fairity

Here's the talk that went along with this deck (for those who would prefer not immediately jumping to ridicule): https://www.youtube.com/watch?v=DtM0Cjb0dEU

So, if I’m following: Banks are lending to private equity firms to fund purchases of businesses.

Many of these businesses are SaaS which means their valuations are tumbling.

It seems possible that valuations tumble so much that the private equity owner no longer has any incentive to operate the business, bc all future cash flows will belong to the bank. What happens in practice then? Will banks actually step in and take operational control? Will the banks renegotiate terms such that the private equity owners are incentivized to continue as stewards? Or, will they prefer to force a business sale immediately?

The author keeps saying, over and over, that the reason this is a good bet is because "the downside is capped and the upside is asymmetric" as if that's some ground-breaking realization.

Sorry, but obviously the downside is capped. The downside of virtually any marketing investment is capped at the cost of the media buy...And, the upside being "asymmetric" isn't some saving grace. What matters is the likelihood that you actually realize that asymmetric upside. And, nowhere in the article does he talk about Ro's estimated success likelihoods or actual outcomes.

In short, he's basically saying:

- I made a bet

- It costs me something ("capped downside")

- There's a potential payout ("asymmetric upside")

- I have no idea whether this is positive expected value

Why are people saying this seems like a bad deal?

If they really only raised $1.7b, per Crunchbase, then this seems to me like a very good outcome for everyone involved except its late stage investors. And, even for the late stage investors, they're breaking even.

Words are cheap. I really wish there was a way to incentivize authors like this to put their money where their mouth is, before seeking attention for their ideas.

Surprised to see this upvoted because the takeaway is completely incorrect, and based on the anecdotal evidence of one advertiser.

As someone who spends seven figures every month on Google ads, what’s much more likely to be happening here is that the individual advertiser is either getting outcompeted or they’re executing ads poorly.

Google ads revenue in the US continues to grow every quarter. And, since advertisers will generally invest in ads until the last dollar is break even, it’s likely that the total value advertisers unlock through Google ads is growing as well. Whether that’s true or not, the notion that value generated for advertisers is “dead” is absurd.

As this incident unfolds, what’s the best way to estimate how many additional hours it’s likely to last? My intuition is that the expected remaining duration increases the longer the outage persists, but that would ultimately depend on the historical distribution of similar incidents. Is that kind of data available anywhere?

As is the case with most complex problems like this, the correct answer is: it depends.

In this case, it depends on what the crux of your business is. Sometimes the crux is building world-class technology. Sometimes the crux is customer acquisition.

If the crux of your business is customer acquisition, then an exceptional business co-founder will actually be the most important ingredient to long-term success.

This is one of the biggest weaknesses I've noticed in YC's mantra. In most industries, just building something people want doesn't lead to success - you have to excel at customer acquisition also. And, in these industries, as you business matures, you realize that customer acquisition, at scale, is actually the hardest problem to solve.

Years ago, I was lying in the grass, having a conversation with a fellow founder, when he noted how, on most days, he would forget to eat lunch because he was so engrossed with his work. I thought to myself, That's ridiculous. Everyone notices when they're hungry. This was just a thinly veiled brag about his work ethic.

Nowadays, I find myself skipping lunch every other day - out of forgetfulness.

Why pretend to be smart and play it safe? True understanding is rare and hard-won, so why claim it before you are sure of it? Isn't it more advantageous to embrace your stupidity/ignorance and be underestimated?

I wish this were true, and I do think this mindset would be optimal if everyone adopted it. Unfortunately, real workplaces are filled with people who are confident and wrong. As a leader, if your intuition is more accurate than your peers and you care about objective success, it’s important to assert yourself.

For anyone who, like me, isn't aware of the "totally predictable explanation", here's more background: https://news.ycombinator.com/item?id=42978340

Tldr; The reason it dropped off the first page was likely due to mass flagging. Whether these flags were coordinated at the behest of a self-interested party is unclear. However, when cases like this are reported, more often than not, it turns out to be a function of genuine flagging.

I'm actually completely fine with internal manual manipulation, bc I trust the HN crew.

I'm concerned that what we're observing is a result of external manipulation at the behest of self-interested parties.

Here's evidence of this concern: https://hnrankings.info/43004889/

Hot take but 99% of all profitable businesses have no moat, and there’s absolutely nothing wrong with that. You can still make lots of $$$.

Can you make $157b without a moat? Or, anything close to that? That's the more relevant question at hand.

The counter argument is that they won't be able to sustain those gross margins when the market matures because they don't have an effective moat.

In this world, R&D costs and gross margin/revenue are inextricably correlated.

It's early innings, and supporting the open source community could be viewed by the CCP as an effective way to undermine the US's lead in AI.

In a way, their strategy could be:

1) Let the US invest $1 trillion in R&D

2) Support the open source community such that their capability to replicate these models only marginally lags the private sector

3) When R&D costs are more manageable, lean in and play catch up

I think it's worth double clicking here. Why did Google have significantly better search results for a long time?

1) There was a data flywheel effect, wherein Google was able to improve search results by analyzing the vast amount of user activity on its site.

2) There were real economies of scale in managing the cost of data centers and servers

3) Their advertising business model benefited from network effects, wherein advertisers don't want to bother giving money to a search engine with a much smaller user base. This profitability funded R&D that competitors couldn't match.

There are probably more that I'm missing, but I think the primary takeaway is that Google's scale, in and of itself, led to a better product.

Can the same be said for OpenAI? I can't think of any strong economies of scale or network effects for them, but maybe I'm missing something. Put another way, how does OpenAI's product or business model get significantly better as more people use their service?

DeepSeek just further reinforces the idea that there is a first-move disadvantage in developing AI models.

When someone can replicate your model for 5% of the cost in 2 years, I can only see 2 rational decisions:

1) Start focusing on cost efficiency today to reduce the advantage of the second mover (i.e. trade growth for profitability)

2) Figure out how to build a real competitive moat through one or more of the following: economies of scale, network effects, regulatory capture

On the second point, it seems to me like the only realistic strategy for companies like OpenAI is to turn themselves into a platform that benefits from direct network effects. Whether that's actually feasible is another question.

Why would it matter? OP is experiencing an undesirable outcome, and assigning blame for the problem seems besides the point when the main goal is to change the outcome.

There seems to already be significant competition in the low cost ETF space. For example, Schwab’s broad based s&p ETF (SCHB) has $34b AUM.

The fact that there exists a competitive market suggests that there’s a good reason expense ratios can’t drop much further than .03%. Presumably, once you reach a certain size, there are costs associated with managing a low cost etf strategy that the end investor actually wants to pay for.

What makes you think you can beat these market rates in a way that is truly accretive to investors? Put another way, what is Schwab wasting money on that you won’t?

I doubt Schwab is just being greedy with their .03% fee. It’s necessary to cover their costs.

How do you prevent kids using social media without 100% surveillance or not allowing internet access at all?

Do the parental controls on mobile phones not work? I'm not a parent, so I don't know, but it seem unbelievable to me that there isn't an effective way to grant internet access to kids without social media.

Thanks for the information! So, if the subsidies are in the form of tax rebates and subsidized loans, is it safe to say, the full economic benefit of these subsidies as a percentage of vehicle sales revenue is single digits? If so, it seems like there's little reason to doubt that BYD would be immensely successful in the US without tarrifs.

How significant are the production subsidies? Are they a meaningful percentage of sales revenue?

Quite interesting that this comment is downvoted when the content is factually correct and pertinent.

It's a very relevant fact that Greg Brockman recently left on his own volition.

Greg was aligned with Sam during the coup. So, the fact that Greg left lends more credence to the idea that Murati is leaving on her own volition.

Everyone postulating that this was Sam’s bidding is forgetting that Greg also left this year, clearly on his own volition.

That makes it much more probable that these execs have simply lost faith in OpenAI.

You’re already getting a lot of solid advice so I’ll keep mine short.

Video games are not inherently bad. They become a problem only when they’re getting in the way of your other life goals.

So, the best place to start is by asking your son: what do you want to achieve over the next 3-4 years?

Then, try to help him figure out the best way to spend his time to achieve those goals.

I feel strongly that the starting point of the conversation should be alignment around the fact that there isn’t anything inherently wrong with video games. Not only is this the truth, it also establishes that you aren’t judging him.

Most of the conversation in this thread consists of people talking past each other bc they aren't aligned on the definition of the word: fired.

Yes, there's a way to define the word "fired" such that PG did fire Sam.

But, that definition is not the colloquial definition of the word "fired".

Just go outside on the street, and ask someone: "My boss just told me that I need to stop working on my side project to keep working at his company. Would you say I just got fired?"

The answer 95%+ of the time will be no.

So, while I can understand why you might argue that PG fired Sam, if you can't understand why PG claims that he did not fire Sam, you simply have your head buried in the sand.

"Got fired" may be a tad ambiguous, but being told "stop working on that other thing or leave" is not too far off.

It's very different.

When employees begin working at my company, they're told a list of things they're not allowed to do. And, they're told if they do these things, they will be shown the door.

By your definition of "not too far off", we're basically firing people on day one. Absurd.

Which of these events have a >1% chance of happening in the next thousand years?

If our rate of innovation continues, maybe we don’t have much to worry about on this front.

I don’t get articles like this. It’s arguably a better financial decision to NOT buy a home, and park your downpayment in a broad based index fund. I get that there are arguments for or against, but there doesn’t seem to be a clear financial advantage to home ownership. So, what’s the big fuss about? Just pay rent and carry on? Surely, there are better things to focus on?

VC as an asset class loses money.

If you're actually open to changing your mind, provide the source for this claim.

I think you'll find you're wrong by most reasonable definitions of "losing money".