Ask HN: Bad experiences after sharing your idea?
20 comments
The only bad experiences I've had after sharing my idea are:
1) realizing that my original idea sucks and that it needed to evolve or completely change
2) realizing that even if my idea is good, most people are either indifferent to it or they hate it. Which makes me think of this quote, "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."
Neither experience is pleasant. Both are morale killers.
Ideas are cheap.
1) realizing that my original idea sucks and that it needed to evolve or completely change
2) realizing that even if my idea is good, most people are either indifferent to it or they hate it. Which makes me think of this quote, "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."
Neither experience is pleasant. Both are morale killers.
Ideas are cheap.
Isn't item 1 a good thing, because after about 100 iterations your idea will probably improve?
Both are good things, that shouldn't be avoided. They're just not pleasant.
They should be. If you feel strongly, you're iterating, and you're getting feedback - you're probably onto something :)
Yes I know, but it's easier said than done. It's kind of like how running a marathon for the 1st time sounds really good in your head, but when you're actually doing it your legs and lungs ache? You're still going to finish the run, it's still good for you, but it just doesn't feel good the 1st time.
The technology roadmap for the next five decades is predictable. For example http://en.wikipedia.org/wiki/Predictions_made_by_Raymond_Kur... are spot on so far. What ideas do you have that aren't there? No big ideas that's for sure.
Startups mainly work by using existing technology to make a working service in a few years. The main problems are economic, social, psychological, not technological.
Will people use some silly limited email service? Yes, because it alters the psychology of communication, enables them to talk to more people quicker. Will people use a search engine that indexes the web? Yes if content on the web is worth a damn. Will labeling the world through people's IDs instead of URLs and brands be more efficient? Yes if you pull it off.
Will people pay for Adobe's apps instead of buying templates? Yes if they're convinced by designers that templates are bad and they need to go through an exclusive branding ritual.
A lot of startups are so mesmerized by what's possible with current technology they can't see two steps ahead. They come up with pretty small ideas in most cases and it's often difficult to link those ideas to the big technological trends even when the startup gets as big as Mint or Twitter.
That's why VCs don't care about ideas. We already have the ideas. If you understand tech like Ray Kurzweil did, you can shit out ideas all day. VCs care about fitting into the unpredictable world of fickle humans, like Twitter's 140 characters did, and your motivation to slave away.
The tech economy will move forward one way or another. In the big scheme of things we will get to AI and understand our own brains until we can predict if Twitter should add the ability to subdivide long texts into 150 character chunks to limit the size of rants like this one.
Startups mainly work by using existing technology to make a working service in a few years. The main problems are economic, social, psychological, not technological.
Will people use some silly limited email service? Yes, because it alters the psychology of communication, enables them to talk to more people quicker. Will people use a search engine that indexes the web? Yes if content on the web is worth a damn. Will labeling the world through people's IDs instead of URLs and brands be more efficient? Yes if you pull it off.
Will people pay for Adobe's apps instead of buying templates? Yes if they're convinced by designers that templates are bad and they need to go through an exclusive branding ritual.
A lot of startups are so mesmerized by what's possible with current technology they can't see two steps ahead. They come up with pretty small ideas in most cases and it's often difficult to link those ideas to the big technological trends even when the startup gets as big as Mint or Twitter.
That's why VCs don't care about ideas. We already have the ideas. If you understand tech like Ray Kurzweil did, you can shit out ideas all day. VCs care about fitting into the unpredictable world of fickle humans, like Twitter's 140 characters did, and your motivation to slave away.
The tech economy will move forward one way or another. In the big scheme of things we will get to AI and understand our own brains until we can predict if Twitter should add the ability to subdivide long texts into 150 character chunks to limit the size of rants like this one.
Just because Kurzweil's predictions from 1990 were correct doesn't mean that we can predict the future, or even that Kurzweil's predictions for the next 10 years.
Think of it this way: lots of people made predictions in 1990 about what the next 10 years will be like. (Some of the ones I remember: that Japan would take over the world, that the American government would fall, that we'd all be watching WebTV, that cars would drive themselves). Simply by chance, somebody is bound to be mostly right. That person will then get lots of media attention for having corrected predicted the last 10 years. But that doesn't mean he'll predict the next 10 years correctly.
In fact, if you look at Kurzweil's predictions from 2001 for 2009 (http://www.kurzweilai.net/meme/frame.html?main=/articles/art...):
He predicted the move to laptops from desktops. He missed the rise of smart cell phones, instead thinking that we'd be using ultrathin tablets and computers embedded in jewelry. He incorrectly predicted a move away from rotating media to solid-state memory (perhaps he was just early, solid state is likely to catch on significantly over the next 5 years - but in servers, which is the one place where he thought it wouldn't catch on). He correctly predicted the rise of wireless. He was dead wrong about the usage of speech recognition technology, which is still too unreliable to recognize more than a few keywords.
He missed the rise of international terrorism as a new geopolitical power. He missed the emergence of the U.S. as an aggressor nation that actively declares war on other nations (in fact, he predicted that national wars likely wouldn't exist), but correctly predicted that the U.S. would remain the dominant military power.
He incorrectly predicted continued economic growth, particularly in the stock market, which is now below where it was in 2001. Economists still do not believe price deflation is a good thing. The U.S. remains an economic leader, but its leadership has declined somewhat. He correctly predicted the rise of China. He missed the emergence of the EBay/Paypal/Adwords economy, where perhaps a million or more people can now make their living off selling niche products online. He did predict the rise of online transactions, however. He completely missed the growth of social networking as an important cultural force. He incorrectly predicted the development of intelligent assistants, which never caught on. He correctly predicted the download economy, where you pay for an information product and then download it directly instead of accepting a physical copy.
If you were to meta-analyze these predictions, there's a pattern that emerges. Those predictions that took an emerging technology that had already caught on with mainstream users and extrapolated it out to pervasiveness tended to come true (laptops, faster computers, wireless, China). Those predictions that took an emerging technology still in the R&D stage and assumed it would catch on usually failed (solid state storage, speech recognition, intelligent assistants). And then inflection points that came out of nowhere obviously were never predicted at all (social networking, AdWords, terrorism, U.S. aggression).
The thing is - there are always those black swan events that come out of nowhere. And they tend to be where fortunes are made. Everyone expected laptops to get cheaper, faster, and lighter in 2001, so that was already priced into their market value. Nobody expected that a good portion of our social lives would consist of broadcasting 140 character text messages.
Think of it this way: lots of people made predictions in 1990 about what the next 10 years will be like. (Some of the ones I remember: that Japan would take over the world, that the American government would fall, that we'd all be watching WebTV, that cars would drive themselves). Simply by chance, somebody is bound to be mostly right. That person will then get lots of media attention for having corrected predicted the last 10 years. But that doesn't mean he'll predict the next 10 years correctly.
In fact, if you look at Kurzweil's predictions from 2001 for 2009 (http://www.kurzweilai.net/meme/frame.html?main=/articles/art...):
He predicted the move to laptops from desktops. He missed the rise of smart cell phones, instead thinking that we'd be using ultrathin tablets and computers embedded in jewelry. He incorrectly predicted a move away from rotating media to solid-state memory (perhaps he was just early, solid state is likely to catch on significantly over the next 5 years - but in servers, which is the one place where he thought it wouldn't catch on). He correctly predicted the rise of wireless. He was dead wrong about the usage of speech recognition technology, which is still too unreliable to recognize more than a few keywords.
He missed the rise of international terrorism as a new geopolitical power. He missed the emergence of the U.S. as an aggressor nation that actively declares war on other nations (in fact, he predicted that national wars likely wouldn't exist), but correctly predicted that the U.S. would remain the dominant military power.
He incorrectly predicted continued economic growth, particularly in the stock market, which is now below where it was in 2001. Economists still do not believe price deflation is a good thing. The U.S. remains an economic leader, but its leadership has declined somewhat. He correctly predicted the rise of China. He missed the emergence of the EBay/Paypal/Adwords economy, where perhaps a million or more people can now make their living off selling niche products online. He did predict the rise of online transactions, however. He completely missed the growth of social networking as an important cultural force. He incorrectly predicted the development of intelligent assistants, which never caught on. He correctly predicted the download economy, where you pay for an information product and then download it directly instead of accepting a physical copy.
If you were to meta-analyze these predictions, there's a pattern that emerges. Those predictions that took an emerging technology that had already caught on with mainstream users and extrapolated it out to pervasiveness tended to come true (laptops, faster computers, wireless, China). Those predictions that took an emerging technology still in the R&D stage and assumed it would catch on usually failed (solid state storage, speech recognition, intelligent assistants). And then inflection points that came out of nowhere obviously were never predicted at all (social networking, AdWords, terrorism, U.S. aggression).
The thing is - there are always those black swan events that come out of nowhere. And they tend to be where fortunes are made. Everyone expected laptops to get cheaper, faster, and lighter in 2001, so that was already priced into their market value. Nobody expected that a good portion of our social lives would consist of broadcasting 140 character text messages.
You're picking out silly details in the predictions. The predictions about desktops to laptops is about computers getting smaller in general, the detail about laptops was just an example, computers fitting inside jewelry is another example.
Do computers fit inside jewelry and get worn on clothes? Yes, RIFD chips and iPod shuffles are jewelry sized.
He didn't miss smaller than state movements having significant influence, he mentioned that ultimately anyone will have the capability to severely disrupt society. Computer viruses could be a serious problem when brain implants will be widespread. Science fiction writers thought of this in the 50's.
No one is claiming that those predictions will be exact to the last detail. We don't know how AIs will look, how brain implants will work in detail today. Maybe 140 char messages are a vital piece of such systems, we'd stumble on that anyway.
You don't need to know every detail. If Google didn't happen, some clever social networking portal system would have happened. If facebook didn't happen, some other way to ID users would. The larger trends are obvious, the details are not.
VCs saw The Matrix. They care how your startup fits into the market in this decade, they want to see something that works now, not hot air about how amazing the future will be.
(Intelligent assistants are GPS things that tell you where to turn and voice activated customer support menus. The prediction about new forms of government are social networks. The underlying idea is that as communication becomes more frequent, less of a hassle, governments and corporations will get reorganized, the startup mania is part of that)
Do computers fit inside jewelry and get worn on clothes? Yes, RIFD chips and iPod shuffles are jewelry sized.
He didn't miss smaller than state movements having significant influence, he mentioned that ultimately anyone will have the capability to severely disrupt society. Computer viruses could be a serious problem when brain implants will be widespread. Science fiction writers thought of this in the 50's.
No one is claiming that those predictions will be exact to the last detail. We don't know how AIs will look, how brain implants will work in detail today. Maybe 140 char messages are a vital piece of such systems, we'd stumble on that anyway.
You don't need to know every detail. If Google didn't happen, some clever social networking portal system would have happened. If facebook didn't happen, some other way to ID users would. The larger trends are obvious, the details are not.
VCs saw The Matrix. They care how your startup fits into the market in this decade, they want to see something that works now, not hot air about how amazing the future will be.
(Intelligent assistants are GPS things that tell you where to turn and voice activated customer support menus. The prediction about new forms of government are social networks. The underlying idea is that as communication becomes more frequent, less of a hassle, governments and corporations will get reorganized, the startup mania is part of that)
If you don't pick out the details, the predictions have no substance.
I could predict today that in 50 years, the earth will still exist. I am almost certain it will be true. But it's also meaningless, because everyone could predict that, and there's really not much you can do with that prediction.
The same with many of the predictions that you mention. It's a fairly good bet that in 10 years, people will use computers to communicate. But that's a useless prediction - so what? Maybe it's useful fodder for cocktail-party conversation, but maybe not even then - there's really not much meat to discuss in that.
In fact, Kurzweil was wrong about even one of his "safe" predictions. He predicted that the stock market would be higher in 2009 than in 2001, something that's been true of every decade since the 1930s. It wasn't.
The details matter. There's an amazing human trend toward confirmation bias - when people find that one of their predictions hasn't panned out, they try and broaden it out, ignore a few details, and fit the data to their predictions. But if you want your data to have any validity at all, you can't do this. Your predictions need to be specific enough in both details and timeframe that you can unequivocally state whether or not they're true, in their original form. And if they aren't, well, they're false.
(And I suspect your overall point, that VCs don't care about these predictions, is something I'd totally agree with. But we have a different idea of what a prediction is. I don't think pundit wankery that speaks in vague generalities about the future counts as a prediction at all. I do think VCs care about predictions, but they care about prediction in the more specific sense, something that is actionable and will be either right or wrong.)
I could predict today that in 50 years, the earth will still exist. I am almost certain it will be true. But it's also meaningless, because everyone could predict that, and there's really not much you can do with that prediction.
The same with many of the predictions that you mention. It's a fairly good bet that in 10 years, people will use computers to communicate. But that's a useless prediction - so what? Maybe it's useful fodder for cocktail-party conversation, but maybe not even then - there's really not much meat to discuss in that.
In fact, Kurzweil was wrong about even one of his "safe" predictions. He predicted that the stock market would be higher in 2009 than in 2001, something that's been true of every decade since the 1930s. It wasn't.
The details matter. There's an amazing human trend toward confirmation bias - when people find that one of their predictions hasn't panned out, they try and broaden it out, ignore a few details, and fit the data to their predictions. But if you want your data to have any validity at all, you can't do this. Your predictions need to be specific enough in both details and timeframe that you can unequivocally state whether or not they're true, in their original form. And if they aren't, well, they're false.
(And I suspect your overall point, that VCs don't care about these predictions, is something I'd totally agree with. But we have a different idea of what a prediction is. I don't think pundit wankery that speaks in vague generalities about the future counts as a prediction at all. I do think VCs care about predictions, but they care about prediction in the more specific sense, something that is actionable and will be either right or wrong.)
Ray didn't expect his predictions to be as accurate as they were. When he made them they weren't obvious to everyone, now they are. They have plenty of substance and are accurate enough to be useful. GPS or genius playlists as intelligent assistants is not broadening it out, it's the change in jargon, the way things would be branded and viewed that he got wrong. People don't call voice commands AI, but he did.
He expected a social backlash to the march of technology, like the anti-facebook groups and then violent sabotage. He expected it to slow things down, but ultimately technology is irresistible. That's not a statement by a person who cares about the details of his predictions.
This whole prediction accuracy threw my point off topic. The point is startup ideas are just as interesting as Ray's predictions about the future. The number of people a company's idea impresses doesn't predict success of that particular company.
The bigger factor is probably the type of people the startup world attracts, the reorganization. They don't think like the people in larger corporations, they're more motivated, addicted to stress, whatever. The ideas they have aren't more amazing than the ideas in big corporate R&D departments, the difference is now the projects are tested out before getting cancelled by people who saw them only in a spreadsheet.
So VCs don't care about ideas, like they don't care about general predictions. They're mostly investing in small companies, not setting up trading strategies. In the current world where VCs invest in particular companies of people, not ideas, it makes more sense to invest in companies that are somewhat functional.
Even if their idea seems dumb or has to change, competent people will make something work. People that bet it all on an idea aren't flexible, aren't a wise investment. That's why investors prefer simple, practical ideas when nothing is built yet. More depends on the people than the idea and a fast to build idea lets people show their important skills, like salesmanship.
---- As far as "safe" stock market predictions, that's your interpretation since you're interested in money centered economics. His "safe" prediction is that money would change step by step, become obsolete sometime this century. The fancy financial instruments made by quants which screwed up the stock market fit right into that "safe" prediction. It's safe because money is a bad measurement system and as we get more information we'll be able to measure better.
He expected a social backlash to the march of technology, like the anti-facebook groups and then violent sabotage. He expected it to slow things down, but ultimately technology is irresistible. That's not a statement by a person who cares about the details of his predictions.
This whole prediction accuracy threw my point off topic. The point is startup ideas are just as interesting as Ray's predictions about the future. The number of people a company's idea impresses doesn't predict success of that particular company.
The bigger factor is probably the type of people the startup world attracts, the reorganization. They don't think like the people in larger corporations, they're more motivated, addicted to stress, whatever. The ideas they have aren't more amazing than the ideas in big corporate R&D departments, the difference is now the projects are tested out before getting cancelled by people who saw them only in a spreadsheet.
So VCs don't care about ideas, like they don't care about general predictions. They're mostly investing in small companies, not setting up trading strategies. In the current world where VCs invest in particular companies of people, not ideas, it makes more sense to invest in companies that are somewhat functional.
Even if their idea seems dumb or has to change, competent people will make something work. People that bet it all on an idea aren't flexible, aren't a wise investment. That's why investors prefer simple, practical ideas when nothing is built yet. More depends on the people than the idea and a fast to build idea lets people show their important skills, like salesmanship.
---- As far as "safe" stock market predictions, that's your interpretation since you're interested in money centered economics. His "safe" prediction is that money would change step by step, become obsolete sometime this century. The fancy financial instruments made by quants which screwed up the stock market fit right into that "safe" prediction. It's safe because money is a bad measurement system and as we get more information we'll be able to measure better.
That's interesting that Kurzweil predicted deflation would be recognized as a good thing.
I was an economics major and never understood the main stream view of economists on that (that it's bad).
I was an economics major and never understood the main stream view of economists on that (that it's bad).
It gives people an incentive to sit on their currency and hoard it away instead of investing it in productive ventures.
Think of it this way: the real interest rate is the nominal interest rate minus the inflation rate. That means that if the inflation rate is negative, people can effectively earn interest simply by sitting on their cash, since it'll be worth more in the future. If people earn interest by doing nothing, what incentive do they have to invest in a potentially risky venture that may make more in the long run, but may also cost them their principal?
Deflation biases people towards inaction, because they know that sitting and waiting means their money will be worth more in the future. Inflation biases people towards action - they know their money will be worth less in the future, so they may as well invest in something. The Austrian critiques of monetary inflation are basically right - it does result in bubbles, as people seek higher returns from progressively more risky investments because they know their cash will be worth less.
Technically, the mainstream economist view shoots for price stability (0% inflation) and not inflation. But they recognize that they'll never achieve that, so they err on the side of inflation. Mostly, this is because inflation is easier to cure than deflation is. If everybody is biased toward inaction, then when the Fed pumps money into the system to stimulate action, it tends to collect within firms who won't spend it because they expect it'll be worth more in the future. (This is currently a very real problem, as much of the money the Fed injected in 2009 is collecting in banks that are trying to shore up their balance sheets and consumers that are trying to pay down debt.) Each firm always has the option of choosing not to spend the money it's received. All it takes is one firm that wants to hoard, and the money will never circulate within the economy.
If you have continuous low-level inflation, however, it can be brought under control simply by reducing the money supply. You can't spend money that you don't have. (Well, you can on a micro-level by borrowing from another firm, but you can't on a macro-level because there's nobody else to borrow from.) So when the Fed restricts the money supply, that reduction filters all the way through the economy, people have less money to spend, and prices drop.
Think of it this way: the real interest rate is the nominal interest rate minus the inflation rate. That means that if the inflation rate is negative, people can effectively earn interest simply by sitting on their cash, since it'll be worth more in the future. If people earn interest by doing nothing, what incentive do they have to invest in a potentially risky venture that may make more in the long run, but may also cost them their principal?
Deflation biases people towards inaction, because they know that sitting and waiting means their money will be worth more in the future. Inflation biases people towards action - they know their money will be worth less in the future, so they may as well invest in something. The Austrian critiques of monetary inflation are basically right - it does result in bubbles, as people seek higher returns from progressively more risky investments because they know their cash will be worth less.
Technically, the mainstream economist view shoots for price stability (0% inflation) and not inflation. But they recognize that they'll never achieve that, so they err on the side of inflation. Mostly, this is because inflation is easier to cure than deflation is. If everybody is biased toward inaction, then when the Fed pumps money into the system to stimulate action, it tends to collect within firms who won't spend it because they expect it'll be worth more in the future. (This is currently a very real problem, as much of the money the Fed injected in 2009 is collecting in banks that are trying to shore up their balance sheets and consumers that are trying to pay down debt.) Each firm always has the option of choosing not to spend the money it's received. All it takes is one firm that wants to hoard, and the money will never circulate within the economy.
If you have continuous low-level inflation, however, it can be brought under control simply by reducing the money supply. You can't spend money that you don't have. (Well, you can on a micro-level by borrowing from another firm, but you can't on a macro-level because there's nobody else to borrow from.) So when the Fed restricts the money supply, that reduction filters all the way through the economy, people have less money to spend, and prices drop.
> It gives people an incentive to sit on their currency and hoard it away instead of investing it in productive ventures.
Kind of like the incentive people have when evaluating electronics, which are under consistent, massive deflation thanks to technological progress? Not such a problem there, is it? We're not fussing over Dell or Apple, or the car companies, for that matter, who see similar, though less pronounced, levels of technology-driven deflation.
Why would such a force, which is so innocuous in these areas, and which develops naturally due to the rise in productive capacity & efficiency over time, be so problematic macroscopically? Why would people stop investing, any more than stop buying computers and cars now? Before answering, see my following point.
> what incentive do they have to invest in a potentially risky venture that may make more in the long run, but may also cost them their principal?
An incentive driven by seeking greater return. In your world, wouldn't everyone invest in the bond market, or buy annuities, rather than the riskier stock market? Doesn't exactly gel with reality, does it?
> If you have continuous low-level inflation, however, it can be brought under control simply by reducing the money supply.
What does lowering the money supply do, pray tell? Wouldn't that increase the value of the dollars remaining in the system? That's deflation, by definition. How can it be both your solution and your problem?
> Deflation biases people towards inaction, Inflation biases people towards action
We'll speak more clearly if we aren't so broadly. Natural deflation is not static, but a force dynamically determined by facts of the economy, such as the growth in productive output.
For natural deflation, little investment -> less growth in productive output -> little deflation -> more incentive to invest. Likewise for the converse: lots of investment -> more deflation -> less incentive to invest. This dynamic interplay is a self-regulating force which serves to naturally counteract the market propensity to go off the rails on some wasteful bubble or other.
Seems to me your arguments are specious, and the current bias against deflation is an orthodoxy.
Kind of like the incentive people have when evaluating electronics, which are under consistent, massive deflation thanks to technological progress? Not such a problem there, is it? We're not fussing over Dell or Apple, or the car companies, for that matter, who see similar, though less pronounced, levels of technology-driven deflation.
Why would such a force, which is so innocuous in these areas, and which develops naturally due to the rise in productive capacity & efficiency over time, be so problematic macroscopically? Why would people stop investing, any more than stop buying computers and cars now? Before answering, see my following point.
> what incentive do they have to invest in a potentially risky venture that may make more in the long run, but may also cost them their principal?
An incentive driven by seeking greater return. In your world, wouldn't everyone invest in the bond market, or buy annuities, rather than the riskier stock market? Doesn't exactly gel with reality, does it?
> If you have continuous low-level inflation, however, it can be brought under control simply by reducing the money supply.
What does lowering the money supply do, pray tell? Wouldn't that increase the value of the dollars remaining in the system? That's deflation, by definition. How can it be both your solution and your problem?
> Deflation biases people towards inaction, Inflation biases people towards action
We'll speak more clearly if we aren't so broadly. Natural deflation is not static, but a force dynamically determined by facts of the economy, such as the growth in productive output.
For natural deflation, little investment -> less growth in productive output -> little deflation -> more incentive to invest. Likewise for the converse: lots of investment -> more deflation -> less incentive to invest. This dynamic interplay is a self-regulating force which serves to naturally counteract the market propensity to go off the rails on some wasteful bubble or other.
Seems to me your arguments are specious, and the current bias against deflation is an orthodoxy.
> Kind of like the incentive people have when evaluating electronics, which are under consistent, massive deflation thanks to technological progress? Not such a problem there, is it?
People put off electronics purchases all the time because of price deflation. How many times have you heard people wait until the next Macworld before buying things from Apple, or wait and see what the next Android phone will be before buying anything?
It's not really a problem for the electronics industry because electronics is a robust and growing industry anyway. So people spend less than they otherwise would, but nobody cares because they're still spending more (on electronics) than they used to.
That growth is because electronics is a substitute for several other old economy goods. What's good for the iPad and the Kindle certainly isn't good for the publishing industry. It is good for the consumer and the economy, because it encourages people to switch away from more resource/labor-intensive, less useful goods like books, and towards less resource/labor-intensive, more useful goods like tablet PCs.
You can't apply the same logic to the level of the whole economy, because (by definition) there's nothing for the consumer to switch to. Price deflation across the whole economy means that the consumer is encouraged to switch away from goods and into cash. But cash itself is non-productive; it has no utility for anyone beyond a means of purchasing other, more productive goods.
Whenever you get confused about macro/micro effects, it's helpful to forget money entirely and look at what people actually do. When prices drop for computers, people switch away from other goods and buy more computers, which, assuming computers are more efficient to manufacture, is good for the economy. When prices drop across the economy, there's nothing for people to switch to, except cash, and cash is not good for the economy or the consumer.
> An incentive driven by seeking greater return. In your world, wouldn't everyone invest in the bond market, or buy annuities, rather than the riskier stock market? Doesn't exactly gel with reality, does it?
"My world" doesn't actually care whether people purchase bonds or stocks or real estate. It abstracts those away and assumes the relative asset mix and risk preferences will be the same. The only difference is that the rate of return for holding cash has gone up, and hence some percentage of the people who otherwise would've purchased stocks or bonds or real estate will instead hold cash. Because they now hold cash instead of stocks/bonds/real estate, they have no incentive to improve ("invest in") the businesses represented by those stocks or bonds.
> What does lowering the money supply do, pray tell? Wouldn't that increase the value of the dollars remaining in the system? That's deflation, by definition. How can it be both your solution and your problem?
No. That's a decrease in the money supply, by definition. (Some people define inflation as a change in the money supply, but such definitions are highly unorthodox, and can't describe phenomena like the 2008 deflation, where the money supply increased sharply yet prices fell.)
Over time, as people's expectations adjust, a rise in the money supply will tend to lead to inflation and a fall will lead to deflation. But before you get full-blown deflation, you're going to get disinflation, where prices are still inflating but at a slower rate. That was the situation during Volcker's "shock therapy" in the 1981-82 recession: the money supply contracted, the contraction squeezed the inflation rate down to something manageable, but then the contraction was reversed before prices could actually start falling.
> We'll speak more clearly if we aren't so broadly. Natural deflation is not static, but a force dynamically determined by facts of the economy, such as the growth in productive output.
Agreed.
> For natural deflation, little investment -> less growth in productive output -> little deflation -> more incentive to invest. Likewise for the converse: lots of investment -> more deflation -> less incentive to invest. This dynamic interplay is a self-regulating force which serves to naturally counteract the market propensity to go off the rails on some wasteful bubble or other.
Somewhat agreed. This, empirically, seems to be the case when deflation is minor and the economy is hovering near equilibrium.
It does not appear to be the case when there is a sudden shock to the system. For example, a financial panic increases the demand for hard currency, which pushes up the value of currency (deflation), which encourages people to hoard even more currency, which causes still more deflation. In theory, this should be self-limiting when entrepreneurs realize that assets are available for bargain-basement prices, then buy them (without credit, otherwise they're at the mercy of fickle creditors) to put to use in new industries. In practice, there's good evidence that it can last a decade or more. It only takes one bad 4-year term to unseat a modern democracy, so policymakers have a strong incentive to not let things get so bad for so long.
People put off electronics purchases all the time because of price deflation. How many times have you heard people wait until the next Macworld before buying things from Apple, or wait and see what the next Android phone will be before buying anything?
It's not really a problem for the electronics industry because electronics is a robust and growing industry anyway. So people spend less than they otherwise would, but nobody cares because they're still spending more (on electronics) than they used to.
That growth is because electronics is a substitute for several other old economy goods. What's good for the iPad and the Kindle certainly isn't good for the publishing industry. It is good for the consumer and the economy, because it encourages people to switch away from more resource/labor-intensive, less useful goods like books, and towards less resource/labor-intensive, more useful goods like tablet PCs.
You can't apply the same logic to the level of the whole economy, because (by definition) there's nothing for the consumer to switch to. Price deflation across the whole economy means that the consumer is encouraged to switch away from goods and into cash. But cash itself is non-productive; it has no utility for anyone beyond a means of purchasing other, more productive goods.
Whenever you get confused about macro/micro effects, it's helpful to forget money entirely and look at what people actually do. When prices drop for computers, people switch away from other goods and buy more computers, which, assuming computers are more efficient to manufacture, is good for the economy. When prices drop across the economy, there's nothing for people to switch to, except cash, and cash is not good for the economy or the consumer.
> An incentive driven by seeking greater return. In your world, wouldn't everyone invest in the bond market, or buy annuities, rather than the riskier stock market? Doesn't exactly gel with reality, does it?
"My world" doesn't actually care whether people purchase bonds or stocks or real estate. It abstracts those away and assumes the relative asset mix and risk preferences will be the same. The only difference is that the rate of return for holding cash has gone up, and hence some percentage of the people who otherwise would've purchased stocks or bonds or real estate will instead hold cash. Because they now hold cash instead of stocks/bonds/real estate, they have no incentive to improve ("invest in") the businesses represented by those stocks or bonds.
> What does lowering the money supply do, pray tell? Wouldn't that increase the value of the dollars remaining in the system? That's deflation, by definition. How can it be both your solution and your problem?
No. That's a decrease in the money supply, by definition. (Some people define inflation as a change in the money supply, but such definitions are highly unorthodox, and can't describe phenomena like the 2008 deflation, where the money supply increased sharply yet prices fell.)
Over time, as people's expectations adjust, a rise in the money supply will tend to lead to inflation and a fall will lead to deflation. But before you get full-blown deflation, you're going to get disinflation, where prices are still inflating but at a slower rate. That was the situation during Volcker's "shock therapy" in the 1981-82 recession: the money supply contracted, the contraction squeezed the inflation rate down to something manageable, but then the contraction was reversed before prices could actually start falling.
> We'll speak more clearly if we aren't so broadly. Natural deflation is not static, but a force dynamically determined by facts of the economy, such as the growth in productive output.
Agreed.
> For natural deflation, little investment -> less growth in productive output -> little deflation -> more incentive to invest. Likewise for the converse: lots of investment -> more deflation -> less incentive to invest. This dynamic interplay is a self-regulating force which serves to naturally counteract the market propensity to go off the rails on some wasteful bubble or other.
Somewhat agreed. This, empirically, seems to be the case when deflation is minor and the economy is hovering near equilibrium.
It does not appear to be the case when there is a sudden shock to the system. For example, a financial panic increases the demand for hard currency, which pushes up the value of currency (deflation), which encourages people to hoard even more currency, which causes still more deflation. In theory, this should be self-limiting when entrepreneurs realize that assets are available for bargain-basement prices, then buy them (without credit, otherwise they're at the mercy of fickle creditors) to put to use in new industries. In practice, there's good evidence that it can last a decade or more. It only takes one bad 4-year term to unseat a modern democracy, so policymakers have a strong incentive to not let things get so bad for so long.
Deflation is a coin with two sides.
On a micro level, if your wages are deflating and your costs are not, it's bad. If the prices of goods/services required to run your business are deflating and the prices you are able to charge are not, it's good.
On a macro level, good deflation is the result of gains in productivity (e.g. improved technology). Bad deflation is when capital assets are reduced in value.
N.B. This is just my preferred, non-scientific view of the matter, but it seems to apply consistently within most discussions of this topic.
Regarding the OP's question, measure twice before mentioning an idea to someone who is your current equity partner in a start-up. You may be legally bound to share the idea and any work contributed to it, unless otherwise specified in your agreement.
On a micro level, if your wages are deflating and your costs are not, it's bad. If the prices of goods/services required to run your business are deflating and the prices you are able to charge are not, it's good.
On a macro level, good deflation is the result of gains in productivity (e.g. improved technology). Bad deflation is when capital assets are reduced in value.
N.B. This is just my preferred, non-scientific view of the matter, but it seems to apply consistently within most discussions of this topic.
Regarding the OP's question, measure twice before mentioning an idea to someone who is your current equity partner in a start-up. You may be legally bound to share the idea and any work contributed to it, unless otherwise specified in your agreement.
Some business ideas are innovative, in the sense that they are a new, bold, or risky approach to solving problems. I don't think you have anything to lose by sharing those ideas. These ideas are all about execution, and passion and domain knowledge will out. Share these with impunity, I think.
Some business ideas are just really fancy arbitrage. Execution matters, but the value is self-evident; the more people that know about the opportunity, the faster the market is going to get flooded. I'd keep these a little closer to the vest.
I suspect the start-ups that we talk about and focus upon here on hacker news fall more in the first category and less in the second.
Some business ideas are just really fancy arbitrage. Execution matters, but the value is self-evident; the more people that know about the opportunity, the faster the market is going to get flooded. I'd keep these a little closer to the vest.
I suspect the start-ups that we talk about and focus upon here on hacker news fall more in the first category and less in the second.
Do you have any anecdotes?
It would be far more useful and in the spirit of the original question than advice/opinion (which I see no dearth of on this site).
It would be far more useful and in the spirit of the original question than advice/opinion (which I see no dearth of on this site).
Yes actually. When I quit my job to start my first company, I told a few employees at my old company what I was working on. One of them thought it was such a good idea, he also quit and started a similar company. I was successful, he wasn't, but in the early days, it was a major headache that I didn't need.
I had a similar experience and, in that time, it sure felt like a major headache. But right now, I think thanks to that I had way more motivation, someone to compete and a clear goal to beat. And yes, I eventually "won" like you say you did. Competition never hurts when you're in it to win.
It was a major push that really helped me.
It was a major push that really helped me.
I don't think it's an accident that both of your stories had a similar ending.
The person who comes up with the original idea is probably the one with the most passion for the thing in the first place and is much more likely to put in the needed effort to see it grow.
That, and the fact that the idea in itself is not as important as the execution plan. The person who came up with it probably was also thinking about that a lot more than the person who stole it.
If it were me and I liked the idea of another person so much that I could steal it, I would probably quit my job and find a way to work with them.
The person who comes up with the original idea is probably the one with the most passion for the thing in the first place and is much more likely to put in the needed effort to see it grow.
That, and the fact that the idea in itself is not as important as the execution plan. The person who came up with it probably was also thinking about that a lot more than the person who stole it.
If it were me and I liked the idea of another person so much that I could steal it, I would probably quit my job and find a way to work with them.
This could have been a blessing had you joined forces, circumstances permitting.
The one thing I have noticed is that it takes considerably longer to implement the idea if I reveal it to someone else first.
I didn't notice it until I read this: http://sivers.org/zipit
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Yeah, me too. If I feel like I'm on to something, I like to talk concepts and then share demos. If I describe what I want to do in detail, the demo won't get built. Describing it constitutes creative release.
The best thing that's ever happened to me with sharing ideas is that someone was inspired by them who could execute on them better than I could. They built it, saving me the trouble.
If you share your good ideas, you'll build a network that informs you and feeds your brain to synthesize more good ideas. Build the ones that really fit you and yours, the ones you can't stop yourself from building, and do it now. Then you don't have this problem, you have the sharing a demo problem, which is better.
If you share your good ideas, you'll build a network that informs you and feeds your brain to synthesize more good ideas. Build the ones that really fit you and yours, the ones you can't stop yourself from building, and do it now. Then you don't have this problem, you have the sharing a demo problem, which is better.
I sometimes share my ideas with the hope that someone will do something with it.
I don't really care about making money and honestly, I have too many ideas to tell the good ones from the bad ones anymore.
I don't really care about making money and honestly, I have too many ideas to tell the good ones from the bad ones anymore.
I feel the same way. If someone took one of my ideas and made a great success out of it I would no doubt feel a little jealous but I would also feel proud and gain confidence in my own ideas.
> I have too many ideas to tell the good ones from the bad ones anymore.
It seems having good ideas is actually just a combination of two things: having lots of ideas (including bad ones), but then putting them through a really good filter to separate the good from the bad. I think both parts are skills that can be deliberately developed over time.
It seems having good ideas is actually just a combination of two things: having lots of ideas (including bad ones), but then putting them through a really good filter to separate the good from the bad. I think both parts are skills that can be deliberately developed over time.
Nobody has ever stolen an idea of mine.
At worst a friend has gotten his hopes up then frustrated we can't/didn't execute the idea.
At worst a friend has gotten his hopes up then frustrated we can't/didn't execute the idea.
This made me think: what if a particular idea isn't a novel concept in itself, but rather manifests itself as market information?
For instance, the knowledge that the available software in sector X sucks might be worth something, simply because people outside the sector don't know that that opportunity exists.
Not all ideas are about revolutionizing news reporting or optimizing dating... sometimes they're about making decent software for veterinarians, or something like that.
For instance, the knowledge that the available software in sector X sucks might be worth something, simply because people outside the sector don't know that that opportunity exists.
Not all ideas are about revolutionizing news reporting or optimizing dating... sometimes they're about making decent software for veterinarians, or something like that.
I realized after several iterations that it is sometimes just as hard to ram down a good idea down someone's throat and it's always worth a shot. But, of course there will always be exceptions.
I personally do a proxy pitch. If I know the person I am pitching to is a potential investor/entrepreneur who could actually implement my once in a "blue moon" (haha) idea, then, I pitch a proxy idea to see how smart their response is. If I like the relationship with them, I indulge them with my real one.
I personally do a proxy pitch. If I know the person I am pitching to is a potential investor/entrepreneur who could actually implement my once in a "blue moon" (haha) idea, then, I pitch a proxy idea to see how smart their response is. If I like the relationship with them, I indulge them with my real one.
Here's my advice: share your ideas, but generally refrain from releasing the seed of it to anyone but investors, most of the time. It's your passion that you should protect. This can can be difficult.
For example, here's a couple of mission statements that remind me of what would have been once the core of ideas: "we turn unstructured information into structured information" (Dapper) or "organize the world's information" (Google).
Sometimes one needs to talk about ideas to drill down into it and release a core value proposition like the ones just mentioned. But, once you have it, if you mention it, you dissipate its energy in yourself and risk transferring it to someone else who can manifest it better than yourself: basically rip you off. At the same time, by sharing the core energy, people may remember you, help you, or work for you. But they also might trash it or steal it.
So once you've refined the gold, just stick it in your pocket until you absolutely need to bring it out, like to customers and beneficiaries of the idea. And when someone talks to you about their ideas, you should likewise respect it.
Good to know someone's background to determine what and how much of your ideas you wish to discuss. Also, when your ideas become real physical energy, then start working.
For example, here's a couple of mission statements that remind me of what would have been once the core of ideas: "we turn unstructured information into structured information" (Dapper) or "organize the world's information" (Google).
Sometimes one needs to talk about ideas to drill down into it and release a core value proposition like the ones just mentioned. But, once you have it, if you mention it, you dissipate its energy in yourself and risk transferring it to someone else who can manifest it better than yourself: basically rip you off. At the same time, by sharing the core energy, people may remember you, help you, or work for you. But they also might trash it or steal it.
So once you've refined the gold, just stick it in your pocket until you absolutely need to bring it out, like to customers and beneficiaries of the idea. And when someone talks to you about their ideas, you should likewise respect it.
Good to know someone's background to determine what and how much of your ideas you wish to discuss. Also, when your ideas become real physical energy, then start working.
Yes, I did have this experience. Made a trip to Silicon Valley to talk over a licensing agreement with a tech giveback (by us). One of the ideas was shot down by a senior tech guy there as "unworkable". We (stupidly) dropped the idea after being ridiculed for it.
More than a year later, he and the head of their marketing took at exact idea, created a company around it, and later sold it for more than 230 million.
So, yes, it can happen.
More than a year later, he and the head of their marketing took at exact idea, created a company around it, and later sold it for more than 230 million.
So, yes, it can happen.
My experience with "sharing ideas" is that I end up spending so much time explaining, justifying and defending my ideas that I end up with no energy left to actually implement them. Consequently, I don't bother telling folks what I'm planning - except for disposible ideas that I spread just to keep folks from pissing on my leg and call it rain.
I think if you have an idea whose execution is complex, its much harder for someone else to grasp, let alone copy. And that's a challenge for the entrepreneur, but you are more likely to build something defensible.
Now just explain in 5 words why I can't live without it and you got it.
Now just explain in 5 words why I can't live without it and you got it.
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Nope, never had a bad experience sharing an idea. I do it on purpose to see if anyone will ever give me a run for my money... but no. Nobody I've met could execute with the dilligence I do, nor do they have the marketing savvy.
I talk about how I'm going to revolutionize email, with user interface enhancements, make it very step-by-step explaining the logic behind them, at conferences where I speak in front of several hundred people -- and so far as I can tell, nobody has lifted a finger.
My ideas aren't revolutionary, either, and they could make a lot of money.
Last week I met a person in my city (Vienna), who was excited to meet me cuz of my reputation, and was worried that it turned out we were going to compete. I told him, no problem. We talked about our different approaches to the same problem. I said maybe he should look at selling his technology to people like me, instead of the end users.
That's about the extent of it. :)
I talk about how I'm going to revolutionize email, with user interface enhancements, make it very step-by-step explaining the logic behind them, at conferences where I speak in front of several hundred people -- and so far as I can tell, nobody has lifted a finger.
My ideas aren't revolutionary, either, and they could make a lot of money.
Last week I met a person in my city (Vienna), who was excited to meet me cuz of my reputation, and was worried that it turned out we were going to compete. I told him, no problem. We talked about our different approaches to the same problem. I said maybe he should look at selling his technology to people like me, instead of the end users.
That's about the extent of it. :)
One time, at Harvard, me and my buds thought up a website. It was gonna be like Myspace, but, uh, like better and stuff. You know, better features and just better. We were too tired from coming up with the idea to do anymore from there, so we went up to this guy and were like, "hey, we have this startup. It's like a Myspace, but better, and like for colleges maybe, I guess. You wanna like do the coding for it?" He agreed, but then he stole our idea, that we put so much thought into. We done the hard part. He just swooped in and made some code to glue our brilliant ideas together. Of course we sued him cause we got the monies, and we ended up with millions, just like patent trolls, but better.
Now I have a new idea. It's like a webapp, but better than webapps today. Anybody wanna come up with some code to help this idea come together? But if you read this, and you try to steal my idea, I'm gonna come after you.
Now I have a new idea. It's like a webapp, but better than webapps today. Anybody wanna come up with some code to help this idea come together? But if you read this, and you try to steal my idea, I'm gonna come after you.
Oh man, I didn't wanna say it before, but like, I have the same freaking idea. I mean the webapp thing... I think we should totally team up.
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Still, I'd like to ask... Did any of you have bad experiences because you shared your startup idea with someone you should not have? What happened?