An Open Challenge to Silicon Valley | Hacker News Reader

An Open Challenge to Silicon Valley

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35 pointsbosshog47 comments

>rebuilding a flawed, false global economy: one which actively transfers wealth from the poor to the rich, from the sick to the healthy

This is self-righteous 'leftist' moralizing of the worst kind.

The global economy is not flawed. It is the way it is. Human interests, interaction, history and habits are stronger than any amateur Marxist can imagine.

You think world is unfair? Probably. However, the pathetic attempts to seek high moral ground are futile. You have seen how One Laptop Per Child faired in real life. You should also remember that there are tons and tons of used computer equipment and especially mobile phones imported into Africa and other poor countries every day. This used equipment is imported for money and put to use immediately. Some of this technology is affecting how farmers in distant African villages are managing their harvest sales, for example.

This is globalisation. It may sound humiliating (used clothes, used phones etc) but it is wonderful, vibrant, living global economic organism which will show some interesting emergent qualities in our lifetime. Who would imagine South East Asia growing the way it does today?

You may see some surprises from Africa too. And no, it would be not because some guilt-ridden guy has shown us, the masses, what to do. Some of the worst damage to third world economies are done by Western donors.

So, basically, my advice to the author: stop preaching the need to change this cruel world and go make something that people want to buy.

I am a libertarian capitalist, and I agree there has been a government-inspired (Fed-inspired, really) transfer of wealth from the poor to the rich.

Let's say you are a smart hacker and I offer you this "deal": you put in $15K, I will lend you $150-300K at very low interest rates, which you can invest as you see fit. The gains (minus the low interest paid) are yours, and in the meantime you can also charge me reasonable expenses. If you fail, you get to walk away, with no personal liability. Will you take this deal?

That was the deal private equity, hedge funds got from the Fed & the banks (aided and abetted by the Fed). In good years, they took great money home. In bad times, many of them go bust, with no personal consequence to themselves.

End result: societal transfer of wealth, from the poor/middle-class to the wealthy. This is not a consequence of a free market. The original sin is the easy credit, supplied to the financially well-connected.

It is funny how now hedge funds and bankers take all the blame, even though millions of 'common people' speculated recklessly in real estate and picked up up enormous debts without any second thought.

The Fed has tried to avoid post-2000 recession and to stimulate general consumption by keeping low interest rates (and not objecting to the tax cuts). This was obviously politically motivated and not very smart as we now see. It did result in a credit bubble. But to claim that it was done to benefit a few 'well-connected' financiers is populism to my opinion. It was done to avoid discontent among people. To appease the masses, so to say...

Interestingly, it is the capitalists who are suffering now, as their equity is eroded by inflation, weak dollar and the bear stock market. The average Joe just defaults on his debts and walks away from his 3 year old house. His creditors take the loss. So it is actually a wealth transfer from the rich to the poor.

>it is the capitalists who are suffering now

lol

http://money.cnn.com/galleries/2008/fortune/0803/gallery.bea...

1gor, you're douching up this thread.

That's fake money. As Marc Andreesen pointed out, U.S. taxpayers paid the Bear Stearns CEO $60M in cash, directly:

http://blog.pmarca.com/2008/03/congratulations.html

PEACE

Hm... I though 'fake money' had something to do with social network valuations... If so, Marc indeed should know everything about that.

Anyway, I just wanted to say a word in defence of poor hedge fund managers. Some members of this forum will get rich enough to use their services (or become one of them -- like Peter Thiel). Recycling populist cliches about evil bankers and globalisation is soo like... Reddit? ;)

Yeah, the investors (hedge funds, pe) don't have to bear the downside of their investment but they get to keep all the upside. Which gives them an incentive to be really risky with their investments.

The Fed has been hesitant to make them face the downside of their decisions, and that needs to slowly change (without causing a panic/crash)

Now come on, just because some outdated computing hardware is shipped to Africa, everything is peachy?? I agree that "the poor to rich, sick to healthy" is moralist and simplistic, but it doesn't make the opposite true. There are injustices in the world, some of which we probably actively contribute to without being aware of it.

Maybe more transparency would be one thing where web startups could help (ie tracking of goods from production to consumption, giving consumers the choice to consume "fair" goods - and I am aware that "fair" is not always "fair").

Are you sure that the "hardware for Africa" thing is not just a scheme to avoid recycling costs, btw.? (I don't know, just asking).

This is self-righteous libertarian moralizing, though certainly not of the worst kind.

The thing here is that big, immediate and obvious problems are almost never solved in Silicon Valley.

Silicon Valley is good at two things: 1) Solving small problems 2) Solving big, lingering problems that most people don't even realize are problems.

I work for a medical device startup that is hard at work trying to solve big, immediate and obvious problems (heart failure, hypertension) that kill millions of people a year. We're in Atlanta, not SV. Other medical device companies are in Boston, L.A., or even Minneapolis. None of them are in SV. I wonder why.

SV really only does three startup industries well: Software, Computer Hardware, and Green tech. And even the third is pushing it. If you're looking for innovation outside of those three areas, you should look outside of Silicon Valley.

This is a great observation. In regards to point 2, a former coworker put it slightly differently: "I don't think trying to solve a problem is the best way to win big. You want to build something that CREATES problems nobody ever had before."

On the contrary, there are quite a few medical device companies in Silicon Valley -- the other day, I was talking to a VC whose sole focus is on investing in medical devices, and he is located in the Valley for a reason. More broadly, there are also a lot of biotech startups in the Valley.

Food prices are skyrocketing. The financial system is melting down. Energy, of course, is more and more toxic, and costly.

These are the problems we're being challenged to solve? The first two appear to be random fluctuations-- possibly very bad ones, but due largely to speculation and chance. The third is something investors and founders are working on energetically right now.

They are not random fluctuations. Federal Reserve policy had a lot to do with both food prices & the financial system.

Read libertarian economic literature to understand how the US and world economy have been fundamentally warped by the credit bubble unleashed by the Fed - LTCM debacle led to Nasdaq bubble, fighting the Nasdaq bust led to the housing bubble and so on.

Even the start-up flip-it mindset in the valley has roots similar to the housing flip-it mindset everywhere.

"So here's my challenge. If you're a revolutionary, then be one: put your money where your mouth is, and fix a big problem that changes the world for the better - if you really have the courage, the purpose, and the vision, that is."

isn't that essentially saying: "be good"?

He was the original "be good" writer, 2004-2008 B.P (Before Paul)

http://www.google.com/search?hl=en&safe=off&q=site+b...

http://www.bubblegeneration.com/2008/03/edge-principles-frie...

Or, "make something people need."

The problems are clear though: create something that will make the variations you speak of (whatever their causes) rarer, slower and of lower magnitude. We have done it before (http://en.wikipedia.org/wiki/Neolithic_Revolution) and we will do it time and time again, hopefully. The solutions, as usual, are hard to see. But if we do not work on the big problems, the hard problems, do we do valuable work?

"That is, when they're not too busy partying."

Stopped reading there, that is just stupid. So people are supposed to feel guilty because they party now?

My suggestion: stop breathing, that way you can save Co2 output of your country and aid the developing countries who will be the first victims of the climate change.

Sorry that I can't express my anger in a more sophisticated way. I just think contrasting world problems with party pics is an incredibly cheap shot.

He's not that far off the mark. The amount of partying going on in Silicon Valley right now is extreme. There are startup mixer events at least every three days. Last week during "Web 2.0 Expo" there were 2-3 per NIGHT. These aren't wine and cheese and show us your powerpoint type events, either. It is straight up barfing on the sidewalk and the sales team doing coke in the bathroom. The frequency and intensity of these events has been steadily increasing over the past year, in the same manner as they did right before the dot-com bust.

What you're objecting to is a straw man. No one is requesting that you should become a monk. But maybe just a little more energy and resources directed towards global problems might be a more balanced position.

There is even money to be earned in doing so. (The Grameen Bank is a good example. So is Dean Kamen's new distiller.)

See Bjorn Lomborg's Ted Talk on cost/benefit in solving global problems!

http://www.ted.com/index.php/talks/view/id/62

And lastly, as Abbie Hoffman used to say: if someone ever says something to get your goat, they struck gold!

I read the article, but came away with a sense of "go fix big problems" and very little sense of what sort of thing he thinks people ought to be doing besides

> rebuilding a flawed, false global economy: one which actively transfers wealth from the poor to the rich, from the sick to the healthy, from productivity to cronyism.

which, frankly, sounds like a little bit more than I can handle at the moment. It also sounds "hand wavy" - it would help if he specified some details. In terms of actual poor people... it seems to me that the Chinese, for instance, are actually getting a lot wealthier these days. But that's happening due to their own opening up, and global trade, not because of some entrepreneur in SV.

guys,

0) if you want responses from me, it would help if you commented where the original post is.

1) these shocks are distinctly not "random fluctuations". they are long-term shifts.

2) what should you be doing? like i said - redress the imbalances these shifts point to. whoever can find a solution to food or water imbalances, for example, is going to be bidding on private islands with larry and sergey.

3) we are very definitely not fixing these problems: the level of cleantech investment is tiny, etc.

4) i appreciate that it's a lot to handle. but aren't you guys supposed to be revolutionaries?

thx to everyone for the comments.

"3) we are very definitely not fixing these problems: the level of cleantech investment is tiny, etc."

KP has $600mil earmarked for green/cleantech. Sequoia has stated numerous times that they are actively looking for green/cleantech (McAdoo used the term "browntech" in his talk at Startup School but no one else seems to know what that means). These two are, admittedly, the top of the VC food chain, and they've been so successful by being ahead of the curve just a wee bit more than the rest of the industry. But, where they go, the rest of the industry will follow.

I think you're underestimating how much people in the valley are thinking about the big problems that they are able to solve--the global economy is a two stage process, involving both government (the largest degree, and something that startups can't have a notable effect on) and business (the big ones that already have clout...startups don't have the power to affect global economic change, though Google and Microsoft do to a degree). But energy is definitely getting attention in the valley. Virtualization is a huge and growing market, partly because it saves tremendously on power requirements in the data center, and lots of money and time is being spent on it. Batteries, boring old batteries, are getting funded.

I think the problem is that you're expecting software and hardware people to move into a completely different field. Sure, some really smart people are working on stuff that might not meet your definition of solving big problems...but if they switch gears to a completely different field (which most of your specified problems are) it'll take years for them to get up to speed on those subjects. Big problems take a lot of research and a lot of knowledge to solve. Most startup guys are not independently wealthy--they need to make their startup pay quickly or they have to go back to their cubicle at MegaCorp and solve even smaller problems and waste away wishing for what could have been.

But, as I mentioned, the money is flowing into energy related startups, and the rate of flow is increasing. Startups will follow the money.

Browntech is energy technology that still has to do with fossil fuels, like clean burning coal or new ways of extracting oil from shale.

http://www.nytimes.com/2007/03/16/technology/16venture.html

The article is addressed to the wrong people. Food and water imbalances are political problems. Energy is a big problem and the fix will be technical but the skillsets of the "Web 2.0" crowd and the petrochemical engineering crowd do not really overlap. Nobody would suggest that NBA players stop doing what they are doing to solve more more important issues.

> redress the imbalances these shifts point to.

To me that sounds like politics, unless you're going to be more specific, or at best economics (distribution of scarce resources). I think many of us are concerned about that kind of thing (and active), but given our own comparative advantages, may feel that it's best to concentrate on what we do best.

> level of cleantech investment is tiny

There are a few guys here with money to invest, but not that many. That's a fair comment, though.

> i appreciate that it's a lot to handle. but aren't you guys supposed to be revolutionaries?

I'm not sure I'd define myself that way - I'm a hacker with a predilection for open source software, and I like to "build stuff". I can't speak for other people. Right now I'm simply hoping to be able to find a niche where I can make a good living for myself making something cool, and my guess is that that probably doesn't include big, world changing ideas. Can't speak for anyone else, but I'd probably look askance at anyone who describes themselves to others as a "revolutionary". Guess I'm at an age where I'm content to leave the world a better place than I found it by doing my part.

fyi, davidw - your open source point is waaay off base. the point of my post was that solving big problems = big $$$, so we should be investing in them.

just my opinion, but cynicism is a great way to never have the imagination to fix these problems.

I could see you not caring for the "hand wavy" or "rant" comments, but my open source line is simply saying it like it is - there's nothing cynical about it. I've spent tons of my own time working on open source software, and while I've gotten a lot out of it and enjoyed it immensely, I don't think that in monetary terms, it adds up to a great deal.

Like many people here, I don't have "big $$$", so that cuts me out of the investing part of the equation.

Let's put it this way: maybe your article makes more sense if specifically directed at people with money to invest. As a hacker, either I have a big green/anti-poverty/etc... idea for people to invest in, or I don't, and as one without such an idea, your article comes across as a bit of a harangue about something I have little control over, having neither the '$$$', nor that kind of idea.

And one final note: there are plenty of practical and noble ideas that could help millions of people that aren't, however, money making ideas. Once again, your article isn't clear (to me at least) on whether that's what people ought to be spending their money on, or if you think that investors can make a buck by investing in this stuff.

Larry Brilliant talks about a web crawler constructed with modest resources that could find evidence of emerging pandemics faster than WHO.

http://www.ted.com/index.php/talks/view/id/58

So there are things that us hackers could do. Another is a Java project for a low cost medical records database usable by hospitals in the 3rd world.

I've churned out a fair amount of open source software over the years. I like it, but it doesn't really pay. I just feel that his article comes off more like a rant than listing problems that need to be solved, and will generate revenue, because in the end, that's got to be part of the equation too, otherwise he should just be hitting up people with money to spend more of it on charities.

Clean water is one area where someone stands to make a lot of money and do a ton of good at the same time.

And as far as money to charities goes, there's money out there. Figuring out the best way to spend it is an ongoing problem.

At the risk of drifting further afield from the topic, isn't the real solution to to scarce water supplies better filtering and water recycling -- in other words, wouldn't there be plenty of water if we just took what went down the drain, filtered it, and piped it back out again?

Feel free to correct me if I have misunderstood the problem.

Doing it at a cost that people can afford is the issue, especially in the third world.

But then it is maybe more efficient to make those people richer than to build cheaper filters. Cheaper filters is just one puzzle piece for getting richer, anyway.

It's a lot easier to make people richer when they have clean water, so they aren't sick from cholera, can safely bathe themselves, and they aren't dehydrated.

Good points, but this sounds a lot like charity work. If that's what he wants, ok, great, but come out and say it clearly.

However:; I think that it's easier to contribute in a big, serious way to charity if you've already made your pile of cash elsewhere.

> However:; I think that it's easier to contribute in a big, serious way to charity if you've already made your pile of cash elsewhere.

That, or if you're really committed, go work for a relief organization in the third world yourself. Sometimes cash isn't as important as people who are willing to get their hands dirty.

Certainly, but I don't think this is what Umair was exhorting people to do. OTOH, I'm not sure exactly what it is that he wants everyone to go do, either.

Startup People are just people like everybody else, though, somehow trying to get by. It is not like most of them are swimming in money, trying to be successful just for fun. So why should they have a special responsibility?

I am not against solving the worlds problems, but I suspect it makes more sense to focus on the problems you also have a chance of solving.

And I buy into the "to create wealth, create value" mantra (or what is it exactly). Anyway, I think if somebody is successful with their startup, they probably have build something that people want, and hence made the world a better place. Even if it is just a game or some stupid network, I think it is still valid and valuable. If the starving people get their first computer, they'll want to have something to play, too.

If the only goal would be survival for everyone (without any prospects of fun), I would probably look into deep freezing technologies.

Finally, I would like the challenging blogger what he himself is doing about those problems?

A good Ted Talk to look at concerning this is Bjorn Lomborg's talk on cost/benefit and global priorities:

http://www.ted.com/index.php/talks/view/id/62

It turns out there's a huge cost/benefit ratio to solving things like access to clean water, malnutrition, and disease. The cost of tackling problems like this is just a fraction of doing things like adopting the Kyoto protocol, and the potential for increasing the economic potential of many countries is very high.

People moaning "I am just a tiny hacker" or "You should be directing this at people with money" are either lacking vision or are just not interested in making the world a better place but prefer chasing the mighty dollar. Which in it itself is fine, but then come out and be honest about it.

There are tons of ways even individual hackers can put their skills to use while solving real world problems. No one is expecting you to solve the problems of world hunger or poverty but bitching "I can't" is a self-fulfilling prophecy.

Have a look at Kiva (kiva.org) for example. They did have a vision and they are doing a pretty damn good job making the world a better place by working on a real-world problem instead of finding a new and "revolutionary" way to figure out what your friends are doing right now.

Gross of the people in the valley are probably to busy liking themselves and praising their good-for-nothing ideas to actually sit down and look at the world in a bit wider perspective.

The world is bigger then the sub-reality that is Silicon Valley.

If only widgets were edible.

Are we really "Dancing on the precipice of economic cataclysm" ?

Yes

Read the last 6 mos of Bubblegeneration for more details

well, for a start have a look here:

www.betterplace.org

and if you like it, register and give me your feedback at jbe (at) betterplace.org

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