Andreessen vs. Thiel (2017)
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allenleein.github.io
“If your product requires advertising or salespeople to sell it, it’s not good enough” and “Technology is primarily about product development, not distribution" appear in Zero to One as the wrong lessons from the dotcom crash. Thiel is saying this to establish what he doesn't believe. In fact, that entire chapter is dedicated to convincing techies that sales and advertising do matter.
Having just a great product will get you so far, but won't break through into the big leagues. Having only sales and marketing but a shit product will get you a flash in the pan.
Also not sure if Thiel has changed his mind since then. Judging by recent interviews (e.g. with Eric Weinstein), he hasn't.
He gives out a mental model to think how much sales is important for your company, and how much you should invest in it. On a scale from tiktok (viral) to Palantir, you have to increase your sales spendings.
He talks how advertising was important for PayPal (by giving some money(sales spending) for referring).
And he talks why small/medium sized businesses don't use softwares for day-to-day tasks. Because they lie (in his words) a dead zone of sales, the 1000$ per product.
Coca-Cola have a field sales team, selling into convenience stores and gas stations and making sure the shelves are full, but that's dwarfed by their enormous marketing budget. It doesn't make sense to have someone making cold calls or doing door to door sales for a $2 bottle of coke.
Oracle has a marketing team, and they sponsor certain things to get visibility in the public eye, but almost all of their spend goes into a large team of salespeople. No Facebook ad, or coupon in the mailbox is going to convince a CIO to spend $5m on a new database solution.
Precisely. It seems rather vacuous to claim something as more necessary than something else. Either something is or is not a necessity.
https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
Read that page a moment and I think you might realize degrees of need isn't such a vacuous idea.
That is a proposal for a dependency graph of needs. It is explicit in the name: hierarchy.
So no, that theory is not measuring a degree of needs.
That was my fault. Thank you for pointing out the mistake. Im working on it :)
The right time often refers to available technology. Andreessen often reference Newton and iPhone to convey what he means by “the right timing”
Article quotes Thiel out of context (NEGATION), exactly reversing (NEGATION) his intended meaning (this is the cost of saying unpopular (NEGATION) things, I guess). “If your product requires advertising or salespeople to sell it, it’s not good enough (NEGATION)” and “Technology is primarily about product development, not distribution (NEGATION)" appear in Zero to One as the wrong (NEGATION) lessons from the dotcom crash. Thiel is saying this to establish what he doesn't (NEGATION) believe. In fact, that entire chapter is dedicated to convincing techies that sales and advertising do matter (implied NEGATION).
With all due respect, and maybe it's a lack of coffee, but I haven't got a clue what you're trying to say.
I think it was lack of coffee for me too, I guess (and please allow me to hide behind English, as it isn't my first language). Also, some of those negations are part of the original quotes, it would feel wrong to edit them, for me.
I'd edit the original comment but it feels wrong now that there are child comments.
I'll try to do better in the future.
Aside from the points mentioned in the comments above, I didn't quite get this point: 'The misunderstood dogma here is to have no definite plan, work in incremental iterations to find out what’s most valuable to customers today(Lean Startup Methodology).'
Having no plan is the opposite of the Lean Methodology. The approach is literally built on the notion of having a business model that contains a set of hypotheses, which you then test, and iterate accordingly. In lean, a pivot is defined as replacing a hypothesis in the business model with a new one. E.g. Who you thought your market was.
All in all, format is interesting but the author doesn't seem particularly knowledgeable in this field. Looking forward to an updated version though.
Your comment stems from a fundamental misconception of what Khosla means.
When Khosla says that, he's specifically referring to tight iteration loops (which implies the existence and importance of plans).
You believe in your hypothesis such that you're willing to try things others deem foolish, however, you're not so dogmatic that you become unable to change in the face of newly presented evidence.
So while you shouldn't be so petrified or overwhelmed you dare not put a stake in the ground (strong opinions), you should simultaneously be very comfortable with changing your mind (weakly held).
Far too many companies do product development without much of a plan at all and just do whatever the loudest customers are complaining about, some trends in the industry, fickle management ideas, or a similar bug-driven approach even before it's fully mature.
As a result, people don't do their homework and then complain that certain methodologies are fundamentally broken. [1]
The mathematical equivalent would be to say that the integers are closed under division because you checked both 8/2 and -10/5.
[1] Not to mention all the straw-manning that's going on. Entrepreneurial science is a mess tbh.
These perspectives were put forward when SaaS was really taking off and software hadn't quite eaten the world yet. The world has change a lot since then. Creating a new software product has never been easier than it is today. That should mean that competition is at its fiercest but we're also seeing a massive consolidation of markets and big winners with no apparent rivals.
I think Thiel's focus on defensibility is becoming more and more important for early-stage startups. Why bother proving out market demand if one of the big players snaps up the opportunity from under your feet. Executing well and moving quickly used to be good ways to defend against this happening but I think the established incumbents are not the slow lumbering giants they once were. They are now the software companies that won the market ten years ago. Maybe our strategies need to change to take this into account.
Big, incumbent non-SW company (Kodak example) being challenged by start-up to Big, software incumbent (Salesforce) with massive developer resources being challenged by start-up.
Maybe the strategies need to change - perhaps increasingly partnering with the software incumbents (if you can't beat 'em, join 'em).. Maybe someone can add some insight..?
This gives cloud based software companies are huge advantage, and opens all kinds of opportunities for companies developing or working with the interfaces between these cloud solutions and involved parties.
My impression is that all the platform start-ups, unless they have competencies in integration of different tools and managing the corresponding processes, are basically dead in the water once VC money is drying up. When we talk about B2B solutions, I don't see any FB-like monopoly. So if start-ups are pushing for that, they gona loose against the big incumbents on the software side and against more operations oriented companies on the integration and process side.
I might be completely wrong with that, so.
Google got big because they embraced the web early on and put themselves in the position of the anti-Microsoft. Microsoft got big because they embraced software abstractions early on, in the form of compilers, multiplatform office software and later on operating systems, and they were the anti-IBM. IBM got big because...
Until we come up with the next big paradigm shift, the incumbents will just keep on copying startups, or buying them up.
I think that he agrees on Andreessen about the importance of timing, but he doesn’t consider timing alone a recipe for a successful business.
Also Thiel seems more focused on technology as a whole, rather than the software-centric position adopted by Andreessen.
I think that both views have pros and cons, and that we would benefit from trying to find the greatest common denominator between the two approaches—instead of discarding that or this view.
PS: I read and enjoyed Zero to One, and I’d like to learn more about Andreessen views. If anyone has any suggestion...
1. Peter Thiel strongly values timing. This is not incompatible with the idea of creating your own market.
2. Thiel argues strongly against the ideas that a good invention sells itself. He emphasizes, to the point of contrarianism, that sales is underrated.
3. Thiel believes that competing on quality and price only is a sucker's game, competition. To get monopoly (the goal), you need to do something fundamentally different than anyone else (in kind, not in efficiency). The exception is if you do something 10x better than anyone else, it rolls back around to constituting a difference in kind.
https://www.youtube.com/watch?v=PUhtHojSphk
In particular there is a moment where Thiel questions whether Silicon Valley will be able to save western civilization the way California saved a lot of down and out people during the depression era disapora: https://youtu.be/PUhtHojSphk?t=1682
In the coming economic, biological and climate crisis I guess we'll see how it fares.
I think the article is not accurate or maybe the author didn't include Thiel's opinion on timing for the sake argument.
Also in my experience by the time Twitter started, lots of people - especially techie people that would have been early adopters - had unlimited texting plans.
They definitely didn't have unlimited data plans by the time Twitter was web-centric.
Does anyone know of any VCs who might be considered advocates for social justice?
we can’t just magic wand our way to a cure/vaccine, so i’m genuinely curious what else we can do...
One of the major reasons we've failed at tackling climate change to date is that we've been treating it as a political, economic, or ultimately moral problem and trying to solve it by moralizing.
I call this approach "abstinence based environmentalism," making a direct analogy to abstinence based sex-ed. It works about as well. Trying to shame people into using less energy or pursuing less economic activity is going to be about as successful as shaming teens into not having sex.
If we try to push abstinence based environmentalism really really hard by legislating it and trying to force people to down-size, we'll get a populist counter-reaction and we'll see the election of explicitly anti-environmentalist candidates. That's worse than nothing. That's going backward. We've already seen some of this.
We've been approaching environmental problems as moral and political issues for decades and what do we have to show for it?
https://www.sciencealert.com/images/2019-05/processed/017-ca...
Total, absolute failure.
To stop CO2 and methane emissions, replace fossil fuels. To stop STDs and unwanted pregnancies, give teens contraceptive pills and rubbers.
I don't disagree. It's in part a framing issue. For decades the message has been "you should feel guilty for wanting things, and to save the world everyone needs to de-industrialize and return to the lifestyle of a medieval peasant." (I'm exaggerating just a little bit, but not much.)
The mainstream response has been similar to how people respond to other moral shaming campaigns: pretend to play along and engage in a lot of token signaling gestures (like banning plastic straws or recycled disposable cups) but otherwise ignore it. Actual behavior does not change, but you get this gloss of fake ineffective feel-good junk.
The developing world's response has been a bit more pointed: "fuck you, we're poor." They're not going to listen to a bunch of rich westerners tell them they need to stay poor to save the planet.
Second your examples of gates and musk are actually examples of the general failure of governments and markets to use existing technologies. Nuclear power, Hydro electric, ocean power, traditional solar ; all of these are existing technologies that dont need innovation what they need is the economic and social Will to construct. Musks EVs ; very expensive direct replacements for existing vehicles to me indicates something very wrong in the approach to solving climate change.
The problem is one of Coordination. The sclerosis of western society and our focus on individual incentive prevents anything but the most marginal of improvements.
A great example can be seen here in Ontario. Here the government subsidized private individuals to put up their own solar on their homes. Electric prices soared. The result is basically a wealth transfer from poor to rich with very little gained. Again there is some similarity here to the Tesla EV. Not that solar makes much sense in Canada but i am sure the government could have done much better to have run this project itself.