While I agree with the general sentiment of the author (and the same general message comes up quite often on HN), I have two issues with the article:
1) It seems to equate "investors" with "VCs", who need big returns or quick losses to make their overall portfolio numbers work. Angel investors don't necessarily fall into this category, nor do more traditional funding sources. Thus, I think the expressed opinion should more be that blindly chasing VC money to fund a business that can't actually turn a legitimate profit on its own is bad, rather than that taking investor money in general is bad.
2) There's an implicit challenge briefly touched on at the very end of the article. If you have a project of love that gets popular quickly, it could literally bankrupt you if you tried to keep it alive on your own. Scaled hosting services aren't free, nor are community support, requested new features, compatibility updates, API costs, etc. etc. It's entirely possible that you could start a side project and then have to shut it down when it starts getting traction because keeping it alive and not-shitty would take more time than it's worth if you're not going to turn it into a venture-funded business.
RE 2), I think the article pretty clearly implies your project of love should pay its own costs. Once your users pay more than they cost you, scaling problem disappears - in fact, economies of scale are your friend here.
I didn't read that implication at all. Many projects of love are free with no revenue model at all, or maybe some random ads to offset costs (not cover them), otherwise it's unlikely people would even start using it in the first place. Going from that to a paid/subsidized model strong enough to cover actual development, hosting, etc. is a tall order.
> Many projects of love are free with no revenue model at all
Yes. I myself have several different ongoing projects. Some of them are in no way intended to be businesses and intentionally have no revenue model at all. Those are free for everyone and will always be (at least until/unless I tire of them and pass them along to someone else).
Others are intended to generate some sort of revenue -- with a couple, I only want them to cover their own costs, with others, I want to see them make a profit. Those are not free.
I agree, it does appear that the author made this error. It's a common one, though. I think it would benefit everyone, including VCs, if people were more aware that venture capital is only one type of investing out of a wider pantheon of investing.
Each type has its own advantages and disadvantages and the wise entrepreneurs and investors alike should judge the different types of investment strategies according to what most aligns with their goals.
This editorial makes sense: once a company takes outside investment that demands outsized returns not in 10 years, but tomorrow, founders and employees will feel pressure to take larger risks and act in ways that might not be moral or ethical. VC-backing is definitely a factor in fraud, anti-competitive tactics, and unethical behavior. But what's the alternative to VC-backing? Doesn't seem possible for everything to be bootstrapped.
Are you really arguing that everything can be bootstrapped without up front investment? I know many things can, but equally many cannot in non geological time.
There are things that can't be bootstrapped. They tend to involve the upfront purchase of millions of dollars of scientific equipment or a decade of R&D. Things like drug candidates and commercial airplanes. That's where venture capital originally developed.
I am unaware of and have not been able to think of a software business that requires comparable investment for technical reasons. When you see a software company that must be backed by venture capital, it's to fund anticompetitive practices.
_Maybe_ if your software business idea had at its core some fundamentally hard problem and you needed expensive hardware to be able to run your service fast enough to support all your customers... but even then you could probably get by on cloud providers and being a bit slow, if what you did was useful enough to be worth waiting for. Then just upgrade as you get more customers paying more money.
No. Not everything but hundreds a day at least. work hard. Save up. Identify a problem. Solve it. Nice and neat. Sell the solution. Profit. Spend some on marketing and sales.
Well maybe not everything should be funded, and maybe we could put moral above money? It’s not because doing immoral things is legal that it should be done, or that it will stay legal forever.
Also, there are ethical things that are illegal to do too.
Not everything can be bootstrapped, but there are different types of investments. The problem is that VC-backed companies can outspend and thus outcompete companies on a saner but slower investment schedule.
This is interesting, but it probably works the opposite way. Twitter et al makes celebrities out of people who seek moral outrage. In this way they overplay their righteousness, but the effect is exactly the same as amplifying the offending message itself: more ad revenue. Interesting hack of our society’s moral norms.
I’m not saying it’s wrong to be offended, but if you are, somebody’s probably getting paid for it.
I think you missed his point. What I heard him saying is that in the past, other commonly accepted practices were eventually deemed unacceptable and ended. There's no reason the currently accepted practices of the advertising industry can't follow a similar trajectory.
Is it a surprise to anyone that all the major advertising companies are more than willing to meet the demands of nations that do not deem child labor as a negative? Not at all. Its why these companies need to be regulated. Sadly, regulation tech is taboo because that means VC s wont be able to make money as easily.
We decided child labor was unacceptable _outside certain limits_. I was helping customers in the family deli at 11-12 years old, and that's perfectly legal as long as time/task regulations are followed.
I think "advertising" is a deliberately ambiguous term nowadays (like justice or freedom)
50 years ago, advertising was a broadcast medium. A sign, a jingle, a page in a magazine with a photo and a pitch.
But nowadays advertising is two-directional, probably more accurately defined as surveillance and profiling of individuals.
For example, if you run the Target app on your phone and look at the "advertisements" for a product, it is very likely the price will go up if you walk into the store and look again.
Human cognition is riddled with exploitable defects. Biologically we are basically just highly pretentious and neurotic monkeys. All of human history is full of people looking for someone to blame for their condition (gods, devils, spirits, corporations, etc) but it never changes.
Keep in mind, from an evolutionary perspective we are exactly the same people who were burning witches at the stake and throwing people in lakes to determine their criminal culpability a few hundred years ago. We just have a different set of superstitions and delusions now.
I get it, is that a thing you want to fix though, or to prevent? Education or regulation or something else, if we take as a given that the market has failed?
I wrote a comment twice (and deleted it as inflammatory, it’s a fact about reality that is largely counterproductive to debate) where I pointed out that Donald Trump is the president of the U.S. and it’s wonderful or terrible depending on your point of view. I don’t want to derail all conversation into irrelevance but what if the “wrong thing” is what people want? What do we even want anyway? Is “exploitation of cognitive errors” just a thing we say when people decide they want things we think are dumb?
The true horror: what if this is the least worst thing people want?
> is that a thing you want to fix though, or to prevent?
wanting to fix is pretty obvious. capable of fixing is a different story. biologically there is no fix (genetic engineering maybe? but that is super sci-fi). so we can try to correct with technology or social conventions but those fixes never change the underlying biological defects so how effective can they really be?
Look at the social engineering aspects of organized Christianity. How well did those work? Look at the social engineering aspects of the U.S. experiment like universal education and literacy. How well did those work?
It is a little bleak but in reality universal literacy has been a complete failure (in the U.S. at least). Probably 80% of the population is at the level of what used to be called "knowing your letters" but they are functionally illiterate (they have never done any significant amount of reading in their life, and aren't really capable of it). That is not a popular opinion, at least not for public consumption, so we can't even begin to address the issue because we refuse to acknowledge that it exists.
If you include the notation used in math and science, then the actual level of literacy is at the same levels as you would have seen 500 years ago. It’s actually kind of similar; the liturgical class was literate enough to read and study the Bible, and the masses relied on them to parse the information. Today, it’s statistical models, but the concept is the same.
How can you tell the difference between your own personal hangups and absolute moral truths? That's what we're really debating here. Good luck solving that one in an afternoon...
Option one, check with your community. That's the approach the pro-censorship side is taking, they only propose censoring content that every acceptable silicon valley individual thinks is objectively harmful. They also support drowning witches. Wait, no, wrong culture, they got it wrong, we got it right this time we promise.
Option two, check with the conscience of the accused. Human beings regret most of their decisions, and people are their dumbest in the heat of the moment, and further people tend to dig in when pushed from the outside, so maybe the path to virtue can only be people improving themselves. However if you're convinced that your enemies are all a bunch of complete evil psychopaths then that won't work because clearly psychopaths don't do that.
Option three, optimize for something completely unrelated, and pretend to be motivated by whatever suits your goals - if morals are "in," then pretend to be moral. That's probably what's going to happen if we can't pick between 1 and 2.
Option four, have an external standard that is neither based on the community nor the individual. But the problem is, that standard has to be right. If it's wrong, then it's going to be used to censor things that contradict it, and therefore enforce the wrongness. So you need a clear standard of what's right. Christianity once furnished such a standard for the West, but no longer. The closest we have now is the law, but that's halfway to option one.
As a side note, what always amuses me when I see phrases like "what people want" is that it sounds like there are all the people, and the speaker is not them.
I suppose the situation is usually more complex; in the simplest case it's just "us vs them", but likely it's a more detailed separation of groups, based on culture, values, etc. Thinking a bit more explicitly about that, and especially about who are "we", the ingroup, could be beneficial.
What is this that you refer to exactly? The deep non uniformity of our current society and politics, globally, indicates that there is, at the very least least, a lot of room to maneuver and improve. Liberalism, for example, likes to push the narrative of the least bad option, but often it does so to reject ideas that have a clear precedent of working better than the ongoing decline of equality and flight of alienated workers towards reactionary politics we have now.
> ...the fact is, hate speech is profitable. It’s killing our society and our planet...
Source? Hate speech has been part of every major society since at least the time of the Egyptians. The opposite could easily be true. Hate speech might be an integral part of society. Its also not very profitable. That's why companies police their own content. No reasonable company wants their advertisement associated with the Klan. As for hate speech's effect on the planet -- I don't think the Earth cares who hates who.
By a broader definition it makes sense. People insulting and mocking each other, talking past other. Even the president.. Did we used to do that IRL in the 70's and 80's?
Humans used to resort to physical violence as well as name calling. Rome had a series of senators brutally murdered in session, even before Cesar. Andrew Jackson used to physically attack opponents. The whole Aaron Burr story.
My unsupport theory is that we've pacified to the point where anyone can say anything without getting beat up or killed, which allows people to push the envelope.
I'm not suggesting we should go back to violence, but i think the lack of direct violence in a person-to-person setting have enabled more and more wild speech.
To add, maybe pacification has led more speech to be deemed "wild" whereas before the same speech may have registered as a 2-out-of-10 on "will this get me beheaded?" scale.
As for "talking past each other", I was astonished in college to see how much of that goes on among college students sitting around a table to discuss an apparently well-scoped topic.
I don't feel like anyone ever addresses the fact that the initial web was modeled after academia, and yet most people were really just looking for a place to share their identity. The (free) companies stepped in to make the web accessible to them.
We're all angry at the broken promise of what the web could be and yet most people I know have shuttered their accounts in the negative nether regions of the internet. Facebook is a ghost town. Twitter was one presidential election from going under. Instagram is thriving because there's little direct communication (or hate communication).
And things are starting to happen again for the decentralized web. People are blogging again on their own sites (including ditching medium). Github has been a boon for collaboration and now is starting to help open science. New social media platforms are popping up too (e.g. Mastadon).
how will it shake out? no clue... but I do think that it will shake out for the better.
>We're all angry at the broken promise of what the web could be
Most users enjoyed the web in 200X. It wasn't a broken promise. It worked. Then there was a concerted Web 2.0 campaign[1] that pushed in the direction of "harnessing the collective intelligence". Well, Twitter is what "collective intelligence" looks like in real life.
>"You can cloak this basic economic trade-off in fifty layers of bullshit—say you believe in freedom of speech, or that the antidote to bad speech is more speech—but the fact is, hate speech is profitable."
May I point out that this happens to be a major talking point of some big media outlets right now? The same outlets, BTW, that mindlessly cheered on Facebook/Twitter/etc. as late as 2013.
It seems like it’d be possible to quantify what % of views derive from enflaming content. A few starting points we could look at, # of people banned and reach of said content, auction price of ad inventory that is temporally or visually adjacent to inflammatory speech, etc. It wouldn't be an exact science, but curious if it’s 10% or 70%.
I fundamentally agree that ad-driven revenue models have perverted many business models for content-driven sites (UGC or publishing). Many of the examples are publisher driven, are there any market examples of (perhaps small) UGC content sites that don’t rely on either selling personal information, or an ad-driven model?
63 comments
[ 1.6 ms ] story [ 108 ms ] thread1) It seems to equate "investors" with "VCs", who need big returns or quick losses to make their overall portfolio numbers work. Angel investors don't necessarily fall into this category, nor do more traditional funding sources. Thus, I think the expressed opinion should more be that blindly chasing VC money to fund a business that can't actually turn a legitimate profit on its own is bad, rather than that taking investor money in general is bad.
2) There's an implicit challenge briefly touched on at the very end of the article. If you have a project of love that gets popular quickly, it could literally bankrupt you if you tried to keep it alive on your own. Scaled hosting services aren't free, nor are community support, requested new features, compatibility updates, API costs, etc. etc. It's entirely possible that you could start a side project and then have to shut it down when it starts getting traction because keeping it alive and not-shitty would take more time than it's worth if you're not going to turn it into a venture-funded business.
Yes. I myself have several different ongoing projects. Some of them are in no way intended to be businesses and intentionally have no revenue model at all. Those are free for everyone and will always be (at least until/unless I tire of them and pass them along to someone else).
Others are intended to generate some sort of revenue -- with a couple, I only want them to cover their own costs, with others, I want to see them make a profit. Those are not free.
There is room for both types of project.
I agree, it does appear that the author made this error. It's a common one, though. I think it would benefit everyone, including VCs, if people were more aware that venture capital is only one type of investing out of a wider pantheon of investing.
Each type has its own advantages and disadvantages and the wise entrepreneurs and investors alike should judge the different types of investment strategies according to what most aligns with their goals.
Are the things that can't be bootstrapped actually worth doing?
Most software doesn't fall into this category, but a lot of hardware and services do.
If you can lower the cost of insulin that would be boon to humanity, but good luck bootstrapping that.
Better glucose monitor. Lots of medical thing are worth it from an ethical point of view but not bootstrap-able.
I am unaware of and have not been able to think of a software business that requires comparable investment for technical reasons. When you see a software company that must be backed by venture capital, it's to fund anticompetitive practices.
Repeat.
Like: just don't start a startup.
I’m not saying it’s wrong to be offended, but if you are, somebody’s probably getting paid for it.
What if the advertising dollars aren’t evil, what if we can’t blame them?
What if the problem is that garbage and trash fires are just what people want, and the ad dollars just follow the success?
I like the idea that there’s some kind of... imbalance? mis-structure to blame? That it’s somebody’s fault or the system is wrong somehow.
We decided child labor was morally unacceptable, so why not advertising?
Smoking and the tobacco industry would be more inline with advertising.
50 years ago, advertising was a broadcast medium. A sign, a jingle, a page in a magazine with a photo and a pitch.
But nowadays advertising is two-directional, probably more accurately defined as surveillance and profiling of individuals.
For example, if you run the Target app on your phone and look at the "advertisements" for a product, it is very likely the price will go up if you walk into the store and look again.
Keep in mind, from an evolutionary perspective we are exactly the same people who were burning witches at the stake and throwing people in lakes to determine their criminal culpability a few hundred years ago. We just have a different set of superstitions and delusions now.
I wrote a comment twice (and deleted it as inflammatory, it’s a fact about reality that is largely counterproductive to debate) where I pointed out that Donald Trump is the president of the U.S. and it’s wonderful or terrible depending on your point of view. I don’t want to derail all conversation into irrelevance but what if the “wrong thing” is what people want? What do we even want anyway? Is “exploitation of cognitive errors” just a thing we say when people decide they want things we think are dumb?
The true horror: what if this is the least worst thing people want?
wanting to fix is pretty obvious. capable of fixing is a different story. biologically there is no fix (genetic engineering maybe? but that is super sci-fi). so we can try to correct with technology or social conventions but those fixes never change the underlying biological defects so how effective can they really be?
Look at the social engineering aspects of organized Christianity. How well did those work? Look at the social engineering aspects of the U.S. experiment like universal education and literacy. How well did those work?
It is a little bleak but in reality universal literacy has been a complete failure (in the U.S. at least). Probably 80% of the population is at the level of what used to be called "knowing your letters" but they are functionally illiterate (they have never done any significant amount of reading in their life, and aren't really capable of it). That is not a popular opinion, at least not for public consumption, so we can't even begin to address the issue because we refuse to acknowledge that it exists.
Option one, check with your community. That's the approach the pro-censorship side is taking, they only propose censoring content that every acceptable silicon valley individual thinks is objectively harmful. They also support drowning witches. Wait, no, wrong culture, they got it wrong, we got it right this time we promise.
Option two, check with the conscience of the accused. Human beings regret most of their decisions, and people are their dumbest in the heat of the moment, and further people tend to dig in when pushed from the outside, so maybe the path to virtue can only be people improving themselves. However if you're convinced that your enemies are all a bunch of complete evil psychopaths then that won't work because clearly psychopaths don't do that.
Option three, optimize for something completely unrelated, and pretend to be motivated by whatever suits your goals - if morals are "in," then pretend to be moral. That's probably what's going to happen if we can't pick between 1 and 2.
How do you verify it? It's no easier than before.
I suppose the situation is usually more complex; in the simplest case it's just "us vs them", but likely it's a more detailed separation of groups, based on culture, values, etc. Thinking a bit more explicitly about that, and especially about who are "we", the ingroup, could be beneficial.
Do you think technology should be used to help us become better? Or help us become worse?
Source? Hate speech has been part of every major society since at least the time of the Egyptians. The opposite could easily be true. Hate speech might be an integral part of society. Its also not very profitable. That's why companies police their own content. No reasonable company wants their advertisement associated with the Klan. As for hate speech's effect on the planet -- I don't think the Earth cares who hates who.
...no it's not. This is nothing new and the planet is fine, but the people are fucked! (George Carlin)
Some did, and the vast majority of the population viewed those people as extremists and/or nutcases to be avoided.
My unsupport theory is that we've pacified to the point where anyone can say anything without getting beat up or killed, which allows people to push the envelope.
I'm not suggesting we should go back to violence, but i think the lack of direct violence in a person-to-person setting have enabled more and more wild speech.
As for "talking past each other", I was astonished in college to see how much of that goes on among college students sitting around a table to discuss an apparently well-scoped topic.
I don't feel like anyone ever addresses the fact that the initial web was modeled after academia, and yet most people were really just looking for a place to share their identity. The (free) companies stepped in to make the web accessible to them.
We're all angry at the broken promise of what the web could be and yet most people I know have shuttered their accounts in the negative nether regions of the internet. Facebook is a ghost town. Twitter was one presidential election from going under. Instagram is thriving because there's little direct communication (or hate communication).
And things are starting to happen again for the decentralized web. People are blogging again on their own sites (including ditching medium). Github has been a boon for collaboration and now is starting to help open science. New social media platforms are popping up too (e.g. Mastadon).
how will it shake out? no clue... but I do think that it will shake out for the better.
Most users enjoyed the web in 200X. It wasn't a broken promise. It worked. Then there was a concerted Web 2.0 campaign[1] that pushed in the direction of "harnessing the collective intelligence". Well, Twitter is what "collective intelligence" looks like in real life.
[1] Remember this? https://www.oreilly.com/pub/a/web2/archive/what-is-web-20.ht...
Laughing at the fact that the best medium is the one where people dont talk to each other.
May I point out that this happens to be a major talking point of some big media outlets right now? The same outlets, BTW, that mindlessly cheered on Facebook/Twitter/etc. as late as 2013.
I fundamentally agree that ad-driven revenue models have perverted many business models for content-driven sites (UGC or publishing). Many of the examples are publisher driven, are there any market examples of (perhaps small) UGC content sites that don’t rely on either selling personal information, or an ad-driven model?