Compile a list of powerful new technologies

Deep learning

• 2016.10.11 - Fast.ai - Andrew Ng says Deep learning is the "New Electricity"; what this means to your organization

Misc ideas to file

• 2017.04.11 - Backblaze - How Backblaze Got Started: The Problem, The Solution, and the Stuff In-Between
  • They noticed that most people don't back up their computers.
  • There were existing solutions. They asked people why they didn't use them, and the top reasons given were that those existing solutions were 1) not easy to use, and 2) expensive.
  • They asked people how much an easy solution would be worth to them, and the most common answer was "$5/mo".
  • They figured out that what people meant by "not easy to use" was that it was a lot of work to organize their files to decide what to back up.
  • They realized that the easiest solution would be to back up everything by default, and ask people instead what they don't want backed up.
  • Somehow they decided that they should offer "unlimited" backup. I think this was to make it easier for customers to understand, since the customers didn't generally have a good idea of how much space they needed, and some were even confusing megabytes and gigabytes.
    • "Providing unlimited data backup wasn’t specifically about providing more storage — it was about making it easier. Since users didn’t know how much data they needed to back up, charging per gigabyte meant they wouldn’t know the cost. Providing unlimited data backup meant they could just relax." (Source)
  • So their problem to be solved was to offer unlimited backup for $5/mo.
• 2017.04.12 - YCombinator - On Growing: 7 Lessons from the Story of WeChat
• 2017.06.06 - ipinfo.io - How I Took an API Side Project to over 250 Million Daily Requests With a $0 Marketing Budget
  
  • Summary: The Y Combinator slogan is the north star for most early stage startups: Make Something People Want.  (...) [T]he easiest way to “Make What People Want”: Make What People Ask For. (...) whether it’s on Stack Overflow, Quora, or Reddit
• Displacement of Concepts aka Invention and the Evolution of Ideas
  
  • this was in the GSB library under the 'Invention...' title.
• If your product is so much at the forefront of the law and technology that it helps your users get away with piracy, that may help you grow.
  • Examples: YouTube, Alibaba, Napster
• 2007.06 - Marc Andreessen - On product/market fit for startups
  • My thoughts:
    • I'm very suspicious that there's some tautological reasoning going on here.
      • He asks, "What's the most important thing for success?", and then seems to answer it by saying "Do whatever is required to get to the point where your product is being used/purchased as quickly as you can make the product available". How is that different from success?
        • I think a more charitable interpretation might be, "Make sure things are working brilliantly on a small scale before you try to scale up."
  • Summary / excerpts:
    • what correlates the most to success — team, product, or market? Or, more bluntly, what causes success? And, for those of us who are students of startup failure — what’s most dangerous: a bad team, a weak product, or a poor market?
      • The size of a startup’s market is the number, and growth rate, of those customers or users for that product.
      • If you ask entrepreneurs or VCs which of team, product, or market is most important, many will say team.
      • On the other hand, if you ask engineers, many will say product.
    • Personally, I’ll take the third position — I’ll assert that market is the most important factor in a startup’s success or failure.
      • NW: This reminds me of my Ancient Philosophy class, where the different philosophers were debating what the fundamental makeup of the universe was, and they had answers like "Everything is water!" and "No, everything is air!". It's failing to recognize the complexity of the situation. It's like asking, "What's the most-important ingredient in a BLT?" and then having people debate: "It's the bacon, of course!" "No, the tomatoes!" "Fools! The lettuce is most important!"
      • In a great market — a market with lots of real potential customers — the market pulls product out of the startup.
      • when you have a great market, the team is remarkably easy to upgrade on the fly
      • Rachleff’s Law of Startup Success:
        
        • When a great team meets a lousy market, market wins.
        • When a lousy team meets a great market, market wins.
        • When a great team meets a great market, something special happens.
    • Since team is the thing you have the most control over at the start, and everyone wants to have a great team, what does a great team actually get you?
      • A: a great team gets you at least an OK product, and ideally a great product.
      • In my experience, the most frequent case of great team paired with bad product and/or terrible market is the second- or third-time entrepreneur whose first company was a huge success.
      • Conversely, I can name you any number of weak teams whose startups were highly successful due to explosively large markets for what they were doing.
    • Can’t great products sometimes create huge new markets?
      • Absolutely. This is a best-case scenario, though. (NW: In other words, this is very, very hard and unlikely, and thus not your best route.)
    • As a startup founder, what should I do about all this?
      • Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.
      • When you get right down to it, you can ignore almost everything else. I’m not suggesting that you do ignore everything else — just that judging from what I’ve seen in successful startups, you can. Whenever you see a successful startup, you see one that has reached product/market fit — and usually along the way screwed up all kinds of other things, from channel model to pipeline development strategy to marketing plan to press relations to compensation policies to the CEO sleeping with the venture capitalist. And the startup is still successful.
      • The only thing that matters is getting to product/market fit. (NW: I'm putting this section after the explicit answer to the question, since it makes it all easier to follow.)
        • You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.
        • And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.
• 2016.06.27 - Michael Seibel - The Real Product Market Fit
  
  • Here’s how Andreessen defines product/market fit: "The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can."
  • You have reached product/market fit when you are overwhelmed with usage—usually to the point where you can’t even make major changes to your product because you are swamped just keeping it up and running.
  • What I look for is a frantic founding team trying to deal with ever-growing numbers of happy, loyal, and ideally paying customers.
  • Your unique and special v1 idea on how to solve that problem is usually wrong and only through launching, talking to customers, and iterating will you actually find a product that reaches product market fit.
  • You need to find problems so dire that users are willing try half-baked, v1, imperfect solutions.
  • The advantage that small companies have over big ones is that they can move fast, deal with problems by having unusually good customer service, and their customers expect less. So to find product market fit, choose a market where users have a real, meaningful problem, launch quickly, and listen to your users.
• Good heuristic: is your software replacing a pre software solution or is it replacing other software? PayPal replaced checks in the mail, eBay replaced catalogs, Uber replaced taxis.
  • Software is eating the world, so look for the things that haven't yet been eaten. Any pre software solutions.
    
• Think about what the CAC will be:
  • How much will it cost to find people / groups that are a good fit for your product?
    • Example: Suppose your product would require cold-calling undercover spies. It would be extremely expensive to find such people.
  • How much will it cost to communicate with those potential customers, once you've found them?
    • Example: Suppose your product was designed for Amazonian tribes, and you live in the United States. It would be extremely expensive to communicate with those tribes.
• David related Ben Horowitz talking about how a great startup idea solves a problem where the user's hair is on fire; they're just desperate for something, anything.
  • I thought that might be a bit extreme, but I definitely think it's worth asking, "Would users be happy to use a buggy, limited version of this idea?" That was definitely the case with Pokemon Go, Facebook, eBay, etc.
• Alok made the good point (which I'd also thought about in the past) that a lot of successful companies involve mapping things that already existed before the internet to the internet. So, Facebook is just the internet version of the pre-internet actual books with faces, Craigslist is just the internet version of classified ads that were in newspapers, etc.
  • So what I want is a list of all of the pre-internet things that have yet to see an internet version. And hell, I want a list of all the pre-internet things that did see an internet version.
• One thing I'd like to do with others is to analyze the really big companies and see what technological / social changes were very important to their success.
  • Example: Uber was only possible because of the existence of smart phones, the widespread use of smart phones, online payments, people comfortable putting their credit card information into the internet, etc.
  • Once you have a bunch of these kinds of analyses, you can use them to try to predict what new companies might be possible when some new technology comes out.
• Look for inefficiency in the world and try to think of a way of changing people's behavior to eliminate that inefficiency.
  • The big example I'm thinking of is Airbnb. You could have said, "It's inefficient for these rooms to go unused when the person isn't present", or "It's inefficient for this couch to not get slept on", and then your only task would have been to figure out if people could be persuaded to adjust their behavior to allow other people to use that space. Having online identity, online payments, fast-loading of high-res images made it possible in a way it wasn't in the '90s.
• SaaS is an exciting business model that'll lead to a lot of opportunities:
  • Examples
    • http://techcrunch.com/2015/12/26/how-i-created-a-350m-software-company-knowing-nothing-about-software/?ncid=rss&cps=gravity_1730_-4356711846797075137#.efa35j:luoa
      • We started shipping Dell machines with a Dialogic telephony board inside loaded with our call center software. It wasn’t sexy, but it sustained us enough to hire a few more people and start growing.

        Then one day, for some odd reason, I had another epiphany.

        Instead of building software to load on cheap servers to sell like everyone else, why not build one “mega-server” that we host ourselves and let people rent the functionality over the web?

        My former boss told me, “No, that’s stupid, that’s killing the Golden Goose.”

        The engineers told me, “No, that’s going to be a pain in the ass to build.” They sent me all sorts of studies from reputable analysts showing that “ASPs” (the buzzword before it was replaced by “SaaS”) was not a profitable business model after all.

        I said, “Guys, what’s the alternative? You want to be the low-cost leader for the rest of your lives hustling these shit-boxes?” I pointed to the growing pile of Dell boxes accumulating in our small office.

        Arguing vehemently with them for a month, I realized that on-demand software services weren’t profitable because everyone had just tried to take traditional client-server software and host it themselves.

        They hadn’t thought to build something that was truly multi-tenant, meaning building software that was solely designed to handle multiple clients and accounts as a service. That would be a critical advantage for us, if we could pull it off, as it was significantly less hardware to purchase and much easier to manage customer accounts.

• Write about how the USA Today game and LSAT logic game puzzles work, where you need to make many passes over a list of potential tools to see which of them is appropriate to make the next advancement.
  • Similarly, you should compile a list of all of the problems in the world and all of the technologies that exist and that are coming into existence, and then have some algorithm for checking to see if any new business has become possible because of a new law, or new technology, etc.
  • I think this is the way innovation is going to happen in the future.
• Look at existing businesses / solutions that solve problems for a wide variety of people, and see if any large subgroup might prefer a more-tailored solution.
  • Examples
    • Airbnb is a more-tailored solution to something that could have been done with Craigslist
    • Slack is a more-tailored solution to something that could be done with Gmail (AFAIK).
    • The division of restaurants into specialties (Italian, Mexican) is an example of more-tailored solutions to a problem that could be solved by a single type of restaurant.
• Take what someone else has done, but hasn't taken full advantage of, and squeeze out as much from it as you can.
  • Examples
    • Family Guy extracted the funniest bits of the Simpsons, removed the fat, and just kept using the same tricks over and over because they worked.
      • Examples
        • In this clip, the Simpsons use the "like that time you..." trick that Family Guy is famous for using ad nauseum:
          • Homer gets arms stuck in vending machine
• Create a tool that can be used in many different ways!
  • Examples
    • YouTube is used by people to share music
    • Justin.tv was used by gaming streamers, which led to Twitch
    • Instagram is used by businesses to show off their stuff
      • Goat herders in the Middle East
• One of the major services that start-ups can perform for big companies is to act as a legal / social barrier for legally- or socially-risky endeavors.
  • Examples
    • Legally-risky endeavors
      • Uber was / is taking on legal risks that the top people at Apple / Google / Facebook would never want to expose their company to.
      • The same thing happened to YouTube: they took on legal risks that the bigger players would not have wanted to expose themselves to.
    • Socially-risky endeavors
      • Airbnb was socially risky. Google probably would not have wanted to risk tarnishing their brand if people ended up thinking it was weird.
      • Google Glass was socially risky.
  • So look for opportunities for legal or social innovation!
• One of the major benefits that big companies can offer to start-ups is to magnify the impact of the startup by giving it the capital / infrastructure / etc. necessary to bring it to many more people.
• Look for any project that a bureaucratic organization is supposed to implement, but it's taking them a long time to do it, possibly because they're tied down to laws.
  • Examples
    • Napster / iTunes
      • They took the initiative to do what the music industry should have done.
      • Napster violated the law in a way that the employees at the existing big companies would not have been willing to do, and it helped them grow faster.
    • YouTube
      • They took the initiative to do what the television industry should have done.
      • They violated copyright in a way that the employees at the existing big companies would not have been willing to do, and it helped them grow faster.
    • Facebook
      • http://www.thecrimson.com/article/2004/2/9/hundreds-register-for-new-facebook-website/
        • “Everyone’s been talking a lot about a universal face book within Harvard,” Zuckerberg said. “I think it’s kind of silly that it would take the University a couple of years to get around to it. I can do it better than they can, and I can do it in a week.” 
           (...)

          But Director of Residential Computing Kevin S. Davis ’98 said that the creation of a Harvard facebook was not as far off as Zuckerberg predicted.

          “There is a project internally with computer services to create a facebook,” Davis said. “We’ve been in touch with the Undergraduate Council, and this is a very high priority for the College. We have every intention of completing the facebook by the end of the spring semester.”

          Davis said that the principle complication with the creation of an official facebook was figuring out how to design an interface so that directory information could not easily be compiled without authorization.

• 2010.03 - Stanford GSB - Idea Evaluation
• Do not assume that just because you can say, "Oh so this is like X", that means the idea is bad!
  • Examples
    • WhatsApp was just AIM / SMS / BBM, but WhatsApp ended up solving the problem.
    • Facebook was just a primitive LivingSocial, but it ended up solving the problem.
    • Airbnb was just like Craigslist, but it ended up solving a problem that Craigslist did not solve well-enough.
    • Reddit / Stack Exchange were just like forums, but they solved the problem in a way that dispersed forums weren't able to.
• https://medium.com/the-story/medium-is-not-a-publishing-tool-4c3c63fa41d2
  • "Understanding Blogger as we did at the time — as a software tool for creating and publishing web sites — we found ourselves in the race many software makers know well: Add features, get more users. Competitor adds more features, lose users. (Marketing and others factors have some effect, depending on the market. In blogging, that was minimal.)

    This game was particularly hard to play for us, since Blogger was hosted software (I mean, in the cloud), unlike most of the tools we were competing against. The operational and engineering challenge was that we had to build features that scaled to all our users. And when we wanted to change something, all the users had to accept that change.

    At the time, scaling centralized systems was a less-solved problem (even at far smaller numbers). More importantly, though it was easier due to this setup, we weren’t creating network effects. Though (I believe) we had more people publishing with Blogger than anything else, that didn’t make Blogger better. In fact, it made it worse, because it got slow and harder to add features to."

  • "Chris Dixon had a great post a while back — Come for the tool, stay for the network — describing how, unlike Twitter, some platforms started out with tool value and transitioned into network value (which, ultimately, became a much bigger part of the equation, such is the case with Instagram)."
    • This is exactly how videogames work. I wonder why videogames end up dying out while these things keep going...I think it must be because the videogames don't have users creating new content!
• From Slack and Airbnb:
  • Look at a situation in which you could use an existing solution to solve a particular problem, but it wouldn't work so well and would be a lot of effort (eg setting up custom filters in Gmail and using 'team+reading@infer.com', and needing to teach every new employee to do that).
• Think about how a solution in one area might be 
• Larry Page's toothbrush test
• Look for areas with rapid growth / adoption. Example: Amazon saw the rapid adoption of the Internet. Airbnb and Uber profited from the rapid adoption of smart phones.

• "The late Richard Feynman, a superb physicist, said once as we talked about the laser that the way to tell a great idea is that, when people hear it, they say, 'Gee, I could have thought of that.'"

  - Charles Townes, How the Laser Happened

• "Most interesting phenomena have multiple causes."

  - N. P. Calderwood

• Paul Graham ‏@paulg Aug 8
  The best way to increase a startup's growth rate is to make the product so good people recommend it to their friends.

  • I think this is a very, very important point. I agree with him that virality is the best way to increase your growth rate.

  • I'm not sure if "good" necessarily captures exactly what you're going for. For example, the Pokemon AR game was described by the people I asked about it as not being very good, but it was so unprecedented that people posted about it on Facebook. Tony Hsieh talks about "Wow" experiences leading to virality.

• Marc Andreessen ‏@pmarca Jun 27
  In tech in the early 1990's, it felt like all the good ideas were already taken. Really.

• Paul Graham ‏@paulg Sep 10
  The spectral signature of a big winner is when people ask "How did I function before x?"

  (Jessica just asked it about HelloSign.)

Ways companies get valuable

Lots of users

• Facebook
• WhatsApp
• Instagram

Lots of revenue

How to identify a good idea

• Facebook, Airbnb, Slack, Twitter all involve dealing with communication between people.
  • It's like humanity is a giant brain, and each person is a neuron, and these companies are making the neurons interact with each other more quickly.
• So you want to look at all of the different kinds of interactions that people have with each other.
• BUT you also want it to be defensible. AOL chat rooms, AIM, IRC all met the first condition, but they weren't defensible because there wasn't a big switching cost for users. You could get a bunch of your friends using a new chat client and they would not have lost anything.
• Google tries to make its things defensible (like Gmail) by just running as fast as it can to make them better and better, so no one could easily copy its features. Like building new defenses for your castle as quickly as possible.
  • I suppose the big thing you need to worry about in a situation like that is that some new invention might make it easier for people to copy your features, OR that some new platform will come out in which everyone will start off on equal footing (that's what happened to Craigslist w/ Airbnb).- But another way to make it defensible is to create tools that allow users to build on top of what you've created. Minecraft has tons of people creating content for it. Counter-Strike was born out of the modding tools for Half-Life.

...