A VC - Latest Comments in Triangulating For Insight

Re: Triangulating For Insight

fredwilson — Wed, 14 May 2008 02:06:02 -0000

Jeff send me an email and we'll set something up

fred

Re: Triangulating For Insight

jnolan — Tue, 13 May 2008 14:56:45 -0000

yeah that's a good point but the cost of building a community, audience, customer base, etc. is still dominated by the costs not related to technology. Are there any Ning communities that you would point out as exceptional in their size and trajectory?

I was going to quibble with you about calling my post a rant but being included in the same company as Winer and O'Reilly certainly left me with little to complain about. :)

BTW, I will be in NYC on June 16/17, would look forward to an opportunity to finally meet up.

Re: Triangulating For Insight

fredwilson — Tue, 13 May 2008 06:01:02 -0000

Jerry colonna once said, when its doctorsthatscubadive.com, you know we are
in trouble

But I am not sure that's true anymore

Because there are some doctors that scuba dive and there are platforms like
ning that allow an entrepreneur to serve them without much capital
investment

fred

Re: Triangulating For Insight

jnolan — Mon, 12 May 2008 19:41:12 -0000

There's a story about a sanguine VC at the tail end of the 1990's who said "now it's not just socks.com, it's kneehighsocks.com... at some point you have to ask the question 'who gives a shit?' ". I was making an observation about Silicon Valley sentiment at the moment, that it was negative is a consequence of the prevailing attitude at the moment. I wish I could remember who made that great socks quote, classic.

Re: Triangulating For Insight

tweetip — Sat, 10 May 2008 15:18:28 -0000

fred said "We are not in an incremental phase. We are in an incremental system."

Filtering & listening to twitter, we've become part of the "twitter system". The river of thoughts may be incremental, but our action based on those thoughts is big bang in scope. IOW, we're not putting out incremental versions of software, we're working through incremental versions of vision.

Our action of coding (manifestation) is a giant leap, speeding us along to reaching as high as we can toward the "star" Laz mentions. Spike Climate Events involve more than the grand cycle of weather :))

Re: Triangulating For Insight

Philippe Bradley — Sat, 10 May 2008 07:04:52 -0000

I just stumbled across a very interesting case where incrementalism was totally acknowledged and encouraged in a maths/programming competition (I've dug out the important excerpt here: http://www.overthecountercu... and the original post is here http://crowdsourcing.typepa...

Wikipedia uses open incrementalism, but that's a simple scenario because it's an altruistic endeavour, so people are happy for their work to be modified or stolen for future revisions. There's no benefit to creating the 'ultimate' entry in wikipedia, so the hippies happily coexist.

But when you have a competitive process where even the most minor tweak of your code by someone else can see first place handed to your rival, competition is extremely intense and you make sure you explore all the angles before submitting. If you, as a contest runner, can avoid the eBay 'bid sniper' tactic of holding back your increment to the very last second, you can have a group of competitors with total attention to detail when they submit, all iterating on each others' ideas - and in this case, the winning submission was 3 orders of magnitude better than the one that kicked it off.

I'm very interested in crowdsourcing (and using it for a new mode of philanthropy) - so to hear this option, of totally open ripoff/addictive incrementalism, is very, very interesting. I might just have to 'increment' my idea with Jeff Howe's!

Re: Triangulating For Insight

qwang — Sat, 10 May 2008 01:03:41 -0000

The current over-saturation of free products with limited data-portability seem more like a counter-current to incrementalism. It's far harder to build a profitable business out of incremental improvements because you have to reach massive scale every time, meanwhile protecting your key data assets (e.g. social graph) with walled-garden tactics. If great features can easily monetize consumers directly, we'd have a much faster feedback mechanism as to what works and what doesn't. Rapid feedback is critical to the natural selection process that Philippe spoke of.

Re: Triangulating For Insight

Nate — Fri, 09 May 2008 17:10:07 -0000

Bottom line for tech startups: build useful products with simple rules so the optimal feature set can emerge from the users' collective actions.

Do NOT build a walled garden where you try to anticipate and codify every possible relationship or user interaction.

Ever notice how Twitter is just way more *fun* than Facebook? It's because Twitter is a playground and Facebook is an office job. I posted about this here: http://nathanbowers.com/des...

Re: Triangulating For Insight

greenskeptic — Fri, 09 May 2008 12:13:30 -0000

Wonderful, wonderful post, Fred.

And I appreciate the Tim O'Reilly video (especially the ending, where he talks about doing something big and important and that matters) and for his reading of Rilke's The Man Watching.

As I mentioned in a tweet last night, that's the second mention of the poem in my world this week. In the first, a friend said my poem "An Unwelcome Guest," reminded her of Rilke's poem and now O'Reilly's good reading on top of his message.

Wow. Worlds converging, triangulating, and colliding in a very positive way. Thanks again.

Oh, you can read my poem here: http://tinyurl.com/49l8ff

Re: Triangulating For Insight

Doug Kersten — Thu, 08 May 2008 17:28:04 -0000

I read Jeff's rant and thought it was negative, which I found disturbing. Even the so-called breakthroughs come with incremental steps. I am reading The Myths of Innovation by Scott Berkun and it talks about the very same thing.

Re: Triangulating For Insight

Philippe Bradley — Thu, 08 May 2008 15:55:54 -0000

I thought somebody might pick up on that. I only meant getting less efficient at living/reproducing in the current niche.

Re: Triangulating For Insight

martin owen — Thu, 08 May 2008 15:18:37 -0000

In learning theory - particularly constructivist learning theories - there is the notion of learning which we take into our existing framework of understanding (incremental learning if you will) - and there are those grand moments when you actually develop a new framework of understanding. Kuhn describes something similar in the development of scientific theories: normal science which is incremental and paradigm shifts: the revolutions. Business is surely the same. However there is no guarantee that the revolutionary is going to make the money. It would also take a great VC to spot them and mentor them. So safe money is on incrementalism. (Shame).

However there are different paths - notably exaptation. Taking a technology out of its natural environment and applying it in a different environment - the microprocessor was never intended for the desktop, HTTP was never intended as an advertising medium. You can make major steps in invention and innovation. I suppose I am saying the same thing a Phillipe.

Finally there is a BIG point to remember - the big steps will tend to come from the public purse (NASA, Military spending, CERN....) This I find interesting in an environment that abhors socialism.

Re: Triangulating For Insight

GeorgeT6 — Thu, 08 May 2008 13:42:23 -0000

Just a quibble on the ‘evolution in reverse’ statement, in my understanding of a true Darwinian (and by extension Gould and Dawkins systems) there is no reverse in evolution. There is only the benefit or obstacle a genetic mutation provides in the environment in which the entity is in. The perspective of good, bad, forward or reverse is only relative the observers perspective and usually declared long after the adaptation(s) effect is in a measureable form. We feel that the development of opposable thumbs are a fantastic evolutionary advantage given we use the features and functions it provides every day. if the enviorment we live in were to change in a way that this adaptation no longer served a progressive purpose it would be a distraction at best or an obstacle at worst.

Not that this has any great impact on your argument \ thesis.

I do feel you make some great points about a VC’s animal husbandry role in developing businesses. This also provides great fodder for the revenge unintended consequences on the greater systems – ie: ‘Free Virus’.

Re: Triangulating For Insight

gregory — Thu, 08 May 2008 12:38:35 -0000

as the units of production become smaller, every site would be a business advertising only itself... to itself.

Re: Triangulating For Insight

gregory — Thu, 08 May 2008 12:20:08 -0000

malcolm gladwell belongs in Reader's Digest, would be a bit of a stoop

Re: Triangulating For Insight

Philippe Bradley — Thu, 08 May 2008 12:07:57 -0000

hmmm, seems i can't edit for bad spelling. sorry.

I should say, this is just spiel/theory. It may be that this isn't a bubble and that advertising really is growing fast enough, for the long term enough, to support all these businesses trying to use the same business model. It didn't last time. Time will tell.

Re: Triangulating For Insight

Philippe Bradley — Thu, 08 May 2008 11:54:34 -0000

it's definitely not native to the Internet, agreed. Anywhere it can find equilibrium with other sources of revenue generation, it represents a stable and sustainable future. But during the last dotcom bubble, a steady state couldn't be found, and businesses that had toyed with 'free' crashed and burned a lot of their investors' money.

An unfortunate effect of supportive VCs is to shield weak (fledgling) businesses from natural selection - just like a welfare system, some argue, 'dilutes' the gene pool by curing genetic defects that are passed onto future generations. Note: I abhor eugenics and believe that in the long term a diverse gene pool is more resilient against epidemics and other challenges than a narrow one - but as a short term point of view, eugenics is correct - the species becomes less well biologically adapted to its niche; more inefficient; protection from natural selection causes evolution in reverse. Just like during the last bubble, and perhaps now, terminally sick businesses polluted the economy to a point where their inefficiency at generating money was an unsupportable load on their ecosystem - hence the crash.

Like everything in like, this is all about 2 things: equilibria, and feedback. There is an equilibrium between parents protecting and educating fledgling children through to maturity (the role of angels and VCs), and supporting leeches through to population crash. It's the same reason my parents are cutting me off as we speak - for the benefit of society, I need to learn to gather my own food.

Back to your question. The concept of the freevirus emerged because Alan and I saw profitable businesses, successfully getting people to pay them for a service they provided, attacked by novice upstarts at way, way undercut prices (free) - not just squeezing them on margins (note the big difference between $0.05c and free - as explained by Dan Ariely; well I believe that also works in reverse - if you're not free, you care about margin and equilibrium is gradually restored). These free businesses, even if run by someone who history will show grossly overestimated his ability to run his business at a profit, is still alive long enough (thanks to the overly protective financial backers) to force a response in the profitable business - and 'free' is so powerful, so disruptive, that often the only (perceived) defence against free is free (Kevin Kelly argues there are other responses. That's definitely true). Hence WSJ dropping pay wall, etc.

I see a bit too many businesses being sieged by free for so long that their reserves are weakened before the free idiot perishes. The result is a situation where both die, the customer gets used to the luxury of free, and any new entrant to the sphere, most likely his confidence boosted by some perceived 'increment' (usually to the service, not to the free business model - such is the legacy of Paul Graham and co), therefore also has to be free. The customer is the winner, bouncing from free to free service - thanks, DataPortability.org!

The problem, also, is that the Internet is the most globalised economic sphere man has ever known. And the differences in wage demands (but not skills) means that the US is a terrible place to play with fire/free. It just can't sustain a freevirus epidemic nearly as long, unless it starts outsourcing big time. And as we see from the paper on Google's internal prediction markets, physical proximity is very important.

Because the Internet isn't a US-hermetic ecosystem, I don't think free can ever find a stable equilibrium there (or here in the UK - or anywhere in the developed world) - certainly not on the scale we're experimenting with it at the moment. The economy needs to be generating companies in need of advertising, as well as eyeball farmers. Someone, at some point, has to dip into my pockets for cash. I'm the Napster generation - we're idealistic hackers in the most plastic (as in, ability to build tools) environment man has ever known, and we're hooked on Free. If for-profit enterprises some day soon find they can't offer their service for free, and ask us for money, and we can't find another VC-funded startup that will - we'll just build it for ourselves and run it as a nonprofit.

These are exceedingly fertile times for innovation and experimentation - as is any period in nature when natural selection is paused; weird and funky mutants nobody imagined can come about whereas they couldn't - so let's celebrate it, and the VCs betting on coming out of the freevirus epidemic with winners amongst the rubble. But let's enjoy it whilst it lasts. China and the rest of BRIC may not give us the opportunity for a third bubble. Two Renaissances in the space of 2 decades is pretty luxurious for any civilization, don't you think?

Re: Triangulating For Insight

DAR — Thu, 08 May 2008 10:42:40 -0000

This is not strange, or a problem. The reasons why startups think incrementally from the get go is because they don't know if they're going to survive long enough to walk down the path of stepping stones. I think only businesses that have achieved some success and stability have the luxury of being able to truly think long-term.

I've heard it said that every startup is a theory to be tested. (i.e., can we make technology that does x? and can we make a profit off of it?) Following that analogy, I think only businesses who've proven their theory can really afford to do any significant planning for the next stepping stone.

Re: Triangulating For Insight

GeorgeT6 — Thu, 08 May 2008 10:29:34 -0000

I came in here to say something similar - i would not have been nearly as eloquent- Gregory’s 'incremental Meme comment is spot on as well.

Anyone care to comment on how relates to 'The Long Tail' ?

Re: Triangulating For Insight

Thomas — Thu, 08 May 2008 10:16:21 -0000

Now quadrilate this analysis with Malcom Gladwell's discussion of innovation!

Re: Triangulating For Insight

Chris Dodge — Thu, 08 May 2008 10:14:34 -0000

Thanks for the New Yorker link. However, I disagree with one statement about Steve Jobs being an elite visionary with groundbreaking innovations. In my opinion, he's a re-tooler of existing computing concepts and wraps them into high design, ease-of-use, and compelling marketing.

The "innovations" around iPods/iPhones/AppleTV have existed for years prior, but Jobs' talent has been in the re-packaging of technologies from a user-experience - including the experience of being marketed to - perspective.

Needless to say, he's completely turned Apple around through such steady incrementalism.

Re: Triangulating For Insight

fredwilson — Thu, 08 May 2008 09:45:31 -0000

i might want to move there!

Re: Triangulating For Insight

gregory — Thu, 08 May 2008 09:45:04 -0000

the incrementalism meme, and impatience with it, is not germane to anything, except maybe somebody's marketing usp... what we are really modeling in this tech world is consciousness, its unencumbered range, and the way it functions .... yogis figured out this a long time ago, internally, the western tech thing is merely externalizing it

Re: Triangulating For Insight

RC — Thu, 08 May 2008 09:41:12 -0000

Strange that you just brought this up, considering that I just read a New Yorker piece by James Surowiecki talking about the same thing! It's about the steady ascent of Toyota; check it out:

http://www.newyorker.com/ta...

Re: Triangulating For Insight

stone — Thu, 08 May 2008 09:02:25 -0000

I'm actually working on a company now that will attempt to do some of the triangulation for you, Fred. It's a monster of a project and yes, we will take it in bite-sized chunks.