize that I might have negatively altered the trajectory of the company: butterfly effect and all that. By hiring me, they might have missed out on hiring engineer X, who sneezed one day at lunch and gave designer Y a cold, who became inspired to doodle a graphic while out sick, which subconsciously cheered up a key customer prospect because of something his daughter said that day, which leans him towards signing a big contract, and that made all the difference. Or perhaps it was a more direct action or inaction of mine that changed the course of history.
Is the success of an endeavor highly sensitive to small perturbations in the timeline? I'm guessing most of us don't buy into the mythology of the all-powerful Idea and Founders. Every employee and action matters. The details matter. If I could go back in time and swap in for employee #8 at MS, it would probably no longer be the MS we know. Or perhaps we wouldn't know of it at all.
Perhaps best not to sweat these missed opportunities, and instead keep making whatever we're doing right now the next MS, or whatever you define as outrageous success.
Is the success of an endeavor highly sensitive to small perturbations in the timeline? I'm guessing most of us don't buy into the mythology of the all-powerful Idea and Founders. Every employee and action matters. The details matter. If I could go back in time and swap in for employee #8 at MS, it would probably no longer be the MS we know. Or perhaps we wouldn't know of it at all.
Perhaps best not to sweat these missed opportunities, and instead keep making whatever we're doing right now the next MS, or whatever you define as outrageous success.
The butterfly effect is good for millions of years--maybe, but giving Hitler a cold in 1925 definitely would not have altered his trajectory in the least (blah blah blah goodwins law blah blah blah) there's just so many other things at work that most small things do very little to decide the success or failure of a company -- despite all the stories people love to tell about fedex's last $25,000, if the founder had gambled the money away instead of quadrupling it he woulda just found an investor or bank willing to back him and fedex would be in the same place it is today.
Perhaps. onejoe's version sure is comforting though.
for those who don't know it, it is a basic human trait that failure is more impactful (e.g. you think of a missed opportunity more than the ones you took) than success, it's called negativity bias[0].
[0] http://en.wikipedia.org/wiki/Negativity_bias
[0] http://en.wikipedia.org/wiki/Negativity_bias
Negativity bias is how a negative event is more impactful than a positive one, but turning down a job is not a negative event.
It may later seem like it was a loss, so some form of retrospective loss aversion might be more appropriate to apply to this phenomena: http://en.wikipedia.org/wiki/Loss_aversion
On a general note wrt. failure/success then we actually tend to slightly exaggerate our successes when remembering them, and similarly downplay our failures.
It may later seem like it was a loss, so some form of retrospective loss aversion might be more appropriate to apply to this phenomena: http://en.wikipedia.org/wiki/Loss_aversion
On a general note wrt. failure/success then we actually tend to slightly exaggerate our successes when remembering them, and similarly downplay our failures.
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Out of curiosity, why would you characterize avoiding Yahoo! as a right gamble? Were they in a really tumultuous period at the time? While not particularly hip, they're still probably the hugest company to survive the dot-com bubble.
Maybe I'm too conservative, but just looking at it from a "cool thing to work on perspective" I would have turned it down as well. I mean, seriously, you tell me a story about how a company offers you a job reinventing a wheel from a previous job, and that company later turns out to be the one in a million that made it on dumb luck and marketing, and you expect the takeaway to be "work for a technologically backwards company for low pay because, hey, they might be successful someday!"? It sounds like you did exactly what excites you: you passed up repeating work from a previous job.
That was an aspect of it, one of the things that I had started at NSI and got cut short when they sold out to Big Blue (and PG would love this) was AI Expert System for Network diagnostics using a Symbolics computer using OPS5. I was convinced at the time that would be the next thing after the GUI. But if I had to be completely honest, a huge part of it (80%) is I just thought they had no chance of making it.
I think what is really interesting in your story is that you directly had a lot of the knowledge and tools to fix the part that you felt was severely lacking in Microsoft's product. Was that the only reason you felt MS was doomed? I would definitely recommend to anyone who feels they can be the missing piece to be that missing piece.
My thoughts on this are: The op's perception could've been that they weren't very capable (since they didn't have solution to a fundamental problem (dirty rectangles?)) and, going in somewhere and being a savior is not something I'd want to do, that's large burden to bear.
>At the time, Windows was very very primitive, they had not yet figured out how to make the windows overlap and re-paint (which we had figured out a long time before that). I actually felt sorry for them at the time because I just could not imagine how they would ever catch up with Apple, the Mac was just so much more advanced. It seemed to me like there was no doubt that they would be out of business in a few years completely replaced by Apple, it was just so obvious at the time to me.
while it feels somewhat paradoxical, reinvention of the wheel has been an extremely efficient way to move the industry forward. Probably because it is an effective way to subterfuge the incumbents, and incumbents are the most significant obstacle on the way forward.
while it feels somewhat paradoxical, reinvention of the wheel has been an extremely efficient way to move the industry forward. Probably because it is an effective way to subterfuge the incumbents, and incumbents are the most significant obstacle on the way forward.
One thing that took me the longest to figure out was the value of half-assed work. It's actually possible to build things of value with enough half-assed work. I think that's one of the ideas behind the "worse is better" philosophy. Sure, it will take orders of magnitude more man-hours, and sure the end-result won't be nearly as elegant and perhaps not as robust as if something else created by a super talented team. But not everything needs to be created by "rockstars", sometimes you just need stuff that works well enough after a sufficient application of development effort.
Maybe, but that is not what makes a good engineer happy.
And if happiness is the goal of live instead of richness in money "worse is better" is the wrong philosophy.
That aspect of "worse is better", certainly. But work isn't about just being happy all the time, it's about doing work to acquire skills and experience as well as income. There is a range of acceptable levels of enjoyment at work and there's often a tradeoff with other factors. Grueling work might still be enjoyable if you have a great boss, great coworkers, and the work forces you to better yourself and provides useful experience or great, positive value to end users. Looking at a company in the early stages while they are flailing around a lot and half-assing things a lot and forming a distinctly negative opinion can sometimes be erroneous. Sometimes it's worthwhile to join an endeavor like that precisely because you'll have the opportunity to improve things so much. And perhaps there might be a lot of money to be made along the way as well. There is a degree of unpleasantness in some jobs which is so poisonous that one should escape as rapidly as possible no matter the financial opportunity cost (personally I walked away from a 6 figure income plus nearly 6 figures in bonuses and stock just to get out of such a job) but there are also many jobs that, while challenging and at times excruciatingly stressful, are still worth it for the RoI. There are tons and tons of folks who put in 5 or 10 years at Microsoft during the chaotic early years and then got rich enough to be able to go off and not only retire but indulge their interests, start new companies, etc.
Let us remember that we are here chatting on HN because PG sold his company to the quintessential collection of half-assers in tech history: Yahoo.
Let us remember that we are here chatting on HN because PG sold his company to the quintessential collection of half-assers in tech history: Yahoo.
This depends on what is being made is a means to an end vs a end in itself.
This reminds of me of an image I used to have as my desktop computer background. Lost it later and the closest I found was this, so I added the same motto (that the image had) at the bottom of my post:
http://jugad2.blogspot.in/2014/11/alley-in-park-bucharest-ro...
http://jugad2.blogspot.in/2014/11/alley-in-park-bucharest-ro...
This is a variant of the Robert Frost poem, "The Road Not Taken" if you didn't know! :)
http://en.wikipedia.org/wiki/Wikipedia:Taking_the_road_less_...
http://en.wikipedia.org/wiki/Wikipedia:Taking_the_road_less_...
Apparently this poem is not meant to encourage taking that less traveled road.
http://en.wikipedia.org/wiki/The_Road_Not_Taken#Analysis
Also, reminds me of my favourite variant of this quote:
"Two roads diverged in the woods. I took the one less traveled, and had to eat bugs until Park rangers rescued me."
( from http://lesswrong.com/lw/xm/building_weirdtopia/ )
http://en.wikipedia.org/wiki/The_Road_Not_Taken#Analysis
Also, reminds me of my favourite variant of this quote:
"Two roads diverged in the woods. I took the one less traveled, and had to eat bugs until Park rangers rescued me."
( from http://lesswrong.com/lw/xm/building_weirdtopia/ )
This. I wish I were not someone who had pet peeves, but this is one of them. People quoting maxims from great literature that are meant ironically. Robert Frost seems particularly prone to it. See also "good fences make good neighbors." And Shakespeare of course - this applies to everything Polonius said, for instance: "neither a barrower not a lender be," and that old favorite, "to thine own self be true."
In what way is "neither a borrower nor a lender be" ironic?
Well, first you have to consider the source. Polonius is a boor and a blowhard. Then consider what he says. Both borrowing and lending can be solid financial decisions. Finance was in its infancy in Elizabethan England, but the British were early adopters in the field and would have known better. Shakespeare also would have been familiar with classical ideas about liberality as a virtue.
But the main takeaway is that Polonius is an idiot and his advice to Laertes should be considered platitudes at best and terrible counsel at worst.
But the main takeaway is that Polonius is an idiot and his advice to Laertes should be considered platitudes at best and terrible counsel at worst.
I think that the context makes it pretty clear that he's talking about borrowing and lending between friends. Shakespeare would indeed have been aware of it, as it was commonplace for young noblemen to run up ruinous debts from gambling and borrowing from each other and moneylenders (who were only too happy to lend to the heir to an estate). Families lost their wealth and estates because of it. "Neither a borrower nor a lender be" is extremely good advice in this context. And, frankly, remains so.
Also, I reckon people are generally too harsh on Polonius. Sure, he's not the sharpest tool in the shed, but in this scene he just seems like an old man who's worried about his son leaving home and trying to give him good advice. That he can't come up with anything genuine to himself is, I think, a little sad.
But I suspect most of us have endured our parents sending us off with good advice on our first time leaving home. And generally that advice seems to be similarly cliched ("Remember to eat properly...and make sure when you're going out, you know how to get home...and wrap up warm when it's cold out..."). I doubt I'll do much better when my time comes!
Also, I reckon people are generally too harsh on Polonius. Sure, he's not the sharpest tool in the shed, but in this scene he just seems like an old man who's worried about his son leaving home and trying to give him good advice. That he can't come up with anything genuine to himself is, I think, a little sad.
But I suspect most of us have endured our parents sending us off with good advice on our first time leaving home. And generally that advice seems to be similarly cliched ("Remember to eat properly...and make sure when you're going out, you know how to get home...and wrap up warm when it's cold out..."). I doubt I'll do much better when my time comes!
Yes, had seen that, much later (just a few weeks ago), via another chain of links. Thanks, though. Interestingly, as Temporal says in a sibling comment, analysts of Frost's poem:
http://en.wikipedia.org/wiki/The_Road_Not_Taken
(linked to from your link) take it to mean something else, somewhat the reverse. I prefer my own (or rather, that background image's) more positive (IMO) interpretation, though :) And that's why I had it on my PC for long. Friends liked it too.
http://en.wikipedia.org/wiki/The_Road_Not_Taken
(linked to from your link) take it to mean something else, somewhat the reverse. I prefer my own (or rather, that background image's) more positive (IMO) interpretation, though :) And that's why I had it on my PC for long. Friends liked it too.
In retrospect, the only difference between the fork in my road and the fork for others is that mine was so obvious in hind sight. Other people probably unwittingly passed over great opportunities but just did not ever find out what they missed.
> the wiser choice is to take the risk and follow the more exciting path...
@AceJohnny2 started to touch on this, but them seemed to retreat(?), but:
I can't find "wisdom" anywhere in that scenario -- some seem to think that making a mistake is -- making a mistake -- which is hilarious because people cheer for articles or philosophies of plowing through the business landscape making mistakes and pivoting until something "sticks".
With the information you had, you made the best decision you could. The lesson is "sometimes people are wrong", or "I had a near-miss w/ success/failure", or "there's no way anybody could have predicted X, and I witnessed part of it." Your experience (I don't mean to diminish anything) is an anecdote.
@AceJohnny2 started to touch on this, but them seemed to retreat(?), but:
I can't find "wisdom" anywhere in that scenario -- some seem to think that making a mistake is -- making a mistake -- which is hilarious because people cheer for articles or philosophies of plowing through the business landscape making mistakes and pivoting until something "sticks".
With the information you had, you made the best decision you could. The lesson is "sometimes people are wrong", or "I had a near-miss w/ success/failure", or "there's no way anybody could have predicted X, and I witnessed part of it." Your experience (I don't mean to diminish anything) is an anecdote.
I agree completely. I do not view it as a mistake (although it seems like everyone else does). It was just the path I took. And I went on and got to work on a lot of other very cool projects and did very well for myself as a result, just not "early MS money" well.
The Google and AirBnB references seem on point, but were people skeptical of Facebook being a good idea? Sure there were naysayers who thought Facebook couldn't beat MySpace or break out of the college campuses, but people did love Facebook pretty early on and weren't hating on the product (it was "cool").
The 0th version of facebook was literally "illegal stalking as a service." Outgrowth from that, and from ignoring the "we're accessing your systems illegally and you can't stop us" part, grew the horrible monster choking the Internet today.
Hah, the first time I met Bill Gates was at Percomp '78 in Long Beach California. This was a pretty small personal computer conference, but Microsoft was there pushing Altair BASIC. I had a Digital Group Z80 system (which I considered to be waaaaay superior to the Altair in the way that only a male high school student can project.) Bill was selling BASIC for $399, I had paid $900 for my entire system (as a kit). He offered to let me work for him and port it to the DG system, I declined. After all this guy was going nowhere, who in their right mind would pay more than half the price of their computer for BASIC right?
Looking back on that I cannot see any way in which I would have concluded differently, given the information I had available, but that experience has since given me insight to never dismiss an idea simply. I like to have solid reasoning behind my mistakes :-)
Looking back on that I cannot see any way in which I would have concluded differently, given the information I had available, but that experience has since given me insight to never dismiss an idea simply. I like to have solid reasoning behind my mistakes :-)
Shows that he believed in what he was doing, and kept at it no matter what. Sounds like he got dismissed by a LOT of people seemingly (from reading posts like yours, and other articles over the years). Pretty good effort I'd say!
All I could think of after reading your post was: ouch!
All I could think of after reading your post was: ouch!
Not to detract from his success, it also may have helped that he was financially independent (had a big safety net) having come from a wealthy family.
Things are different if you're worried about putting food on the table a couple of months from now.
Things are different if you're worried about putting food on the table a couple of months from now.
I think that helps but as I've mentioned before there is a notion of 'fearlessness' that you get as the risk of losing your job becomes less of a catastrophe. Paying off your house for example adds a level of fearlessness because you know you can make enough to cover insurance and taxes, having enough saved for your kids college bills adds a level because you don't worry that some screw up of yours is going to disadvantage your kids, and having enough in the bank that you could continue to live in your paid off house without consuming principal, means that you really can take a huge risk and if it doesn't work out, just try something different.
Having met Bill since that time in other contexts, it is clear to me that he had a much bigger picture in mind than my high school self could conceive of at the time. I'm not sure he forsaw all of what Microsoft became, but he saw a whole lot more in the future of microcomputers than I did.
Having met Bill since that time in other contexts, it is clear to me that he had a much bigger picture in mind than my high school self could conceive of at the time. I'm not sure he forsaw all of what Microsoft became, but he saw a whole lot more in the future of microcomputers than I did.
Gates & Allen were able to generate revenue almost from day one, to cover expenses for the business.
Your theory is also decimated by Paul Allen.
Those two never had to worry about starving to death, because they made sure to generate sales from the very beginning. Microsoft was started for peanuts, they lived on peanuts in New Mexico, they drove sales, and that was that. It would not have mattered if it was two Paul Allen's coming from a middle class background, or a Gates and Allen. One thing mattered: sales.
You know why Allen wasn't afraid, despite lacking the Gates family money? He knew he had the ability to go get a well paying job at dozens of companies, he had a valuable skill.
Your theory is also decimated by Paul Allen.
Those two never had to worry about starving to death, because they made sure to generate sales from the very beginning. Microsoft was started for peanuts, they lived on peanuts in New Mexico, they drove sales, and that was that. It would not have mattered if it was two Paul Allen's coming from a middle class background, or a Gates and Allen. One thing mattered: sales.
You know why Allen wasn't afraid, despite lacking the Gates family money? He knew he had the ability to go get a well paying job at dozens of companies, he had a valuable skill.
This. Why would you start a business around a product nobody is interested in paying for? Doesn't make a lick of sense to me.
You could also say that having a wealthy family was not an incentive to work hard. There is no rule to success.
It's certainly fine to never be interested in risking everything you have to take a chance and build a company. I get tired of those that chant that mantra as though that's the only way to have happiness in life. At the same time it seems insulting to boil Bill Gates down to "Well yeah he had a big nest egg so he could take chances" Anybody who builds something real and lasting stares down devastating financial and emotional defeat once if not multiple times during that time but perseveres.
If this really had anything to do with it, why did he keep going at all? After all, what's the point in trying to start a company if you already have a wealthy family and a safety net?
"Money isn't the game. It's just how you keep score."
Because you want to, and not because you have to tread all the time to stay fed and sheltered.
This theory is invalidated by Paul Allen.
They didn't have to worry about staying fed and sheltered, because they generated revenue immediately. They built a real business.
They didn't have to worry about staying fed and sheltered, because they generated revenue immediately. They built a real business.
Exactly. If you look at the kids of wealthy people that don't have to ever worry about money, they don't start their own businesses.
Maybe. But I was replying to the second part of paulhauggis's comment, and I still think the general point stands.
Yeah, well, this doesn't really make any sense. But you can continue to believe this.
Nonsense. You are coming up with excuses for your own lot in life. Many people were given even better opportunities than Gates and had limited success. The guy is a genius, took huge risks, worked hard and had good fortune.
> Nonsense. You are coming up with excuses for your own lot in life.
Please don't make needlessly personal accusations in HN comments. This comment would be much better if it started from "Many people were given even better..."
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newswelcome.html
Please don't make needlessly personal accusations in HN comments. This comment would be much better if it started from "Many people were given even better..."
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newswelcome.html
The missing element here is: there were A LOT of small companies pushing microcomputer hardware and software products in the late 70's, Gates and Microsoft were pretty much indistinguishable from the field.
Anecdota: My Father used to subscribe to the Wall Street journal during this time, and him and I observed the whole thing play out. There no indication, none what so ever that Microsoft would win out the way they did. It was all really remarkable.
Anecdota: My Father used to subscribe to the Wall Street journal during this time, and him and I observed the whole thing play out. There no indication, none what so ever that Microsoft would win out the way they did. It was all really remarkable.
I and a number of my friends thought DEC would dominate the business! After all, DEC had an enormous head start with the LSI-11, RT-11, mature compilers, etc. I had an H-11 computer.
If there ever was a computer company that squandered a golden opportunity, it was DEC.
If there ever was a computer company that squandered a golden opportunity, it was DEC.
But weren't they the first to sell software for personal computers?
(of course, DOS was their big break)
(of course, DOS was their big break)
It's more sheer luck with their deal with IBM for doing an OS (which wasn't even their core business).
Fellow DG owner! Cool. I soldered my first computer together out of one of their kits, in 1977-78. I learned a hell of a lot building that thing.
I still have mine. Some day I'll get it running again (restoring the capacitive keyboard is pretty hairy, I understand).
Can you imagine what it was like to be the only kid in 11th grade (high school) who had a computer?
DG had a couple of pretty good BASIC implementations (MAXI-BASIC and Business-BASIC). They were not hurting there.
I still have mine. Some day I'll get it running again (restoring the capacitive keyboard is pretty hairy, I understand).
Can you imagine what it was like to be the only kid in 11th grade (high school) who had a computer?
DG had a couple of pretty good BASIC implementations (MAXI-BASIC and Business-BASIC). They were not hurting there.
[deleted]
Its a fun thought experiment, but I think it falls down when you start to consider how many "right bets" Microsoft, Apple and Google made. The other examples are no where near as mature and, to me, are still working on their initial idea.
The 3 I mentioned I think much of their success comes from implementing their first ideas very well and attracting the excellent talent which allowed them to pivot or broaden when other things came along.
Of course that then lands you back on another familiar YC idea of investing in teams rather than ideas.
The 3 I mentioned I think much of their success comes from implementing their first ideas very well and attracting the excellent talent which allowed them to pivot or broaden when other things came along.
Of course that then lands you back on another familiar YC idea of investing in teams rather than ideas.
How does framing the question this way lead to deeper thinking or rather, yield different answers, than the typical questions of 'whats the bigger picture' or 'whats the company vision' ?
Reasoning based on concrete examples is easier to convey to other human meat brains for understanding and retention. If you start off with "big picture" or "vision" you're already into meaningless buzzword territory, and any discussion quickly derails practical advice/progress/suggestions.
Examples first, details later.
The Altair->Microsoft example also emphasizes the minimum condition necessary. What seems small but could be big (given the proper market growth and a mother who's also an IBM executive to get you free connections+business)?
Also see this great example: https://news.ycombinator.com/item?id=9082844
Examples first, details later.
The Altair->Microsoft example also emphasizes the minimum condition necessary. What seems small but could be big (given the proper market growth and a mother who's also an IBM executive to get you free connections+business)?
Also see this great example: https://news.ycombinator.com/item?id=9082844
Because the question worded that way is more specific. I asked myself the same question you ask and my answer was that the question "what is the company's vision?" or anything that has the words "vision" or "mission" immediately gets eyes rolling.
I have to strongly disagree with this article. Altair BASIC was not lame for it's time. It was GREAT! There was no OS, there were barely any assemblers, you would have to toggle switches to binary representation to enter code in home brew computer.
Without BASIC, You do have to first of all learn assembly programming, learn to assemble it by hand and translate to hex/binary then flip it in. BASIC was amazing for the time, anyone could and can program in BASIC.
Google was not lame for the time, search engines sucked, no one saw/used google and said why? The first time we all used google we were hooked, we didn't have to AND OR NOT our results, it found meaningful results from the get go.
Now Facebook we could argue that about if it would take off, you might say, why? There's already myspace. But I don't know that the Microsoft BASIC or google search was lame in any way shape or form. If we all folks did was hear about the idea, then yes, they would easily be brushed off, but after implementation, it was a no brainer. Kinda like Tesla, all electric cars have really sucked until Tesla showed you could make electric cars stylish, fun to drive and with range.
Without BASIC, You do have to first of all learn assembly programming, learn to assemble it by hand and translate to hex/binary then flip it in. BASIC was amazing for the time, anyone could and can program in BASIC.
Google was not lame for the time, search engines sucked, no one saw/used google and said why? The first time we all used google we were hooked, we didn't have to AND OR NOT our results, it found meaningful results from the get go.
Now Facebook we could argue that about if it would take off, you might say, why? There's already myspace. But I don't know that the Microsoft BASIC or google search was lame in any way shape or form. If we all folks did was hear about the idea, then yes, they would easily be brushed off, but after implementation, it was a no brainer. Kinda like Tesla, all electric cars have really sucked until Tesla showed you could make electric cars stylish, fun to drive and with range.
They weren't lame products, they were lame companies.
Yeah, Google had a better way to search. But it was obvious that Google, without any viable revenue model (they planned to lease their tech to other search engines) could never compete with the might Yahoo! or Excite.
Likewise the Altair. Sure it was a great personal computer, but who wanted a personal computer? What would you do with it? (Remember that some of the first Apple Computer commercials showed the Apple ][ being used to store recipes...What do you do at home? You cook. What would you do with a PC? Um, use it to help cook?)
I don't think PG is saying anything especially novel in this post. It's the obvious next step from the now-cliche "The best companies start out looking like toys" to "how do I distinguish between the companies that really are toys and the ones that can get big?" The answer is to imagine a way in which they could become big. Sometimes they do and sometimes they don't, but at least you can weed out the ones that can't.
Yeah, Google had a better way to search. But it was obvious that Google, without any viable revenue model (they planned to lease their tech to other search engines) could never compete with the might Yahoo! or Excite.
Likewise the Altair. Sure it was a great personal computer, but who wanted a personal computer? What would you do with it? (Remember that some of the first Apple Computer commercials showed the Apple ][ being used to store recipes...What do you do at home? You cook. What would you do with a PC? Um, use it to help cook?)
I don't think PG is saying anything especially novel in this post. It's the obvious next step from the now-cliche "The best companies start out looking like toys" to "how do I distinguish between the companies that really are toys and the ones that can get big?" The answer is to imagine a way in which they could become big. Sometimes they do and sometimes they don't, but at least you can weed out the ones that can't.
The answer is to look at the team, not to look at the idea.
WebVan.
and, more recently, Color.com.
It's kind on interesting that a lot of the above companies success of those mentioned correlates with founders being smart / high IQ. Gates & Zuck got near perfect SATs, the Google guys are obviously smart, the Airbnb CTO was a Harvard CompSci. The Color guys on the other had went to second string colleges. The exception is Louis Borders at Webvan who did Math at MIT and presumably was smart but still he did ok at Borders and you can't win them all. Maybe the trick is to have smarter guys than the competition. Paul Graham himself kinds of fits - I suspect Viaweb won out against 30 or so competitors not so much because he used lisp as because he was a guy smart enough to design his own lisp.
“The future is already here; it’s just not evenly distributed”
Once you throw in the success stories like Steve Jobs, Larry Ellison, and James Cameron, it seems that the benefits really accrue to those people that were lucky enough to be near "a lump of the future", and fearless enough to capitalize on it.
Of course, you can make your own luck to a degree: One of the big advantages to attending a top research university is that you get exposed to stuff that the rest of the world won’t see for another decade or so. This was especially the case with Bill Gates since he not only had access to a powerful computer while in college, but he also attended a high school that had rare access to a computer. Since smarts correlates with getting into a good university, it makes sense that smart people would be overrepresented in technology success stories.
But, then you have Larry Ellison who read research papers and happened to find the one that laid out the theory for relational databases. Like Bill Gates, he got lucky that IBM didn’t fully appreciate the value of that idea. Similarly, James Cameron would go read grad students’ theses while working as a truck driver, after he had dropped out of community college.
Steve Jobs was pretty lucky in that he grew up near Silicon Valley when and where a lot of future technology was being invented. But, he was fearless enough to reach out to Bill Hewlett (co-founder of HP) and ended up getting a summer job there. So he got a lump of the future at 12 years old, kind of like Gates did.
But here’s the thing about getting access to lumps of the future: thanks to Moore’s Law, any of us can live in the future by spending enough money. But, it does not seem to occur to most programmers that they should be playing with $50K[1] computers instead of the $1-$5K computers that are already yesterday’s machines before they even hit the store shelves.
[1] To say nothing of playing with a $192,000 machine, which is equivalent to the one that BG used, adjusted for inflation.
Once you throw in the success stories like Steve Jobs, Larry Ellison, and James Cameron, it seems that the benefits really accrue to those people that were lucky enough to be near "a lump of the future", and fearless enough to capitalize on it.
Of course, you can make your own luck to a degree: One of the big advantages to attending a top research university is that you get exposed to stuff that the rest of the world won’t see for another decade or so. This was especially the case with Bill Gates since he not only had access to a powerful computer while in college, but he also attended a high school that had rare access to a computer. Since smarts correlates with getting into a good university, it makes sense that smart people would be overrepresented in technology success stories.
But, then you have Larry Ellison who read research papers and happened to find the one that laid out the theory for relational databases. Like Bill Gates, he got lucky that IBM didn’t fully appreciate the value of that idea. Similarly, James Cameron would go read grad students’ theses while working as a truck driver, after he had dropped out of community college.
Steve Jobs was pretty lucky in that he grew up near Silicon Valley when and where a lot of future technology was being invented. But, he was fearless enough to reach out to Bill Hewlett (co-founder of HP) and ended up getting a summer job there. So he got a lump of the future at 12 years old, kind of like Gates did.
But here’s the thing about getting access to lumps of the future: thanks to Moore’s Law, any of us can live in the future by spending enough money. But, it does not seem to occur to most programmers that they should be playing with $50K[1] computers instead of the $1-$5K computers that are already yesterday’s machines before they even hit the store shelves.
[1] To say nothing of playing with a $192,000 machine, which is equivalent to the one that BG used, adjusted for inflation.
Or perhaps its almost entirely luck, and you're just arguing from a viewpoint of survivorship bias. Phrases like "are obviously smart," "you can't win them all", and "maybe the trick is" certainly suggest that.
PCs were lame for their time. They cost a couple thousand dollars, there was no software for them, and you really couldn't do much with them.
Search was lame for its time. You couldn't actually find anything, that's why we all had to use portals and directories instead.
Social networking online was lame for its time. What are you, some kind of nerd who doesn't have any friends?
I think the meta-lesson here is that you don't want your product to be lame. You want your product to be exceptional, given what's already out there. You want your market to be lame, but very fast-growing, such that in a couple years people won't think it's so lame anymore.
Search was lame for its time. You couldn't actually find anything, that's why we all had to use portals and directories instead.
Social networking online was lame for its time. What are you, some kind of nerd who doesn't have any friends?
I think the meta-lesson here is that you don't want your product to be lame. You want your product to be exceptional, given what's already out there. You want your market to be lame, but very fast-growing, such that in a couple years people won't think it's so lame anymore.
PCs had a huge ecosystem of software, certainly after a year or two.
Google search was awesome. Even Altavista was awesome back at the beginning before they let their search results become polluted by spam.
Google search was awesome. Even Altavista was awesome back at the beginning before they let their search results become polluted by spam.
When Altair Basic came out? PCs had a huge ecosystem of software by the time I was born, in the 80s. The Altair was released in January 1975 and Altair Basic was released in March 1975.
Ditto Google - I don't recall search being all that useful. I went to Yahoo to find websites until I was introduced to Google in 2000.
Ditto Google - I don't recall search being all that useful. I went to Yahoo to find websites until I was introduced to Google in 2000.
I gotta agree with you about Google; if anything, it was too good to be true. My boss and I discussed it, and he wrote it up in a blog post: https://medium.com/@snootymonkey/paul-graham-is-wrong-411fe0...
It's interesting for me to look at your boss's "Good ideas" circle, because for me, Amazon was an obviously bad idea, Uber is still a bad idea, and I thought DropBox was a good idea but when I look at their initial Show HN a good number of other people did not.
I think the problem we all suffer from is that we all have a very limited perspective. Things that we think are bad ideas - because we don't have an immediate need for them, or because we don't understand them - may be an obvious good idea for someone sitting somewhere else. And the trick to picking good startups is to get out of that personal bubble, and understand what is it about the users of that startup that differs from us, and whether that characteristic is going to be shared by more people in the future.
I think the problem we all suffer from is that we all have a very limited perspective. Things that we think are bad ideas - because we don't have an immediate need for them, or because we don't understand them - may be an obvious good idea for someone sitting somewhere else. And the trick to picking good startups is to get out of that personal bubble, and understand what is it about the users of that startup that differs from us, and whether that characteristic is going to be shared by more people in the future.
Yes, Altair BASIC was definitely great. If I understand correctly, Microsoft (at that time, BillG and Paul Allen) were the first that managed to pack the whole thing in 4 KB for the 8080 processor.
Google was also great: before them the best search engine was AltaVista where I often had to load a a few tens of pages in order to find the link relevant for me, the one that Google returned typically at the first page. Other engines were even worse, as in not even indexing most of the sites on the internet.
Google was also great: before them the best search engine was AltaVista where I often had to load a a few tens of pages in order to find the link relevant for me, the one that Google returned typically at the first page. Other engines were even worse, as in not even indexing most of the sites on the internet.
I was in college when google first launched. I remember distinctly at the time AltaVista was the best search engine, but I still rarely got relevant pages from searches. I dont think that in the early days I remembered getting much better results from Google, but eventually it was pretty clear cut for me. I do remember in around 2004-2005 some folks I worked with were thinking of starting a "new" search engine, and that it would far surpass Google. I can say I thought that was a pretty lame idea. Of course to a large degree I think that Uber and AirBnb are a bad idea, but you cant argue with valuations....
>I was in college when google first launched.
I was working in a company at the time. Happened to be one of the early people there to know about Google. Tried it out. A few days later told a friend, who was sitting at the desk next to me, about it. He tried it with a search; results came back in 0.x seconds (even in those days, 1997 or so), then muttered: "That's fast."
I was working in a company at the time. Happened to be one of the early people there to know about Google. Tried it out. A few days later told a friend, who was sitting at the desk next to me, about it. He tried it with a search; results came back in 0.x seconds (even in those days, 1997 or so), then muttered: "That's fast."
For the group I ran around with it was how easy and uncluttered Google was back then that made us like and switch to it.
I wish it were still the case.
I wish it were still the case.
Setting aside Facebook -- Apple, Microsoft, and Google were all technically impressive early on -- it's as a business that they were kind of pathetic. It's easy to think of similarly technically impressive products that never turned into megacorporations -- e.g. UCSD Pascal did not create a software empire.
UCSD Pascal was very slow compared to the (later) Turbo Pascal. It was the "Java before Java" always interpreting the bytecode.
And that was my impression of the p-System too. The key thing that made Java fast, and wasn't clearly appreciated (except by a few people, not me) at the time was that the JVM was small enough to execute entirely in the CPU's cache. When the p-System came out, caches were tiny, a handful of bytes at most. By the time Java was defined, caches were growing larger, and the language designers knew it.
UCSD Pascal allowed you to write compiled binaries on the Apple II -- that's very impressive technically when everyone else was either coding in BASIC or having to code in assembler. My point being that this was, in its way, far more impressive than MS BASIC, but did not create a software behemoth.
The binaries were p-code. I agree, using Pascal at that point (very small RAM, the need to extend the Pascal to be more than a tool for learning) was surely a worthy technological achievement, and, if I remember correctly, the system allowed the user programmers to produce the programs which were bigger than the available RAM. That had otherwise to be custom implemented in the non-trivial programs at the time. To compare, original MS Word (for DOS) was also at least partially p-code and was bigger than the RAM. Before it, Wordstar also had to have the mechanisms of having only one part of the program in the RAM at the time. However I still find the later Turbo Pascal significantly more amazing product.
How many times can he make this same blog post with different wording?
My own side project sounds so comically bad that I don't even bother describing it to folks anymore. Usually when they ask why anyone would use it, I just pretend to be surprised and say, "Oh, I guess we never thought about that." Multiples times people have gotten so angry by how bad they think the idea is that they've actually started visibly shaking, which is a lot of fun in public at meetups or whatever.
The good thing though is that it keeps us totally focused on building our MVP.
I think part of the issue is that the most successful startups aren't successful because of new hardware or software, but because of the new social practices they enable. And while Apple releasing a new iPhone every year has gotten people really good at evaluating new hardware and software, most people don't have the same level of proficiency at evaluating novel forms of social interaction. (Even though it's totally learnable.)
The good thing though is that it keeps us totally focused on building our MVP.
I think part of the issue is that the most successful startups aren't successful because of new hardware or software, but because of the new social practices they enable. And while Apple releasing a new iPhone every year has gotten people really good at evaluating new hardware and software, most people don't have the same level of proficiency at evaluating novel forms of social interaction. (Even though it's totally learnable.)
Well you can't just dangle that out there and then not actually describe your idea!
I think there's a lot of survivorship bias in the statement that lame ideas turn out to be visionary.
Just because many successful companies are built on ideas that at first seemed ridiculous doesn't mean that ideas that seem ridiculous will be smash hits. Actually, most ideas that seem ridiculous are ridiculous.
If, however, a new market, technology or cultural bend turns up, an idea that exploits it might seem ridiculous because it breaks with social norm or accepted technological limitations but actually be viable. When Tesla started building electric cars they were ridiculed because few people understood that both the technology and the social acceptance was now at a point that made it possible. Had they started ten years prior the idea would probably have been ridiculous.
The trick is to be able to see the difference between the snakeoil salesmen, mad hatters and crazy inventors and the true visionaries. What makes this really difficult is that noone, including the founders, knows whether they're one or the other. There's a lot of luck and timing involved.
I'd also wager that the reason that mindblowingly successful companies often start out as seemingly ridiculous ideas is that if they don't have any competition in a niche that they can exploit. Microsoft, for example, were the first to sell software. IBM laughed them out of the room because software was just something that came with the hardware. The idea that you could sell software seemed as crazy as selling sand in Sahara. But because of a technological and cultural shift it was a good idea, and because it seemed ridiculous to "real" companies they had the market to themselves for the first vital years. Had they not been so lucky (or smart) with their timing noone would know who Bill Gates is.
I think you might be able to conclude the following:
"If you want merely to be well-off start a company that isn't based on a ridiculous idea. If you want a small chance of changing the world start a company based on a ridiculous idea"
Just because many successful companies are built on ideas that at first seemed ridiculous doesn't mean that ideas that seem ridiculous will be smash hits. Actually, most ideas that seem ridiculous are ridiculous.
If, however, a new market, technology or cultural bend turns up, an idea that exploits it might seem ridiculous because it breaks with social norm or accepted technological limitations but actually be viable. When Tesla started building electric cars they were ridiculed because few people understood that both the technology and the social acceptance was now at a point that made it possible. Had they started ten years prior the idea would probably have been ridiculous.
The trick is to be able to see the difference between the snakeoil salesmen, mad hatters and crazy inventors and the true visionaries. What makes this really difficult is that noone, including the founders, knows whether they're one or the other. There's a lot of luck and timing involved.
I'd also wager that the reason that mindblowingly successful companies often start out as seemingly ridiculous ideas is that if they don't have any competition in a niche that they can exploit. Microsoft, for example, were the first to sell software. IBM laughed them out of the room because software was just something that came with the hardware. The idea that you could sell software seemed as crazy as selling sand in Sahara. But because of a technological and cultural shift it was a good idea, and because it seemed ridiculous to "real" companies they had the market to themselves for the first vital years. Had they not been so lucky (or smart) with their timing noone would know who Bill Gates is.
I think you might be able to conclude the following:
"If you want merely to be well-off start a company that isn't based on a ridiculous idea. If you want a small chance of changing the world start a company based on a ridiculous idea"
I think the article more useful to VCs than to founders.
Good VCs worry about being pitched on the next Apple/Microsoft/Facebook/Google and passing on it because of their own prejudices or lack of vision. I see the article as an effort to consciously counter those prejudices.
But VCs have the luxury of being able to invest in a lot of companies. When you have that luxury, you can afford to say "let's let a few lame ideas in because they could grow huge".
You're right that potential founders don't have that luxury. Sinking 5-10 years of your life into a lame idea is overwhelmingly likely to have little payoff for the founder.
Good VCs worry about being pitched on the next Apple/Microsoft/Facebook/Google and passing on it because of their own prejudices or lack of vision. I see the article as an effort to consciously counter those prejudices.
But VCs have the luxury of being able to invest in a lot of companies. When you have that luxury, you can afford to say "let's let a few lame ideas in because they could grow huge".
You're right that potential founders don't have that luxury. Sinking 5-10 years of your life into a lame idea is overwhelmingly likely to have little payoff for the founder.
> "let's let a few lame ideas in because they could grow huge"."
Which seems to be the strategy used by most VCs anyway. The primary difference is that may not (at the time) see some of those companies/ideas as 'lame' themselves. But "invest in a large number because X will fail and we need one homerun" seems to be the prevailing MO.
Which seems to be the strategy used by most VCs anyway. The primary difference is that may not (at the time) see some of those companies/ideas as 'lame' themselves. But "invest in a large number because X will fail and we need one homerun" seems to be the prevailing MO.
I don't think the takeaway here was meant to be "lame ideas turn out to be visionary."
If anything, I would say the takeaway is that many ideas that seem lame are dismissed without truly understanding their potential, and that PG has made it a point to spend more time exploring their potential before deciding they are indeed lame.
If anything, I would say the takeaway is that many ideas that seem lame are dismissed without truly understanding their potential, and that PG has made it a point to spend more time exploring their potential before deciding they are indeed lame.
Yep. Huge survivor bias both in the article and the comments here. Plenty of people talking about the time they turned down a job with early MS and came to regret it. We need some stories of the people that took a risk and failed miserably, because that's the far more common occurrence.
Unusually short, and I feel very biased essay with examples from 3 big(est) companies out of hundreds of thousands (more?).
#NotConvinced
But how do we account for the perennial bad ideas? The 15th time we get pitched "stock market for small businesses" or "social network for coupons"?
Are these good ideas that are just too boring to have attracted a good team yet? I've heard these ideas going back and forth for 10 years now. After 10 years, nobody has gotten it right? Or are they lazy ideas that appeal to get-rich-quickers who think they can play the startup game? What is it?
I understand the value of "don't make fun", and it's something I really struggle with in my own life. I've (unfortunately) been on both sides of that exchange, and frequently feel bad about my involvement in it. It's a weird world we live in where you can't just keep your mouth shut sometimes. It's probably a sign of internet addiction. I digress.
But I also have to consider things from the standpoint of someone who is being pitched by non-technical founders on these ideas. "It might be a good idea" isn't enough.
Are these good ideas that are just too boring to have attracted a good team yet? I've heard these ideas going back and forth for 10 years now. After 10 years, nobody has gotten it right? Or are they lazy ideas that appeal to get-rich-quickers who think they can play the startup game? What is it?
I understand the value of "don't make fun", and it's something I really struggle with in my own life. I've (unfortunately) been on both sides of that exchange, and frequently feel bad about my involvement in it. It's a weird world we live in where you can't just keep your mouth shut sometimes. It's probably a sign of internet addiction. I digress.
But I also have to consider things from the standpoint of someone who is being pitched by non-technical founders on these ideas. "It might be a good idea" isn't enough.
Companies can fail because of bad idea, but also finance/capitalization, personal issues, bad execution...
Want a huge fight? Assign the dreaded smart watch to one of those reasons for past failure and likely near future. Or "the smart house". Or "voice control" or alternative UIs in general.
If you can convince a couple people the only reason the cuecat failed was their capitalization structure, then the world is doomed to a flood of plastic cat barcode readers and barcodes all over legacy media. Not all the different from QR codes (aren't they officially dead now?)
Want a huge fight? Assign the dreaded smart watch to one of those reasons for past failure and likely near future. Or "the smart house". Or "voice control" or alternative UIs in general.
If you can convince a couple people the only reason the cuecat failed was their capitalization structure, then the world is doomed to a flood of plastic cat barcode readers and barcodes all over legacy media. Not all the different from QR codes (aren't they officially dead now?)
Youngsters are notorious for thinking history began when they got involved. See also, sex, drugs, music, dance...
Anyway I am sad to report that PDP8s and Decmates were widely available (if you had friends in the right places, surplus, repaired scrap, etc) but DEC insanely wanted to charge $3000 or whatever for the OS8 license. I think even Fortran and basic were separately licensed and billed products. It was nuts. You could get an old -8 for free, more or less, (back then, now they sell for thousands on ebay) but legal software was insanely priced. Microsoft disrupted the market at a mere $300. That's what made them interesting right from the start, the dinosaurs of the industry didn't understand the imploding ratios of hardware cost to software cost. Sure the hardware is dropping in price so something that cost a corporate buyer $10K in '63 might only cost $1K in '73 but its not like software was getting even on dollar cheaper so if legacy corp buyers will pay $3K per seat for OS-8 I guess we'll keep right on charging $3K till they go away or we go away. Well guess how that turned out?
The above is based on my Dad's experiences although I was a kid watching watching it all unfold at that time.
Anyway I am sad to report that PDP8s and Decmates were widely available (if you had friends in the right places, surplus, repaired scrap, etc) but DEC insanely wanted to charge $3000 or whatever for the OS8 license. I think even Fortran and basic were separately licensed and billed products. It was nuts. You could get an old -8 for free, more or less, (back then, now they sell for thousands on ebay) but legal software was insanely priced. Microsoft disrupted the market at a mere $300. That's what made them interesting right from the start, the dinosaurs of the industry didn't understand the imploding ratios of hardware cost to software cost. Sure the hardware is dropping in price so something that cost a corporate buyer $10K in '63 might only cost $1K in '73 but its not like software was getting even on dollar cheaper so if legacy corp buyers will pay $3K per seat for OS-8 I guess we'll keep right on charging $3K till they go away or we go away. Well guess how that turned out?
The above is based on my Dad's experiences although I was a kid watching watching it all unfold at that time.
As long as that realization is tempered with this one:
"The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."
"The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."
"What Microsoft is this the Altair Basic of?"
... then figure out, 'Which IBM will let itself be duped?'. If MS hadn't made the DOS deal with IBM PC, would the Microsoft we know now, have happened? This is of course counter-factual, because MS was a raging success.
It's a great question to ask though.
... then figure out, 'Which IBM will let itself be duped?'. If MS hadn't made the DOS deal with IBM PC, would the Microsoft we know now, have happened? This is of course counter-factual, because MS was a raging success.
It's a great question to ask though.
Give Bill Gates more credit: his vision certainly went beyond BASIC. They had a directed effort to provide microprocessor versions of all popular (or business significant) languages. For example, they had Fortran and Cobol before they had MSDOS.
The title would have been better worded as follows:
"How does this Altair BASIC become a Microsoft?"
"How does this Altair BASIC become a Microsoft?"
While he didn't know Microsoft would pioneer it, Bill Gates says he knew that there'd be a software industry.
While he didn't know Facebook would pioneer it, Mark Zuckerberg says he knew that all software would be social.
While he didn't know Google would pioneer it, Larry Page said he knew that the fast growing web would eventually need a good way to search.
While he didn't know Viaweb would pioneer it, Paul Graham said he knew that ecommerce sites would eventually be created by software.
And so on....
I respect the fuzziness and path dependence of startup growth but boy do I respect people who can see the future now, make it happen and end up being correct. Even more props to people who make it happen multiple times [e.g. Joel Spolsky, Elon Musk]
While he didn't know Facebook would pioneer it, Mark Zuckerberg says he knew that all software would be social.
While he didn't know Google would pioneer it, Larry Page said he knew that the fast growing web would eventually need a good way to search.
While he didn't know Viaweb would pioneer it, Paul Graham said he knew that ecommerce sites would eventually be created by software.
And so on....
I respect the fuzziness and path dependence of startup growth but boy do I respect people who can see the future now, make it happen and end up being correct. Even more props to people who make it happen multiple times [e.g. Joel Spolsky, Elon Musk]
While he didn't know WebVan would pioneer it, Loius Borders says he know ecommerce would rule the world.
...that doesn't quite have the same ring, does it? There is a lot of survivorship bias at play here. Thousands of individuals had convictions that their instincts were right as as well - but it turned out poorly for them. Luck and timing plays a big part in success, but more often than not, hn ignores this.
...that doesn't quite have the same ring, does it? There is a lot of survivorship bias at play here. Thousands of individuals had convictions that their instincts were right as as well - but it turned out poorly for them. Luck and timing plays a big part in success, but more often than not, hn ignores this.
How does this change the point that there are entrepreneurs who have instincts about the market AND timing that turn out to be right?
The broader point is Peter Thiel's --> You are not a lottery ticket.
The best example might be Jeff Bezos and his business plan. Elon Musk has been consistent for ~ 20 yrs about the areas he set out to work on since college and he's followed that through. It's not dumb luck. It's skill + luck. The skill part of the equation is oft dumbed down in favor of the randomized success algorithm. People who are able to repeat their successes multiple times e.g. Joel Spolsky, Elon Musk, David Duffield, Rich Barton are especially skilled and it would be disingenuous to attribute their successes to some luck/timing that they were not ultimately mostly responsible for creating or noticing.
The broader point is Peter Thiel's --> You are not a lottery ticket.
The best example might be Jeff Bezos and his business plan. Elon Musk has been consistent for ~ 20 yrs about the areas he set out to work on since college and he's followed that through. It's not dumb luck. It's skill + luck. The skill part of the equation is oft dumbed down in favor of the randomized success algorithm. People who are able to repeat their successes multiple times e.g. Joel Spolsky, Elon Musk, David Duffield, Rich Barton are especially skilled and it would be disingenuous to attribute their successes to some luck/timing that they were not ultimately mostly responsible for creating or noticing.
To counter your example: on their second, third, fourth companies repeatedly successful entrepreneurs have all the benefits from the first success. As a result, they are far less reliant on luck in relation to funding, talent, getting the word out, etc. For your example to fully prove your point, you would need to find entrepreneurs who have repeatedly changed their name and identity between each of their successes.
PG sounds like it's okay to invest time,
effort, code, money, etc. in a project
without having any idea why it might work,
and his justification is Microsoft,
Facebook, Google, etc.
Okay:
I grew up not far from a nice public golf course. It had some par 3 holes. Sure, on such a hole, it's possible to make a hole in one.
Okay, for a year track all the hole in one successes and see how many were by expert golfers and how many were by people lucky to have a round at 10 over par.
So, conclude from this that for a hole in one it doesn't help to be good at golf? Nope! Instead, on that course there were so many more poor players than expert ones that, likely, net, just from luck, there were more successful hole in one shots from the poor players than from the expert ones.
Or, case #9,284,387,437 of how to lie with statistics!
But, let's consider some other examples:
Ike wanted some pictures of the USSR and sent some U-2 airplanes. Too soon one got shot down, and then someone called Kelly Johnson at Lockheed, and he noticed a new engine developed by Pratt and Whitney in their Florida operation: The engine was a turbojet until about Mach 2.5 at which time it became a ram jet and, thus, could go on to Mach 3+ without overheating the engine.
So, get some titanium, design some aerodynamics especially good for supersonic flight, and get an airplane that could fly at Mach 3+, at 80,000+ feet, for 2000+ miles without refueling. Then the US got a lot of good pictures, and the Lockheed plane, the SR-71, never got shot down.
There are many more examples from GPS, the F-117, the first Xerox copier, etc.
These examples are cases of hole in one with high payoff and low risk from just routine work after the initial planning and review of the plans.
Commercial version?
Okay: Xerox, the IBM System 360, the Intel 386, Cisco IP routers, the Bell Labs work in optical fibers and Ga-Al-As heterojunction lasers, the Sony work on Blu-ray optical disks, etc.
Lesson: It really is possible to pick a good target, plan carefully, execute with low risk, and be successful. For just one team, poor work and luck are not better.
Okay:
I grew up not far from a nice public golf course. It had some par 3 holes. Sure, on such a hole, it's possible to make a hole in one.
Okay, for a year track all the hole in one successes and see how many were by expert golfers and how many were by people lucky to have a round at 10 over par.
So, conclude from this that for a hole in one it doesn't help to be good at golf? Nope! Instead, on that course there were so many more poor players than expert ones that, likely, net, just from luck, there were more successful hole in one shots from the poor players than from the expert ones.
Or, case #9,284,387,437 of how to lie with statistics!
But, let's consider some other examples:
Ike wanted some pictures of the USSR and sent some U-2 airplanes. Too soon one got shot down, and then someone called Kelly Johnson at Lockheed, and he noticed a new engine developed by Pratt and Whitney in their Florida operation: The engine was a turbojet until about Mach 2.5 at which time it became a ram jet and, thus, could go on to Mach 3+ without overheating the engine.
So, get some titanium, design some aerodynamics especially good for supersonic flight, and get an airplane that could fly at Mach 3+, at 80,000+ feet, for 2000+ miles without refueling. Then the US got a lot of good pictures, and the Lockheed plane, the SR-71, never got shot down.
There are many more examples from GPS, the F-117, the first Xerox copier, etc.
These examples are cases of hole in one with high payoff and low risk from just routine work after the initial planning and review of the plans.
Commercial version?
Okay: Xerox, the IBM System 360, the Intel 386, Cisco IP routers, the Bell Labs work in optical fibers and Ga-Al-As heterojunction lasers, the Sony work on Blu-ray optical disks, etc.
Lesson: It really is possible to pick a good target, plan carefully, execute with low risk, and be successful. For just one team, poor work and luck are not better.
What Microsoft was Aereo the Altair Basic of? :)
(The problem of silent evidence.)
(The problem of silent evidence.)
I had a similar feeling when egroups[1] was announced. We were all using mailing lists at the time, and what was clever about that? The clever bit was that end users didn't have to set up and host majordomo themselves. Now egroups itself never came to much, but the idea of taking complex applications (mailing lists, email, CRM, ..) and turning them into SaaS is pretty massive.
[1] https://en.wikipedia.org/wiki/EGroups
[1] https://en.wikipedia.org/wiki/EGroups
They're not all the same - two of those companies - Facebook and Google initially had no clue about funding their companies. MS and Apple sold actual products that people could buy. As startups they did the really really hard work of convincing a bunch of people to open their wallets and pay hard cash for a product. I think this is a far more valuable exercise that attempting to create something that's popular by giving it away for free, and then selling some advertising product/platform/service that has a nebulous value which is often supported by spying/data-mining users. (aka Investor Story time http://idlewords.com/bt14.htm)
Any idea sounds awful if you phrase it right. Any idea sounds good phrased right. I don't think this is a good metric at all to evaluate a start-up.
Wrong wrong wrong. For example, the guys at Google spent years doing research in the field before starting their company. Clearly MS achieved success with a different product than they had begun with.
The real measure of a theory is how successful it is at predicting whatever it predicts. So out of all of the companies that you predicted could become the next "Microsoft of X", how many did? If your method doesn't perform better than randomized selection, then it's worthless. I suspect that's the case here.
Of course, the law of large numbers combined with the high returns offered by tech companies means that even if investors aren't performing better than a randomized process, they feel like their theories about what makes a successful companies/entrepreneur are valid.
Here's an experiment that will never happen, but that I'd love to see YC perform: for a given batch, select who makes it to the batch randomly from the pool of preselected applicants (you want preselected applicants and not all applicants because it's fairly likely that the 90% of people who are applying with their "Facebook for cats" idea that they came up with after beers 2 hours before the submission deadline won't make it. Or will they?). Then, look how that batch performs. It wouldn't be surprising if the batch performed no worse or no better.