How putting $10M into UBeam illustrates what is wrong with tech investing (2014)
lookatmeimdanny.tumblr.com
lookatmeimdanny.tumblr.com
Then there was this - http://techcrunch.com/2015/04/26/kill-the-cord/#.mdch08:KANb
It turns out it's ridiculously hard to evaluate what can and can't work about an idea just from reading the website you guys.
How likely is it that no investor asked any physicist about this?
One thing that A16Z is not lacking is access to tons of Stanford/Berkeley physics PHDs....
Yes indeed, and neither the OP nor the commenters in this thread have access to it. That's why threads like this degenerate.
That being said, I'd be highly skeptical of the health risks of this technology, especially given the only benefit is convenience.
> She connected me with Andreessen’s due diligence team who were surprisingly open with all the technical analysis they had done.
[0] http://www.bothsidesofthetable.com/2014/10/30/the-audacious-...
> Did the physics actually work? Check
Ok I'm convinced?
> Was it safe? Well … for starters it is just an inaudible soundwave being transferred – as in the kind also used for women during pregnancy. It also happens to be how your car likely tells the distance to objects when you park or if you have a side assist whether you can change lanes safely.
Yeah just like bullets are made of the same metal you use for door knobs. Totally safe!
This is a stupid infeasible idea. One of those things that maybe initially sounds plausible, but when you look at the actual numbers it's off by orders of magnitude.
[1]http://www.eevblog.com/forum/projects/ubeam-ultrasonic-wirel...
The piece aside - which I won't make a commentary on - I wonder whether this is just the right level of snark and intellectual elitism (founded or not) to be consistently popular on HN. Why it's worth dredging up, with apparently no new or novel updates, is beyond me.
It's not bad, it's that this has already been done nine months ago. The linked post isn't updated - in which case I wouldn't have a problem with it - it's just another outlet for HN to vent at the injustices of the VC world.
Bingo—where the primary "injustice" is that they're giving money to others and not to me.
We both know that in a year from now (but no more than three) there will be 10% of the current number of startups, and investing will be much more grounded. It happens every 7-10 years. No need to take shots.
My statement was too glib (I edit most of those out, but you got me this time). I do think that one can't understand discussions like this without understanding implicit resentment. Underneath "others are stupid" lies "my intelligence goes unrecognized"; underneath "others are undeservedly rich" lies "I deserve better"; and so on. The drivers, at bottom, are personal, which explains why the discussions aren't intellectually interesting—they're driven by a different kind of interest. It also explains why people are quick to anger and/or show up with guns blazing: these feelings are already in cache. It also, sadly, explains why such posts invariably get many upvotes.
Actually, the discussion might become interesting again if people would speak openly and personally about such feelings. It's the posture of pseudo-critique that's the problem: the format of substantive discussion without the content. The real content there is the emotional charge in the language.
My point here doesn't have to do with VCs or startups or UBeam but with the quality of discussion we want on HN.
YC has no interest to me as an incubator, but HN has changed the way I look at the world and is directly responsible for my newest venture. I am sure there are many others out there like me.
That's good to hear! One of my dreams for HN is for it to stimulate or at least facilitate more new projects. It feels like so much more is possible.
Underneath "others are stupid" lies "my intelligence goes unrecognized"
Oh, but that's why it's good to check where this is coming from: It is precisely because I know what brilliant minds we have in this industry that I am disappointed. I am blown away by how much smarter others in this industry are than I am -- and that is one of the reasons it stings. Imagine you have a nephew who you know to be a prodigy and, sure enough, he ends up getting his PhD at MIT, and you're so proud of him. Then he tells you his dissertation is called 'Yo' and is 200 pages about sending 'Yo' to your friends, and how he expects will make him rich, rich, rich!
The disappointment stems from the expectation that he can do better.
underneath "others are undeservedly rich" lies "I deserve better"; and so on.
That's a very strange motivation to project on this situation that we're funding foolish endeavours and not funding truly interesting research. [By the way, projecting jealousy is one of the last tools of defence in the box and one of the lowest. It's easy to use, hard to refute and is rarely germane. Please be careful.]
My comments were made because our industry is a ship driven by greed to foolish ends. We are abundant in potential but are squandering it like spoiled grandchildren. Joe Armstrong opened last year's StrangeLoop with "We can do better." I'm sure you've heard Alan Kay's talks since, what, 1997? He's... jealous? I don't think so. He, like many of us, would just like to see progress. But we've made little-to-no progress in the last 35 years.
So when we also see what projects are funded, it's not hard to frustrated. Can you imagine a time when chemistry is exploding and yet it's hard to get funding to do medical research but there is funding, plenty of it, if you want to create better fireworks? Go to a top conference on the most innovative projects and there's not an investor to be found, but stand near someone who just made Angry Birds and you might get a concussion from the stampede.
A much lighter way of hearing what I'm trying to say is this: try to find a TV show called "That Mitchell and Webb Look", Episode 4.1, wherein a chemist who thinks he finds a cure for a disease is told by the owner, M. Ganier, that this is his laboratoire and he demands new ways to make hair silky! I think you'll find it's hysterical and at the same time -- this is how many of us feel.
You're right that you hear emotion, but it's frustration, because it's not that we can't, it's that we don't.
In any case, this is definitely not the ressentiment I was talking about; this is an opposite kind of discussion, one that is thoughtful, not cynically predictable, and opens the conversation further rather than closes it. All of which is just fine for HN.
It's also an example of what I meant by "if people would speak openly and personally about such feelings", and that takes some courage and I admire you for it.
Yes. His sources are a WSJ article and "the loss numbers quoted in UBeam’s patent applications". That's probably not enough information to derive an accurate description of what the company is trying to do, so there's a good chance he's dismissing a straw man.
He claims that this investment took place "without even the slightest sanity check" and that "no one is doing the hour’s worth of basic math". How does he know this? He doesn't; he assumes it. The odds are low that neither A16Z nor anyone else would have asked for a sanity check (Stanford is down the street, after all), so a charitable approach (http://philosophy.lander.edu/oriental/charity.html) would pause to question this assumption. For a nice example of how to think charitably, see https://news.ycombinator.com/item?id=8542253 from the previous thread.
But the ranting language in the article indicates that he doesn't want to be charitable. His purpose is not to investigate wireless power transmission, it's to confirm the angry worldview he recites at the end, complete with vaccines, yogurt enemas, and clueless VCs. Such articles resonate with others with similar angry worldviews. That's the real dynamic of discussions like this. It has nothing to do with physics; physics was just the kindling this time.
Who knows if UBeam will work or will make it to market. If it doesn't, though, this will likely be for some reason other than an obviously stupid mistake that a throng of internet commenters saw through in a few minutes.
Let's not forget that investors like A16Z and others are supposed to invest in things that don't work in the end. If they don't, they're not doing their job, which is to take enough risk to reach the borderline of what's possible. (Let's also not forget how another common complaint is that VCs never invest in anything hard. Internet commenters get to have it both ways.) If they're doing their job well, the likely outcome is still that this investment will fail, because most do. In that case you can expect these sproutlings of dismissal to yield a full harvest of I-told-you-so's—but they'll still likely be wrong, because the due diligence of any VC doing a good job would include precisely the sanity checks and basic math being wielded here. Are they doing their job? I don't know, and neither does any other commenter here, and in such cases it's the Principle of Charity we should all fall back on.
Wishful thinking about the stupidity of others is a dangerous thing to take pleasure in. It stops up the mind, and makes for mediocre Hacker News threads.
We had a teacher in University that proved to us how bees could not fly, making the assumption of laminar flow of course, that is what we use for flying airplanes.
Ever flying over terrain or water at small heights the physics are completely different than general flight (ground effect).
So If a guy is fool and young enough to actually make a prototype(stay foolish, stay hungry) he could discover specific "special cases" that could make this invention useful enough for something.
For example, probably when you put your telephone over a small 1 millimeter distance of the charger you could get some time of resonance and you could increase the frequency, making the amplitude necessary smaller. I don't know, some times our assumptions(generalizations) are just wrong.
Marc Andressen tweeted "Hater News" on that day. But still , noone really knows how this thing works but I assume that VCs aren't going to throw 10 million dollars at somebody without doing atleast some due diligence.
Atleast they got a few PhDs to audit this device and its working. So maybe we don't have the full story on how this works.
Here's a VC saying it works: http://www.quora.com/Is-uBeam-practical/answer/Ben-Parr?srid...
In general your point is correct, there is value to secrecy in some instances. And often people who really know whats going on can laugh at naysayers. But, for example, if someone said they have a perpetual motion machine, and laughed at people who questioned it, the laugh would seem more like delusion than informed confidence.
If uBeam truly had a way of making this work, it would be a Nobel Prize contender.
The credulous VCs are being taken for a ride by a charismatic, possibly naive but possibly purposefully misleading founder.
There is a lot more potential money in building a company.
I was making a serious point which is a phd does not make you an expert in an area outside your area of study. I have a phd and I know I don't have the expertise to judge the physics involved.
This is a dangerous assumption.
VCs often trust founders more than they should, especially when it comes to areas the VCs are not knowledgeable. Add in an idea that would obviously be adopted everywhere, and the allure of a billion dollar idea overrides sanity checks.
While I would agree with the general idea, I do not like the general tone of the post. It is as if this guy knew everything about ultrasound technology. A given idea does not seem to make sense ? Maybe it is just that you don't know enough about it.
Happily concluding that Marc Andreessen, Mark Cuban et al. are just dumb investors pouring their money into impossible products is a bit short sighted.
This article implies they were rather hasty in investing.
Sheesh, who didn't do that?
I react very negatively to this sort of catty writing. I find it obnoxious. I understand that I shouldn't necessarily expect more from something from tumblr. On the other hand, I do like that the calculations were included.
For this technology to actually take off, an industry working group will need to be formed to promote and share it in the same way we have working groups for existing wireless charging techniques.
We already have the Wireless Power Consortium who currently foster the Qi inductive power standard: https://en.wikipedia.org/wiki/Qi_(inductive_power_standard). Same sort of deal.
What good is a new wireless charging technique that doesn't come built into my iPhone or Android phone? If it isn't included in every phone and gadget no one is going to bother with it.
In the process of forming such a working group, some extremely smart people are going to take a very close look at this from both an engineering and business standpoint. If it isn't absolutely rock solid it is going to die.
Until a working group is formed to share this technology with the likes of Samsung, Apple, Sony (major hardware device manufacturers), you can pretty much discount it.
(Which doesn't really contradict the poster's point: that made-up BS >> tawdry physical reality.)
Frankly, I'd prefer not to use any technology that could directly affect one of my most important senses if I don't have to...
So, how many scientists believed that you couldn't get a train to go faster without suffocating the people inside? (and a load of other things)
I am definitely doubtful of UBeam, but for every sayer that is right there are 10 naysayers.
No lessons will be learned, nobody will understand physics more because the things they (re)learned about basic science will be lost behind the veil of "stealth mode" and all of society will be a bit poorer in the end.
It doesn't matter because the money will vaporize, nobody will learn anything and we'll get another useless app that nobody will use (unless they do then they'll be lauded for great execution and their investors will be called visionaries, the pivot from ear shattering charge-tech to chat app will be just a footnote in everybody's success story).
Then the whole thing will be acquired by IBM or something and will disappear into history.
Also, VCs are comp'ed on outcomes. Folks that don't deliver do not last very long.
Money is flowing to people who don't need it and shouldn't have it (Because they don't know what they are doing) based on some weird self-fullfilling prophecies of naive investors (I know what I'm doing I rolled a dice a few times and got lucky) combined with idiots (I'll just burn all this cash and look for new ones or I'll get the most unrealistic valuation possible so I get kicked out of my own company).
Quietly, many corners of HN, people are building and making money by bootstrapping. There is no money to burn here, only due dilligence. There is no bail out or connections, only yourself and your employees. There is no chance to make costly mistakes so you focus on making money today.
But everywhere you look it seems like we've reinvented the value of money. Money that will be made in the distant unknown future seems to be more valuable than money made today.
We are in for some major market correction that's going to evaporate a lot of dreams, jobs, and capital. All so they have a chance at another Uber.
High political and economic stability has brought us to this point. The more uncertain the world is, the more people prefer money today to money tomorrow. But when people have accumulated more wealth than they could concievably spend, and feel safe enough to let it out of their sight, they want to invest. Hence the flood of cheap money. The capital flight from China helps too.
Investors are also still believing that they can win the Apple lottery: buy an underappreciated tech company at the right time then watch it take over the world, and stay there forever.
I don't think we're in for a 'correction' any time soon. Where else are investors going to put their money? Leave it in a bank earning 0%?
Doesn't sound idiotic to me. So far as anyone has been able to prove, humans live only once. And realistically speaking have about 20 years in which to make money that will determine the level of comfort and luxury they will enjoy for the duration of that single life. If at some point in that 20 years one finds oneself in an environment in which "naive investors" are willing to hand out $10m at a throw on the basis of a physically unworkable idea and a pitch deck, I would strongly advise coming up with physically unworkable ideas and pitch decks. Writing articles about how foolish people are to pursue these ideas does not put money in your wallet, even if it's true.
I urge you to rethink your statement with the future of the industry in mind, not just a single bank account.
That said, even if I agreed with you 100% (and you're certainly right in principle), I would not change my view. That's why I noted that humans live only once and have a short time frame to accumulate money. In the fullness of time, yes, this behavior is harmful. But humans don't live in the fullness of time; they live when they're born. Secure your own future and to hell with the industry's.
This is just not something I can agree with, regardless how it's twisted. Accumulating a sustainable amount of money isn't as easy as raising a few rounds on a weak idea. It takes a real idea, perseverance, and thinking really long term. The mindset quoted above isn't likely to support any of these requirements.
So, really what you'll end up with is a nice house, a pretty car, and a few fake friends while it's all running smoothly. The second you can no longer deliver it all goes away. I might be in the minority here, but I plan to leave my children an empire. Not a house of cards.
It's fine to say that you don't like what I'm saying. It's fine to think it's unethical, or that it harms others. But don't suggest that it doesn't work; it very obviously does.
Now this may not be the case always, so yes, a short term plan could work. But I doubt it works reliably enough to be turned into a rule.
It's always worth remembering that it's people who get investment, not companies and certainly not ideas. What we see is the public face, not what's really going on. Yo is a good example of why some people get investment - someone who can take that app and persuade large numbers of people to use it is clearly good at building and marketing things. If they get their idea (not Yo, their actual idea) in front of an investor having proven that they're capable of building a product and taking it to market, then the investor will listen and do the necessary sanity checks and due diligence, and then invest in the next product. The real one, the one that needs investment.
Building something that proves you're someone who can build an engaged community of people that you can market other things to is a very good thing for your investment prospects. The fact the thing you built is stupid is of absolutely no consequence.
And what's worse is that people like Andreesen used to be innovators and now they are happy to make this all a circus if it makes them just a little more obscenely rich.
I don't have anything to add to this, because I find it to be the most tragically accurate portrait of both Western and startup culture I've ever come across. I just wanted to thank you for providing the perfect response when someone next tries to convince me, non-sarcastically, that Color was "a phenomenal idea."
Using Yo as an example of investors impeding innovation just highlights the fact you need to look at a sample of more than one investment to see what's going on.
[1] http://www.quora.com/How-many-Uber-drivers-are-there-in-the-...
The thread we are in currently suggests otherwise – the marketing here is extremely deceptive and lead to a startup scamming 10 million US$ out of a VC.
There are businesses that are not self fundable, though and will take massive amounts of investment to make happen. Uber is one since they need to get critical mass of drivers/riders in many cities to take over. uBeam is also one of those companies, as a whole lot of R&D has to be done to take it to market. They have a thesis and if correct will have a big impact and can only be done with some real investment (can you imagine self-funding this??). This seems like the perfect thing to invest in.
Its super easy to poke holes in other peoples business but we are also not working with all the information. Let her work!
Such comments invariably sprout up when there isn't enough actual information to discuss anything concrete. They're like fireweed, except fireweed is pretty.
If there was no substance then why would people vote for it in the first place?
The original article was about how the investments in tech is fucked up and generic to begin with.
Thinking "outside the box" when it comes to industry standards may be a path to innovation. Thinking "outside the box" when it comes to the laws of physics is a path to nowhere.
Check with Einstein and others on what it takes to make breatkthroughs, discoveries and think outside the box in the context of science. With the attitudes of some, we'd never make discoveries!
“Imagination is more important than knowledge. Knowledge is limited; imagination encircles the world.” ~Albert Einstein
You might also enjoy these references as well:
http://serenityhacker.com/2009/09/albert-einstein-problem-so...
https://cultivatedpages.wordpress.com/2007/04/10/einsteins-b...
Still Einstein did not say that the previous centuries of physics were bullshit. He built on them to further the theory in specific cases (like his work on relativity).
Taking quotes out of context is very hazardous and does not prove anything either.
This quote fits this situation far better.
When Perls published the quip in the 1940s he said "a famous astronomer", not Einstein. He wouldn't have put it that way if Einstein had been the source, especially since he mentions Einstein elsewhere in the same paragraph.
The Quote Investigator is extremely conservative in refuting bogus quotes; when they say "probably not", they mean "hell freezes over if". The readiest explanation is that Perls, a showman who (unlike Einstein) often made caustic quips like this one, simply optimized his story over time.