After the Gold Rush

I can't speak such a broad generalization, but I noticed a learning curve/ trajectory of how people perceive opportunity online and the ideas they get excited about. It seems to depend when someone truly dove into internet and used it for everyday needs.

I only have anecdotal evidence to this, but I really think that most follow are following the same trajectory/learning curve about opportunity online and people are currently in place across that curve. We still have fewer than half the world online, and billions who are using the internet today the way we used it in 1994.

This is my theory for why old school domainers stopped buying domain names for a premium in 2007, and yet there are still people today paying a ridiculous amount of money for domain names, and thousands more investing in them like it's still a gold rush. That gravy train seemed to dry up in the last decade, yet somehow new people enter the market and fall in love. I bet there are still penny auctions making money and daily deal sites emerging, despite those trends passing years and years ago.

Those on the cutting edge need to remember that they don't reflect the bulk of the world, there is lagging opportunity for at least a decade in every space that seems to be owned.

http://www.inference.vc/deep-learning-is-easy/ https://news.ycombinator.com/item?id=11006067

So OK, we've got tools for the IOT(mbed/arduino, etc). The key question is - how do you protect your product from being rapidly copied by big competitors(or worse, china),when they are using those same tools ?

In web development, we did it by getting tons of users really really fast and using that as a tool. But hardware markets are much slower.

That leaves us having unique, well protect IP(if you want a unicorn). And maybe this can be created by a startups, but a totally different type of startup: Maybe based on long university research. Maybe based of on a group of exceptional multi-disciplinary people with unique skills working together - and not a bunch of kids with an idea.

Seems very ironic, if you remember that time in Asia. (https://en.wikipedia.org/wiki/1997_Asian_financial_crisis)

This sounds like pure denial. You don't want to face a painful truth, so you create a rationalization. But your sentence could be applied to dozens of other maturing industries, and your sentence would be wrong in every case:

In the 1880s: "There are thousands of oil reserves that no one has discovered yet, therefore the field remains wide open to innovators who want to take a risk on a new field."

And yet, after 1880s, the industry consolidated into a single behemoth. Even as late as the early 21st century, wildcatters could still make some money off a hard to reach patch, if prices were high enough. That didn't change the fact that all the big profits were held by a few near monopoly powers.

In the 1880s: "Much of the country can not yet be reached by train, so this industry is wide open to innovators who want to build new lines."

And yet the train industry consolidated after 1880.

1920s: "In automobiles, there are still vast innovations to be made to make brakes reliable, and someone needs to invent an automatic starter, since hand crakes are now dangerous, given the growing size of the engines. And an automatic transmission would be an amazing breakthrough, if anyone can figure out how to do it. The space is wide open for innovators who can solve any of the many problems that remain in the auto industry."

But the auto industry consolidated from that point forward.

In the 1980s: "The CPU is a new idea and the path forward for processors is still wide open to innovation."

And yet, Motorola was founded in 1928, Digital Equipment Corporation in 1957, Intel in 1968 and AMD was founded in 1969. The dominant powers for computer processors started a long time ago, the field consolidated when much was still unknown about the ideal strategy for processors.

There are industries that clearly have not yet emerged as stable entities with a clear path forward. Genetic engineering is an obvious one. But the software industry is clearly much more consolidated than it was in the past.

Why not? Reddit is old...

Woe! :P

Or just copy you.

Even if they are 10-20% worse, they have a bigger, cheaper distribution channel than you which they can stuff their product into.

It looks like a cycle. Come up with new product with a small team, add more employees, add more managers, add more cruft, slow down.

Then a startup comes along, moving faster, innovating faster, disrupting until it grows and starts to add more employees, add more managers, add more cruft, slow down.

And Then a startup comes along ......

I have worked for a bank before coming to Google. The biggest difference, even in the core business, is that people speak up to management and call bullshit out.

Memegen, for all its flaws, wouldn't survive one week in the open in a bank, and the perpetrators would be fired.

There's no middle ground in most of the news I read. Imo, the markets are tightening up forcing companies at all stages to cut their budgets and/or generate revenue.

Tighter markets and harder conditions does not equate to the stagnation of tech. They are not the same. In fact, constraints lead to greater innovation.

Though, all tech has not been made yet - I suspect tech is taking a short time-out right now before the next big disruptions are enabled by:

* VR (cinema, anyone? could even make some 3d printing obsolete)

* order-of-magnitude faster mobile internet

* cheap(er) robotics

* abundant energy supply thanks to fusion or <insert yet unknown source>; also, perhaps break-through battery tech?

* self-driving cars (obvious, but I think that in itself will enable a lot of disruptions, like cheap grocery delivery)

* cheap(er) drones (= flying cars eventually?)

> Move into new fields that have not (yet) gone through this transition. Tech giants may have adapted (somewhat) to the startup threat, but there are other fields — healthcare, for instance — still trying to adjust to last decade’s technology. These will remain fertile ground for some time yet.

However, we know that this is not an easy field for many reasons (regulations, importance, no mistakes allowed, …). There is a reason why this field seems that stale.

This is something that wasn't the case for software, so I guess this is also why this goldrush was so much different than anything else we've seen before.

The current SV business model is "hoover up personal information people don't completely realize they're providing you, then use it to sell them marginally-more-effective ads." That works for "social" websites and taxi companies that aren't taxi companies, but I doubt it will fly for health care.

"In 2011, Y Combinator’s poster-child alumni were — already — AirBNB, Dropbox, and Stripe. Can you think of any Y Combinator companies from the last five years as well-positioned today as those Big Three were then? Maybe Instacart, if their unit economics work. That’s it."

Ssssh, don't give away the secret. ;)

Actually, startups designed to sell to other startups will fail too when the whole thing collapses like a stack of cards...

Enter Mandrill, which recently found its conversion funnel so ineffective that they suddenly shut the entire system down.

I don't think that is true. Less than 50% of humans have regular access to the Internet. Do you really think that more than half the people on the planet do not want to get online?

In the end, the entire macroeconomic background is different.

The answer for Facebook and me, is nothing. If Google disappeared tomorrow, I would be hurting for many services I probably take for granted. I suspect if Facebook disappeared tomorrow, most people's lives would not materially change for the worse. Perhaps they would even change for the better.

Has the US experimented monetary deflation since the half of last year?

I had the same thought - TC is pretty much an eye-roll-and-move-on for me at this point.

However...

> Tell me this: if not into startups, where will the money go to find possible returns? Negative interest rates, oil price can't find the bottom and stocks aren't really going anywhere either. So where will this money go?

I think that the point here isn't that entrepreneurship is suddenly dead, but rather that

> [the big players] have co-opted the same technologies startups used to attack them” and so “until there is another fundamental technology disruption, the window of opportunity for startups is limited to more traditional markets with less competitive players.”

The various *AAS models may be coming to the end of their usefulness as a disruptive media, but there's plenty of "fundamental technology disruption" ahead: mesh networking, crypto-blockchains, embedded, VR, and on and on.

The article provides no clear metric for success, just impressions based on brand success. Things are not so rosy for its darlings as it implies. A price to earnings ratio of 70+ is quite a risk, no matter how sure it seems that such a company becomes a permanent monopoly. I feel that the low (now negative!) interest rates offered by central banks are fueling a huge bubble in the valuation of these companies.