muerdeme

Why does the money leaking via commissions necessarily make the game sub-zero sum? Is it because we aren't looking at the big picture where everyone wins?

It seems like the risk managers must have a positive incentive to sell their risk on the marketplace instead of assuming it themselves. I.e. hedging another investment like someone else said already.

This at least explains the reference. I certainly don't understand why he felt so overwhelmed by this of all things.

I understand your general sentiment, but this is silly. I don't know why you call it pandering when they have a vested stake in a company's financial future; the shareholders are owners, too.

Having a dual class structure will hopefully, help structure the right incentives for people running public companies and will make sure they don't do things just to boost stock prices or do things in the short term to make their quarterly numbers.

This depends more on management compensation than stock structure. If the CEO gets a huge bonus for the stock going up in the short term, he's more likely to do shady things to boost the price.

Luckily, he won't be able to say "I told you so" when our universe runs out of memory.

Whoa. I didn't expect to hear that.

I want all of my media everywhere. Is that so wrong?

I certainly agree with this, but I wonder if we'll actually see any more posts than usual that say "@#$% my job, I'm doing a startup."

He notes that this new insight into how the brain processes social standing may have important public health consequences, possibly even paving the way to new stress-reduction therapies.

The prospect of the government trying to reduce public stress by making sure everyone gets laid makes me laugh.

More recently, they've started to crack down on underage drinking, and now the police blotter fills a column in the campus newspaper with a series of "Driver arrested on suspicion of DWI." Hopefully this is a result of them cracking down on drinking and driving too, but I fear that to some extent it's because they are forcing the parties off campus.

Chances are that more companies are facing similar problems, and marketing a solution to a known problem is more effective than showing up on their doorstep and telling them their software sucks.

This thread made me realize that a problem my boss has been complaining is a good opportunity for a startup.

I understand your overall point, and I agree with it, but I don't think this assumption was clear the first time I read through the article.

I wholeheartedly agree that convincing VCs of this isn't the way to go, and that others are going to make a killing by stepping in. My main point is only that the VCs aren't being irrational.

I completely agree. The answer isn't to convince VCs to invest in companies they aren't suited to be messing around with. Something new needs to happen. PG pointing it out to outsiders should help the free market in the right direction...

I don't agree with this. The investors have to be just as sure of the risk involved in each valuation as before in order to have the same expected value for the overall portfolio. However, investing $400K in 5 companies instead of $2M in a single company will reduce the variance of the return on investment.

I think it's a tradeoff for the VCs between variance in the portfolio and the amount of work involved in finding 5 times as many companies. Given the amount of funding they deal with, I can understand them leaning towards the companies looking for $2M rounds.

It seems obvious. But I've proposed to several VC firms that they set aside some money and designate one partner to make more, smaller bets, and they react as if I'd proposed the partners all get nose rings.

As I pointed out above, the partner has to be just as sure of each of the 5 bets as he would be of one. I'd react the same way if someone suggested I'd do better at my job if I worked 5 times as hard.

I find it interesting that the reason for YCombinator's existence belies the fundamental problem with software patents: the ever-diminishing barriers to entry.

I understand the problem that programmers have with software patents, but I also still see a great deal of value in the patent system (though for full disclosure, patents pay my bills).

Many people point the finger at the pharmaceutical industry as the big, bad bully of the patent system. Personally, I use it as my token example that the patent system is a positive by comparing the barriers to entry in developing new drugs (finding a safe, effective formula and performing clinical trials) to the relative ease of copying drugs (I'm not a chemist, but I'm pretty sure this is easy).

In this case, the alternative to patent protection for drug companies would be to rely entirely on the government to supply money for drug research and manufacturing. However, this leaves us to the whims of politics to determine what we need instead of letting a free market work. I suspect that there are plenty of Viagra fans out there that won't complain about the high prices of seemingly unnecessary drugs. I'm by no means saying that the situation with drug companies is good or that they can stand on moral high ground, but I do believe (unquantifiable opinion) that they have been a net plus on society because of patent protection.

The last thing I've been thinking about is that there is a variable that we can consider. Patents grant the patentee 20 years of the right to exclude others from making and selling the claimed invention. The date is certainly arbitrary, and was set at a time when the markets reacted more slowly to innovation and the rate of the advancement of technology was slower. Could it been time to shorten the patent term in order to free up the market?

As a result, many absurdly broad business method patents were issued between 1998 and 2001, when the PTO started to tighten up on the issuances for business methods. For example, see U.S. Patent No. 5,715,314 ("Network sales system"), which probably covers every online shopping cart you've ever used...

I find it interesting that the timing of the decision coincided perfectly with beginning of the internet tech boom, so the overwhelming majority of business method patents are related to internet businesses, for better or worse.

For full disclosure, I must admit that I highlight and click around computer text that I'm reading almost uncontrollably.