The New Funding Landscape
Want to start a startup?
Get funded by
Y Combinator
.
October 2010
After barely changing at all for decades, the startup funding
business is now in what could, at least by comparison, be called
turmoil.  At Y Combinator we've seen dramatic changes in the funding
environment for startups.  Fortunately one of them is much higher
valuations.
The trends we've been seeing are probably not YC-specific.  I wish
I could say they were, but the main cause is probably just that we
see trends first—partly because the startups we fund are very
plugged into the Valley and are quick to take advantage of anything
new, and partly because we fund so many that we have enough data
points to see patterns clearly.
What we're seeing now, everyone's probably going to be seeing in
the next couple years.  So I'm going to explain what we're seeing,
and what that will mean for you if you try to raise money.
Super-Angels
Let me start by describing what the world of startup funding used
to look like.  There used to be two sharply differentiated types
of investors: angels and venture capitalists.  Angels are individual
rich people who invest small amounts of their own money, while VCs
are employees of funds that invest large amounts of other people's.
For decades there were just those two types of investors, but now
a third type has appeared halfway between them: the so-called
super-angels.
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And VCs have been provoked by their arrival
into making a lot of angel-style investments themselves.  So the
previously sharp line between angels and VCs has become hopelessly
blurred.
There used to be a no man's land between angels and VCs.  Angels
would invest $20k to $50k apiece, and VCs usually a million or more.
So an angel round meant a collection of angel investments that
combined to maybe $200k, and a VC round meant a series A round in
which a single VC fund (or occasionally two) invested $1-5 million.
The no man's land between angels and VCs was a very inconvenient
one for startups, because it coincided with the amount many wanted
to raise.  Most startups coming out of Demo Day wanted to raise
around $400k.  But it was a pain to stitch together that much out
of angel investments, and most VCs weren't interested in investments
so small.  That's the fundamental reason the super-angels have
appeared.  They're responding to the market.
The arrival of a new type of investor is big news for startups,
because there used to be only two and they rarely competed with one
another.  Super-angels compete with both angels and VCs.  That's
going to change the rules about how to raise money.  I don't know
yet what the new rules will be, but it looks like most of the changes
will be for the better.
A super-angel has some of the qualities of an angel, and some of
the qualities of a VC.  They're usually individuals, like angels.
In fact many of the current super-angels were initially angels of
the classic type.  But like VCs, they invest other people's money.
This allows them to invest larger amounts than angels:  a typical
super-angel investment is currently about $100k.  They make investment
decisions quickly, like angels.  And they make a lot more investments
per partner than VCs—up to 10 times as many.
The fact that super-angels invest other people's money makes them
doubly alarming to VCs. They don't just compete for startups; they
also compete for investors.  What super-angels really are is a new
form of fast-moving, lightweight VC fund.   And those of us in the
technology world know what usually happens when something comes
along that can be described in terms like that.  Usually it's the
replacement.
Will it be?  As of now, few of the startups that take money from
super-angels are ruling out taking VC money.  They're just postponing
it.  But that's still a problem for VCs.  Some of the startups that
postpone raising VC money may do so well on the angel money they
raise that they never bother to raise more.  And those who do raise
VC rounds will be able to get higher valuations when they do.  If
the best startups get 10x higher valuations when they raise series
A rounds, that would cut VCs' returns from winners at least tenfold.
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So I think VC funds are seriously threatened by the super-angels.
But one thing that may save them to some extent is the uneven
distribution of startup outcomes: practically all the returns are
concentrated in a few big successes.  The expected value of a startup
is the percentage chance it's Google.  So to the extent that winning
is a matter of absolute returns, the super-angels could win practically
all the battles for individual startups and yet lose the war, if
they merely failed to get those few big winners.  And there's a
chance that could happen, because the top VC funds have better
brands, and can also do more for their portfolio companies.
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Because super-angels make more investments per partner, they have
less partner per investment.  They can't pay as much attention to
you as a VC on your board could.  How much is that extra attention
worth?  It will vary enormously from one partner to another.  There's
no consensus yet in the general case.  So for now this is something
startups are deciding individually.
Till now, VCs' claims about how much value they added were sort of
like the government's.  Maybe they made you feel better, but you
had no choice in the matter, if you needed money on the scale only
VCs could supply.  Now that VCs have competitors, that's going to
put a market price on the help they offer.  The interesting thing
is, no one knows yet what it will be.
Do startups that want to get really big need the sort of advice and
connections only the top VCs can supply?  Or would super-angel money
do just as well?  The VCs will say you need them, and the super-angels
will say you don't.  But the truth is, no one knows yet, not even
the VCs and super-angels themselves.   All the super-angels know
is that their new model seems promising enough to be worth trying,
and all the VCs know is that it seems promising enough to worry
about.
Rounds
Whatever the outcome, the conflict between VCs and super-angels is
good news for founders.  And not just for the obvious reason that
more competition for deals means better terms.  The whole shape of
deals is changing.
One of the biggest differences between angels and VCs is the amount
of your company they want.  VCs want a lot.  In a series A round
they want a third of your company, if they can get it.  They don't
care much how much they pay for it, but they want a lot because the
number of series A investments they can do is so small.  In a
traditional series A investment, at least one partner from the VC
fund takes a seat on your board.
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Since board seats last about
5 years and each partner can't handle more than about 10 at once,
that means a VC fund can only do about 2 series A deals per partner
per year. And that means they need to get as much of the company
as they can in each one.  You'd have to be a very promising startup
indeed to get a VC to use up one of his 10 board seats for only a
few percent of you.
Since angels generally don't take board seats, they don't have this
constraint.  They're happy to buy only a few percent of you.  And
although the super-angels are in most respects mini VC funds, they've
retained this critical property of angels.  They don't take board
seats, so they don't need a big percentage of your company.
Though that means you'll get correspondingly less attention from
them, it's good news in other respects.  Founders never really liked
giving up as much equity as VCs wanted.  It was a lot of the company
to give up in one shot.  Most founders doing series A deals would
prefer to take half as much money for half as much stock, and then
see what valuation they could get for the second half of the stock
after using the first half of the money to increase its value.  But
VCs never offered that option.
Now startups have another alternative.  Now it's easy to raise angel
rounds about half the size of series A rounds.  Many of the startups
we fund are taking this route, and I predict that will be true of
startups in general.
A typical big angel round might be $600k on a convertible note with
a valuation cap of $4 million premoney.  Meaning that when the note
converts into stock (in a later round, or upon acquisition), the
investors in that round will get .6 / 4.6, or 13% of the company.
That's a lot less than the 30 to 40% of the company you usually
give up in a series A round if you do it so early.
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But the advantage of these medium-sized rounds is not just that
they cause less dilution.  You also lose less control.  After an
angel round, the founders almost always still have control of the
company, whereas after a series A round they often don't.  The
traditional board structure after a series A round is two founders,
two VCs, and a (supposedly) neutral fifth person.  Plus series A
terms usually give the investors a veto over various kinds of
important decisions, including selling the company.  Founders usually
have a lot of de facto control after a series A, as long as things
are going well.  But that's not the same as just being able to do
what you want, like you could before.
A third and quite significant advantage of angel rounds is that
they're less stressful to raise.  Raising a traditional series A
round has in the past taken weeks, if not months.  When a VC firm
can only do 2 deals per partner per year, they're careful about
which they do.  To get a traditional series A round you have to go
through a series of meetings, culminating in a full partner meeting
where the firm as a whole says yes or no.  That's the really scary
part for founders: not just that series A rounds take so long, but
at the end of this long process the VCs might still say no.  The
chance of getting rejected after the full partner meeting averages
about 25%.  At some firms it's over 50%.
Fortunately for founders, VCs have been getting a lot faster.
Nowadays Valley VCs are more likely to take 2 weeks than 2 months.
But they're still not as fast as angels and super-angels, the most
decisive of whom sometimes decide in hours.
Raising an angel round is not only quicker, but you get feedback
as it progresses.  An angel round is not an all or nothing thing
like a series A.  It's composed of multiple investors with varying
degrees of seriousness, ranging from the upstanding ones who commit
unequivocally to the jerks who give you lines like "come back to
me to fill out the round." You usually start collecting money from
the most committed investors and work your way out toward the
ambivalent ones, whose interest increases as the round fills up.
But at each point you know how you're doing.  If investors turn
cold you may have to raise less, but when investors in an angel
round turn cold the process at least degrades gracefully, instead
of blowing up in your face and leaving you with nothing, as happens
if you get rejected by a VC fund after a full partner meeting.
Whereas if investors seem hot, you can not only close the round
faster, but now that convertible notes are becoming the norm,
actually
raise the price
to reflect demand.
Valuation
However, the VCs have a weapon they can use against the super-angels,
and they have started to use it.   VCs have started making angel-sized
investments too.  The term "angel round" doesn't mean that all the
investors in it are angels; it just describes the structure of the
round.  Increasingly the participants include VCs making investments
of a hundred thousand or two.  And when VCs invest in angel rounds
they can do things that super-angels don't like.  VCs are quite
valuation-insensitive in angel rounds—partly because they are
in general, and partly because they don't care that much about the
returns on angel rounds, which they still view mostly as a way to
recruit startups for series A rounds later.  So VCs who invest in
angel rounds can blow up the valuations for angels and super-angels
who invest in them.
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Some super-angels seem to care about valuations.  Several turned
down YC-funded startups after Demo Day because their valuations
were too high.  This was not a problem for the startups; by definition
a high valuation means enough investors were willing to accept it.
But it was mysterious to me that the super-angels would quibble
about valuations.  Did they not understand that the big returns
come from a few big successes, and that it therefore mattered far
more which startups you picked than how much you paid for them?
After thinking about it for a while and observing certain other
signs, I have a theory that explains why the super-angels may be
smarter than they seem.  It would make sense for super-angels to
want low valuations if they're hoping to invest in startups that
get bought early.  If you're hoping to hit the next Google, you
shouldn't care if the valuation is 20 million.  But if you're looking
for companies that are going to get bought for 30 million, you care.
If you invest at 20 and the company gets bought for 30, you only
get 1.5x.  You might as well buy Apple.
So if some of the super-angels were looking for companies that could
get acquired quickly, that would explain why they'd care about
valuations.  But why would they be looking for those?   Because
depending on the meaning of "quickly," it could actually be very
profitable.  A company that gets acquired for 30 million is a failure
to a VC, but it could be a 10x return for an angel, and moreover,
a
quick
10x return.  Rate of return is what matters in
investing—not the multiple you get, but the multiple per year.
If a super-angel gets 10x in one year, that's a higher rate of
return than a VC could ever hope to get from a company that took 6
years to go public.  To get the same rate of return, the VC would
have to get a multiple of 10^6—one million x.  Even Google
didn't come close to that.
So I think at least some super-angels are looking for companies
that will get bought.  That's the only rational explanation for
focusing on getting the right valuations, instead of the right
companies.  And if so they'll be different to deal with than VCs.
They'll be tougher on valuations, but more accommodating if you want
to sell early.
Prognosis
Who will win, the super-angels or the VCs?  I think the answer to
that is, some of each.  They'll each become more like one another.
The super-angels will start to invest larger amounts, and the VCs
will gradually figure out ways to make more, smaller investments
faster.  A decade from now the players will be hard to tell apart,
and there will probably be survivors from each group.
What does that mean for founders?  One thing it means is that the
high valuations startups are presently getting may not last forever.
To the extent that valuations are being driven up by price-insensitive
VCs, they'll fall again if VCs become more like super-angels and
start to become more miserly about valuations.  Fortunately if this
does happen it will take years.
The short term forecast is more competition between investors, which
is good news for you.  The super-angels will try to undermine the
VCs by acting faster, and the VCs will try to undermine the
super-angels by driving up valuations.  Which for founders will
result in the perfect combination: funding rounds that close fast,
with high valuations.
But remember that to get that combination, your startup will have
to appeal to both super-angels and VCs.  If you don't seem like you
have the potential to go public, you won't be able to use VCs to
drive up the valuation of an angel round.
There is a danger of having VCs in an angel round: the so-called
signalling risk.  If VCs are only doing it in the hope of investing
more later, what happens if they don't?  That's a signal to everyone
else that they think you're lame.
How much should you worry about that?  The seriousness of signalling
risk depends on how far along you are.  If by the next time you
need to raise money, you have graphs showing rising revenue or
traffic month after month, you don't have to worry about any signals
your existing investors are sending.  Your results will speak for
themselves.
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Whereas if the next time you need to raise money you won't yet have
concrete results, you may need to think more about the message your
investors might send if they don't invest more.  I'm not sure yet
how much you have to worry, because this whole phenomenon of VCs
doing angel investments is so new. But my instincts tell me you
don't have to worry much.  Signalling risk smells like one of those
things founders worry about that's not a real problem.  As a rule,
the only thing that can kill a good startup is the startup itself.
Startups hurt themselves way more often than competitors hurt them,
for example.  I suspect signalling risk is in this category too.
One thing YC-funded startups have been doing to mitigate the risk
of taking money from VCs in angel rounds is not to take too much
from any one VC.  Maybe that will help, if you have the luxury of
turning down money.
Fortunately, more and more startups will.  After decades of competition
that could best be described as intramural, the startup funding
business is finally getting some real competition.  That should
last several years at least, and maybe a lot longer. Unless there's
some huge market crash, the next couple years are going to be a
good time for startups to raise money.  And that's exciting because
it means lots more startups will happen.
Notes
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I've also heard them called "Mini-VCs" and "Micro-VCs." I
don't know which name will stick.
There were a couple predecessors.  Ron Conway had angel funds
starting in the 1990s, and in some ways First Round Capital is closer to a
super-angel than a VC fund.
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It wouldn't cut their overall returns tenfold, because investing
later would probably (a) cause them to lose less on investments
that failed, and (b) not allow them to get as large a percentage
of startups as they do now.  So it's hard to predict precisely what
would happen to their returns.
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The brand of an investor derives mostly from the success of
their portfolio companies.  The top VCs thus have a big brand
advantage over the super-angels.  They could make it self-perpetuating
if they used it to get all the best new startups.  But I don't think
they'll be able to.  To get all the best startups, you have to do
more than make them want you.  You also have to want them; you have
to recognize them when you see them, and that's much harder.
Super-angels will snap up stars that VCs miss.  And that will cause
the brand gap between the top VCs and the super-angels gradually
to erode.
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Though in a traditional series A round VCs put two partners
on your board, there are signs now that VCs may begin to conserve
board seats by switching to what used to be considered an angel-round
board, consisting of two founders and one VC.  Which is also to the
founders' advantage if it means they still control the company.
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In a series A round, you usually have to give up more than
the actual amount of stock the VCs buy, because they insist you
dilute yourselves to set aside an "option pool" as well.  I predict
this practice will gradually disappear though.
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The best thing for founders, if they can get it, is a convertible
note with no valuation cap at all.  In that case the money invested
in the angel round just converts into stock at the valuation of the
next round, no matter how large.  Angels and super-angels tend not
to like uncapped notes. They have no idea how much of the company
they're buying.  If the company does well and the valuation of the
next round is high, they may end up with only a sliver of it.  So
by agreeing to uncapped notes, VCs who don't care about valuations
in angel rounds can make offers that super-angels hate to match.
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Obviously signalling risk is also not a problem if you'll
never need to raise more money.  But startups are often mistaken
about that.
Thanks
to Sam Altman, John Bautista, Patrick Collison, James
Lindenbaum, Reid Hoffman, Jessica Livingston and Harj Taggar
for reading drafts
of this.


@KarthikIO How could this be true? Do you think it's going to become impossible to build anything a few years from now?

@cboyack @DiscoverPraxis The point of college is not to prepare you for "professional success." It's to improve your mind.

Nor are these distinct paths. The people who achieve the greatest "professional success" are those who think of college as more than job training.

@0xtherealbatman Depends how shitty.

@rehack20 No, I've always felt this way.

@CatGodSandHive It almost never is. It was for Zuck, but that kind of situation is the exception.

@HaydenH36 If you mean you learn more from your friends than from lectures, that was always the case.

If you mean the main advantage of college is "networking," that was never the case.

@staysaasy Most would still have become super rich if they'd waited. Probably richer in fact.

Don't drop out of college to start or work for a startup. There will be other (and probably better) startup opportunities, but you can't get your college years back.

@RDublong65428 It isn't, but there's a good chance you are.

13 yo's take on the generations:

Boomers: old and out of touch

Gen X: indistinguishable from Boomers

Millennials: hippies

Gen Z: tired and depressed

Gen Alpha: brainrotted


@tlbtlbtlb @garrytan What comparing China's and the UK's numbers shows is that the lower power consuming kind of work they do in the UK makes more money than the higher power consuming work they do in China. Which in turn contradicts the annotation on the chart.

@tlbtlbtlb @garrytan That's a valid gotcha when one is talking about how much pollution each country is morally responsible for, but that's not what this graph, or this conversation, is about.

@RichardSocher What the graph shows is that happiness is proportional to log(wealth). Saying that it's = the number of digits is a way to express that that everyone can understand.

@Suhail Even if you have some kind of moat, losing focus tends to be fatal.

@garrytan I agree with you that degrowth is a stupid idea, but this graph may not be the best way to express that. In fact one of the most interesting things one can learn from it is that the UK is much richer than China despite using less electricity per capita.

Happiness = the number of digits of wealth. https://t.co/cQpIgTZQkX

@Chris_arnade Conservatives live in the country. For them cities are places to drive through, not live.

The F3 looks like the intermediate phase in an animation.

The reason this looks wrong is that the facial features are those of a head seen straight on, but the head isn't straight on. It's as if the facial features have drifted to the sitter's right around his head. Which would be a clever statement if it had been done on purpose... https://t.co/hApyPqoNAG

@patrickc Young startup founders seem better than ever, though I realize this is a bold claim to make to you.


I still remember the shipping address of Viaweb's most persistent would-be fraudster: Sarmizegetusa St, Iasi, Romania.

@__tosh Just don't look too closely at the code itself.

@fridtamir No, but if I could only ask a startup about one number, this would be the one.

@sarmadgulzar 20% is really good. That's 9x a year. You can't keep that up for too many years or you run out of atoms in the universe.

The really striking thing about this case is that this startup is several years old, and yet they have growth that would be impressive during YC, in a company starting from nothing.

DMs with a founder. This kind of growth is about as good as it gets.

Founder: We’re making so much money btw.

Me: I don't care how much; I care about the growth rate; what's that?

Founder: 46.8% MoM

Me: Whoah. For how long?

Founder: Since September

@ImageOcclusion @ESYudkowsky It's easier to do for ships than for the grid.

@AvidFayaz @ESYudkowsky You will in the sense that your Tesla will be getting its batteries charged by fusion reactors on the grid.

@tr_babb @ESYudkowsky Sure, if the expected value is high enough. Boom Supersonic is over 10 years old.

@Garage_Drag0n @ESYudkowsky This startup isn't assuming it won't. But it's easier to satisfy the maritime market than to make plants for the power grid because (a) they have fewer alternatives and (b) the uptime requirements aren't so high (the system can be powered down in port).


A Local Revolution?
April 2009
Recently I realized I'd been holding two ideas in my head that would explode if combined.
The first is that startups may represent a
new economic phase
, on the scale of the Industrial Revolution. I'm not sure of this, but there seems a decent chance it's true.  People are dramatically more
productive
as founders or early employees of startups—imagine how much less Larry and Sergey would have achieved if they'd gone to work for a big company—and that scale of improvement can change social customs.
The second idea is that startups are a type of business that flourishes in certain places that
specialize
in it—that Silicon Valley specializes in startups in the same way Los Angeles specializes in movies, or New York in finance.
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What if both are true?  What if startups are both a new economic phase and also a type of business that only flourishes in certain centers?
If so, this revolution is going to be particularly revolutionary. All previous revolutions have spread.  Agriculture, cities, and industrialization all spread widely. If startups end up being like the movie business, with just a handful of centers and one dominant one, that's going to have novel consequences.
There are already signs that startups may not spread particularly well.  The spread of startups seems to be proceeding slower than the spread of the Industrial Revolution, despite the fact that communication is so much faster now.
Within a few decades of the founding of Boulton & Watt there were steam engines scattered over northern Europe and North America.  Industrialization didn't spread much beyond those regions for a while. It only spread to places where there was a strong middle class—countries where a private citizen could make a fortune without having it confiscated. Otherwise it wasn't worth investing in factories.  But in a country with a strong middle class it was easy for industrial techniques to take root.  An individual mine or factory owner could decide to install a steam engine, and within a few years he could probably find someone local to make him one.  So steam engines spread fast.  And they spread widely, because the locations of mines and factories were determined by features like rivers, harbors, and sources of raw materials.
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Startups don't seem to spread so well, partly because they're more a social than a technical phenomenon, and partly because they're not tied to geography.  An individual European manufacturer could import industrial techniques and they'd work fine.  This doesn't seem to work so well with startups: you need a community of expertise, as you do in the movie business.
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Plus there aren't the same forces driving startups to spread.  Once railroads or electric power grids were invented, every region had to have them.  An area without railroads or power was a rich potential market.  But this isn't true with startups.  There's no need for a Microsoft of France or Google of Germany.
Governments may decide they want to encourage startups locally, but government policy can't call them into being the way a genuine need could.
How will this all play out?  If I had to predict now, I'd say that startups will spread, but very slowly, because their spread will be driven not by government policies (which won't work) or by market need (which doesn't exist) but, to the extent that it happens at all, by the same random factors that have caused startup culture to spread thus far.  And such random factors will increasingly be outweighed by the pull of existing startup hubs.
Silicon Valley is where it is because William Shockley wanted to move back to Palo Alto, where he grew up, and the experts he lured west to work with him liked it so much they stayed.  Seattle owes much of its position as a tech center to the same cause: Gates and Allen wanted to move home.  Otherwise Albuquerque might have Seattle's place in the rankings.  Boston is a tech center because it's the intellectual capital of the US and probably the world.  And if Battery Ventures hadn't turned down Facebook, Boston would be significantly bigger now on the startup radar screen.
But of course it's not a coincidence that Facebook got funded in the Valley and not Boston.  There are more and bolder investors in Silicon Valley than in Boston, and even undergrads know it.
Boston's case illustrates the difficulty you'd have establishing a new startup hub this late in the game.  If you wanted to create a startup hub by reproducing the way existing ones happened, the
way to do it
would be to establish a first-rate research university in a place so nice that rich people wanted to live there.  Then the town would be hospitable to both groups you need: both founders and investors.  That's the combination that yielded Silicon Valley.  But Silicon Valley didn't have Silicon Valley to compete with.  If you tried now to create a startup hub by planting a great university in a nice place, it would have a harder time getting started, because many of the best startups it produced would be sucked away to existing startup hubs.
Recently I suggested a potential shortcut:
pay startups to move
.  Once you had enough good startups in one place, it would create a self-sustaining chain reaction.  Founders would start to move there without being paid, because that was where their peers were, and investors would appear too, because that was where the deals were.
In practice I doubt any government would have the balls to try this, or the brains to do it right.  I didn't mean it as a practical suggestion, but more as an exploration of the lower bound of what it would take to create a startup hub deliberately.
The most likely scenario is (1) that no government will successfully establish a startup hub, and (2) that the spread of startup culture will thus be driven by the random factors that have driven it so far, but (3) that these factors will be increasingly outweighed by the pull of existing startup hubs.  Result: this revolution, if it is one, will be unusually localized.
Notes
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There are two very different types of startup: one kind that evolves naturally, and one kind that's called into being to "commercialize" a scientific discovery.  Most computer/software startups are now the first type, and most pharmaceutical startups the second.  When I talk about startups in this essay, I mean type I startups.  There is no difficulty making type II startups spread: all you have to do is fund medical research labs; commercializing whatever new discoveries the boffins throw off is as straightforward as building a new airport.  Type II startups neither require nor produce startup culture. But that means having type II startups won't get you type I startups.  Philadelphia is a case in point: lots of type II startups, but hardly any type I.
Incidentally, Google may appear to be an instance of a type II startup, but it wasn't.  Google is not pagerank commercialized.  They could have used another algorithm and everything would have turned out the same.  What made Google Google is that they cared about doing search well at a critical point in the evolution of the web.
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 Watt didn't invent the steam engine.  His critical invention was a refinement that made steam engines dramatically more efficient: the separate condenser.  But that oversimplifies his role.  He had such a different attitude to the problem and approached it with such energy that he transformed the field.  Perhaps the most accurate way to put it would be to say that Watt reinvented the steam engine.
[
3
]
The biggest counterexample here is Skype.  If you're doing
something that would get shut down in the US, it becomes an
advantage to be located elsewhere.  That's why Kazaa took
the place of Napster.  And the expertise and connections the
founders gained from running Kazaa helped ensure the success
of Skype.
Thanks
to Patrick Collison, Jessica Livingston, and Fred Wilson for reading drafts of this.


@ShubhamTerdale Right now my view on the tariffs is that my jaw hurts.

At the dentist this morning I was able to distract myself while having a molar ground down for a temporary crown by thinking about the startup idea he'd mentioned. I've thought about startup ideas under some grim conditions (drunk, jetlagged, EDM) but this has to be a new record.

@fnetisma @TomasReimers Just start the startup a few years earlier.

@LilianPertenava @TomasReimers That study is notoriously bogus, to the point where you could fairly accurately call it an urban legend.

You could do a more accurate study in a few minutes. Walk down the Nasdaq in order of market cap and look at the ages of the founders when each company was started.

@anshulbhide @TomasReimers They can be for some people, but the most ambitious people are usually already plenty motivated before they have kids.

@joshycodes I'm talking about a different thing entirely. I'm not suggesting that founders be contrarian, but that they're operating on a different vector.

@FelipeBudinich Yeah, that's the opposite.

@AdanBecerraPhD Not that much.

@TomasReimers When your life is the wrong shape. For example, it's better to do before you have kids than after, and better to do before the college friends you want to recruit as cofounders are locked into jobs they don't want to quit.

Weirdly enough, this is also what the founders themselves are betting on, though they rarely realize it. And no, they don't already know the answer.


@JohnDCook I wouldn't be surprised. Do you have a theory about why? Do you think it's because there's lots of undiscerning demand for such books?

I spoke at a high school yesterday and someone asked what I'd tell my 18 year old self if I could. It would be not to be tricked by prestige. It is at best a trailing indicator, and often simply wrong. Curiosity is a better guide.

@Scientific_Bird It would be interesting to see the trend in never married by itself.

@JohnDCook Most books are bad. Do you think books on leadership are especially bad, or do they merely share the mediocrity of books in general?

@ID_AA_Carmack Now that people aren't going write their code themselves, maybe it can even be Lisp. AIs don't need syntax that makes source code look accessible. They're fine programming in s-expressions.

@daltonc 497 to go!

If anyone's curious what I was talking about, this was it: https://t.co/8iHPtnWCLs

@startupsharma They'll probably screw up. Most founders do.

@Austen Yeah, he did it very publicly at the very peak of wokeness. You'd get mobs after you just for defending him. It seems so strange now. Which shows how much wokeness has receded.

@Number2Onion Neither of those are true, but I'd trade that for them both being true.


@Conanbatt If Kamala was the kind of person Putin would want to win, quite possibly.

@maddyb65 You've probably heard about this principle before, but just in case you haven't: Actions speak louder than words.

@1v100000 Occam's razor says Putin is doing this now for the same reason he did it in 2016.

https://t.co/RgLn2qUF5E

@thomastupchurch If the single issue is whether America is weak or strong, they should be.

@realfastman @pitdesi Or maybe it's what a bunch of fake accounts run out of Russia look like. But either way it makes Twitter worse.

@kumailht @pitdesi I've been thinking about it.

@brainstormvince @pitdesi I think you can be more precise than that. I think the secret is to understand how much variation there is among people. Some are more wonderful than you could imagine. Some are much worse than you could imagine.

Putin wants Trump to win. There's no serious debate about that. Does Putin want America to be weak or strong? There's no serious debate about that either.

Why would you vote for the candidate Putin wants you to vote for? https://t.co/NYIGZiOfnm

@pitdesi These look like the same people I've been seeing in my replies lately. This place is going downhill...

@unusual_whales But only 1% will go ahead and do it.


@rajatsuri @dflieb I don't think David means it as an aptitude test for the job but rather as a threshold everyone should be over before you even let them take the aptitude test.

@ryangrim Apparently they got the story wrong, and they're confusing Reid Hoffman with Reed Hastings.

@andrewmccalip Apparently no one has done this before. So you're not just proposing to do this, but to be the first to do this.

@Jack_Raines Interesting point. I wouldn't and I don't think most writers would, but maybe some would.

If you think you're reasonable, you should want AIs to be trained on your writing. They're going to be trained on something, and if you're excluded that would bring down the average.

(This is a separate question from whether you should get paid for it.)

@IAPonomarenko Actually it appears to be not just compromised but completely fake. This is the real Iain Simcock.

https://t.co/lhjQQ8uHq7

@IAPonomarenko I think this is an account that has been compromised by the Russians and is now effectively a bot. A church organist wouldn't be posting such a random mix of European and American right-wing stuff.

"Judge talent at its best but character at its worst."

— Lord Acton

@ammon_mcbride @Chris_Deeg @gfodor If you listen to the podcast you'll hear all about it.

@cperciva You always have the most interesting questions, cperciva. The answer is that the recipes are really simple.


Ideas for Startups
Want to start a startup?
Get funded by
Y Combinator
.
October 2005
(This essay is derived from a talk at the 2005
Startup School.
)
How do you get good ideas for
startups
?  That's probably the number
one question people ask me.
I'd like to reply with another question: why do people think it's
hard to come up with ideas for startups?
That might seem a stupid thing to ask.  Why do they
think
it's hard?  If people can't do it, then it
is
hard, at least
for them.  Right?
Well, maybe not.  What people usually say is not that they can't
think of ideas, but that they don't have any.  That's not quite the
same thing.  It could be the reason they don't have any is that
they haven't tried to generate them.
I think this is often the case.  I think people believe that coming
up with ideas for startups is very hard-- that it
must
be
very hard-- and so they don't try do to it.  They assume ideas are
like miracles: they either pop into your head or they don't.
I also have a theory about why people think this.  They overvalue
ideas.  They think creating a startup is just a matter of implementing
some fabulous initial idea.  And since a successful startup is worth
millions of dollars, a good idea is therefore a million dollar idea.
If coming up with an idea for a startup equals coming up with a
million dollar idea, then of course it's going to seem hard.  Too
hard to bother trying.  Our instincts tell us something so valuable
would not be just lying around for anyone to discover.
Actually, startup ideas are not million dollar ideas, and here's
an experiment you can try to prove it: just try to sell one.  Nothing
evolves faster than markets.  The fact that there's no market for
startup ideas suggests there's no demand.  Which means, in the
narrow sense of the word, that startup ideas are worthless.
Questions
The fact is, most startups end up nothing like the initial idea.
It would be closer to the truth to say the main value of your initial
idea is that, in the process of discovering it's broken, you'll
come up with your real idea.
The initial idea is just a starting point-- not a blueprint, but a
question.  It might help if they were expressed that way.  Instead
of saying that your idea is to make a collaborative, web-based
spreadsheet, say: could one make a collaborative, web-based
spreadsheet?  A few grammatical tweaks, and a woefully incomplete
idea becomes a promising question to explore.
There's a real difference, because an assertion provokes objections
in a way a question doesn't.  If you say: I'm going to build a
web-based spreadsheet, then critics-- the most dangerous of which
are in your own head-- will immediately reply that you'd be competing
with Microsoft, that you couldn't give people the kind of UI they
expect, that users wouldn't want to have their data on your servers,
and so on.
A question doesn't seem so challenging.  It becomes: let's try
making a web-based spreadsheet and see how far we get.  And everyone
knows that if you tried this you'd be able to make
something
useful.  Maybe what you'd end up with wouldn't even be a spreadsheet.
Maybe it would be some kind of new spreadsheet-like collaboration
tool that doesn't even have a name yet.  You wouldn't have thought
of something like that except by implementing your way toward it.
Treating a startup idea as a question changes what you're looking
for.  If an idea is a blueprint, it has to be right.  But if it's
a question, it can be wrong, so long as it's wrong in a way that
leads to more ideas.
One valuable way for an idea to be wrong is to be only a partial
solution.  When someone's working on a problem that seems too
big, I always ask: is there some way to bite off some subset of the
problem, then gradually expand from there?  That will generally
work unless you get trapped on a local maximum, like 1980s-style
AI, or C.
Upwind
So far, we've reduced the problem from thinking of a million dollar
idea to thinking of a mistaken question.  That doesn't seem so hard,
does it?
To generate such questions you need two things: to be familiar with
promising new technologies, and to have the right kind of friends.
New technologies are the ingredients startup ideas are made of, and
conversations with friends are the kitchen they're cooked in.
Universities have both, and that's why so many startups grow out
of them.  They're filled with new technologies, because they're
trying to produce research, and only things that are new count as
research.  And they're full of exactly the right kind of people to
have ideas with: the other students, who will be not only smart but
elastic-minded to a fault.
The opposite extreme would be a well-paying but boring job at a big
company.  Big companies are biased against new technologies, and
the people you'd meet there would be wrong too.
In an
essay
I wrote for high school students,
I said a good rule of thumb was to stay upwind-- to
work on things that maximize your future options. The principle
applies for adults too, though perhaps it has to be modified to:
stay upwind for as long as you can, then cash in the potential
energy you've accumulated when you need to pay for kids.
I don't think people consciously realize this, but one reason
downwind jobs like churning out Java for a bank pay so well is
precisely that they are downwind.  The market price for that kind
of work is higher because it gives you fewer options for the future.
A job that lets you work on exciting new stuff will tend to pay
less, because part of the compensation is in the form of the new
skills you'll learn.
Grad school is the other end of the spectrum from a coding job at
a big company: the pay's low but you spend most of your time working
on new stuff.  And of course, it's called "school," which makes
that clear to everyone, though in fact all jobs are some percentage
school.
The right environment for having startup ideas need not be a
university per se.  It just has to be a situation with a large
percentage of school.
It's obvious why you want exposure to new technology, but why do
you need other people?  Can't you just think of new ideas yourself?
The empirical answer is: no.  Even Einstein needed people to bounce
ideas off.  Ideas get developed in the process of explaining them
to the right kind of person.  You need that resistance, just
as a carver needs the resistance of the wood.
This is one reason Y Combinator has a rule against investing in
startups with only one founder.  Practically every successful company
has at least two.  And because startup founders work under great
pressure, it's critical they be friends.
I didn't realize it till I was writing this, but that may help
explain why there are so few female startup founders.  I read on
the Internet (so it must be true) that only 1.7% of VC-backed
startups are founded by women.  The percentage of female hackers
is small, but not that small.  So why the discrepancy?
When you realize that successful startups tend to have multiple
founders who were already friends, a
possible explanation emerges.  People's best friends are likely to
be of the same sex, and if one group is a minority in some population,
pairs
of them will be a minority squared.
[
1
]
Doodling
What these groups of co-founders do together is more complicated
than just sitting down and trying to think of ideas.  I suspect the
most productive setup is a kind of together-alone-together sandwich.
Together you talk about some hard problem, probably getting nowhere.
Then, the next morning, one of you has an idea in the shower about
how to solve it.  He runs eagerly to to tell the others, and together
they work out the kinks.
What happens in that shower?  It seems to me that ideas just pop
into my head.  But can we say more than that?
Taking a shower is like a form of meditation.  You're alert, but
there's nothing to distract you.  It's in a situation like this,
where your mind is free to roam, that it bumps into new ideas.
What happens when your mind wanders?  It may be like doodling.  Most
people have characteristic ways of doodling.  This habit is
unconscious, but not random: I found my doodles changed after I
started studying painting.  I started to make the kind of gestures
I'd make if I were drawing from life.  They were atoms of drawing,
but arranged randomly.
[
2
]
Perhaps letting your mind wander is like doodling with ideas.  You
have certain mental gestures you've learned in your work, and when
you're not paying attention, you keep making these same gestures,
but somewhat randomly.  In effect, you call the same functions on
random arguments.  That's what a metaphor is: a function applied
to an argument of the wrong type.
Conveniently, as I was writing this, my mind wandered: would it be
useful to have metaphors in a programming language?  I don't know;
I don't have time to think about this.  But it's convenient because
this is an example of what I mean by habits of mind.  I spend a lot
of time thinking about language design, and my habit of always
asking "would x be useful in a programming language" just got
invoked.
If new ideas arise like doodles, this would explain why you have
to work at something for a while before you have any.  It's not
just that you can't judge ideas till you're an expert in a field.
You won't even generate ideas, because you won't have any habits
of mind to invoke.
Of course the habits of mind you invoke on some field don't have
to be derived from working in that field.  In fact, it's often
better if they're not.  You're not just looking for good ideas, but
for good
new
ideas, and you have a better chance of generating
those if you combine stuff from distant fields.  As hackers, one
of our habits of mind is to ask, could one open-source x?  For
example, what if you made an open-source operating system?  A fine
idea, but not very novel.  Whereas if you ask, could you make an
open-source play?  you might be onto something.
Are some kinds of work better sources of habits of mind than others?
I suspect harder fields may be better sources, because to attack
hard problems you need powerful solvents.  I find math is a good
source of metaphors-- good enough that it's worth studying just for
that.  Related fields are also good sources, especially when they're
related in unexpected ways.  Everyone knows computer science and
electrical engineering are related, but precisely because everyone
knows it, importing ideas from one to the other doesn't yield great
profits.  It's like importing something from Wisconsin to Michigan.
Whereas (I claim) hacking and
painting
are
also related, in the sense that hackers and painters are both
makers
,
and this source of new ideas is practically virgin territory.
Problems
In theory you could stick together ideas at random and see what you
came up with.  What if you built a peer-to-peer dating site?  Would
it be useful to have an automatic book?  Could you turn theorems
into a commodity?  When you assemble ideas at random like this,
they may not be just stupid, but semantically ill-formed.  What
would it even mean to make theorems a commodity?  You got me.  I
didn't think of that idea, just its name.
You might come up with something useful this way, but I never have.
It's like knowing a fabulous sculpture is hidden inside a block of
marble, and all you have to do is remove the marble that isn't part
of it.  It's an encouraging thought, because it reminds you there
is an answer, but it's not much use in practice because the search
space is too big.
I find that to have good ideas I need to be working on some problem.
You can't start with randomness.  You have to start with a problem,
then let your mind wander just far enough for new ideas to form.
In a way, it's harder to see problems than their solutions.  Most
people prefer to remain in denial about problems.  It's obvious
why: problems are irritating.  They're problems!  Imagine if people
in 1700 saw their lives the way we'd see them.  It would have been
unbearable.  This denial is such a powerful force that, even when
presented with possible solutions, people often prefer to believe
they wouldn't work.
I saw this phenomenon when I worked on spam filters.  In 2002, most
people preferred to ignore spam, and most of those who didn't
preferred to believe the heuristic filters then available were the
best you could do.
I found spam intolerable, and I felt it had to be possible to
recognize it statistically.  And it turns out that was all you
needed to solve the problem.  The algorithm I used was ridiculously
simple.  Anyone who'd really tried to solve the problem would have
found it.  It was just that no one had really tried to solve the
problem.
[
3
]
Let me repeat that recipe: finding the problem intolerable and
feeling it must be possible to solve it.  Simple as it seems, that's
the recipe for a lot of startup ideas.
Wealth
So far most of what I've said applies to ideas in general.  What's
special about startup ideas?  Startup ideas are ideas for companies,
and companies have to make money.  And the way to make money is to
make something people want.
Wealth is what people want.  I don't mean that as some kind of
philosophical statement; I mean it as a tautology.
So an idea for a startup is an idea for something people want.
Wouldn't any good idea be something people want?  Unfortunately
not.  I think new theorems are a fine thing to create, but there
is no great demand for them.  Whereas there appears to be great
demand for celebrity gossip magazines.  Wealth is defined democratically.
Good ideas and valuable ideas are not quite the same thing; the
difference is individual tastes.
But valuable ideas are very close to good ideas, especially in
technology.  I think they're so close that you can get away with
working as if the goal were to discover good ideas, so long as, in
the final stage, you stop and ask: will people actually pay for
this?  Only a few ideas are likely to make it that far and then get
shot down; RPN calculators might be one example.
One way to make something people want is to look at stuff people
use now that's broken.  Dating sites are a prime example.  They
have millions of users, so they must be promising something people
want.  And yet they work horribly.  Just ask anyone who uses them.
It's as if they used the worse-is-better approach but stopped after
the first stage and handed the thing over to marketers.
Of course, the most obvious breakage in the average computer user's
life is Windows itself.  But this is a special case: you can't
defeat a monopoly by a frontal attack.  Windows can and will be
overthrown, but not by giving people a better desktop OS.  The way
to kill it is to redefine the problem as a superset of the current
one.  The problem is not, what operating system should people use
on desktop computers?  but how should people use applications?
There are answers to that question that don't even involve desktop
computers.
Everyone thinks Google is going to solve this problem, but it is a
very subtle one, so subtle that a company as big as Google might
well get it wrong.  I think the odds are better than 50-50 that the
Windows killer-- or more accurately, Windows transcender-- will
come from some little startup.
Another classic way to make something people want is to take a
luxury and make it into a commmodity.  People must want something
if they pay a lot for it.  And it is a very rare product that can't
be made dramatically cheaper if you try.
This was Henry Ford's plan.  He made cars, which had been a luxury
item, into a commodity.  But the idea is much older than Henry Ford.
Water mills transformed mechanical power from a luxury into a
commodity, and they were used in the Roman empire.  Arguably
pastoralism transformed a luxury into a commodity.
When you make something cheaper you can sell more of them.  But if
you make something dramatically cheaper you often get qualitative
changes, because people start to use it in different ways.  For
example, once computers get so cheap that most people can have one
of their own, you can use them as communication devices.
Often to make something dramatically cheaper you have to redefine
the problem.  The Model T didn't have all the features previous
cars did.  It only came in black, for example.  But it solved the
problem people cared most about, which was getting from place to
place.
One of the most useful mental habits I know I learned from Michael
Rabin: that the best way to solve a problem is often to redefine
it.  A lot of people use this technique without being consciously
aware of it, but Rabin was spectacularly explicit.  You need a big
prime number?  Those are pretty expensive.  How about if I give you
a big number that only has a 10 to the minus 100 chance of not being
prime?  Would that do?  Well, probably; I mean, that's probably
smaller than the chance that I'm imagining all this anyway.
Redefining the problem is a particularly juicy heuristic when you
have competitors, because it's so hard for rigid-minded people to
follow.  You can work in plain sight and they don't realize the
danger.  Don't worry about us. We're just working on search.  Do
one thing and do it well, that's our motto.
Making things cheaper is actually a subset of a more general
technique: making things easier.  For a long time it was most of
making things easier, but now that the things we build are so
complicated, there's another rapidly growing subset: making things
easier to
use
.
This is an area where there's great room for improvement.  What you
want to be able to say about technology is: it just works.  How
often do you say that now?
Simplicity takes effort-- genius, even.  The average programmer
seems to produce UI designs that are almost willfully bad. I was
trying to use the stove at my mother's house a couple weeks ago.
It was a new one, and instead of physical knobs it had buttons and
an LED display.  I tried pressing some buttons I thought would cause
it to get hot, and you know what it said?  "Err."  Not even "Error."
"Err."  You can't just say "Err" to the user of a
stove
.
You should design the UI so that errors are impossible.  And the
boneheads who designed this stove even had an example of such a UI
to work from: the old one.  You turn one knob to set the temperature
and another to set the timer.  What was wrong with that?  It just
worked.
It seems that, for the average engineer, more options just means
more rope to hang yourself.  So if you want to start a startup, you
can take almost any existing technology produced by a big company,
and assume you could build something way easier to use.
Design for Exit
Success for a startup approximately equals getting bought.  You
need some kind of exit strategy, because you can't get the smartest
people to work for you without giving them options likely to be
worth something.  Which means you either have to get bought or go
public, and the number of startups that go public is very small.
If success probably means getting bought, should you make that a
conscious goal?  The old answer was no: you were supposed to pretend
that you wanted to create a giant, public company, and act surprised
when someone made you an offer.  Really, you want to buy us? Well,
I suppose we'd consider it, for the right price.
I think things are changing.  If 98% of the time success means
getting bought, why not be open about it?  If 98% of the time you're
doing product development on spec for some big company, why not
think of that as your task?  One advantage of this approach is that
it gives you another source of ideas: look at big companies, think
what they
should
be doing, and do it yourself.  Even if
they already know it, you'll probably be done faster.
Just be sure to make something multiple acquirers will want.  Don't
fix Windows, because the only potential acquirer is Microsoft, and
when there's only one acquirer, they don't have to hurry.  They can
take their time and copy you instead of buying you.  If you want
to get market price, work on something where there's competition.
If an increasing number of startups are created to do product
development on spec, it will be a natural counterweight to monopolies.
Once some type of technology is captured by a monopoly, it will
only evolve at big company rates instead of startup rates, whereas
alternatives will evolve with especial speed.  A free market
interprets monopoly as damage and routes around it.
The Woz Route
The most productive way to generate startup ideas is also the
most unlikely-sounding: by accident.  If you look at how famous
startups got started, a lot of them weren't initially supposed to
be startups.  Lotus began with a program Mitch Kapor wrote for a
friend. Apple got started because Steve Wozniak wanted to build
microcomputers, and his employer, Hewlett-Packard, wouldn't let him
do it at work.  Yahoo began as David Filo's personal collection of
links.
This is not the only way to start startups.  You can sit down and
consciously come up with an idea for a company; we did.  But measured
in total market cap, the build-stuff-for-yourself model might be
more fruitful.  It certainly has to be the most fun way to come up
with startup ideas.  And since a startup ought to have multiple
founders who were already friends before they decided to start a
company, the rather surprising conclusion is that the best way to
generate startup ideas is to do what hackers do for fun: cook up
amusing hacks with your friends.
It seems like it violates some kind of conservation law, but there
it is: the best way to get a "million dollar idea" is just to do
what hackers enjoy doing anyway.
Notes
[
1
]
This phenomenon may account for a number of discrepancies
currently blamed on various forbidden isms.  Never attribute to
malice what can be explained by math.
[
2
]
A lot of classic abstract expressionism is doodling of this type:
artists trained to paint from life using the same gestures but
without using them to represent anything.  This explains why such
paintings are (slightly) more interesting than random marks would be.
[
3
]
Bill Yerazunis had solved the problem, but he got there by
another path.  He made a general-purpose file classifier so good
that it also worked for spam.
One Specific Idea
Romanian Translation
Japanese Translation
Traditional Chinese Translation
Russian Translation
Arabic Translation


@collinjpham I keep shelves of them.

@_mikeVSG 100% physical books.

Skunk Works, My Family and Other Animals, A Mathematician's Apology, Surely You're Joking Mr. Feynman, Austen's novels, The Quest for El Cid, Wing Leader, A Time of Gifts, The Conquest of Gaul, Medieval Technology and Social Change, Franklin's Autobiography.

You'd think that figuring out which books are the best would be a solved problem by now, but it isn't. I'm almost 60 and have been reading a lot my whole life, and I'm still constantly searching for the good books.

Someone who tries to read but doesn't understand about the need to search will end up reading bad books, and will wonder why people who read a lot like to do something so boring.

Something I taught 12 yo: There's a second component of reading that many people don't realize exists: searching for the good books. There are a huge number of books and only a small percentage of them are really good, so reading means searching.

@growing_daniel Trump doesn't get clowned on. He gets "take him seriously but not literally."

@JoeBiden You're not the nominee of the Democratic party. That's what the convention is for, to nominate the party's candidate for president.

@catalinmpit FAANG narrows it down to five. Can anyone say confidently which this sounds like?

This is a dramatic change, and not the kind of change that people who voted for Brexit were hoping for. https://t.co/U9b1gqq6HY


@robinhanson Why do you think they got rid of them?

@ptrschmdtnlsn That was the first AI-generated art that tricked me into thinking it was by a human. At the time. Now it seems obviously AI.

Jessica and our 13 yo son went away on a trip. The way the house felt when they returned is the argument for getting married and having kids. It was like the house came to life again.

@andrewoetting @StatisticUrban The slope of the revenue graph.

@StatisticUrban Music was a growth industry till about 1995 and movies till about 2002. The things made in a growth industry are usually better. Once growth stops, people get conservative.

@McFaul On the other hand, the more time he spends thinking about this, the less time he has to think about more dangerous things.

@lreyzin The markets are still hoping Trump will roll back the tariffs when it becomes clear what a disaster they are.

@lreyzin The effects are delayed by the time it takes for goods to get from their makers to their buyers. But then there are domino effects.

@garrytan Some policies do more than prevent harms. The space program for example. It would be interesting to study how to do that kind right. I bet there turn out to be all kinds of subtle limitations.

Mr. Fine?


@synopsi Still there on desktop. https://t.co/fjaenax36j

@CollinRugg Prediction: He will not move his money.

@garrytan With mobs you seem to get more pushback if you apologize (or even seem to) than if you don't. If they sense weakness, it makes them more aggressive.

@engineers_feed At first glance I thought it was a pencil sharpener.

@CoderNolimit I didn't invent Lisp. I wish. But that was John McCarthy.

@fmp_rosie @amasad I don't know, I didn't go into Burger King.

@davidduwaer @santiviquez Very much so.

@amasad They explain this in Pulp Fiction.

@asymmetricinfo You changed my mind somewhat.

12 yo is imagining a dystopian English village. It has a King's Head Pub, but the king is Charles I, so it's just the head.


The Trouble with the Segway
July 2009
The Segway hasn't delivered on its initial promise, to put it mildly.
There are several reasons why, but one is that people don't want
to be seen riding them. Someone riding a Segway looks like a dork.
My friend Trevor Blackwell built
his own Segway
,
which we called
the Segwell. He also built a one-wheeled version,
the Eunicycle
,
which looks exactly like a regular unicycle till you realize the
rider isn't pedaling.  He has ridden them both to downtown Mountain
View to get coffee.  When he rides the Eunicycle, people smile at
him.  But when he rides the Segwell, they shout abuse from their
cars: "Too lazy to walk, ya fuckin homo?"
Why do Segways provoke this reaction?  The reason you look like a
dork riding a Segway is that you look
smug
.  You don't seem to
be working hard enough.
Someone riding a motorcycle isn't working any harder. But because
he's sitting astride it, he seems to be making an effort.  When
you're riding a Segway you're just standing there.  And someone who's
being whisked along while seeming to do no work — someone in a sedan
chair, for example — can't help but look smug.
Try this thought experiment and it becomes clear: imagine something
that worked like the Segway, but that you rode with one foot in
front of the other, like a skateboard.  That wouldn't seem nearly
as uncool.
So there may be a way to capture more of the market Segway hoped
to reach: make a version that doesn't look so easy for the rider.
It would also be helpful if the styling was in the tradition of
skateboards or bicycles rather than medical devices.
Curiously enough, what got Segway into this problem was that the
company was itself a kind of Segway.  It was too easy for them;
they were too successful raising money.  If they'd had to grow the
company gradually, by iterating through several versions they sold
to real users, they'd have learned pretty quickly that people looked
stupid riding them. Instead they had enough to work in secret.  They
had focus groups aplenty, I'm sure, but they didn't have the people
yelling insults out of cars.  So they never realized they were
zooming confidently down a blind alley.


@robinhanson Me too.

@DeltaMike_6 If that's what you already have too many of.

@glaksmono I realize this is a circular explanation, but at least the radius is a bit smaller. And explaining what I mean by interesting would take an essay. Which might actually be a good essay to write...

@fkasummer Energy.

@glaksmono @robertskmiles @AlecStapp @waitbutwhy @skdh @robinhanson @amasad @cremieuxrecueil @bscholl @tylercowen @MaxCRoser @ahistoryinart @DKThomp @levie @ryangrim @scienceisstrat1 @CuriosMuseum They show or tell me things that are true, interesting, and novel.

A thread of accounts I've found most interesting: @robertskmiles @AlecStapp @waitbutwhy @skdh @robinhanson @amasad @cremieuxrecueil @bscholl @tylercowen @MaxCRoser @ahistoryinart @DKThomp @levie @ryangrim @scienceisstrat1 @CuriosMuseum

Christmas present buying tip: You can't go wrong by buying someone another of something they already have too many of. Anyone who already has 30 snow globes will presumably appreciate another.

@amasad Sounds like the Turbo button on 1990s tower computers.

In the Q&A at a recent YC event, someone in the audience asked how I'd known AI would be a big deal. I told them it was because I noticed that the people most surprised by its progress were the *insiders*.

@sentientist Do you know anyone who's tried it? If so was it a good or bad idea?


By the way, in case anyone thought this Lego was mine, it all belongs to our younger son. Lego is almost all he's wanted for birthdays and Christmases since he was about 4, and now it has colonized most of our house.

@ESYudkowsky @ArmandDoma Sales are down dramatically in Europe, but I don't think it's because Europeans care how much he did or didn't trim off the US budget.

@dacc_maxi @jarvis_best This sort of thing always sounds dystopian and then it turns out that it can change the lives of people with some kind of medical problem.

@mfi82 There's lots of Christmas Lego, yes.

@synopsi I see a lot of books I recognize too.

@signulll By the trade goods test, every few decades we're infinitely richer. https://t.co/K65ynG7ZPc

@Clausnitzercan Mostly because that was the country the student asked me about. But the UK is a good candidate for the Silicon Valley of Europe. (Sweden would also be good, but it's just so small.)

@RichBruner It literally says "Crimea is Ukraine" and it's by a Trump official, after the end of the Obama administration.

@jarvis_best If you used that trick on Trump's base, it would just make them more loyal.

Norway is already capitalizing on this recruiting advantage. https://t.co/L7oEeElb9Q


@eyeslasho Sweden's capital gains tax rate is also lower than California's.

https://t.co/xbWtTR60dH

@ESYudkowsky @Miles_Brundage They're in Hay on Wye.

@lefineder Is there any DNA trace of this remaining?

@stuartbates @mundanemun @waitbutwhy That statistic is even scarier when you're a parent. You've used up 93% of your kid time.

@Marwood_PostLib True, it may be at most a few percent, but I think about that few percent a lot. Those are usually the people I'm writing for.

@multasapientia Yes. Thank God.

@shantsarcsam The left cried a great deal about Germany.

@mundanemun Yes, good point. I wish I'd spent more time with my parents, and now it's too late.

@Marwood_PostLib Depends on their work. No one wishes they had spent more time on their random corporate job, but someone who might have been good at something important if they'd tried harder might wish they'd tried harder.

No one ever, when they're old, wishes they hadn't spent so much time with their kids.


@Anishsbharadwaj @debracleaver @NooraHealth Thanks. It's from "The Origins of Wokeness" (https://t.co/jvOj5Ayr3x).

@pitdesi @Noahpinion @NAChristakis @billybinion @sapinker @nntaleb @glukianoff @McCormickProf @mattyglesias @ATabarrok @cremieuxrecueil @GarettJones @nikitabier @jessesingal @AlecStapp @DKThomp @reason @tylercowen @clairlemon Yes, I just didn't have room for everyone.

@burningion Many books have been written about that.

@RyanPMoser @waitbutwhy Yes. Sorry I omitted you Tim.

@debracleaver An aggressively performative focus on social justice.

Please donate the dollar to @NooraHealth.

@AntiToxicPeople He could be self-aware and also aware that his base has an infinite appetite for lies.

@stylewarning Basic.

@GebrochenBuck @Noahpinion @NAChristakis @billybinion @sapinker @nntaleb @glukianoff @McCormickProf @mattyglesias @ATabarrok @cremieuxrecueil @GarettJones @nikitabier @jessesingal @AlecStapp @DKThomp Do you frequent them often?

@TerminusEst24 @Noahpinion @NAChristakis @billybinion @sapinker @nntaleb @glukianoff @McCormickProf @mattyglesias @ATabarrok @cremieuxrecueil @GarettJones @nikitabier @jessesingal @AlecStapp @DKThomp I noticed that and thought the same thing.

@PerryALPHA You don't say.


Bradley's Ghost
November 2004
A lot of people are writing now about
why Kerry lost.  Here I want to
examine a more specific question: why were the exit polls so
wrong?
In Ohio, which Kerry ultimately
lost 49-51, exit polls gave him a 52-48 victory.  And this wasn't just
random error.  In every swing state they overestimated the Kerry vote.
In Florida, which Bush ultimately won 52-47, exit polls predicted
a dead heat.
(These are not early numbers. They're from about midnight eastern time,
long after polls closed in Ohio and Florida.  And yet by the
next afternoon the exit poll numbers online corresponded to the returns.
The only way I can imagine this happening is if those in
charge of the exit polls cooked the books after seeing the actual
returns.  But that's another issue.)
What happened?  The source of the problem may be a variant of
the Bradley Effect.
This term
was invented after Tom Bradley, the black mayor of Los Angeles,
lost an election for governor of California despite a comfortable
lead in the polls.  Apparently voters were afraid to say
they planned to vote against him, lest their motives be
(perhaps correctly) suspected.
It seems likely that something similar happened in exit polls this year.
In theory, exit polls ought to be very accurate.
You're not asking people what they would do.  You're
asking what they just did.
How can you get errors asking that?  Because some people don't
respond.  To get a truly random sample, pollsters ask, say, every
20th person leaving the polling place who they voted for.  But not
everyone wants to answer.  And the pollsters can't simply ignore
those who won't, or their sample isn't random anymore.  So what
they do, apparently, is note down the age and race and sex of the
person, and guess from that who they voted for.
This works so long as there is no
correlation
between who people
vote for and whether they're willing to talk about it.  But this
year there may have been.  It may be that a significant number of
those who voted for
Bush didn't want to say so.
Why not?  Because people in the US are more conservative than they're
willing to admit.  The values of the elite in this country, at least
at the moment, are NPR values.  The average person, as I think both
Republicans and Democrats would agree, is more socially conservative.
But while some openly flaunt the fact that they don't share the
opinions of the elite, others feel a little nervous about it, as
if they had bad table manners.
For example, according to current NPR values, you
can't say
anything that might be
perceived as disparaging towards homosexuals.  To do
so is "homophobic."  And yet a large number of Americans are deeply
religious, and the Bible is quite explicit on the subject of
homosexuality.  What are they to do?  I think what many do is keep
their opinions, but keep them to themselves.
They know what they believe, but they also know what they're supposed
to believe.
And so when a stranger (for example, a pollster) asks
them their opinion about something like gay marriage, they will not
always say what they really think.
When the values of the elite are liberal, polls will tend to
underestimate the conservativeness of ordinary voters.  This seems
to me the leading theory to explain why the exit polls were so
far off this year.  NPR values
said one ought to vote for Kerry.  So all the people who voted for
Kerry felt virtuous for doing so, and were eager to tell pollsters
they had. No one who voted for Kerry did it as an act of quiet
defiance.
Support for a Woman President
Japanese Translation
If you liked this, you may also like
Hackers & Painters
.


@pitdesi Prediction: this will not end well.

@samdaceo Give %.

I was going to make this into a nicely phrased point about venture debt, but I decided to just give you a screenshot of the DM I sent to a YC founder yesterday. https://t.co/KxZ1lP4DwR

@MatthewStadlen Are you?

@adamveroni Yes, many people do.

@sweatystartup I bet there are a lot of things no one talks about at happy hours in Athens, GA.

@michael_nielsen When I was a junior in college I tried to estimate how many good books there were. I'm sure my estimate was low, but it was obviously way more than I could ever read. So I decided to start with the fun ones.

I was sent stats for the YC board meeting tomorrow. The second number is the fraction of companies with no revenue when YC funded them. High is good because it means we're investing early. If this doesn't convince you that you don't have to wait to apply, I don't know what will.

@Niklas_Sikorra @JonErlichman By using a grammar for example.

@jessegenet YC has been selecting founders this way since the beginning. I've been saying controversial things in essays since before we started YC. Anyone who was sufficiently offended by them didn't apply. YC's returns show how little that mattered.


@Noahpinion Bots can't show up at a parade.

@BarthOmondi @elonmusk He does care about the truth.

Spanish anesthesiologist Dr. Raul Xario describes the situation in Gaza.

"Civilians being mutilated by the Israeli army on a daily basis, constantly, one after another."

@elonmusk Vance Boelter's close friend David Carlson said that Boelter was a conservative and had voted for Trump. https://t.co/V2XNwk0msh

@elonmusk The NY Post says he registered as a Republican in 2022. Possibly what they mean is that he chose to vote in the Republican primary, since in MN you choose a primary to vote in rather than registering as a member of a party. But I'm going to delete this till we know more.

@CarlSian @elonmusk Ok, here you go:

"Despite serving under Democratic governors, Boelter last registered to vote in 2022 as a Republican, according to the New York Post."

https://t.co/IVTFUZQuOE

@Conservative_X1 @elonmusk "Despite serving under Democratic governors, Boelter last registered to vote in 2022 as a Republican, according to the New York Post."

https://t.co/IVTFUZR2Ec

@andrewlayman He was better.

@artee_49 @k_ovfefe2 Nothing like to the extent that map is red. The difference in the popular vote was 1.6%. Trump didn't even get half the popular vote.

@k_ovfefe2 I don't usually like this meme, but: Tell me you don't understand the concept of population density without telling me you don't understand the concept of population density.


@sfmcguire79 I don't think it's fair to mock the students in this case. Considering how strictly some universities have started to punish students who support the Palestinians, it's reasonable for them to worry that the administration will find a way to do something bad to them.

This is good. They've investigated what happened and they're taking measures to prevent it from happening again.

https://t.co/RN3XoNHV8t

@nitingupta2 If my kids had no food and I had a phone, this is exactly what I'd be doing, trying to get the story out to the rest of the world in the hope they'd save us.

@Benjami89700129 Allowed? Deliberately starving civilians is universally regarded as a war crime.

@mich___l So why do you say it's hard to "imagine believing this actually happened?" Surely it's not hard to believe, if you know that no food has been allowed in for 74 days.

@mich___l Do you understand that the Israeli government has been preventing any food or medicine from entering Gaza since March 2?

You do at least acknowledge that, right?

@mich___l Why do you find it difficult to believe, Michael? Does it seem implausible to you that people would have been without food for 10 days when no food has been allowed in for over 70?

Imagine not having had any food to give your kids for 10 days.

Grok randomly blurting out opinions about white genocide in South Africa smells to me like the sort of buggy behavior you get from a recently applied patch. I sure hope it isn't. It would be really bad if widely used AIs got editorialized on the fly by those who controlled them.

@_sanjeev_verma @garrytan That is a common phenomenon in California.


Being good (in either sense) will bring you what seems like good luck, but isn't as random as it seems. People will talk about you behind your back, just as they do if you're bad, but instead of secretly harming you, they'll secretly help you.

@coinresearcher2 There was, they just didn't call it that.

@willnitze If so I would not bet on that trend.

The reason there are more smart kids is easy to see if you live in a coastal city: immigration, especially from China and India. These smart kids will make it harder for admissions officers to maintain their de facto rule of reflecting the overall population.

Colleges that weren't hard to get into when I was in HS are hard to get into now. The population has increased by 43%, but competition for elite colleges seems to have increased more. I think the reason is that there are more smart kids. If so that's fortunate for America.

@Will_Bunch Anti-nuclear protestors gave us climate change.

@kendrictonn Sort of. I think Duolingo is optimized to be a sort of game, and that people who are serious about learning a language self-select into other apps.

@erikbryn @bryan_caplan There's no such thing as *the* dictionary definition. There are many dictionaries. In the median case editorial decisions are made by 27 yo Middlebury grads. For a word like this, especially, many will give a meaning that doesn't reflect actual usage.

@TruthBomb_EV While you don't have to know about finance, it's definitely not just a relationship business. What you have to know about is what good founders look like, what kind of products succeed, and how to build them.

@stevo_marky That's not a new trend. They've been wanting to since the Internet Bubble in the late 90s.