Be passionate about the territory, not the map
Balaji is a deep thinker on crypto and its implications. Formerly the CTO of Coinbase and General Partner at Andreessen Horowitz, he's seen how technologies evolve over time, which ones change the world and which ones fizzle out as a fad.
He believes crypto technologies such as bitcoin represent the former. To him, crypto will emerge as something that's as important as the Internet and influence our society for decades to come.
All startups live in an ecosystem where different businesses directly or indirectly support one another. For example, in the case of the automotive industry, the ecosystem consists of car manufacturers, car parts manufacturers, petrol stations, car service centers, car insurance companies, and government regulators.
All of them mutually support the entire ecosystem, which means growth or decline of one business will directly impact all other businesses.
Entrepreneurs are irrationally attached to innovation. In some cases, fresh ideas are absolutely required but an attachment to originality and the corresponding aversion to exploring ideas pioneered by others can often lead to a significant delay in success (or even failure).
Startups can fail for many reasons. Even if an entrepreneur gets everything right but errs on a specific aspect (say distribution, pricing, onboarding, or even the choice of technology), it’s possible that her entire project fails.
Entrepreneurs are always in a hurry. They want the product to be out so that they can get customer feedback sooner.
This hurry is understandable yet misguided because it prioritizes getting the idea out in front of customers over everything else. The initial excitement about an idea can easily lead to months of wasted development effort. Imagine discovering major flaws in pricing, distribution, design, or market after all that effort. Isn’t it much better to flesh out ideas with a few weeks of research than to spend months developing them?
Imagine an economy that keeps on growing indefinitely. It's essentially a non-zero sum economy - as the pie becomes bigger, everyone becomes better as even a small percentage of a really large number is substantial.
Can such an economy exist in our universe?
People have busy lives and they usually don’t think much about the products and services they use in their lives. It’s a myth that people are on a constant lookout to (marginally) improve their lives. The reality is that unless the value delivered by a new product or service is substantially higher, most people will not change how they live their life and by virtue of that, they won’t change what they buy or use.
Ever heard of meta-science?
It’s the science of science. In this episode, I interview the meta-scientist James A. Evans who explains how science happens, why smaller teams do big scientific breakthroughs, similarities between startups and scientific endeavors, and what research shows about the path to success.
His research shows how science is not an automatic machine that keeps on generating truth, but is rather a system where social dynamics of how scientists interact with each other determine what they end up discovering. ... Read the entire post →
Most markets are like the car market. Some people like bigger cars, others like efficient cars and then there are some who like premium cars. That is, markets aren’t homogeneous. They consist of different sets of people who value different aspects in a solution.
Because different segments value different aspects, an improvement in one aspect will only be appreciated by that segment and get ignored by everyone else in the market. For example, if the customers in a particular segment are price-insensitive, your discounts won’t work on them. In your mind, a discount should clearly work but for a certain segment of customers, it may actually decrease the appeal of your product for them. But, if a customer segment is price-sensitive, and you give them a clearly higher quality product at slightly higher prices, they may not care enough about the quality to make a switch from what they usually use.
Should we worry about AI?
Connor Leahy is an AI researcher at EleutherAI, a grass-roots collection of open-source AI researchers. Their current ambitious project is GPT-Neo, where they’re replicating currently closed-access GPT-3 to make it available to everyone.
Connor is deeply interested in the dangers posed by AI systems that don’t share human values and goals. I talked to Connor about AI misalignment and why it poses a potential existential risk for humanity.
There’s always a temptation to launch a fully built product with more features and capabilities than existing competitors. It’s exciting to build the next Google, the next iPhone or the next SpaceX, isn’t it?
This temptation is dangerous because even the most successful products in a market had simple beginnings. No product arrives in the market fully fleshed out. The company behind a successful product has developed its internal capabilities and know-how about various tiny but important details over a long period of time. On day 1, a startup simply cannot match such capabilities. ... Read the entire post →