What this really underscores is that conventional capitalism provides little incentive for fundamental innovation.
All this stuff we're gluing together is the product of state-funded research, mostly from the cold war era. DARPANet, the web (CERN), DARPA research on "augmented human intelligence," etc.
(I bet you thought Xerox PARC invented that stuff, right? Or Apple? Nope. DARPA and SRI invented the entire modern user experience in the 1960s.)
Few companies ever fund that kind of thing. There's two reasons. One is risk vs. reward-- such projects are typically "high risk, high payoff" as DARPA likes to say. Most lead nowhere. The second reason is that there is no good mechanism for monetizing the result. Fundamental innovations are often too fundamental to patent effectively, and are easy to copy once understood. They're also often worthless in themselves. They are enablers of value that is built on top of them.
Fundamental innovation is a lot like infrastructure -- something else free market players seldom invest in.
This is a problem for today's generation of enthusiastic free-market proponents. Who is going to pay for the next generation of innovation?
It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-Lee, is he a billionaire? No, we have 17 year olds making quick millions gluing together the work of dozens of Ph.D's who will never see that kind of money in their lifetimes.
It's a big thing that turned me off the Ph.D path. I don't feel like taking a vow of poverty and toiling in the dungeons to develop some fundamental, difficult concept that someone else then takes, glues to something else, flips, and gets rich.
It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-Lee, is he a billionaire? No, we have 17 year olds making quick millions gluing together the work of dozens of Ph.D's who will never see that kind of money in their lifetimes.
I'm not sure this is fair. Look at the number of entrepreneurs that actually succeed, then look at the positions that people with a CS Ph.D actually end up in. On average (using a median), I'm willing to bet those with a CS Ph.d do a lot better than your average startup founder. We just hear about success stories.
All of this is also ignoring the huge benefits that come with becoming a professor, if you are able to. The kind of pay, job security, and benefits that come with the MIT professorship that Berners-Lee has are enormously beneficial to ones peace of mind.
People don't really realize it, but the mid 1950's through mid 1970's, besides being the golden age of the American economy, was also the golden age of American innovation, and much of it was bankrolled by DOD money (SRI is, of course, a major defense contractor). Not only was the infrastructure around us mostly built during that time (the highways, power plants, etc) but most concepts in computing: programming languages, AI, GUIs, databases, etc.
Over time I become more and more convinced that the market doesn't produce (much) real innovation. If you look at the stuff that really matters, it's come from one of three sources:
1) Government research labs (NASA) or government funded defense contractors (Lockeed-Martin, SRI, BBN, etc)
2) Government funded universities (MIT and its $1 billion in defense contracts each year)
3) Private companies that have either monopolies (AT&T Bell Labs) or massive market power with entrenched cash-cow products (IBM, Xerox PARC).
Look at innovation that's happening now. Where is it happening? Self-driving cars got a big boost from DARPA in the early 2000's (DARPA Grand Challenge), and is now being funded by Google (which has a ton of cash from its deeply entrenched position in search).
I think that undervalues the innovation that goes into taking a new technology and turning it into a widely available, affordable product. That is not easy, and without that step, no invention is going to change the world very much.
I also think it undervalues the role of the market in creating the capital to fund these activities, and the many different companies and universities (many private) who compete to spend that money in innovative ways.
By comparison, the Soviet Union centrally funded their core research too, but were not able to keep up technologically with market economies like the U.S. or western Europe.
I'm not really disagreeing with you, at least in the sense that I do agree that market economies create wealth and wealth is a necessary pre-requisite for funding research. What I think I'm getting at is that I disagree with the common trope that market competition creates fundamental innovation. I think market competition makes companies slaves to the bottom line, fighting tooth and nail in the dirt just to survive. To the extent that the market creates innovation, it does so in companies well-insulated from market competition (monopolies, oligopolies, etc). The decline of Hewlett Packard is a great example. When they became just another hardware company, competing on price in printers, PC's, etc, they ceased to be innovative.
> Over time I become more and more convinced that the market doesn't produce (much) real innovation.
This is something I've researched a bit in the past. It ends up being a case of semantics. The market produces plenty of innovation but not much basic research; whether it encourages invention is ambiguous.
These three terms (innovation, invention, discovery) are well-defined in the academic literature; typically innovation is the only act of progress that can be monetized. Innovation occurs both on a technical level (hey, this transistor doo-hickey can be put in microchips!) and procedural (hey, organizing in an assembly line increases the speed with which we can make model T's!). Invention is creating something new from known principles, innovation is applying an invention, and discovery is finding previously unknown principles.
Most of the people who don't succeed financially made a terrible choice of who there parents were. It's probably the single most important choice one can make.
When I was about to start my PhD, a professor and good friend of mine (who already had one) told me: "The people who finish a PhD are not the most intelligent, but the most perseverant".
Some people don't live their lives to interact with high-power investors, but contribute vastly more value to society than people who do live their lives to do so.
When people complain about overpaid football players, or overpaid Wall Street executives, etc, is "envy" the first word that really comes to your mind?
How many financial executives are there in the U.S.? Should we assume that each of their children founded a company and exited profitably by the age of 17?
Let's not take too much away from what this person accomplished.
Because I'm feeling a bit (just a tiny bit, I feel I'm almost beyond that) envious I almost want to celebrate your comment. Although there is a lot of true into this we have to admit that even kids born into riches are not that much more likely to be a world success. Because unless you have the will/desire to succeed you probably won't get that far. (Going to an ivy league school and working a nice cushy job is not enough in my book)
Granted, some people have been put closer to the finish line then most of us but I rather not take that as an excuse to explain away my lack of success.
p.s. I grew up in NYC to a working class poor immigrant family. The fact that I grew up in NYC is all the head start I needed. So far I've made to graduate school. There is still a long road ahead. No use complaining about which family I was born into.
Define "success." Being born into a rich family and going to an Ivy league school won't get you an instant $30m in the bank, but unless the apple really falls far from the tree, you won't have to try very hard to get into the top 5% in a country where even below-median people live pretty well. Not a bad ROI on simply choosing your parents well.
we have to admit that even kids born into riches are not that much more likely to be a world success.
They are MUCH less likely to wind up bleeding out on a streetcorner in the Tenderloin or creaking along on subsistence wages. It's rarely about "world success."
that's not really fair to the kid. All of us are born with advantages that others lack.
Every person living in America has access to wealth and connections that the average African can only dream of. That shouldn't take away from anyone's success here or diminish any of our accomplishments
This is logically incoherent. The fact that a larger disparity exists between the ultra-wealthy in the West and impoverished people in the third world (though, to be fair, many parts of the West are beginning to resemble the third world) does not invalidate the point that inequality also exists within the first world.
Just because impoverished Africans can't get Ashton Kutcher to invest in their startup doesn't mean that you or I can.
For those who don’t recognize this, it is a quote from the Hitch-Hiker’s Guide to the Galaxay [1]. The context is: Ford is an (intelligent) hitch-hiker and CHAIRMAN and MARKETING GIRL are parts of the "useless third" of the population of Golgafrincham (basically, middle managers and the like), who were exiled from the planet entirely. (Perceived sexism attributable to Douglas Adams and/or the fact this was a radio broadcast, so everyone has an assigned gender)
I think you're being a little unfair. I work in quantum computing. I'll probably work in the public sector for most of my life. I have every incentive to plug government-funded research, and oh by the way, you guys all need to vote for politicians who will increase my puny grad student stipend.
Researchers in the private sector publish a healthy amount of papers in peer-reviewed journals. The elephant in the room is drug design. Many of the drugs on the market today were indeed developed and funded by pharmaceutical companies; yes, pharma companies do occasionally push bullshit products. But imatinib works. It's a trillion-dollar industry for a reason.
As an aside, academia probably shouldn't be lumped under the banner of "state" -- the independence of academia helps it succeed.
>This is a problem for today's generation of enthusiastic free-market proponents. Who is going to pay for the next generation of innovation?
Take a deep breath. The bottom line is this: scientific research is cheap.
The US spends a paltry portion of its budget on research. Hell, I think they even spend more on education. Funny, right? So in the context of the great economic circus, publically funding scientific research affects the "freeness" of the market about as much as publically funding, say, the police. Even Ron Paul wasn't looking to make very large cuts to research.
And that's another reason you should vote for whoever is going to increase my salary: it won't hardly cost you anything.
I think you're being a little unfair. I work in quantum computing. I'll probably work in the public sector for most of my life. I have every incentive to plug government-funded research, and oh by the way, you guys all need to vote for politicians who will increase my puny grad student stipend.
Quantum computing is fucking cool. Very intellectually challenging stuff. Props for that.
I agree on public funding for basic research. Politicians who say "these guys aren't earning their keep" are idiots, and we're worse (as a populace) for not firing these assholes. The mechanism is right there, it's unambiguously legal. Let's fucking use it. Anyway, how is a PhD who makes $85,000 per year while advancing the state of science, who is giving all the work away for the public good, not earning her keep? It makes no damn sense.
Researchers in the private sector publish a healthy amount of papers in peer-reviewed journals. The elephant in the room is drug design. Many of the drugs on the market today were indeed developed and funded by pharmaceutical companies; yes, pharma companies do occasionally push bullshit products. But imatinib works. It's a trillion-dollar industry for a reason.
My issue with the drug industry is that the profit motive seems to be generating 20 variations on the same theme (e.g. statins) and underfunding a lot of greater advancements.
The US spends a paltry portion of its budget on research
Damn right. It's pathetic. We spend more on this "war on terror" in one year than on cancer research in 50. Yet cancer kills orders of magnitude more people than terrorism.
If you aren't satisfied with the way the government is being run, is it a failure of Representative Democracy? You can petition your representative. If you still aren't satisfied you can cast your vote for another representative.
If you aren't satisfied with the way your capital is being allocated, is it a failure of Capitalism? You can petition your board members. If still aren't satisfied you can vote for new board members in the next election. If you still aren't satisfied you can sell -- in Yahoo's case many shareholders have chosen this option since Microsoft's $31/share offer. If you want to allocate other people's capital, see previous paragraph.
Leaving aside the notion of justice, since it is a Difficult Philosophical Issue ♪, to me the only thing that this underscores is that Yahoo is a poor allocator of capital.
>What this really underscores is that conventional capitalism provides little incentive for fundamental innovation.
No, what this really underscores is a fundamental change in thinking for equality that our civilizations seeks since centuries: taking people seriously, no matter of gender, race or in this case age. Many people have good reason to be jealous, being jealous this was not possible when they/we were so young.
When I was that age I hated the fact that only old people would be taken seriously when it comes to business. We can be happy this is possible and as a further sign that age discrimination is going to be eradicated. Besides, this is about discrimination of young people but old people are discriminated against too.
Military research may have made done early development on networking protocols, but it was capitalism and the free market principals that took if from "something that could have potential" to the "humanities greatest creation."
Saying that government created the internet would be like giving a government credit for creating cars because while making new weapons, they accidentally made wheel.
First: Je viens en paix. So, please, don't turn this into a mud-slinging competition.
Also, because of the ambiguity that exists in the English language I should clarify that this is addressed to the general HN audience rather than to api. In other words, when I use "you" it is generally meant as the plural "you".
I have a genuine problem understanding where anti-capitalism sentiment, particularly in HN, comes from. I also have a huge problem with pro-government sentiment bordering on socialism and even going as far as having a communist undertone. I keep seeing this come up again and again on HN and I just don't get it. I don't understand it.
So, this is me asking for help. Why do you (plural) think this way?
Again, please, I am looking for a respectful conversation. This is about you, not me. I want to understand you. I have lots of questions. Some might sound dumb and maybe even off-base. Go with me, if you will, humor me, and see if you can help me --and others-- understand where you are coming from.
How far back in human history do we have to go until you would concede we don't owe what existed at that point in time to state-funded research? Fire? Hunting? The wheel? Agriculture? Making clothes? Making boats? Domestication of animals? Medieval time? Industrial revolution?
And, when feudal lords enslaved the population, was that population to be thankful because of the developments that came from such "state-funded" efforts?
Communism funded lots of things. Not sure anything of use to the world at large came out of any communist country. Do you think communism is better than capitalism? Why? How about socialist ideas? Better than capitalism?
The Nazi's funded a lot of medical research in the context of killing millions of Jews. Are you suggesting that we all benefit from that today? Are there a few million people somewhere in the world you would be willing to kill today in order to do some state-funded research that would benefit us all?
I know this is a ridiculous and grotesque question to ask, but it is a valid question. If you are deriving any benefit whatsoever from what the Nazi's did then you either have to reject all technology derived from that research --even if it costs your own life or that of your loved ones-- or be willing to do the same in the name of progress. I am not proposing, for even an instant, that what they did was acceptable.
Where do you stop singing the praises of state-funded research? How many people did ARPANET help kill? If we owe the modern Internet to all the military programs between 1960 and 199x or so and you recognize this as good; what's the difference between that and the various Nazi programs. Killing is killing, isn't it?
Well, virtually all state-funded research is motivated by war. War means killing people. Sometimes by the millions. Certainly by the thousands. And, in that regard --in terms of the mass killings-- it is no different from genocide.
How about nuclear power? A great result of state-funded research? Killed millions.
So, in embracing your belief system, do we ever fault governments or do we always look at the rosy side of state-funded research and ignore the ugly parts. As I asked before, how many people did ARPANET help kill? Is that ever a consideration? I am not sure Compuserve and other civilian BBS's helped kill nearly as many people --if any-- as the various means of communication resulting from state-funded research.
When I was younger the realities of war never really hit my radar. As I got older it really started to turn my stomach. And that's why I developed this idea that we should limit our government to throwing fancy dinners for visiting dignitaries and pull ALL non essential funding from their hands. All they do is kill people, one way or the other. The research would be done far better, cheaper, faster and with less violent purposes in the private sector.
I prefer capitalism and profit-driven entrepreneurship than war-driven state-sponsored research who's aim is to kill millions. Do you see the difference? How does that align with your pro-state belief system?
That aside, on the assumption a rare state-funded project produces something of note, for how many decades or centuries should we be thankful?
Do advancements ever become part of human culture and intellectual property upon which we can build without being labeled as having taken advantage of those before us?
Are you of this opinion because you have studied the subject or because you were indoctrinated into this manner of thinking at school or at home?
It's an honest question. Please don't be offended by it.
As an example, most religions folks were indoctrinated into their religion. I don't know anyone who grew up without any kind of religion shoveled at them as a kid, only to choose one independently as an adult.
It is a fair question: Are you pro state/government/communism/socialism because you chose to believe this way or because the thoughts were shoveled into your head? Can you remove yourself from your mind far enough to even make that evaluation?
All forms of governments, from democratic to communist seem to be great at devising ways to kill people. If WW1 and WW2 --with over a hundred million people dead-- did not prove that, I don't know what would.
It is also interesting to note that governments seem to need war as a motivator to invent anything. Why? Is that the only goal they understand?
Can you reconcile your "more government is good" view of the world with the fact that governments --not people-- have started all known wars and that they have caused the death of hundreds of millions of people throughout history? People don't start wars. Governments do.
I sincerely reject the idea that "All this stuff we're gluing together is the product of state-funded research". There are countless innovations that originated far, far away from government. Too many examples to list, but such things as flying machines, the telegraph and the light bulb come to mind.
Now, it is natural for entrepreneurs to look for markets for their inventions. Governments are flush with cash. In the US, if you can mold your idea or invention into something that can be of benefit to our mighty armed forces you can get tons of money for further development and even hugely profitable contracts through programs such as SBIR.
Entrepreneurs look for markets where they can make money. This means that while I am sure someone is going to claim that aviation was funded by government, I will propose the opposite: Aviation entrepreneurs went where the money was: Military contracts.
I could go on, but it is time to listen. There are a lot of questions above. I ask you to think, really think about them and then give me your perspective. And, again, I mean this with the utmost respect. I truly want to understand. I have seen enough pro socialist/communist/government/state posts on HN to cause me pause. I don't know if these are coming from outside the US (or outside democratic/capitalistic cultures) or from within. Don't know. Please, help me understand you.
I think you took his comment a bit too far: the point is that the government is an institution that is meant to mitigate risks that cannot efficiently be dealt with otherwise.
The risk of going to the moon before anyone else is such a risk (political motivations aside).
Stating that the government can be an effective tool for mitigating risks associated with research is not an endorsement of everything the government does. This is not an endorsement of everything governments have done in the past. This isn't even an endorsement of government at all in its current form.
It is a statement of what our government ought to be doing more of. It is a statement that our current system has disproportionately distributed rewards -- aren't we supposed to reward those who create the most value?
I don't believe he went too far, I think he is just trolling. As someone who lost a close friend in a war and who had grandparents who lose relatives because of the Soviets and the Nazis, I think he's just talking bullshit in trying to advance the old Randian Gospel and its false dilemmas of calling everyone Socialists.
I was to answer him, but I could not believe he's doing this to listen,as he claim. I also would not hold my anger.
Well, considering that my family lost quote a few members to genocide I think I am entitled to detest war. And, no, I am not trolling. You shouldn't be angry at all. This is just a conversation.
Pointing out that the vast majority of the technology stemming from state-funded research came from military programs is nothing less than the truth.
Ok, I'll give you the benefit of doubt, I'm not angry anymore and realized it was stupid to be in the first place.
I'll not enter in a discussion with you here and now, politically I'm very pragmatic, although I'm pretty Conservative (As a Tory used to be some years ago). This post brought some memories (of my friend) which are uncomfortable in certain situations and with the due respect to my grandparents I'll also pass this one.
OK, I grant you that. I did say I wasn't aiming my post at him though. I've just seen a --in my eyes at least-- seemingly blind pro-government, pro public-sector bend in HN that always seems to float to the surface and I simply don't understand it. I'm not fighting it at this point because I clearly don't understand it. I have to understand it first before I can go past that. Not a molecule in my body thinks this way, so I need help.
As far as the distribution of rewards. The market decides that. Obviously the market --the average consumer-- does not think government is producing enough value or they would be flush with cash. If government produced real value we would be throwing money at them, me included.
With regards to the question of risky or very, very long term research.
Do we really believe government is good at this at all? I don't really see it that way. If you compare the evolution of technologies in private hands vs. that of publicly funded programs, what are the results?
Perhaps the best comparison is to compare efforts in the old Soviet Union with efforts in similar industries in the US. For all their might, the Soviets couldn't make a car worth a damn. During the same period in the US a multitude of private companies produced design after design and evolved solutions that were ages better than anything coming out of the Soviets.
Even Igor Sikorsky ultimately had to emigrate to the US in order to have his helicopter designs grow out of private efforts and evolve as they have. Little known fact: Composer Sergei Rachmaninov funded Sikorsky to the tune of $5,000 to help him launch his company.
Now, of course, as any good entrepreneur would do, you look for where you can sell your products. If government wants to buy you are not going to say "no". And, if government wants to throw more money at you to build other products for them you are going to follow suit. A lot had to happen before government could shovel money at Sikorsky. Other similar stories abound.
Then there's the question of whether or not government is actually equipped to truly make long reaching decision. Few decisions are really made with a clear view of what the future outcome might be. Why did we go to the moon? It was part of an arms race with the Soviets. Not much more than that. Again, war. I have a very fundamental problem with this idea of doing all of these things and spending all of this money to be better at war-making. It really stinks.
Was the lunar program truly worth the investment? Could we have produced similar or better results through other programs?
I am watching companies like SpaceX with great interest. The drive, focus and priorities private enterprise has, when combined with people hell-bent to make it happen, cannot be paralleled by any organization assembled by government. The mindset is massively different.
We could point at side benefits of technologies like GPS. Great stuff, right? Again, what was the motivator? Military. War. More efficient killing. Yuk! The civilian use of GPS was never a part of the program or the driving motivators.
And so, nearly all "good" technology that has come out of any government effort is almost always linked to military needs. If there are no military needs government either does not do it or they fail miserably.
This is the aspect of the whole pro-government, pro-public sector, pro-state-funded mentality I am not getting. You can't point at ARPANET as a state-funded research success without pointing at the thousand or millions (who knows) of people it was surely responsible for helping kill. One goes with the other. There is not dividing line. The state did not initiate these programs to help milk cows or to help us buy books online. They launched and funded these programs to create better killing systems for the wars they need to conduct.
I know I am harping on the military connection. I am eager to have someone provide me with a list of state-funded technologies that DO NOT have their genesis in a fundamental military need. I really can't think of one off the top of my head. Not one.
And so, being pro government/public sector/state and singing the praises of all this wonderful technology we should be so thankful for is tantamount to being thankful for, and supporting, all of the military programs and wars that inspire them. If you elevate what we have received from these government programs and ignore the wars and killing that brought the technologies in to existence you are being a hypocrite. I sincerely doubt that most of the folks who express pro-state views on HN are war-mongers.
And that's when my brain short circuits and I just don't get it.
In my biased opinion I'd suggest you study western and northern European democracies. The government provides essential services (decentralized up to the district level) like education, water, streets, police, health care, social security for it's citizens.
I'd rather have clean water and unbiased police and justice and free education. Every private company needs to maximize their own profit. The government does not need to do this. They can subsidize important but nonprofitable projects. This can be and has been made efficient.
There is no interest in a private prison company to reduce crime. There is also not much reason for a private rail company to invest in infrastructure that not profitable. But as a citizen I have an interest to use a efficient train.
It's not black and white. Private sector is very good at a lot of things. But there are certain other things that are natural monopolies or important for the functioning of the society that in my opinion can be best served by an efficient government.
The private sector and capitalism do not also not always work in your interest - Adam Curtis from the BBC (also government :) did a great documentation about certain effects of free market radicalism: http://en.wikipedia.org/wiki/The_Mayfair_Set
> The government provides essential services (decentralized up to the district level) like education, water, streets, police, health care, social security for it's citizens.
I wonder if herein lies the fundamental difference. I would never put it the way you have.
The people form the government and pay them to administer infrastructure and services for them. That is massively different than the "government does for it's people" view. One is almost a royals-and-subjects view while the other says, well, government of the people, by the people and for the people.
In my model we hire the government to serve us. They are nothing more than our employees.
The other data point I have is that as a youngster my family spent quite a number of years in Argentina. Monkeys would govern that country better than nearly any administration they have had to endure. I have followed their politics on and off over the years. To this day they continue to be raped and pillaged by their government. The only way you can characterize them is thugs, thieves and gangsters. It is quite possible that seeing some of the things I saw there planted the seeds for not seeing government as part of the solution as an adult. I mean, look at Cyprus.
I wouldn't look to a private prison company to reduce crime because that's not the need they are pursuing. The commercial war on crime tends to be waged by associations that roughly map to where/how crimes are committed and chambers of commerce. These organizations are the pooled efforts of businesses to fight common problems.
A private rail company might decide to lay down unprofitable track to massively grow demand and habitual preference for rail travel. Or, it might stick to more profitable tracks and in exchange not have to pass on the costs of disparate routes to the customers in the high-density areas.
> As an example, most religions folks were indoctrinated into their religion. I don't know anyone who grew up without any kind of religion shoveled at them as a kid, only to choose one independently as an adult.
It is a fair question: Are you pro state/government/communism/socialism because you chose to believe this way or because the thoughts were shoveled into your head? Can you remove yourself from your mind far enough to even make that evaluation?
Attended private and public schools (nearly a 50/50 split). Private school was not quite religious but had a Christian church next as part of the campus and some of our teachers were the priests. Became an atheist somewhere in college. Highly entrepreneurial family. Have been an entrepreneur myself since probably high school. Started and ran half a dozen businesses with my own money. Also worked in industry (employee) at various levels (Junior Engineer to CTO) for about twenty years.
I was more refering to where you grew up, or other things that might be correlated to setting the groundstones for a persons political outlook/philosophy. Sorry for not being specific.
"But it's critical to keep tabs on the ratio known as 'glue versus thought.' Sure, both imply progress and both are necessary. But the former is eminently mundane, replaceable, and outsource-able. The latter is typically what gives a company its edge, what is generally regarded as a competitive advantage."
I am in finance. I am glue. I take existing people, things (read: capital), and ideas and bolt them together. Glue is the socioeconomic fabric that gives value to ideas, things, and ultimately people.
It's not just finance. Craigslist? Airbnb? Facebook? Apple? Glue. Put it this way: if you walked out the door with their source code, how much of their value could you replicate? Put it another way: how much would you pay to walk out the door with their source code and physical assets? Put it another way: how much would you pay to walk out the door with their source code, physical assets, and low to mid-level developers but none of their senior guys?
We have laws to protect intellectual property because thoughts and technologies are copyable, fungible, and ultimately outsource-able. We don't need such laws to protect relationships, the gluiest of glues. In fact, we need laws to break down their strength.
I think that his point is that glue is only as valuable as the product in which it's used.
In the case of finance, it's the fact that they operate as the middleman, getting money from one place to another. The product isn't just getting people together, it's providing a smooth way to move money around.
The other examples have a product where individual technologies were melded together to produce that specific product. They did much more than just take a few technologies, then bolt them together.
On the other hand, Summly seems like the technology should be the product. NLP is a very hot research topic, and when I first saw that the product went for $30 mil, I thought that they had some brand new NLP technique or algorithm that Yahoo was snapping up. In fact, several articles, like this NY Times article(http://www.nytimes.com/2013/03/26/business/media/nick-dalois... ) supported that view.
However, the truth is that they just took a pre-existing tech, and bolted it onto an iOS application. I can't comment about the app, since it's been pulled from the iOS store, but it does sound like they attempted to do something new with the interface, but that's about it. So Yahoo basically bought 2 engineers and a Siri NLP engine license, the later of which will undoubtedly become more expensive when the contract is renegotiated.
I'm commenting less on Summly and more on the general case. People who bolt together existing tech into something people want are extremely valuable. They have identified demand and found a way to address it using off-the-shelf components. The risk, often, is that someone else can just as easily bolt together the same components. This risk is mitigated by locking in the demand source, e.g. through brand recognition from your first-mover position. Someone able to rapidly bolt together a product that they subsequently ensconce with piercing marketing or another form of customer lock-in is a gold mine.
Interestingly, $30 million for the license is probably relatively cheap. I imagine that had Yahoo licensed it directly, that they'd be paying a lot more for it.
I really like this reply. I was both in finance and technology and there is a degree of glue and thought in both. However, in this case it's about the false perception that was created to the outsiders about Summly's level of innovation.
> It's not just finance. Craigslist? Airbnb? Facebook? Apple? Glue. Put it this way: if you walked out the door with their source code tomorrow, how much of their value could you replicate?
You are conflating the "thought vs. glue" ratio with the "past thought vs. currently generating thought" ratio.
In terms of the first three, a lot of the value is in what economists call "positive network externalities", or "network effects".
If you walked out the door of Apple with source code and "source code" for their hardware, you could replicate a lot of their value for the immediate future, until they had time to cook up new stuff.
"If you walked out the door of Apple with source code and "source code" for their hardware, you could replicate a lot of their value for the immediate future, until they had time to cook up new stuff."
You are correct in that more of Facebook or Craigslist's values are comprised by network effects, but I still believe more of Apple is network effect than not.
Consider the walking-out-of-the-door-with-the-blueprints hypothetical. You would still need to cobble together a supply chain, i.e. glue together a string of "doers" and make sure the glue is strong enough so the whole thing doesn't fly apart like a 787.
Remember the Hacker News refrain about execution versus MBA-style "ideation"? The execution guys are valuable because they know where to find what and whom, not because they ninja together the eleventh hour code themselves.
> Consider the walking-out-of-the-door-with-the-blueprints hypothetical. You would still need to cobble together a supply chain, i.e. glue together a string of "doers" and make sure the glue is strong enough so the whole thing doesn't fly apart like a 787.
Maybe a more interesting hypothetical is "what could the 2nd place competitor do if they got blueprints and source code, and could use it freely?". In terms of Facebook and Craigslist, nothing much. In terms of Apple, Samsung could probably go to town with it, although I suppose you could also argue that "the right to use it freely" is in some ways the most important bit, as Samsung can probably replicate the hardware, and has good enough software at this point.
"You are conflating the 'thought vs. glue' ratio with the 'past thought vs. currently generating thought' ratio."
Glue takes thought, so the dichotomy is a bit rickety out of the door. I'm taking it as network value versus technical value. Both take present thought.
If you are glue, there is a terrible problem. When you are in finance you should be in the "Thought". You should think on who can pay the bills and who can not, so you could give loans to them or not.
You should be on thinking what is going to be the future and the business strategies that makes sense, business that are sound and solid versus scams to get people's money.
The fact that you consider yourself glue is the main problem. We are in a society when finance means "too big to fail", "we make bad decisions but do not pay for it", and "if people can not pay back its loans(because we lended irresponsibly) , we have to lower the requirements for loans even more".
I don't think is the right way to think about things. How much sense does Instagram make in 2010? How much sense did Twitter make in 2006? How much sense did Amazon make after the dotcom crash? No one has perfect information, and "business that are sound and solid" aren't the ones that need loans. Sound and solid businesses don't need help from finance guys.
The people that connect people, things (i.e. capital), and ideas are not naturally less valuable than the people that come up with ideas or who have things. If you have someone who is able to whip together existing technologies into something that's tractable they very well can be more valuable than someone who invents new technologies all day. There is more information needed beyond "that's glue, it's worthless".
> The people that connect people, things (i.e. capital), and ideas are not naturally less valuable than the people that come up with ideas or who have things
I don't think anyone would argue that glue is naturally less valuable. The problem is that our current economic structure treats glue as if it creates approximately ALL of the value because we haven't figured out a good way to split value between different stages of the pipeline (IP isn't a good way).
Over-investing in glue is bad insofar as it comes at the expense of investing in fundamental technologies/research. Since our (over)valuation of glue currently places a rather heavy opportunity cost on performing said research and endorses the "academia is a waste" attitude, I tend to agree that our economy is too focused on glue.
I think the point of the OP is not that glue is not an essential part of a product. It is that when you start making things exclusively out of glue, then the all "glue and thought" ultimately worthless.
Overpaying for apps is the new overpaying for social networks for that vague master bullshit artistry of "reaching" users.
Yahoo irrationally overpays for tons of stuff, AOL irrationally overpaid for Bebo, there was that high school girl that made a social network and makes millions of dollars so she bought her mom a house, there are plenty of other data points I filed away in my head over the years.
Tons of things happen in Silicon Valley everyday that makes no sense to outsiders, or sometimes even to those stuck in the tunnel. Are you new here? Sit, enjoy a cup of tea meanwhile.
Throw on top of that the youth obsession in tech has been around since I was 17 eleven years ago and it will continue to stay. Youth is forever a distraction that you have to grow out of. If you don't then consider seeking a therapist.
Your brain hurts from trying to neatly organize this particular liquidity event as fair? Maybe you can't. Maybe it doesn't matter. Get over it, stop the hating, and get back to work.
Funny enough, mainstream media with old talking heads are spinning this narrative two ways: 1) the ever louder need to get every child to learn to code and 2) it's so fun bit of escapism to think what you would have done with big money when you're still a teenager contrasted against the $325MM Powerball win in New York.
All in all, this barely registers as a blip on the average American considering real shit that's ongoing with fairness over marriage equality in SCOTUS.
I've been saying this for the last three years here on Hn: Yahoo is stupid to not be aggressively and heavily spending their massive cash reserves to buy back into an innovative place here in the valley.
Mayer is no dope! She knows that being the convoluted portal that Yahoo is, is a death sentence. They need to act quick and fast and often.
Buying up a very young tech upstart is a good step toward splicing in some new, nimble DNA - which Yahoo needs desperately.
$30MM is also a marketing number!
Remember when everyone's exit plan was Google or Facebook? Well, add Yahoo to the list for exit acquire players.
Exactly. Yahoo tried the "buy our way into being innovative" when they went on their Web 2.0 spending spree, picking up Delicious, Flickr and Upcoming. They systematically choked each one to death because the corporate structure/culture didn't support buying in companies that way (see EA for the same thing in games).
Marissa Mayer may be able to stave that off this time around and Yahoo may be able to buy their way into mobile, but when mobile is so hit-driven and short-term, it seems unwise to start spending money on little things like silly TL;DR apps (that you're going to shut down, anyway).
If the deal is about pushing into mobile, Yahoo needs to secure culture changers, not apps. They need to buy the Duartes and Rubensteins and Brichters, and give them full autonomy to run the mobile ship however they please. That's a longer term plan, but it pays off in actual tangible results. $100 says we never hear anything about Summly's technology again, and the kid leaves as soon as his stock vests.
Yes, I am familiar with Yahoo's history as well - and clearly their leadership in the past was simply not qualified to buy their way to innovation - as they didn't come from an innovated place.
Yahoo is a web 1.0 company, pre-crash and just didn't have it in their DNA to innovate out - like you said, they choked those previous acquisitions to death.
That doesn't mean that the strategy of acquiring their way back to a good position is bad - it was that the leaders previously attempting to do so just didn't have it in them.
They have to, as they are way behind in mobile and nobody good wants to work there.
Sumly is three people and they paid about $30 million for it. Start throwing million dollar /year offers and many "good" programmers will want to work there. This stinks, IMO.
I'd agree they're overpaying because they're behind, but let's not simplify this too much. They did not pay $30m to 3 people in exchange for them 3 people working with them.
Yahoo! paid $30 mil and, in exchange, got 3 people working for them. Not all the money made its way into those people's hands, but from Y!'s perspective I think the summary is fair.
> Your brain hurts from trying to neatly organize this particular liquidity event as fair?
Like much of the commentary in the other story, you're projecting. The article is a discussion of why this deal is stupid, not bellyaching about it being unfair.
This is my (pessimistic) take on this Summly thing. I think the following scenario happened:
15 year old kid does something with computers and for some reason the press is all over it. Some smart investors thinks; "hey, I can use this to make money". They invest money into this 15 year old which gives him more press coverage. Wait a few years and the investor gets his buddies at Yahoo to buy it for a substantial amount of money. Ka-ching, money in the bank.
If this is true, imagine what it's like to be a Yahoo engineer. You just lost the ability to telecommute. You've suffered through downsizing. Morale is (by all reports) completely in the tank, and now they dump $30M into a 17 year old?
You usually don't get to be a billionaire without spending a lot of time in the office and working pretty hard. To give some apropos examples: Marissa Mayer is reportedly going over every Yahoo hire; _In The Plex_ mentions Page doing the same thing at Google.
"Police had to step in to keep order among investors queuing to buy shares as the internet gold rush swept dramatically into Hong Kong.
A crowd of about 30,000 people formed outside one of the few banks where small investors could apply for shares in internet firm tom.com.
...
Thousands of investors pushed and shoved through queues stretching back as far as half a mile to hand in their forms at the worst hit HSBC branch in Kowloon.
Analysts have predicted that the Hong Kong firm's share sale will prove to have been a record 2,000 times over-subscribed."
Summly had tons of investors, who put in a grand total of $1.5 million. If they needed to be bailed out of that, they shouldn't have been investing in the first place.
What this really underscores is that conventional capitalism provides little incentive for fundamental innovation.
I'm not as convinced as you may be, but there certainly seems to have been a decline in past decades, in terms of private funding for basic research. At one time, Bell Labs, Xerox, IBM, HP and others did quite a bit of basic, fundamental research. IBM still do, last I saw, but here's the question... if it made economic sense to fund private, basic research in the past, what has changed? WHY don't the HP's and Bell Labs, and Xerox's of the world still spend as much on research.
Note: I am, of course, talking out of my ass here, as I have no actual objective numbers to support the idea that private funding for basic research is diminishing. But, subjectively, from what I read, see reported, hear, etc., it sure seems to be the case.
All this stuff we're gluing together is the product of state-funded research, mostly from the cold war era. DARPANet, the web (CERN), DARPA research on "augmented human intelligence," etc.
That's probably true, but there is a danger in looking at the past on a macro level and saying "this means the future must be $THISWAY". The problem is, we don't know what the other outcomes could or would have been. If DARPA had not funded all of that research, we cannot say that the same innovations would not still have been developed via other sources. History, IMO, hints at conclusions, but it's hardly a definitive guide to the future.
“Based on the NYSE index data, the mean duration of holding period by US investors was around 7 years in 1940. This stayed the same for the next 35 years. The average holding period had fallen to under 2 years by the time of the 1987 crash. By the turn of the century it had fallen to below one year. It was around 7 months by 2007.
Similar pattern exists in the UK also as shown in the chart above. There the average duration has fallen from around 5 years in the mid-1960s to less than 7.5 months in 2007.
Over the past 15 years even in international equity markets, holding periods have fallen. The Chinese market was red hot until few months ago. However the duration for the Shanghai stock market index is close to just 6 months.This shows that Chinese investors do not have a long term horizon.”
"Summly's entire business model seems to revolve around catering to this demographic. Frankly, it pains me."
I reads like a critique of Chubby Checker's "Twist" from a professor a Julliard. Perhaps, and I say that because I can't know what they were really thinking, but perhaps that was the point. This company had successfully "catered to this demographic" (which was defined as young hipster like brogrammers) and while those guys drink their PBR and deck out their mancaves perhaps it is a demographic that Yahoo desperately wants to reach? Maybe the whole point was that Yahoo folks were building things for middle-aged dot boomers and not for the cool kids.
Maybe the goal was to get more people who could quickly assemble a MVP from existing APIs that appealed to the emerging cohort of buyers and trendsetters. Maybe NLP wasn't the point.
Well, I'm not finding a lot inherently wrong with using new and existing apis to make other things. I would in fact argue that that is why we create apis.
However, I feel like people aren't very upfront with the fact that they are building on top of APIs. For whatever reason, there's this perception that arranging existing resources into a more valuable arrangement is somehow not a valid approach.
I've got to say that people who can quickly assemble appealing MVPs from existing markets are exactly the sort of people Yahoo need, but the reported purchasing figures is a hefty price to pay for three staff, especially if all the available evidence points to them being productive startup generalists rather than visionary corporate project managers
Imagine how many MVPs Yahoo's existing staff could create if allocated $30 million of development time for skunkworks projects...
>Maybe the goal was to get more people who could quickly assemble a MVP from existing APIs that appealed to the emerging cohort of buyers and trendsetters.
There is a lot to be said for building the right thing; but the actual ability to assemble such products are very common and even the very premium skills are definitely for sale at market rates much lower than $15MM per year.
The skills are common here, not in general, and $15MM (total, not per year) is a cost of purchasing the assembled infrastructure, not the idea and potential to build. I don't think this is a wise expenditure, but you're attacking it from a poor angle.
So much of what goes on in transactions in Silicon Valley has little to do with the headlines and a lot to do with power brokers and their interests.
It's a shame we don't have investigative journalism in Silicon Valley any more - partly because it's out of vogue nationally, and partly because Silicon Valley journalists love to hob-nob with investors. I'd love to see a follow-the-money on this deal.
Ouch. Still, hard to find fault with the analysis, no matter how unpopular it may be with much of the readership of HN. Many folks here would love to sell a company to Yahoo! for $30MM after 18mo with minimal engineering effort and download numbers probably below those of many folks reading the news on HN.
We should all be very happy. This is a sign that easy money is still out there for the clever individual. I applaud the kid for what he has done. Yahoo might be stupid, but we've known that for a long long time.
I hear what you're saying, but the problem with poor deals like this which are done for reasons other than the headline reason, is that they're effectively random. You cannot structure your business in order to get an exit like this. You tend to luck into one - or more often you get it because you have a network of unpublicized connections who have interests that are not overtly clear. The rest of us? We should be happy when money is going to solid, well-built businesses with metrics we can all understand rewarding us for hard work and innovation - because unless you're already an insider, that's the only thing you can control to get a win.
Perhaps the license from SRI is the valuable part and for some reason, it conveys intact with the sale? What would SRI charge to license to Yahoo vs a 17yo kid playing "my first startup"?
> For 95% of the news I read, that can be done with a regexp that slices out the first sentence.
Interestingly, that seems to be what Google News does for its summaries. It works well most of the time but I've seen some screw ups. Also interesting, Mayer worked on Google News so she probably knows this topic well.
It's amazing how many column-inches, irate blog posts, etc. can be generated by a off-the-record "sources close to the deal said that the deal was worth $X million" remark from one source.
Having seen this for a Y Combinator exit (no names) where the bullshit factor was around 10X (according to what I've heard from actual insiders vs the Techcrunch leak), I find it hard to get too exercised about it or to understand why anyone else is so worked up.
Fantastic mini example of the point the author makes about TLDR's
I started reading your comment (first 9 words), nearly stopped reading it thinking "they don't get it," carried on for some reason and 5 words later it showed that I agreed with you completely!
It doesn't seem to matter what the app does or how its built.
The story goes something like (a) people (yahoo) want mobile apps (b) the kid got investors to give him cash (c) people downloaded it generating 'buzz' (d) more investors and cash (e) more downloads and publicity (f) yahoo plays right into the hands of the investors and the hype around a young founder (g) yahoo buys the company, making the kid a millionaire, it's a PR grand slam, bringing more publicity and 'users' to the app (for now)
It works out really, really well for the investors and founder; in my opinion it seems like Yahoo got duped.
Yahoo didn't buy the technology, they purchased the talent. Talent that knows how to reach an audience. You can always get high quality engineers to figure out the rest...
The article's main point is that the founders didn't do anything really noteworthy, technologically speaking, and so Yahoo overpaid for the talent in question.
A million downloads of a free app is not really that noteworthy. My friend made a simple, free iPhone game in a weekend where you tap on a soccer ball and keep it from dropping and routinely gets 10s of thousands of downloads a month with absolutely no marketing.
I have some rather strong misgivings when purchased talent != high quality engineers where software product/company acquisitions are concerned.
There are some excellent professionals out there with a far more rigorously proven and solid track record of knowing how to reach an audience. You're suggesting the 17-yr-old & 2 compatriots have proven themselves to possess $30-million-worth of reaching-an-audience skill?
Which is why this acquisition was more about PR than talent or technology. It says (or tries to say), "You might think we're just dusty old Yahoo!, but we're hiring 17-year-old wunderkind too! We're hip to the next big thing! And remember we have a new CEO..."
Am I the only one who is not surprised Yahoo! bought it? I'd be surprised if Google, Apple, Adobe, Microsoft or some other respected company did it.
I mean who really uses Yahoo! these days anyway? The only good thing that they still have to offer is YUI (most notable is its compressor). I don't want to sound like a Google supremacist (although I might be guilty of it), but Google offers a better search engine, a better mail service (people use yahoo mail only for traditional reasons). To me this just feels like Yahoo! wants to join the "we <funded|bought> this awesome <product|service|project> created by this <16...22> old."
(I hope) Other companies did it because it improved their service. Yahoo did it so it would be talked about.
I could be wrong, and $30 mil. might be a lot for an attention whoring attempt (let me just point out that it's successful so far), but what else do they have to do with the money they acquired with their past success.
Summly version: Yahoo! bought us in an attempt to save its stale ass from Oblivion.
[If anyone is reading this, they are probably in the gutter (down vote) section of the thread... Welcome to the dark side, we lied about the cookies.]
For the record: not Oakleys, not at a beach, but yes, looking to the side.
If we're done picking on looks and personal issues, something I tried to avoid very carefully in the article, perhaps we can focus on content and ideas?
I think looks and activities is inextricable with "bro"-ness. You're not slaying the LES bar circuit unless you have a certain look along with a certain behavior and attitude.
I feel sad for anyone that has to experience an interview session with you, if such an event happens, because you clearly have no issue with guessing a person's life and behavior from one small photo that you are seeing out of context. Even though the person in question stated that you are in fact wrong in almost every way of what you think you see in the picture. In fact, I'm sensing a small bit of projection in this because your statements make no real sense at this point, so you appear to be lashing out at a stranger for no apparent reason. Perhaps jealousy?
Please post a small photo of you in a somewhat generic setting that I don't know the story behind so that I too can play the game of guessing a person's life experiences and attitude based on that one small example.
I just finished watching an interview with D'Aloisio on the huge 7.30pm current affairs show here on the ABC in Australia (unimaginatively named 7.30).
The interview opened with the newsreader restating the fact that he had been covered on the front page of almost every major newspaper. Then here he was, talking to her on TV, talking about Yahoo, and their amazing 'focus on mobile' etc etc. Suddenly it dawns on me - I live in Australia. Australia is practically the other side of the universe. Yahoo has a fresh faced 17 year old kid talking to just about every living room in this country about how focussed they are on mobile.
Every country in the Western world from the US to Australia and beyond, front pages of newspapers, prime time TV interviews on government owned ad free broadcasters during primetime - no amount of PR spend can buy this.
I know the PR rationale was mooted, but nobody could have imagined it would be this big.
So, what is Yahoo signaling to the world? "We value glue more than thought."
What? No it doesn't signal that at all. Look at Yahoo's other recent acquisitions. Yahoo is buying mobile app companies. Spinning it as technology vs glue is silly. It's all about buying expertise in mobile.
One point I wish the author would elaborate on is the value a company gets by acquihiring a great designer. I haven't used Summly so I cannot measure the talent of a designer Yahoo gets. But it would be wrong to ignore the design by focusing on technology advancement in "glue vs thought" argument.
How much would a company pay to acquihiring Jonathan Ive or Philippe Stark?
The author may be right to question the designer's talent or by googling "I use Summly", but it seems rather shallow analysis.
A common motivation for acquisitions is to buy users, not technology. YouTube used PHP and the video tech in flash - but they were the ones to grow the userbase (and continue to do so). If Summly had the product/marketing to be popular and growing, that's why Yahoo bought it. (though it seems Summly doesn't have the strong network-effects of YouTube, of gaining both producers and consumers).
EDIT they could be buying market-product fit...? but yes, if they killed it... hmmm...
Considering that yahoo immediately killed the product, and that its 1mill total users read 90mill summaries in ~18 months (that's less then 1 a day) I'd say they aren't buying users.
Whoa, I had an idea creating something like that in 2011. And I thought "it's stupid, noone would use it except me" and "google or yahoo would probably build a much better one and have 10x more engineers iterating on it".
Which brings me to the point: Why did Yahoo buy this, instead of building it themselves? Are they really that thin with engineering talent?
Actually extracting metaphors via Natural Language Parsing of Ulysses interests me far more than yahoo blowing money or some lucky kid winning the lottery.If its not an isolated example the field is more advanced and interesting than I suspected.
I dread to think what parsing Finnegans Wake would be like.
> By definition, Yahoo's directors know how to spend Yahoo's cash reserves best.
This is absolutely incorrect. There are many instances in which there is a personal financial connection between a board member and an acquired company. For example, a board member is a limited in a VC fund.
I think you're supposed to have read irony into that comment. If you had bothered reading after that you would have seen that. That and the author's critique of people who can't be bothered reading more than a few paragraphs - in your case presumably because your default assumption is that you must know more than the author of the article and that he cannot possibly have been making a sophisticated point that would take more than that single sentence to unpack.
Ironic. The post says: "But it's really not ok to act functionally illiterate when you're not actually illiterate, when an advanced society that once put a man on the moon worked so hard to educate you."
If you'd read the text more carefully you wouldn't have missed the sarcasm of the passage you were so quick to dismiss. He was being sarcastic!
I didn't see any sarcasm about that; through the rest of the essay he seemed to continue to take at face value that Yahoo's management is doing what they think right for Yahoo. The summly acquisition being some sort of self-dealing fraud would contradict his entire point.
By definition, even if you include your statement, Yahoo directors know how to spend Yahoo's cash reserves best. It may be for their own best interest, but your statement doesn't contradict the OP's.
You get more points than the informative posts because you are the glue - the viscous, translucent glue that makes the Hacker News comment pages always stick together into a big, messy ball of self-satisfied cluelessness.
I've never used Summly but perhaps it would have come in handy when reading this article.
Many businesses have been built by riding on the backs of others. A good number of them have already been mentioned in the discussion here.
Many others have also tried, and failed. And have lost both time and capital in the process.
Lets not forget something here - a 17 year old kid licensed technology from SRI and then developed this app. How many 17 year old kids do you know who would even think to do something like that? It's certainly not something that ever crossed my mind as a teenager.
Obviously Yahoo sees something in him (them) that many others don't. Can't comment on whether its the right move or not, but just look at their stock price since Mayer took over.
What's actually right about Yahoo's purchase of Summly: we are still talking about it, and are still reminded that Yahoo exists. The marketing was great (the video is really well-done), and to be honest yahoo really could use some marketing boost at a time like this.
I'm reminded Yahoo exists every time I check my false-negatives spam filter training file. Virtually all spam which gets through to my inbox is from Yahoo addresses, often from compromised actual people I need to receive mail from (including at least one partner at a fund, my dentist, etc.)
I dont understand why the current wave of criticism is leaving the market penetration (and 1st mover advantage), brand, and million users (and climbing) out of the picture - like it's not important. And are assuming that Yahoo must of paid it all to hire 3 people.
Uh, the end result is that Yahoo paid for all of it to hire 3 people.
The app has been pulled from the app store( http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-ac... ), and it does not sound like it's going to be back. Which is a disappointment, because I wanted to know exactly what the heck the app is, since I've never heard of it before.
So Yahoo's dropped any market penetration, the entire brand, and the million users. For 3 engineers and a few software API licenses.
And most of us are, indeed, jelly. The bottom line is, if you're into start-ups, you understand that in many ways it's a lottery. Instagram won last week, then Pinterest, and now Summly. This is the norm. Over-paying for products that aren't really even products.
I'm surprised a professor at Cornell hasn't understood the VC culture yet. I was talking to a friend last week about this cute chick he wanted to introduce me to. Turns out she works at a relatively famous startup in L.A. as a secretary. It also turns out that she makes more than my mom (who's a research chemist). I've just learned to /sigh, move on and then quickly get back to work.
Throwing money around is how Silicon Valley works. Get used to it.
Certainly I know some people of U of I who worked on it, but Hadoop isn't developed for a Yahoo user. It is used mainly for serving ads and doing market analysis. A normal Yahoo user reads their mail and the sports page. Google makes its bread by facilitating advertizements on other peoples websites - it provides these kinds of technologies to other people. How they put up advertizements is their choice. Google's clients are responsible for content. Yahoo is more about providing media, they happen to make revenue with their own internal advertizements.
Google's primarily goal isn't to own every computer screen, they just hope that their ads make it to every screen. Yahoo's goal is to fill every screen. For Yahoo buying screen space is a end in itself.
The fact is that technology is in almost every facet of the world. However we view Yahoo!, they must know that technology is foundational relationship to cultivate and enhance.
idk, their core asset may not be their technologies. Their asset maybe the ad space they sell and the properteis they own. I think of Yahoo in as in the buisness of owning things so they can sell adds. I don't think they care about the technology of this app (which is less then a masters thesis) compared to its user base.
I thought a good bit about the reflection of TL;DR. My Gut reaction was to think we're heading to an idiocracy, but it could be people just getting smarter. Trust me I love the virtues of deep reading, but think of all the knowledge you could gain if it was done well? There is an entire business about providing executive summaries on books, news, and other important bits of information that we're inundated with. While I would cringe at a TL;DR for The Brothers Karamazov, I think there is some merit to being able to get a lot of tidbits quickly from a lot of news source. Would be very interesting to compare Fox, NYTimes, and the Washington Post on their 'gist.'
To the author: Would you have not taken a buyout offer from Yahoo! if you were in this kids position? All HN discussions regarding this topic have just screamed jealousy/disdain. It is as if people come to HN to read an intelligent argument to argue for their immature feelings. Also, the most important premise in your argument, that their technology was licensed, is incorrect. Their natural language technology was 100% proprietary according to them, and not "licensed from SRI" [0].
To truely understand what's going on here you have to follow the money. All of the money.
This is not a simple story of a hard working smart kid winning the tech lottery with a hot app/technology going from rags to riches. This is an arranged marriage, a PR stunt and a good-ole-boy deal all rolled into one. It's a VC fuck-you to all people that truly have innovative ideas, viable businesses, and dedicated employees that are trying to get management to notice solutions instead of golfing with "consultants" or blowing big money on solutions that could be built in-house for 1% of the costs.
The kid was born on third base, got home on a wild pitch and some folks think he hit a home run.
I wonder if Yahoo has got the rights to make a movie about this fairy tale. That's about the only way I can think of for them to cash-in. But it seems more likely that they just got sucker-punched.
I doubt the acqui-hire was for $30m. I would believe probably $3m, structured as $1m each over 4 years, with each person getting 100k in the first year, 200k in the 2nd, 300k in the 3rd and 400k in the fourth. Lots of these "acqui-hires" get reported in the press at some stupid number. I know a couple that were reported way off. The original journalist says "it sounds better", and then all the secondary sources just quote the figure from the first.
I like his point about how trivial "tl;dr" summaries often don't get at the core idea of an essay, but they still work for news formats which are kinda "tl;dr" already.
This is the second article from the same author that is well reasoned and factually incorrect (the first was the MongoDB hate). Check http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-mil... to see there is some research going on there. Also, glue or not, a successful mobile, one that has an audience is worth some money...
Summly as a technology play is only moderately interesting.
What I suspect though is Yahoo desperately needs new users. We know that most Yahoo visitors use Yahoo out of habit from the 90s. Where are the new users? Having a young man with penchant for both technology and publicity be the public face of Yahoo the same way as Marissa did with Google gives Yahoo a slightly better edge.
I expect Nick to be groomed for bigger things. Congrats.
Do we know that the purchase agreement did not include a multi-year license to use the SRI technology across yahoo, or are we just reading a lot of wild speculation?
It is altogether possible that yahoo made a foolish purchase, but it is also possible that they made a great purchase and we are just guessing at the details and assuming that all $30 million went to the staff they acqui-hired.
If this article's premise is correct, Yahoo is buying Summly in order to generate more news about Yahoo rather than the intrinsic value of Summly.
However, this article is adding to the flood of news about Yahoo acquiring Summly, thereby giving the purchase even more publicity. I wonder how many articles have taken the same approach.
While I don't disagree with this opinion, I believe that there is also a positive side of the problem and I have expressed my opinion here - https://news.ycombinator.com/item?id=5447184
What surprises me is that the same people who complain about patents and intellectual property are often the first to bring up the discussion of how market tends to undervalue fundamental research. You can't have your cake and eat it too.
Totally unrelated, but what does I interviewed at DE Shaw when Bezos was there and turned them down for 1/10th of their salary offer mean? I'm having trouble parsing the "for 1/10th of their salary offer" part.
Someone should put a reminder in their Google calendar to ask whoever is CEO at Yahoo at the their 2014 annual shareholder meeting what the Summly team has done for the company over the last twelve months.
The beautiful girl Jenny falls for Chris and marries him. I think she has made a terrible mistake; it's natural to be jealous. But I keep the feelings to myself.
The author of this rant created a NoSQL database that's so much better than MongoDB no one believes him. So he probably doesn't think we've hit any kind of ceiling.
The OP seems to be calling for bringing unique, new,
powerful, valuable technology to information
technology (IT) products, presumably as a way to
faster progress for civilization. If so, then okay.
But:
Given a claim of such technology, an investor doing
'due diligence' has to evaluate it. Then if the
investor is a venture partner (VP), they have to
consider the 'guidelines' they agreed to with their
limited partners (LPs) and for the investment maybe
'explain' to the limited partners. Then the LPs
have to 'judge' the accuracy of the due diligence.
But, the VPs and LPs don't like to do, or get
involved with, such things. Instead they just
prefer to "let the market decide".
Are the VPs and LPs wrong? From some data posted
recently by Fred Wilson at his AVC.com, apparently
they are wrong: The numerical data seems to say
that in recent years the 'venture capital asset
class' has done significantly less well than an
index fund or the S&P.
For more, the financial value of the coveted,
honored, respected, celebrated "unique, new,
powerful, valuable technology" in IT doesn't have
such a great track record at least in the sense that
it's not easy to find the yachts. Can take this
situation as either a slap in the face of the hopes
of financial gains from research or as a great, wide
open field, free of competition, for such gains from
research.
One argument for the research is that what the
venture partners are looking for is exceptional; if
a venture partner gets 2000 contacts from
entrepreneurs, evaluates 100, and invests in 3, then
clearly they are looking for something exceptional.
Well, looking for value in "unique, new, powerful,
valuable technology" from research should be a
promising place to look for something exceptionally
good (in ROI).
However, look at two more points:
First, what does it take to evaluate research? For
one important case, we know well: In school mostly
it takes a Ph.D. committee that, for each Ph.D.
granted, spends maybe hundreds of hours in close
work and evaluation. Then after school, for a
submitted paper, there are reviewers, editors, and
editors in chief, and they all play a role. To get
to be an editor in chief is, from a Ph.D. and a good
research record, maybe a 20 year effort. So, how
are venture partners, rarely with a Ph.D., who don't
really do research, going to do the work of
reviewers, editors, and editors in chief, not just
in one narrow field but in everything that might
land in their in-box? They can't. Could they
'outsource' the evaluations? Maybe, but there would
likely be risks there.
Second, the VPs and LPs seem to be highly concerned
that somehow 'the market' is some unpredictable,
chaotic, inscrutable swamp where even the best
research results can get laughed at and die.
So, apparently so far in IT the investors just
concentrate on 'let the market decide'. If 'the
market' means that Yahoo writes a check mostly just
for reasons of buzz, publicity, internal
inspiration, etc., so be it.
Could there be something else? Perhaps: (1) Get
what one VP calls a "big ass problem" (BAP). So, if
can get a good or much better solution for this BAP,
then there should not be much question about
virality, 'traction', happy users/customers, or
'product/market fit'. Or there is Sequoia's
optimistic remark, "A huge market with customers
yearning for a product developed by great engineers
requires very little firepower.". (2) Do some
research to get the solution. Or to modify the
(1)-(2), get a list of BAPs and a list of research
results likely can achieve or build on, and then
pick a pair of a BAP and a research result that
provides the needed solution. This pair picking is
part of 'problem selection' and widely viewed as
important for success. Then do the evaluation of
the solution, possibly presented just on paper,
e.g., much as in a journal article, but with a
better organized approach than the peer-reviewed
journals use.
So, can such pair picking and evaluations lead to
success? For success in the market, recall the BAP.
For the success research promised, yes. Examples of
this last? Sure: What the US DoD has done, with
batting average much higher than the VPs, since
about 1940. E.g., the USAF's GPS was the second
version; the first was by the US Navy, with crucial
early work at the JHU/APL in Maryland. The work was
proposed essentially just on paper, and the rest is
history. For another example, when the U-2 was shot
down, the US wanted a replacement -- Mach 3+,
80,000+ feet, 2000+ miles without refueling. Kelly
Johnson drew a picture, and the rest is history,
right, the SR-71. Net, it really is possible to
plan projects with "unique, new, powerful, valuable
technology" and execute the plans successfully.
VPs, LPs, listen up.
Net, likely a better solution would be for
researchers to talk of the value of their work at
media parties on their yachts, 250+ feet long. Or
"money talks". Or, the VPs and even the LPs have
been known to rush for 'the next big thing'. Well,
a few IT researchers with $1+ billion exits could be
a 'next big thing'.
Funding for such work? Well, just do an MVP by
licensing some code from SRI or some such, put a
mobile app in front of it, get a lot of publicity,
sell out for $30 million, and then use that cash to
fund the real project. So, that would be a $30
million Series A where the VPs get 0% for a project
without yet even a single dollar of revenue, user,
or line of code!
Researchers, believe me: When your serious project
is the next big thing and you are worth $1+ billion,
your little MVP $30 million weekend will be
forgiven!
Whatever we do, currently we are crawling like a
snail and, instead, very much need to get going, and
VPs and LPs need to be part of it for all concerned
including themselves.
it's about comfort zones, my 17-yo will take out the trash, but only to the screened in porch, not to the can. He also won't walk around the corner to get the can if it is still in the driveway, he will leave the trash exposed to racoons on the deck near where the can is supposed to be. Comfort zones...
I'm sure a lot of people are resentful or disgusted that a 17-year-old was acquired for $30 million. I just find it fucking hilarious. It's awesome, not in some dipshit "American Dream" sort of way, but in the "holy shit, this world is on crack" sense of it. I say, go him!
The next time I am looking for work I am seriously considering getting rid of the resume and coming up with a bullshit startup name. It's pretty ridiculous that my "acq-hire" value in a startup with a bullshit product would be about 50 times the market salary for someone at my level of skill. (I've seen enough inside numbers to know that this is not an exaggeration. Acq-hire values are $2-4M for mediocre engineers and $4-10M for good ones.)
One could do major social-proof arbitrage by offering cuts (of future acq-hires) to people in the tech press. I am dead-fucking-sure this is already happening. It must be. The stakes are too high, and the players too degenerate.
On to the main point: yeah, it is terrifying that large corporate cultures are that desperate for innovation. I feel like they suffer the same problem as command economies. The natural information-theoretic incompetence of central authorities makes them slow to respond to anything (including especially their own creeping obsolescence, for which they compensate by purchasing external talent at extreme prices) but overreactive once they do.
I am going to give Yahoo the benefit of the doubt. I have a hard time believing that they'd pay $30M to gain five programmers. There's a lot more to this than we are aware of. C'mon folks, if you think the math doesn't add-up (as an acqui-hire) don't you think the folks at Yahoo can do basic arithmetic as well.
I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.
Here's a bit of news for detractors: Business is hard. No, it is fucking hard. And, at their size and scale it is even harder. And, at the break-neck competitive speed of the internet, even harder still.
Mere humans make mistakes. We can read the tea-leaves wrong and take the wrong road --or one that is less than ideal. In business this can cost you years before you regain your prior position. What matters is that you do not give up.
I like Yahoo very much. They've been around for a long time and hopefully they'll be around a lot longer. They might eventually find a groove to fall into and light-up the afterburners. Stupid they are not. What they are doing is hard. What all of us are doing is hard, at any scale.
I have a hard time believing that they'd pay $30M to gain five programmers.
That's a fairly standard acq-hire, actually. It's not just Yahoo that's paying over $5 million per head. It's ridiculous, when you consider that the value of an employment relationship (which can be ended by either party at any time) is set at 30-60 times the annual salary. (Just think about it: how is a relationship that lasts 4.5 years on average worth 50x salary?) As I said, either engineers are getting screwed, or acq-hires are signs of severe desperation and devastating information poverty. It seems to be both.
I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.
I am dead sure that there are a lot of amazing engineers at Yahoo. It's just sad that the company is so calamitously bad at recognizing talent at the bottom that it has to hire external 17-year-olds. I'm sure they have plenty of great people who'd be thrilled to do an NLP/R&D project for just their regular salary.
If I were at Yahoo right now, after this acq-hire I'd write Marissa Mayer an email:
Dear Marissa,
Hi, I'm Michael O. Church. My salary is now $500,000 and I have full autonomy to
work on whatever project I want. Based on the rate you are paying for external
talent, this salary is justified. I am dead sure I will deliver more
economic value to Yahoo than I take from it, but I will choose my projects
from here on out. If that is not acceptable to you, Friday is my last day.
If you're writing $30-million acq-hire checks for 17-year-olds, you should fire every goddamn middle manager, because your ability to recognize talent at the bottom is for shit.
It's not even five programmers - according to the news, only the founder and 2 employees are joining Yahoo. This is acquisition is fantastic news for the founder, but I'm still at a loss on how it can possibly be a good business decision for Yahoo.
I don't believe in "publicity" and "getting in the news" and "making Yahoo hip again" - for $30m, you could do much better. I don't really believe it's for talent either - they could have found much bigger and better mobile teams for that money if they wanted to.
The only two hypotheses that seem plausible to me are:
* SRI accidentally granted Summly a too broad and cheap license for their summarisation technology, and it's cheaper than licensing from SRI directly.
* The 17-year-old founder's parent is a Morgan Stanley executive, and the startup has high-profile investors. Some M&A exec at Yahoo went golfing with one of the investors, and decided to help an old friend cash out on his investment. The rest of the deal is just a side effect.
This is spot on. I'm certain this 17-year-old is incredibly clever, but you could hire an entire think tank of clever people to do nothing but innovative R&D for $30M. Hell, I'd take a significant pay cut if I could transition from coding around bullshit UI quirks to actually solving real problems.
Well, first they'd have to acq-hire me. I'm cheaper than $30 million, though.
I am seriously considering considering going into business as an "unfuck your culture" consultant. If you're at the point where you're paying $6 million per head for talent, then I'm a fucking steal at $2500 per hour [0]. Sure, I will talk your ear off for 200-400 hours over two months and bill you for almost a million, but I will solve your damn problem.
[0] That's my rate for large companies. Startups get a discount. Inquire within.
Without commenting on Yahoo! specifically, I think it's the case that sometimes companies become so dysfunctional they're beyond redemption. One company I worked at used to do contract work for Nortel. At one time it occurred to me: "you know this seems like stuff they could do in house, why are they paying us to do it?" Apparently the institutional bureaucracy was so bad no R&D-type project could get done internally. Of course the company filed for bankruptcy like a year or two later.
"I am seriously considering considering going into business as an "unfuck your culture" consultant."
After only six months and two gigs as a contract software engineer, I'm thinking about this too. So far I'm appalled at the state of play in the small software houses I've seen.
Many years ago I watched a tv documentary (probably BBC with the Open University) about business consultants.
There was a small - medium engineering company. These firms tend to be split between white collar office and management work, and blue collar shop floor work.
The consultant went in, had a bit of a chat with the management, and then went onto the shop floor. After a bit of resistance he got a lot of great information. When someone is sitting at a machine pushing a button for 8 hours a day one thing they know is what makes that harder and what might make it easier.
He got all these suggestions and put together a plan. All the blue collar staff were energised, active, keen to be involved. He then told them he was going to make a presentation to management. He asked the shop-floor workers what they thought would happen.
"They'll ignore you" was the reply. "No!" he said, "They'll see the work we're put in, and they'll see the benefits to them, and they'll put in some changes!"
He called the meeting. He gave his presentation. All the management sat, waiting for someone else to make a first move.
Obviously they did not agree with any of the suggested changes. They heard the story about the car factory worker who saved his company thousands with a simple bag over the licence plate suggestion. They didn't care.
"What you don't seem to realise is that we've already thought about all of this before we put the machines in" - it's like kaizen never existed.
There's a reason many work cultures are fucked.
But, you know, it is a good idea and I wish you luck if you try it!
PS: obviously the point is not "shop floor great, management bad", because I've met many lazy shop floor workers.
Given your comment history, and the way you seem to understand the bigger picture, I would not hesitate to go to business with you. So, let's get busy getting acq-hired. (:
If it's that easy why don't you do it? Surely a self-proclaimed 1 in a 100 programmer could bang out a product ripe for aquihire in the time it took to write all these "don't care, but still" posts?
We both know that it's not "easy" to get acq-hired for $30 million. It's also not easy to win the Powerball, even if any idiot has a chance.
It is, however, a sign of something wrong in the economy.
When a $6-million-per-engineer acq-hire (the team, not the product, is being bought) is going down, the company is paying about 50 years of an engineer's salary for an employment relationship. A job lasts, on average, 4.4 years according to BLS. Particulars to acq-hires only make that expected duration lower, but let's use 4.4 because we don't know what the "real number" here is.
Executives bitch until they're blue in the face about paying 25% for a normal recruiter. It seems inconsistent to complain that your headhunter's charging you 25%, then pay 5000% for an HR acquisition.
This means one of two things. The first is that, possibly, the employment relationship is worth that much. That is, it's worth $1.5 million per year (as opposed to the more typically cited figures, which are around $200,000) to employ an engineer. Well, then engineers are getting screwed. They're only getting ~7% of their total value-add (120k / 1620k) instead of 38% (120k / 320k).
The second possibility is that engineers aren't getting screwed, but that companies are so bad at discovering talent internally that the only way the executives and get their hands on someone good is to buy people on the market at a very high price. That's not saying that there aren't good people at a company like Yahoo; only that the middle-management filter is so dysfunctional that executives don't know what they have.
Let's say that in November, you pay $2000, out of desperation, for a new coat that's worth $175. When your lease ends in August and you're cleaning everything out, you find that you had an equally good coat in your apartment, just sitting there all winter. You couldn't spot it before because the place was such a pigsty. You'd feel like an idiot, then, wouldn't you?
That's how executives deserve to feel if they acq-hire talent for $6 million but have capable people within (and I'm sure they must have some) who are being underutilized on trivial features and fourth-quadrant nonsense. If you simply don't have talent, then go ahead and buy it at a high price. If you have it and can't find or use it, then you need to scorched-earth your whole management structure.
You're discounting the multiplicative value of the team.
A lone wolf programmer, even if he/she is an ace, is pretty limited. An entire team - spanning the entire stack from design, backend, frontend, etc, is many times more powerful than its individual constituent employees.
High-performing teams are also extremely rare, and extremely hard to build. It's not hard to build a team that can get its shit together long enough to ship a product. It's really hard to build a team that can ship at the top of the field, consistently, repeatedly.
I don't know enough about Summly to know if this is the case, but if they fit this description, then the acquisition doesn't strike me as completely ludicrous - just a little bit.
Of course, this logic doesn't fly in reality because it's practically a guarantee that the slow, stodgy, MegaCorp that acquired the lean, high-performing startup team is going to stomp all over whatever it was that made them tick. I've seen this happen too many times to believe that there is another possible outcome.
But it seems that every stodgy, slow MegaCorp believes they're different, and this time they'll adopt a hands-off approach and let the team work its magic. Then reality sets in, some middle manager crashes it all while fighting for his/her fiefdom, and the whole exercise is forgotten about until the next acqui-hire.
Anyway, theoretically an engineer can be worth $1.5mm a year if they're in a proven, performing team that's operating a couple of standard deviations above the norm, in a competitive field. That same engineer would be worth far less if they came alone.
Maybe it's not just about talent, you could certainly hire amazing talent for a lot less than $30 million.
I imagine this kid will disappear into Yahoo and emerge again in 3 years time more mature and having been groomed for a leadership role by Mayer etc.
He will be the "lead developer" for some new product they have spent $serious_R&D_budget on and will make another promotional video where he talks in a charming British accent and drinks cups of tea with Stephen Fry.
In other words "The wonderkid who turned the crusty old dotcom around".
Technology is a celebrity culture and Mayer knows this. Liken to manufactured "boy bands".
I'm an old fart (29) and don't have a British accent, but I'll do the three-year CEO-protege thing for a mere $10 million and kick it's ass (as long as you listen to me; if not, then you're wasting money).
Bidding war's on! (If you say $9.99 million, then you are a fucking asshole.)
If you had the connections that this guy (and Mayer, and Sandberg, and Zuckerberg, and...) has, you wouldn't need to auction yourself. That's how the system prefers to work.
The listening is obviously a part of the package. Before I can say, "You're doing it wrong" in good conscience, I have to make sure that you are doing wrong.
I know it must seem like I get off on pointing out Wrongness, but there's this thankless and time-consuming process of finding the Wrongness. It's exhausting work. Y'all just see the fun part.
I know that the OP did take it off the table. I'm not doing so. It's important, and here's why.
I'm sure he's extremely talented. Most 17-year-olds aren't programming at all. However, this is an HR acquisition (they're shutting Summly down). What exactly does a 17-year-old have that merits a $30m hiring bonus?
I'm not ragging on him, at all. I think it's great for him. He had the opportunity and took it. That's awesome. But... what are Yahoo's executives thinking?
When DE Shaw hires Putnam Fellows, they start them at $150-200k. Not $30 million. They have to work their way up to that.
I'm not asking this out of resentment, because I don't care. Yahoo could have acquired him for $500m and I wouldn't care. I'm asking that out of honest curiosity. If you're that desperate for talent that you're hiring 17-year-olds (very good 17-year-olds, no doubt) with a $30m hiring bonus instead of a much more reasonable, I don't know, $500k, then what did you do so wrong as to get there?
See, I'm sure there are economic reasons for large companies to buy goofy startups for $7 million per engineer. But that's a sign that either (a) they're all seriously underpaying their people, and it's systemic across the Valley, or (b) their internal cultures are so stifling of creativity that they're desperate for innovation, and the only thing they can come up with is to massively overpay "credible" people from the outside instead of developing internal talent.
I suspect that it's both (a) and (b). In fact, I've been inside enough short-sighted, badly-run companies to know that it is.
It's of personal interest to me. Companies are literally in headline-making death throes because they can't get people like me, and when one of us shows up-- we aren't that rare, maybe 1 in ~100 software engineers-- they treat us like shit. It's bizarre.
Here's a proposal to all the large corporations out there. For a mere $2500 per hour I, Michael O. Church, will tell you how to unfuck your inefficient, talent-stifling culture. CEO of a megalith that can't hire good people without a 5-million-per-engineer acq-hire? (Actually, you probably have good people-- some much better than I am-- but the dopey middle managers keep you from seeing their talents. Fire them. That'll be $175.) I will help you change that. All you have to do is listen to me. After 200 hours (that's a mere $500k) you will no longer to acq-hire at $5-10m per engineer to get good teams. You'll be able to do it for $3m per engineer because people will actually want to work for you. Or, better yet, you'll be able to get good people the old-fashioned way.
Mark Zuckerberg is young and rich, but he actually built a free-standing company. So it's not as ridiculous that he's worth billions, given that the work (possibly not the code, but the ongoing business process) is still in use.
It's hard to say this without sounding insulting or belittling, but I'm genuinely curious... What are your credentials? You don't have to justify yourself to some random guy on the internet (me), but a few of your comments mention you're in the "1 in a 100" category, so I'm wondering what you've done that would be so valuable to Yahoo. Is it that you're a talented engineer or more?
I probably sound like a complete dick but I'm being sincere. I often wonder where on the scale I sit (e.g. 10 in 100?), and whether I'm undervaluing myself or my talents, or even whether I'm overvaluing it? So I'm wondering how/why you arrived at your personal valuation. Hope that's not taken the wrong way.
It's from 0.0 to 3.0, but the majority of professional software engineers are between 1.0 and 2.0. Average is about 1.1-1.2, and 1.5 is seriously good; it means you're starting to have sound multiplier, infrastructural contributions.
I'm probably at 1.8, which is about 97th percentile. I promoted to "1 in ~100" because I have a lot of creative talents, cultural insight, and design experience. That's just a ballpark. I'm somewhere between 1-in-10 and 1-in-1000 (among software engineers). It's highly subjective and has a lot to do with tool fit, project/person coherence, and peoples' motivations. In some companies, I'm the absolute last guy you want to hire. In others, I'm a 4-sigma catch. Especially at the upper end, it depends a lot more on fit than anything objective.
My point with "1 in ~100" was that, while I won't claim to be average, if you're at Yahoo's size you almost certainly have people who think like me. If you can't find them through normal methods and have to acq-hire to get top talent, that's on you, but I think you're spilling money on the floor. It'd be cheaper, in the long run, to develop what you have internally.
Interesting credentials, but I prefer to rank professional software engineers on the Freyr scale, which ranges from 'Fink Melange' to 'Banana Whelp'. It's a complex system based on myriad factors, and even discounts for spatial-temporal mislocations and organizational dissynergies.
Right now, I'm a 'Piebald Lummox', which places me squarely in the 99.3 percentile. In other words, I command top dollar and you're an idiot if you don't hire me.
If you need any further credentials, I'll tell you about my inverse Graftenberg scale of managerial excellence. I'm currently at -ξ.
Haha, "here's an article I prepared earlier"! Looks like an interesting read, I'll go through it now.
I understand what you mean, given the sample size it's statistically likely that there must be a some number of extraordinarily talented devs. And that they're not nurturing that talent. It is a fair observation I must say.
This "strange" deal actually did a few things for Yahoo:
- people are talking about it (and not in a bad way, like it was with the telecommuting memo)
- this may attract some fresh talent (just out of novelty; before, Yahoo was pretty much written off)
- it's crazy enough, it's actually pretty energizing for the right kind of people on the inside
On the other hand, I can only imagine what kind of internal HR issues these acqui-hires may create for Yahoo.
People are talking about it in a bad way. I don't think it's useful to hate or resent a 17-year-old for getting acq-hired (although it's pretty disgusting that he keeps the company of Mark Pincus and Rupert Murdoch; I'll give him till 21 to clean his judgment of character of such) but this reflects really badly on Yahoo.
On the other hand, I can only imagine what kind of internal HR issues these acqui-hires may create for Yahoo.
Well, for fuck's sake yeah.
What Yahoo needs to do, and fast, is get better at discovering talent within. Apparently they have a problem with lazy people. Ok, so make it possible for a not-lazy employee to make a real dent-- important projects, self-direction, lots of autonomy. Give your best people an incentive to bring themselves out and shine. Honestly, if you give your most talented people basic support and autonomy instead of letting them get eaten alive by people they intimidate, you're doing better than 90+ percent of companies.
Any attempt to innovate in corporation is potential career killer. That is how companies work. So many smart engineers are just quiet and they just do what they are told (make they boss happy).
Seems Yahoo! tried to solve this with their "brickhouse" program, a new product incubator, but ultimately it seems that was too disruptive and got axed.
As a cynic who is constantly looking for ways for human structures to fall to pieces, I'd be very worried about the large-company politics of a center-of-excellence/"honors college". When you set up a CoE, the rest of the organization feels put out.
If you put some set of people into R&D roles where they have full autonomy, then everyone wants it. The "Real Googler" issue (~10% of engineers have 20%T and the freedom to move around the company; the rest have manager-as-SPOF bullshit) is definitely a source of resentment at the Big G.
If you're going to do that, then have open allocation for all engineers. It's a much ballsier step, but it avoids resentment of the "special friends club" that gets to do cool R&D and that the rest of the company ends up undermining.
Whilst I generally agree with your view on innovation and the whole "special friends club". But 20% time wouldn't counter the innovator's dilemma: there will still be established power structures in place, reaching to the top levels of the business, who have a vested interest in their status quo (and that doesn't mean no innovation - they can still be innovating), who will fight disruptive innovation. Google seems particularly rife with this!
The value in a incubator, new product development group, or "spin out", (don't think any CoE I've seen fits this model...), is that they have top level sponsorship to go outside of normal process for: hiring, sales, tools, platforms, etc. as required, and just build new stuff. If that's disruptive in the short term, C-levels should be pushing it through for long term gains.
You also place a lot of trust in engineers to have Clue about what to work on. Most will have ideas, many of those ideas would be a very poor use of the companies resources. If those guys feel strongly, they should spin out, and pitch to their old senior execs for seed funding. They'll soon find out if their idea has legs...
In large corporations new hires and acquisitions are handled by different teams. Both teams may be working for the same set of goals, but in ways that are often conflicting in a practical sense.
It's not the fact he's 17. There are 25 year olds in startups, as recently as yesterday's Demo Day at YC, who've been given multi-million dollar investment and acquisition offers.
It's the fact that they paid $30m, for what essentially a lot of people here could build.
Heck, Yahoo has talented hires, they could create a similar app from scratch for significantly less.
But they instead chose to buy it, at the stupidly high figure that they chose. That is why people just don't understand.
>It's the fact that they paid $30m, for what essentially a lot of people here could build. Heck, Yahoo has talented hires, they could create a similar app from scratch for significantly less.
Ok, I think get your point. Still I have to disagree. The thing is this, many successful ideas don't need lots of genuine innovation and creativity. Instead they need to be 1. realized, 2. at the right time and 3. targetted towards the right people.
IMHO Facebook is a prime example for this. When you look at the history of communities, Facebook was by no means innovative. There have been plenty communities already and the world of communities progressed towards continuous improvements. In fact I used to be a vivid user of many Web 1.0 communities and watched with great excitement the transition from tech-people dominated communities towards general audience communities. Why did Yahoo not create Facebook? Well, it's the same reason small startups can drive big elephants out of business. I think there have been enough posts about this thing on HN in the past.
>But they instead chose to buy it, at the stupidly high figure that they chose. That is why people just don't understand.
1. The authors did put a lot of time in it (yes, multiple people worked on that, check out the website's About)
2. A great number of users are using it
3. Yahoo is not the only company interested in taking over a working website. Market mechanics.
From his own quoted post:
"I lived through 8 years of a non-reading president along with everyone else. I know that the brogrammers out there are constantly getting texts from their buddies to plan the weekend's broactivities..."
Thanks Professor, now I don't have to continue reading your post – ie, you're kind of a jerk.
Do you know which president I had in mind? I lived through quite a few 8 year terms, and yes, that includes Reagan.
If your response is "but everyone knows which president you were referring to," then surely it's fair game to refer to whoever that is since the facts are universally accepted? :-)
The comment thread is only just getting started and there are already two comments about why they didn't bother reading. The TL;DR generation has another skill - finding ways to rationalize why they didn't tax their brains with the effort of reading. Mostly they're of the format "I read x in the first few lines so it disqualified the rest of the article from further attention".
I think there's a new qualification for TL;DR - DFIAT - didn't fit in a tweet.
Dang, I been tricked!
Seriously, though, it's not in our nature to take counsel from folks who act disrespectfully. The quip about a non-reading president and "brogrammers" fits that.
The point is to dig up something cool in the vast universe of information and actually deliver it. It is nice there are friends and university Professors who knows about this certain technology way deeper but can they _really_ deliver ? Sure, they will teach other kids and those kids will teach others or maybe going to be employed at some tech company.
This kind of success is just more potent a visible. It really depends from what angle you look.
This guy has financial, educational and social success. From standpoint of the startup culture, I think he's done very well. Anything can be judged only by comparison to something else.
As a fellow 17-year-old, I have nothing less than respect for Nick. You're obviously doing something right if you sell your company for $30M before you're an adult. Who cares if he's not an AI researcher? The scholar who wrote this article can't bash this kid's product until he actually builds something useful. If he came up with a revolutionary AI theory, great. But the people who take an experimental idea and see the value in it are the people who change the world. Einstein came up with some good theories, but nobody will remember his name when someone uses the theories to create a time machine.
Are we going to ridicule Tesla Motors for making (highly innovative) cars because they licensed the steering wheel or navigation system from another company?
I should have known better about the age thing. I know it's a stretch to compare the two, but Summly seems more innovative than "a unique new social network" if you know what I mean. I give the kid tons of credit.
All this stuff we're gluing together is the product of state-funded research, mostly from the cold war era. DARPANet, the web (CERN), DARPA research on "augmented human intelligence," etc.
Stuff like: http://www.youtube.com/watch?v=yJDv-zdhzMY
(I bet you thought Xerox PARC invented that stuff, right? Or Apple? Nope. DARPA and SRI invented the entire modern user experience in the 1960s.)
Few companies ever fund that kind of thing. There's two reasons. One is risk vs. reward-- such projects are typically "high risk, high payoff" as DARPA likes to say. Most lead nowhere. The second reason is that there is no good mechanism for monetizing the result. Fundamental innovations are often too fundamental to patent effectively, and are easy to copy once understood. They're also often worthless in themselves. They are enablers of value that is built on top of them.
Fundamental innovation is a lot like infrastructure -- something else free market players seldom invest in.
This is a problem for today's generation of enthusiastic free-market proponents. Who is going to pay for the next generation of innovation?
It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-Lee, is he a billionaire? No, we have 17 year olds making quick millions gluing together the work of dozens of Ph.D's who will never see that kind of money in their lifetimes.
It's a big thing that turned me off the Ph.D path. I don't feel like taking a vow of poverty and toiling in the dungeons to develop some fundamental, difficult concept that someone else then takes, glues to something else, flips, and gets rich.