A16z Monthly Newsletter: Good things come in threes | Hacker News Reader

A16z Monthly Newsletter: Good things come in threes

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123 pointstriplesec17 comments

I have had several friends who built businesses in the crypto and finance space in the past 12 months - people are just throwing money at them. Some don't even have a product yet and are getting several million dollar buy out offers...

One in particular is https://taxtoken.io/ which is only a few months old and they've gotten way more investment that I would have thought. Of course, they are easily the best business I've seen in the space - making government & accountants happy.

Even my business: https://projectpiglet.com/

I realeased the first verison of the trading suggestion engine two weeks ago and already people are signing up regularly. Personally, I'm not taking on investment (yet), but even I've had people sending me emails. It's pretty crazy in the space right now.

Honestly, it feels like a pretty big bubble.

One thing that is driving me nuts, is a lot of people in this space are investing based on whitepapers. There's very little research being done, and what is being done is often super faulty. I've spent years on developing and testing my systems, then people come out and don't even do backtesting properly[1] and will raise a ton of money. I often feel VCs are just chasing the times, investing in everyone in the field, and praying. Which would be fine, but it also will bring about the downfall because people will lose faith in the products and / or will lead to much higher and stricter regulation in the field.

This is especially the case of Bio & Fianance where I've spent most of my time.

Also, why is this a mailchimp link? Seems odd.

[1] https://blog.projectpiglet.com/2018/01/perils-of-backtesting...

I'm not as familiar with fintech, but the bio world is pretty different. There is an entire industry within venture focused solely on drug development, and this sector invests ~20% of all venture dollars. The recent entry of tech companies into this space may increase the number of startups and temper valuations (which is good), but many of the companies that tech VCs are funding are quite different than pure play biotechs that are funded by life sci specialists (and that have been generating market leading returns the last 5 years).

More tech investment into bio won't kill the market as that market is supported by fundamental industry trends and specialist investors, but it could lead to bio-IT micro-bubbles

>"I have had several friends who built businesses in the crypto and finance space in the past 12 months..."

I am curious were these folks that came from the finance world? It seems like if you have good connections in finance there's a pretty easy path there from which to raise capital.

The taxtoken is a laughable idea! Made even more suspicious by the fact that the founders are barely out of diapers.

I guess a nice landing page is good enough these days.

But it has blockchain and AI. Blockchain. And. A. I.

> barely out of diapers

This is ageist. Against the young and the very old.

>Honestly, it feels like a pretty big bubble.

You think?

https://i.imgur.com/Lly8RAI.png

Genuine question: What does the chart represent?

I think he's suggesting that there's an asset bubble that goes well beyond crytpocurrencies

The result of printing too much money.

People have been saying this since 2013. Not saying it's not a bubble but holding through the "bubble" and the pop might be more profitable in the long run unless you're an oracle.

> I've spent years on developing and testing my systems, then people come out and don't even do backtesting properly[1] and will raise a ton of money.

Umm. What? Which ICO didn't do backtesting right and raised money? Feels like a weird way to spread ads for your project, that is if you keep it this way.

Nice charts on market sentiment. If not secret, is your business already profitable? Or it's just cool fun project?

Should be profitable this month actually. Just launched the first beta two weeks ago, where people are paying.

Assuming I don't have a >50% drop off rate, I should at least pay for sustaining the infrastructure (which is actually fairly expensive).

Black Box: "The unseeable space between where data goes in and answers come out is often referred to as a “black box” in artificial intelligence, and there’s particular concern about this in health care. But these fears about the implications of a black box are misplaced: AI is no less transparent than the way in which doctors have always worked -- and in many cases it represents an improvement, augmenting what hospitals can do for patients and the entire health care system. After all, the black box in artificial intelligence isn’t a new problem due to new tech: Human intelligence itself is, and always has been, a black box."

From a liability perspective a doctor takes responsibility with a code of ethics and a standard of care in a way that software developers have yet to.

I’m sure I’m just missing something obvious, but what are the threes? The article has five headings, and it doesn’t look like each is a list of three things.

AI discovery in cancer drugs is definitely a good trend as it is halving the time to discover. However, the other four I fear are overblown. Old fintech is no close to being unseated by any startups. Lots of new online banks have gone and went in both US and Europe. The only reason wechat pay took off in China is because the credit cards and payment networks Wasn’t there. Plus its a singular entity mostly owned by the states that have no competition, and Chinese consumers are now concerned a lot about their data. As for crypto, Jason calacanis just sent out an email warning everyone about Bitcoin - That’s the top angel investor in Silicon Valley. As for China, tariffs and fines are now starting to hit China, with US, Europe, japan enacting barriers. China was able to get around some of that by setting up factories in Malaysia, Taiwan and other countries, but Europe and US have enacted tariffs around that. China’s trade is going to suffer greatly. And protectionism is going to be the theme going forward

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