Taikhoom10

We are in a bubble, but you are looking at this in the wrong way. OpenRouter basically creates lock-in through Stripe's distribution and family of products; it is much stronger within Stripe than alone. I agree valuations are absurd, but it is what it is. But if we have to go through a bubble for a16z to crash and burn, I am all for it.

You're right in that OpenRouter alone does not have embedded switching costs, but bundled with Stripe's other offerings, it creates lock-in.

I think the PayPal acquistion is to buy something that throws of real cash, to prevent a down round for Stripe when valuations reset.

Yeah, I mean, it looks like a network effect, but anybody can aggregate the models; rather, it is the switching costs in the logs and work, and the cost savings, etc.

Yeah while a positive step, I do not understand a 90% stock increase.

Yeah, the story of Acorn is ridiculous, and the fact that Intel rejected them, forcing ARM to make their own chips, really goes to show how things change.

yeah that's fair, Office Space is goated.

AI consumer hardware

Well I mean you have to pivot to survive, they likley should just sell to a larger dominant omnichannel retailer.

No defintley I would love to be consulatants, I think they can create value, It just depends.

yeah but are you independent?

sent you a email :)

ah so literally OpenRouter for voice eh? Well then I would ask, what happens when OpenRouter just ads voice, seems simple right?

I think OpenAI's opportunity is ai first hardware; I mean, the consumer is Google, simply because the distribution and the product are perfect. Enterprise is much better with AI; I do not see any AI-first enterprise companies succeeding in the long run.

Yeah, except profits are down from the peak. I do not know enough about the market, but my suspicion is that they basically benefited by focusing on a specific market, "Focus," and will basically see this erode over time as more companies in the high end move into their market.

I think generalizations are usually bad. I genuinely am weirded out by management's fascination with consultants. It really is about incentives, and consultants usually do not have the right ones, at least the big ones. Also, there are management which feel like companies always need change, but really you have to examine the competitve position within the broader industry not just a vacumm. Things honestly stay the same for a long time. IBM had more revenue then Microsoft all the way up to the early 2010s. Switching costs are powerful - https://s-1.vercel.app/posts/why-dropbox-is-a-obvious-pe-tar...

I think a key takeaway is the human nature to constantly act, and not just sit and do nothing. Lot's of value in sitting around, especially in investing.

So how exactly are you counter-positioned to Eleven Labs? They are serving a similar market correct?

are you a paying customer?

right so basically moving upmarket, upselling around a core idea.

Curious to hear: does GitHub not have any switching costs to leave? Or is it the broader Microsoft ecosystem? Or a mix of both?

Bro nothing is free, if the goverment pays for all of us, then it is our own money being used for that, we have the most liberal tax code in the world, we spend the most in healthcare.

yeah basically stuck in the middle market, a pre iminent death.

I have although I would prefer just riffing with someone every week, similar to the Exponent Podcast.

Yeah I do not think this is a good idea -

Basically, OpenRouter makes sense because it further strengthens developer lock in, not sure what PayPal adds to that. Plus, on paper today, PayPal is a behemoth compared to Stripe; their FCF is Stripe's revenue today, so valuations are out of touch, plus Stripe should go public so they can use stock in these acquisitions, it lowers there costs of capital, relative to their crazy valuation today.

I mean, I wish Commodore was still around, a lot of nostalgia, but what do you expect, when your only differentiation is price, and you do not build a structure around your business that creates customer lock-in in some way, it becomes hard to create sustainable profits and stick around.

With Windows and Intel locking down the enterprise, you really had to create some kind of premium brand like Apple did, not focus on the low end.

No, I get this; it is not a problem. It becomes one when they cannot pay back this financing, in the event that they cannot build a sustainable business, which they cannot, because the capital cycle leads to overinvestment, meaning the financiers cannot meet their returns.

https://s-1.vercel.app/posts/the-capital-cycle-theory/

Uh no, NVDIA helping startups get financing so they can buy NVDIA chips is inherently damaging because eventually the debtors will not help with the financing and startups will not be able to buy chips.

Yeah I think it is broadly applicable to tech as a whole, I mean any great startup is just really a counter positioned company to incumbents -

Margin is not necessarily important. You would much rather be Amazon and take 50% of e-commerce at a small margin than be a SaaS with 80 +, but your market is inherently tinier.

Plus, the ads business built on top of retail is better than AWS and retail. AWS is great, but ads is higher margin, grows with retail, and is something you see across so many aggregators.

https://s-1.vercel.app/posts/marketplaces-airbnb-future-foun...

Well, they should be motivated by profit, especially if they can create an integrated solution, the convenience means everybody wins.