Tim O'Reilly: Stop throwing sheep, do something worthy(news.cnet.com)
news.cnet.com
Tim O'Reilly: Stop throwing sheep, do something worthy
http://news.cnet.com/8301-17939_109-10045321-2.html
20 comments
He was definitely emphasizing a focus on something "bigger" and a shift away from many of the current crop of apps/startups. Can't say I disagree with him either. There are so many smart people out there. We can definitely do more.
I think a good rule of thumb at this point is to be extremely skeptical of anything advertising supported. If people won't pay you, are you really creating enough value to society to justify awarding yourself any warm fuzzies?
I suppose exceptions could be made for services like Google, which people would pay $1000/year for if that's what all the providers charged, but which happen to be advertising-supported.
"Make something people want enough to pay for." Now there's a terrifying heuristic.
I suppose exceptions could be made for services like Google, which people would pay $1000/year for if that's what all the providers charged, but which happen to be advertising-supported.
"Make something people want enough to pay for." Now there's a terrifying heuristic.
> I suppose exceptions could be made for services like Google, which people would pay $1000/year for if that's what all the providers charged
Nobody would have paid $1000 a year for google. If they had started of trying to charge users then nobody would know about them.
Most classes of online consumer apps are dominated by advertising supported models - search, email, social networking, social news, forums, productivity, etc. The transaction cost/hassle associated with paying is too large for most users to bother with.
Nobody would have paid $1000 a year for google. If they had started of trying to charge users then nobody would know about them.
Most classes of online consumer apps are dominated by advertising supported models - search, email, social networking, social news, forums, productivity, etc. The transaction cost/hassle associated with paying is too large for most users to bother with.
This was exactly the common wisdom in 01/02. And then the economy turned around, and ad-supported was all the rage again.
So you're right - now. But if you've got enough cash to wait out the downturn, ad-supported businesses could be very profitable. It's always a mistake to try and extrapolate the present out indefinitely...
So you're right - now. But if you've got enough cash to wait out the downturn, ad-supported businesses could be very profitable. It's always a mistake to try and extrapolate the present out indefinitely...
I don't think the question is whether or not you can run a profitable ad-supported business. The question is whether your product truly matters if people wouldn't pay for it.
I believe there are ad-supported products that matter, but I'm tired of being advertised to. I will pay for good products.
I believe there are ad-supported products that matter, but I'm tired of being advertised to. I will pay for good products.
"Make something people need enough to pay for."
Even better.
Even better.
We've made way more through voluntary payments than ads.
I totally agree with O'Reilly, Companies like Slide and RockYou do not deserve half a billion valuation and I am pretty much sure Max Levchin can do better than make social apps for Social-Networks.
How do you decide what's worth half a billion dollars? If a social network app will drive half a billion dollars worth of advertising profit over N years, then it's worth half a billion dollars, even if the same effort is better spent combating malaria.
Advertising revenues on social networks have historically been pretty poor.
I think what O'Reilly was getting at was people forming their startups that essentially chase the latest trends in what now amounts to a bubble. He makes a valid argument and we could all be looking back at what he said in the future and only realize then just how spot on he was.
I think what O'Reilly was getting at was people forming their startups that essentially chase the latest trends in what now amounts to a bubble. He makes a valid argument and we could all be looking back at what he said in the future and only realize then just how spot on he was.
I think you're probably right, but I also think there's a lazy argument out there that you could go halt malaria instead of making ad money, and that's a stupid argument; make the ad money and spend it on malaria if you're that committed.
You don't have to fight malaria or stop making money form ads. If you're going to make an ad supported app at least make it do something useful (GMail is one example of a useful ad supported app).
That's an argument against the entire entertainment industry. This is a debate over aesthetics, and I don't have much more to say about it.
I think he recognises that - the article quotes him as saying "I really believe in markets, and I believe in the power we all have to build great companies that change things.".
Do you really think SuperPoke or Top Friends has the potential to make a Billion, I really don't think so. Throwing a sheep or sending a drink is of no value, it might excite someone in short-term but it really has no value in long-term business sense.
That's a silly argument. "Mad Men" is of no tangible value, but it drives a huge amount of advertising revenue.
You are getting it wrong, We are talking about Half a Billion Dollar worth Businesses not some tv shows. Are these Companies or products worth the money they are valued at, Are they creating sustainable businesses and products and Are they helping or improving technology and community as a whole.
Are they asking rhetorical questions without the correct punctuation.
I think Tim is behind the curve on this one and startups have already stepped up to this challenge. Startups that create social networks or other semi-frivolous toys have already had a stigma attached to them for at least a year now.
tell me a startup that is not creating a frivolous toy
We're aiming to create practical, beautiful, inexpensive compressed air powered vehicles.
(Warning: Following comment irrelevant to OP's subject.) Wow, that's amazing! There're so many interesting mechanical (and electro-mechanical) innovations on your Technology page. My appreciation for Hacker News just went up several notches since it's attracting folks like you. Are you funded? I hope so.
Who else is building such stuff that isn't just computer science/engineering?
Who else is building such stuff that isn't just computer science/engineering?
We're of course intending to raise funds. At this stage we're writing the business plan, putting together the engineering drawings, doing simulations, and sourcing components for the first prototype build. We'll be moving into fundraising mode soon.
That is both interesting and awesome. I just looked at your website. Good luck, and I hope you'll keep us all informed about your progress. (I'd buy one!)
Have you looked at this?:
http://en.wikipedia.org/wiki/Energy_density#Energy_density_i...
http://en.wikipedia.org/wiki/Energy_density#Energy_density_i...
Energy density Energy density
by mass (MJ/kg) by volume (MJ/L)
Gasoline 46.9 34.6
Lithium ion battery 0.72 1.9
Lead acid battery 0.11 0.17
Compressed air in fiber-wound
bottle at 200 bar (at 24°C) 0.1 0.1
compressed air in steel bottle
at 200 bar (at 24°C) 0.04 0.1Yes, we have. We're not intending to use 200 bar air, and we have to aim at a substantially more efficient vehicle, and even then we need a much larger tank than normal.
But compared to batteries they're very, very cheap. We think we can hit the range required, and that's what really matters.
But compared to batteries they're very, very cheap. We think we can hit the range required, and that's what really matters.
There are 700-bar tanks. What are you aiming for?
and we have to aim at a substantially more efficient vehicle
Against which car models (once you are done marketing the scooter) are you intending for your car to compete? Camry/Accord?
But compared to batteries they're very, very cheap.
What tank-prices are you figuring? $4,000?
http://www.google.com/search?q=hydrogen+car+tank+costs
and we have to aim at a substantially more efficient vehicle
Against which car models (once you are done marketing the scooter) are you intending for your car to compete? Camry/Accord?
But compared to batteries they're very, very cheap.
What tank-prices are you figuring? $4,000?
http://www.google.com/search?q=hydrogen+car+tank+costs
We'd scale from 300 to 700 bar as the market allows. In the Asian market, for example, range and bulk is less of an issue than cost.
We're actually aiming at creating a scooter first, and other vehicles later.
The hydrogen tanks are much more sophisticated than we need. In particular they require a plastic liner (because hydrogen is so damned small). We just need carbon fiber wound tanks. These are manufactured to a higher precision but are not fundamentally different from 300 bar tanks which are fairly cheap (ie: you can buy single quantities of 9 L tanks for $500 - $600).
It's only a guess, but we think we can keep the tank price for a scooter below $1000, and for a car, below $3000. This is dependent on carbon fiber prices, and how efficient we can make the engine and drivetrain.
The important thing is that we can expect prices to improve handsomely while t goes to infinity, whereas batteries have had a lot of the manufacturing improvements that they're going to get.
We're actually aiming at creating a scooter first, and other vehicles later.
The hydrogen tanks are much more sophisticated than we need. In particular they require a plastic liner (because hydrogen is so damned small). We just need carbon fiber wound tanks. These are manufactured to a higher precision but are not fundamentally different from 300 bar tanks which are fairly cheap (ie: you can buy single quantities of 9 L tanks for $500 - $600).
It's only a guess, but we think we can keep the tank price for a scooter below $1000, and for a car, below $3000. This is dependent on carbon fiber prices, and how efficient we can make the engine and drivetrain.
The important thing is that we can expect prices to improve handsomely while t goes to infinity, whereas batteries have had a lot of the manufacturing improvements that they're going to get.
This is interesting:
http://www.google.com/search?q=%22modern+car%22+%22million+p...
... a modern car involves as many as 30000 component parts
In light of the fact that in a modern car there are about 2000–3000 galvanised parts
http://www.google.com/search?q=%22modern+car%22+%22million+p...
... a modern car involves as many as 30000 component parts
In light of the fact that in a modern car there are about 2000–3000 galvanised parts
Modern cars are quite complicated devices, even if the median vehicle contains no technical innovation at all. This is one reason we're doing a scooter first.
But compared to batteries they're very, very cheap.
Lead-acid batteries can do something that air-tanks might not do as well: provide ballast.
http://www.google.com/search?q=commuter+cars+ballasted+paten...
Lead-acid batteries can do something that air-tanks might not do as well: provide ballast.
http://www.google.com/search?q=commuter+cars+ballasted+paten...
Empirically, when you improve the weight of a car by a factor of 10% it improves the fuel usage by a factor of nearly 8%. Ballast is an expensive way to get stability.
With Hecl, I'm trying to make it easier for people to write programs for mobile phones. That is potentially a lot of people and a lot of programs.
> tell me a startup that is not creating a frivolous toy
https://www.23andme.com/
https://www.23andme.com/
The other day I had a crazy realization. If you add up the actual labor time required to create a lifetime's worth of standard goods and services, you get something like 5-10 man years. You can do something "worthy" that makes humans more productive, but since we are already so productive it doesn't make a huge difference. The $64,000 question is, if technology has increased our productivity so much over the past 50 years, why are we actually working more hours, and liking our jobs less? Why aren't we all retiring at 30 to do what we love?
Because "standard goods and services" are redefined as productivity increases. 20 years ago we couldn't afford half the stuff that is "standard" now.
I'm taking that into account. HDTV's, laptops, iPods, etc, don't take many man hours to produce. My point was that the man years of labor necessary to support a comfortable, modern standard of living are actually quite few.
sure they do. esp when you take into account inventing and bringing to market all the sustaining innovations (making hard drives smaller, better screens, software, etc. -- plus the operational overhead of coordinating all these millions of people's effort) needed for your iPod, laptop, etc. the number of man hours is staggering.
Per item produced, the man hours are not that staggering. Here's my back of the envelop calculation:
A laptop costs about $1,000. Assume a $15/hour wage. That's about the average for most the electronics producing world, and it represents a balance between the wages of the engineers and the wages of assemblers. Make the generous assumption that 100% of the cost is labor. That adds up to 66 hours of total labor for my laptop. I probably own about $3,000 worth of goods total, and have no desire for anything more. That's about 200 hours of total labor - or 5 months. That will easily last me 5 years or more.
A laptop costs about $1,000. Assume a $15/hour wage. That's about the average for most the electronics producing world, and it represents a balance between the wages of the engineers and the wages of assemblers. Make the generous assumption that 100% of the cost is labor. That adds up to 66 hours of total labor for my laptop. I probably own about $3,000 worth of goods total, and have no desire for anything more. That's about 200 hours of total labor - or 5 months. That will easily last me 5 years or more.
AMEN. go into any food bank and ask the "clients" how many of them have cable tv and cell phones with data plans
Food is considerably more expensive than cable tv and cell phones.
Cable TV is about $100/month. Let's call it $25/week or $3/day.
Yuppie beans are around $3/pound, so $1/day should do for protein. Carbs in the form of rice or potatoes are cheaper. Veggies and fruit are about the same.
In other words, food can be about as expensive as cable tv.
Yuppie beans are around $3/pound, so $1/day should do for protein. Carbs in the form of rice or potatoes are cheaper. Veggies and fruit are about the same.
In other words, food can be about as expensive as cable tv.
Food is considerably more expensive than cable tv and cell phones.
you're changing the topic. the point is that people's baseline expectations keep rising.
your point is spurious because you reason that because a month's worth of food costs more than a month of cable tv, one should not sacrifice cable tv for food
you're changing the topic. the point is that people's baseline expectations keep rising.
your point is spurious because you reason that because a month's worth of food costs more than a month of cable tv, one should not sacrifice cable tv for food
But the definition of "afford" has changed in 20 years, too, right? Part of the reason so people have these things is because of credit (and, more importantly, debt).
I reckon many people (including plenty who shop at Whole Foods/Wild Oats rather than a food bank) can't "afford" their lifestyles, either, but cheap credit (which may be coming to an end) makes it seem that way.
I reckon many people (including plenty who shop at Whole Foods/Wild Oats rather than a food bank) can't "afford" their lifestyles, either, but cheap credit (which may be coming to an end) makes it seem that way.
The $64,000 question is, if technology has increased our productivity so much over the past 50 years, why are we actually working more hours than ever, and liking our jobs less?
because we are donkeys who fetishize work. pretty much the whole theme of this site is work fetishization.
because we are donkeys who fetishize work. pretty much the whole theme of this site is work fetishization.
If the iBeer thing is what I think it is, it's an application that will find you the nearest store to purchase beer when you tap the glass with your finger.
I don't see how that's some scathing critique of the devolution of society, moreso than the phone itself at least.
People can ignore what's going on in the world and contribute to the "downfall of society" or choose to live in a perpetual state of guilt about the success that the "first world" lives in at the moment, neither has a moral high ground. Your attitude doesn't matter -- but your contribution does.
The fact that the US is losing its edge in technology has as much to do with the rest of the world catching up or exceeding where we are. That's not cause for tears and somber attitudes, that's the third world gaining prosperity and health, and the second world joining the first world party. The luddites and idiots have been a problem as long as there has been humanity; that they've been in a leadership role in the US is a minor anomoly at best, and a self solving problem at worst.
I'm almost the perfect pessimist, but even I'm seeing the glass as half full at this point in history. Web 2.0's pretty overrated on the whole though -- maybe he could reclaim the conference time for something more useful.
I don't see how that's some scathing critique of the devolution of society, moreso than the phone itself at least.
People can ignore what's going on in the world and contribute to the "downfall of society" or choose to live in a perpetual state of guilt about the success that the "first world" lives in at the moment, neither has a moral high ground. Your attitude doesn't matter -- but your contribution does.
The fact that the US is losing its edge in technology has as much to do with the rest of the world catching up or exceeding where we are. That's not cause for tears and somber attitudes, that's the third world gaining prosperity and health, and the second world joining the first world party. The luddites and idiots have been a problem as long as there has been humanity; that they've been in a leadership role in the US is a minor anomoly at best, and a self solving problem at worst.
I'm almost the perfect pessimist, but even I'm seeing the glass as half full at this point in history. Web 2.0's pretty overrated on the whole though -- maybe he could reclaim the conference time for something more useful.
No I think he's talking about the app that uses the accelerometer to simulate chugging a beer. That's it.
I am proud of not knowing what "throwing sheep" meant because it is Facebook related afterall.
Do you also enjoy telling people that you don't watch television?
Television rots the brain. Only watch anime on your computer monitor.
Television rots the brain
Like crack cocaine! http://www.tvshowsondvd.net/graphics/news3/KiTHHat.jpg
Like crack cocaine! http://www.tvshowsondvd.net/graphics/news3/KiTHHat.jpg
Ouch. Guess I'm the only Kids in the Hall fan here.
Big fan. Unfortunately, only over-the-hill Canadians (or near-Canadians) would catch the reference. I'll reimburse you one karma point.
Unfortunately, only over-the-hill Canadians
Has it really come to that? :) Well, the reference was from the later crappier seasons.
Has it really come to that? :) Well, the reference was from the later crappier seasons.
In his Ignite Boston talk he basically said "startups are not where it's at. do something that matters"
Startups, or only frivolous (sheep-throwing) startups?
It was an overly broad statement, for sure
Here's the video: http://blip.tv/play/AbTEA4a8DQ
So basically, creating games is not worthy? How about creating art, or creating music? Writing novels?
This summary is more robust:
http://greensear.ch/2008/09/18/tim-oreilly-keynote-at-the-we...
And I found out through a Google Alert that O'Reilly mentioned Stormpulse.
And I found out through a Google Alert that O'Reilly mentioned Stormpulse.
In a way, I hate to say it because I'm the kind of person who always thinks that people should do with their time or resources whatever they damn well please. BUT I wonder the same thing all the time: why are all these smart people spending their effort on yet another social/media website when there are so many other profitable or meaningful businesses to start.
While reading the part - "and certainly aren't helping the environment by distributing tons of press kits and swag--not to mention flying in hundreds of attendees in a massive spurt of carbon emissions." - I got the feeling that the author wanted to continue on to say O'Reilly makes his money selling dead trees, but stopped short.
[deleted]
If we're headed for a depression: what business types flourished during the Great Depression?
Is it really true that facilitating laughter and connection isn't worthy?
Is it really true that facilitating laughter and connection isn't worthy?
Entertainment flourished. People needed a way to forget their troubles, even if it's temporary.
Escapist entertainment only helps proliferate troubles. We need entertainment that improves us too. Classically, it was thought the two go hand in hand.
Alcohol & cigarettes. Board games. Movies. Also automobiles, radio, defense.
what business types flourished during the Great Depression?
repo men
repo men
You can't funnel creativity. For every satellite we send to Mars, there will be 20,000 things like SuperPoke and iBeer, and that's not a problem.
[deleted]
he is echoing bubblegeneration.com
Amen.
For all the buzz about "Facebook apps", has anyone looked at most of these things? Bug-ridden, ugly, utter shit. Facebook is slouching toward the Gomorrah of clutter. I hope something better comes along. I never liked Facebook (originally Thefacebook, lulz-on-a-vomit-pie) or that Zuckerberg clown, and I only use it because my friends do.
Sheep-throwing is a case of the exception attempting to drive the rule. SuperPoke is a mediocre idea that has achieved some measure of viral success. It makes "success" (high user count) look easy, and that's a catchy idea to many people. Does the "Million Dollar Homepage" really scale? Of course not, but it's an attractive idea that some kid out there can make $1m from a mediocre, one-flash concept.
With the right infrastructure and some luck, mediocre ideas can lead to smashing success, even reliably. Take the board game Monopoly. The design of the game is quite primitive; not nearly on the level of Settlers of Catan, much less Tigris and Euphrates or Puerto Rico. But mass-producing and marketing a board game during the Great Depression was not easy, and there was a high barrier to entry, so the designer who was able to surmount this barrier was able to collect. Now that the barrier to entry for most ideas is low, the mediocre ideas that achieve lasting success are going to be very rare.
In terms of the money and talent being wasted on mediocre ideas, one source of this problem is inherent to the VC culture. MBAs, by definition, are risk-averse people. It's an incredibly risk-averse move to trade two years and $100,000 (if you have, or can borrow, the money) for an assurance of elevated career status. Elite MBA programs are, compared to similar law, medical, or PhD programs, extremely unselective, and getting an MBA is a way to reach the executive level by (wait for it) schmoozing and taking classes-- in other words, without accomplishing or risking anything. To the extent that most VCs are elite MBAs, of course they're going to be throwing their money after me-too social networking sites, which can be compared to other such sites on paper-- rather than original ideas that only the marketplace can evaluate. Investing money in social networking and "Web 2.0" is like buying the proverbial IBM, for which nobody was ever fired.
For all the buzz about "Facebook apps", has anyone looked at most of these things? Bug-ridden, ugly, utter shit. Facebook is slouching toward the Gomorrah of clutter. I hope something better comes along. I never liked Facebook (originally Thefacebook, lulz-on-a-vomit-pie) or that Zuckerberg clown, and I only use it because my friends do.
Sheep-throwing is a case of the exception attempting to drive the rule. SuperPoke is a mediocre idea that has achieved some measure of viral success. It makes "success" (high user count) look easy, and that's a catchy idea to many people. Does the "Million Dollar Homepage" really scale? Of course not, but it's an attractive idea that some kid out there can make $1m from a mediocre, one-flash concept.
With the right infrastructure and some luck, mediocre ideas can lead to smashing success, even reliably. Take the board game Monopoly. The design of the game is quite primitive; not nearly on the level of Settlers of Catan, much less Tigris and Euphrates or Puerto Rico. But mass-producing and marketing a board game during the Great Depression was not easy, and there was a high barrier to entry, so the designer who was able to surmount this barrier was able to collect. Now that the barrier to entry for most ideas is low, the mediocre ideas that achieve lasting success are going to be very rare.
In terms of the money and talent being wasted on mediocre ideas, one source of this problem is inherent to the VC culture. MBAs, by definition, are risk-averse people. It's an incredibly risk-averse move to trade two years and $100,000 (if you have, or can borrow, the money) for an assurance of elevated career status. Elite MBA programs are, compared to similar law, medical, or PhD programs, extremely unselective, and getting an MBA is a way to reach the executive level by (wait for it) schmoozing and taking classes-- in other words, without accomplishing or risking anything. To the extent that most VCs are elite MBAs, of course they're going to be throwing their money after me-too social networking sites, which can be compared to other such sites on paper-- rather than original ideas that only the marketplace can evaluate. Investing money in social networking and "Web 2.0" is like buying the proverbial IBM, for which nobody was ever fired.
the market will sort it out. have any of the yc guys gotten rich lately? in the end, no one but the franciscans is really interested in a vow of poverty.
beyond seed capital it doesn't even seem that rockyou and slide are swimming in cash. from yelp to loopt to twitter...at some point it will be put up or shut up on the revenue side.
beyond seed capital it doesn't even seem that rockyou and slide are swimming in cash. from yelp to loopt to twitter...at some point it will be put up or shut up on the revenue side.
Most of the focus in the comments is on what makes a viable business model (ad-supported vs. pay-for-use) or a rational valuation (is Slide really worth half a billion?), but my reading made me think that O'Reilly was trying to get people focus on something bigger, specifically, is what you're working on worthwhile?
Like, if you got hit by a bus tomorrow, will you consider your life well-spent to have built that sheep thrower when you could have been doing something else?