[HN Gopher] "A solution in search of a problem" is a low-rates p...
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"A solution in search of a problem" is a low-rates phenomenon
Author : firstSpeaker
Score : 74 points
Date : 2022-12-12 13:57 UTC (9 hours ago)
(HTM) web link (www.thediff.co)
(TXT) w3m dump (www.thediff.co)
| obblekk wrote:
| I really dislike these takes on low interest rates.
|
| As far back as the 70s (when interest rates were 8-15%), there
| have been random business ideas being started and shutdown (pet
| rocks, every airline ever, etc.).
|
| We don't remember those because they shutdown 40 years ago.
| Today, we only see the successful ones that survived (walmart,
| fedex, etc.).
|
| There's a legit question: why have long term interests declined
| over the past 500 years, accelerating in the past 50-100 years.
|
| The answer to that more likely has to do with some very broad
| phenomenon: capital has been accumulating due to increases in
| energy availability. Human talent (that turns capital into
| something actual) is plateauing due to slowing of population
| growth.
|
| Testable Prediction: we will have <1% fed interest rates again at
| some point before 2030, because the long term trend remains
| downward for now.
| spaceman_2020 wrote:
| Counterpoint: The entire crypto market, which topped over $3
| trillion in value at one point.
|
| Even as someone who believes in crypto, some of the stuff being
| built is beyond stupid, and could only be built at a time when
| no real work needs to be done.
|
| Like I understand Ethereum. I also understand basic DeFi
| projects building on top of Ethereum - Maker, Uniswap, AAVE,
| Compound, etc.
|
| But once you start going a few layer deeper, you realize the
| sheer excess and waste. Like a project that allows you to wrap
| your leveraged positions in AAVE and deposit them into a dual-
| token vault and earn yield if one of the two tokens goes up or
| if there are liquidations in your AAVE or...
|
| It's mind boggling that people thought spending their resources
| creating virtualization upon virtualization upon
| virtualization...
|
| Somehow, I can't imagine something like this happening if you
| were paying 10% interest on your mortgage.
| epicureanideal wrote:
| Based on my experience working for many startups, I would say
| talent is not plateauing, but the capital is being managed and
| deployed by shockingly incompetent people. Far less competent
| than the people who end up working for them.
| satvikpendem wrote:
| Pet rocks were actually quite profitable, the creator made a
| few million dollars if I recall correctly. Contrast that to
| unprofitable ventures today, like food delivery companies or
| Twitter.
| nicoburns wrote:
| I thought the reason interest rates have been so low for the
| last ~30 years is because governments in the 90s (certainly the
| US and UK ones) took the decision to make it their monetary
| policy to keep them low.
| mym1990 wrote:
| The case for decrease of human talent(however you quantify that
| kind of metric, if it is even true) likely has little to do
| with population growth, and rather the quality of education
| that can be provided to a broad population.
| epicureanideal wrote:
| Or to the reduced incentives available to most of the
| population. The very rich are accumulating more and even the
| upper middle class are struggling, and it might take decades
| of work to build up enough capital to start a small business,
| while someone with the right connections and half the talent
| is handed money for little effort.
| mym1990 wrote:
| Reduced incentives for what?
| wolfram74 wrote:
| What's the point in generating value if it's all being
| captured by the capital holding class?
| astrange wrote:
| The capital holding class is "people with 401ks" and so
| includes you.
| PeterisP wrote:
| The chance to become part of the capital holding class.
| mym1990 wrote:
| I generate value for my company in exchange for payment
| so I can put food on the table and not starve, seems to
| be a pretty good reason for me.
| kspacewalk2 wrote:
| Have those random business ideas grown to anything like
| billion-dollar companies (adjusted for inflation) before
| everyone realized that oops, actually these things won't turn a
| profit? It's a fair argument to make that low interest rates
| (with can be thought of as a proxy for 'too much money chasing
| too few opportunities') take random ideas and inject them with
| far too much money.
|
| (Airline industry is a special case, eventual "failure" is part
| of the business plan, so leave those aside.)
| obblekk wrote:
| I'm not sure why airlines should be excluded. They were the
| "growth at all costs, we'll make it up on volume" business of
| the 70s and 80s. More capital invested than ever returned
| over 40 years.
|
| Other businesses like this: franchise restaurants (many, many
| failed), motels, car rentals (you can see the gold rush in
| supporting the new tourist economy back then).
| majormajor wrote:
| > (Airline industry is a special case, eventual "failure" is
| part of the business plan, so leave those aside.)
|
| You could make this statement about today's "unicorns" too,
| once you start excluding things. If you're cynical, be
| cynical equally. WeWork? Classic "greater fool" "let it fail
| after we cash out" company. Many others out there too.
| Crypto? 10000%. I'm sure there will be a bunch of "obvious
| failure in retrospect" companies in a large-language-model
| wave too.
| xyzelement wrote:
| Hang on... This sub-thread is venturing into the territory of
| lumping airlines with "solutions in search of a problem" and
| that just doesn't make any sense to me.
|
| You can argue that airlines have not returned on the capital
| (it may be true, I have no idea) but there's clearly demand and
| utility for the product, as evidenced by nearly every flight
| being nearly or completely full at all times.
| ElevenLathe wrote:
| An industry basically can't ever make a profit is not a
| solution to anything.
| spaceman_2020 wrote:
| Guess we need to shut down all the government subsidized
| schools in my country where tens of millions of poor kids
| study in every day.
|
| Also shut down the unprofitable state funded hospitals for
| people too poor to afford private medical care.
| cedilla wrote:
| All the goods and people transported won't mind that a few
| shareholders were unhappy.
| lesuorac wrote:
| They might be unhappy when the profitable business are
| all ran out of town and the unprofitable ones collapse
| leaving neither behind.
| RC_ITR wrote:
| Guess all that drinking water we have is just a waste then.
|
| Highways too.
|
| Airlines are unique in that they're essentially a public
| good that we've allowed to be a private market (look at how
| often the government intervenes in the industry).
|
| That doesn't mean that airplanes are pointless.
| ElevenLathe wrote:
| Absolutely. The entire building-airplanes-and-flying-them
| "industry" is a side effect of their necessity as weapons
| of war and toys for rich people (same thing, really).
| There is no rational reason for it to exist, especially
| knowing what we know now, but we're not a rational
| species.
| Retric wrote:
| You could say that about the restaurant industry where
| people regularly lose their shirts, except a few players
| are consistently profitable.
| recursive wrote:
| So that would be a problem without a solution.
| mym1990 wrote:
| United Airlines making 10 billion a quarter doesn't sound
| like its in an industry that has no profit.
| PaulHoule wrote:
| Profits seem to be sporadic. Some may be doing well right
| now because of unusual conditions but when competition
| returns and things get back to normal profits might
| disappear.
| hedora wrote:
| Here are some example "solutions in search of a problem"
| airlines:
|
| https://samchui.com/2022/05/30/worlds-top-10-strange-
| airline...
| notahacker wrote:
| Airlines vs Silicon Valley are actually a good example of how
| the sort of business that _is_ massively threatened by higher
| interest rates is often an actual real business solving real
| people 's problems that just happens to be capital intensive,
| low margin and fairly predictable, not the solution in terms
| of a problem where the return on investment is claims of high
| margins and pure optimism.
|
| High interest rates won't stop VCs looking for 20-40x returns
| under high uncertainty falling for a pitch about how everyone
| will use this dumb website in future, honest
|
| But they are a major problem for an airline that has a few
| billion dollars of aircraft to finance, and lots of
| passengers but at low single digit profit margins.
| prottog wrote:
| > why have long term interests declined over the past 500
| years, accelerating in the past 50-100 years
|
| The cost of money (that is, interest) is based on two things:
| the time value of money, which is the concept that an amount of
| money is worth more now than the same amount of money later
| (above and beyond inflation); and the default risk, that you
| may not get back some or all of the money that you lent out.
|
| As the world became more stable over time, the default risk
| also lessened over time; and there's a good argument that the
| time value of money also decreased over time, as the quickening
| of the pace of technological advances meant that lenders could
| expect more returns over a shorter amount of time. Both factors
| combined to gradually decrease interest rates in the recent
| past.
|
| If you believe that we are now in a new era of geopolitical
| instability, it's reasonable to bet on this long-term trend
| reversing.
| FooBarBizBazz wrote:
| > the time value of money also decreased over time, as the
| quickening of the pace of technological advances meant that
| lenders could expect more returns over a shorter amount of
| time.
|
| Isn't this backwards?
|
| In a world where money has no time-value, a world where a
| dollar today is the same as a dollar tomorrow, and the same
| as a dollar five years from now, then, if there's no default
| risk, you can pay me back the same dollar I gave you, without
| interest. Zero interest rates.
|
| In a world where everything changes rapidly and I might need
| money _now_ , I'm going to demand a lot of interest before
| I'll lend you my cash. Because I'm incurring a lot of
| opportunity cost by parting with it.
|
| If this were a reinforcement learning problem, we might
| specify a discount factor. If that discount factor were near
| one, then we'd have a long time horizon. If it were closer to
| zero, then we'd have a short time horizon.
|
| I'd think that low interest rates would go together with a
| static, unchanging environment, in which money has very
| little time-value.
|
| I do agree, however, with your earlier sentence:
|
| > As the world became more stable over time, the default risk
| also lessened over time
| prottog wrote:
| > In a world where everything changes rapidly and I might
| need money now, I'm going to demand a lot of interest
| before I'll lend you my cash. Because I'm incurring a lot
| of opportunity cost by parting with it.
|
| My logic is that the market participants have the
| expectation that everything changes rapidly _for the
| better_ ; that is, advances in technology have a
| deflationary effect and therefore people are happy to lend
| at a lower interest rate, expecting the same number of
| dollars to buy more later.
| trgn wrote:
| > has to do with some very broad phenomenon:
|
| Consider also social and political stability. The variability
| of interest rates in function of societal cohesion was already
| observed hundreds of years ago, and seems consistent across
| timescales and geographies.
| jameshart wrote:
| I think the point being made here is that when a solution has
| found its problem, exploitation of that solution drives up rates,
| because rolling out the solution is an 'easy money' investment.
| Seems reasonable. I can buy that connection. The motor vehicle
| example makes sense.
|
| Of course you then have to hold that theory up to other cases and
| see if it holds. Like: where was the high rate era that followed
| from the invention of the internet? Rates have been falling more
| or less constantly since the mid nineties.
|
| And I'm not sure that it logically follows that we will _only_
| find solutions in search of a problem during low rates eras, or
| that high rates only happen during times when a solution to a
| problem is in the exploitation phase.
|
| So.. what's the predictive value of this connection?
| black_puppydog wrote:
| > [...] products that ultimately turned out to be dead ends, like
| the Palm Pilot [...]
|
| Huh? I never had a Pilot, but from everything I've read about it
| (and how people who did have one describe it) it was quite
| amazing, and arguably the predecessor of the smartphone, no?
|
| I get that the _product line_ is dead, but the concept was very
| much viable...
| adav wrote:
| From memory, I believe that the software from Palm lives on
| powering "smart" TVs.
| bandrami wrote:
| I used them for years, even delayed finally getting an Android
| because I liked my Treo so much (the Treo is a reminder that
| Palm combined the PIM with a phone long before Apple or Google
| did)
| arcturus17 wrote:
| My dad had a few iterations and used the hell out of them.
| anthonybsd wrote:
| Palm Pilot was a huge success both from a sales perspective and
| from "getting consumers comfortable with touch screen"
| perspective. The author of the article has a very poor choice
| of metaphors and examples which really obscures his point.
| spiffytech wrote:
| Palm PDAs were instrumental in getting me into the tech field.
|
| At the time, the way they could enhance my life felt magical,
| and they were down-to-business and solution-oriented in a way
| that I miss in modern smartphones.
| electroly wrote:
| I had several Palm devices. As I recall there was a fairly long
| gap between the death of PDAs and the birth of smartphones. I
| certainly did not replace my Palm with a smartphone; I replaced
| it with nothing, and then years later I got a smartphone. Most
| of the things that are amazing about smartphones were _not_
| present on my Palm IIIe, FWIW.
| _jal wrote:
| My memory is that the sort of person who was really in to
| Palm's gear migrated to Blackberries.
| jen20 wrote:
| I had all kinds of Palm devices, but the only Blackberry I
| ever had was supplied by a company (around 2006) - I don't
| recall them being consumer devices in the UK until after
| the iPhone.
| dredmorbius wrote:
| The Palm Treo and Pre filled in the gap between PDAs and
| smartphones. And of course there was the Blackberry from RIM,
| whose first true smartphone products (the 850 and 857) were
| released in 2002.
|
| Keep in mind that the iPhone somewhat evolved from the iPod
| with the iPod Touch being effectively a WiFi-only iPhone.
| Largely what we'd call and iPad today, though the iPod Touch
| was produced through 2019 per Wikipedia.
|
| There was also the Ericcson P900, a smartphone also released
| in 2002:
|
| <https://en.wikipedia.org/wiki/Sony_Ericsson_P900>
|
| I do miss much about the Palm III, specifically Grafitti.
| Modern e-ink tablets with notetaking capabilities somewhat
| supplant that.
| kevstev wrote:
| I disagree here- The Palm Treo was arguably the first smart
| phone, limited as it may have been. I had a 650 from around
| 2005 or so, and I actually kept that thing going until 2009
| when I got an IPhone 3GS. The Treos and "regular" PDAs all
| ran the same PalmOS software. The Palm 600 was the first real
| smartphone and was released in 2003.
|
| I didn't pay for data, so used the PDA features much like you
| would a regular PDA- I had a dock and did a sync to my
| computer via their software. But I could and did put ebooks,
| mp3s on the device, synced my calendar, etc... it did the
| job, just much more poorly.
|
| You also had "Pocket PCs" made mostly by HP that were kicking
| around during this period as well. Ipaq's were only
| discontinued around 2011, the last model apparently being
| released in 2009: https://en.wikipedia.org/wiki/IPAQ
| nottorp wrote:
| nerdponx wrote:
| Are you sure? You might have replaced it with a smaller,
| lighter, more-powerful laptop that you could more easily use
| on the train or a flight, and a Blackberry phone that had a
| lot of Palm features built into it (minus the screen and
| stylus of course).
| michaelhoffman wrote:
| If we're trading anecdotes, I certainly replaced my Palm with
| a smartphone. In fact, my first smartphone was a Palm.
|
| Anyway, I don't think the Palm Pilot was a dead end. It's
| hard to see it not influencing Blackberries and smartphones.
| myvoiceismypass wrote:
| I went from a Palm PDAs (m105, Handspring Visor) to the Treo
| 650 as my first smart phone personally. And for years before
| the Treo, I was using some sort of cable tether to my phone
| to provide internet access to the PDAs. It was pretty cool.
|
| I still miss Palm WebOS and the potential of the Pre/Pixi
| line.
| Brian_K_White wrote:
| Most of the things that were amazing about the iphone I had
| in my Samsung sph-i300 palmos phone 6 years earlier.
|
| In many ways the palm device was more amazing since it was
| already a rich mature ecosystem by then and already had 3rd
| party apps, thousands of them, for every imaginable purpose.
|
| It was the essense of the later iphone (after it allowed 3rd
| party apps) 6 years before the first iphone.
|
| I don't remember any gap. I certainly had an unbroken
| sequence of pda phones from several makers after that, but
| maybe there was a time before 2001 where people didn't use
| pdas much?
|
| I never used straight non-phone pdas myself.
|
| I was playing with a wince pda for a while but only for
| stunts like getting an old dos version of my companies unix
| software to run in a dos emulator on a Journada, just to show
| it at a company xmas dinner to the guy who invented & wrote
| the language and db initially on the trs80 (he immediately
| closed that and tried to find porn, I love that guy).
|
| To me a pda was never that useful by itself, only when
| Kyocera combined it with a phone a year or two before that
| i300 did it become a must have for me.
|
| But the way I remember it they seemed to be pretty popular
| with everyone else.
| ipsi wrote:
| > there was a fairly long gap between the death of PDAs and
| the birth of smartphones.
|
| Only if you define the birth of smartphones as starting with
| Android/iPhone. Palm released their own smartphones using the
| same OS as their PDAs (the Treo line) prior to that, and
| Microsoft had Windows Mobile plus a bundle of third-party
| manufacturers. Plus Blackberry had been around the whole
| time, too.
|
| Looking it up, it seems that Palm Tungsten TX[1] was produced
| in 2005, 1.5-2 years after they started producing the Treo
| 600[2], which was one of the first smartphones - yes, it was
| inferior to the iPhone in a number of ways, but having owned
| a Treo 680, in my mind it still qualifies as a smartphone.
|
| [1]: https://en.wikipedia.org/wiki/Palm_TX
|
| [2]: https://en.wikipedia.org/wiki/Treo_600
| acdha wrote:
| I'd put the starting point at the iPhone, but not for
| technical reasons and with a heavy American focus.
|
| At the turn of the century I had a PDA with unlimited
| wireless data (Handspring Prism + Ricochet). I used that a
| lot for email and web browsing but stopped when those
| companies failed.
|
| There continued to be PDAs on the market but the chokepoint
| as needing $100/month or more for an unlimited data plan.
| This especially toxic for the web where you have no idea
| how much data the link you are thinking about clicking on
| will use. Also, the phone carriers charged App Store fees
| which would've made Steve Jobs blush and had to be
| individually negotiated with every phone company so few
| developers even worked on apps seriously since the market
| was so limited.
|
| The iPhone was a huge improvement in the device but equally
| big for Americans was the cheap unlimited data plan meaning
| you weren't having to think about the cost before sharing
| photos or sending an email with an attachment.
| kragen wrote:
| also in the 02004-8 timeframe the danger hiptop was the hot
| smartphone
|
| As aaronsw explained in December 02008 in
| http://www.aaronsw.com/weblog/forgottensidekick
|
| > _It's been a frustrating year for us Sidekick users. It
| seems like every television show, periodical, and man in
| the street is raving about the amazing world-changing
| capabilities of the iPhone (and, to a lesser extent, the
| Google Phone). How having a device that can conveniently
| surf the Web, answer email, run third-party applications
| and fit in your pocket is as big a technological
| breakthrough as hovercars._
|
| > _Which is infuriating to those of us who have been using
| a superior device for the past five years._
| bux93 wrote:
| This. For me it started with the XDA (II). The telecom
| provider O2 had an HTC produced handset called the XDA,
| essentially a Pocket PC (predecessor of Windows Mobile) PDA
| with built-in GPRS modem (which I remember fetching up to
| 64 kbps, as opposed to using dial-up via GSM, which would
| get you 9600 bps if you paired up a Palm or psion 3/5 via
| irda to a nokia 6210). The XDA II followed a year later. By
| that time, there were also multiple Treo models with built-
| in mobile modems.
|
| It was great. There was no app store, but there were dozens
| if not hundreds of apps voor PPC on Tucows and other such
| download sites. But, people would laugh at you 'why would
| you want to browse websites or check your e-mail when
| you're not at a computer?'
|
| [1] https://en.wikipedia.org/wiki/O2_Xda
| Brian_K_White wrote:
| Try Sammsung SPH-i300 from 2001
|
| Even before that was a Kyocera but that was really nothing
| like an iphone and not that great to use. It was probably
| first or close to it, but took a couple other iterations to
| get good.
|
| That Samsung was awesome though. I loved that thing even
| though I did and still do miss having a real keyboard, so
| that was actually not an aspect I loved, but it sure was
| slick and the universe of apps provided any funky
| functionality I wanted, because the apps could actually
| integrate with the phone and hardware. For instance out of
| the box the dialer was not that well integrated with
| anything else like the address book. But a guy sold an app
| that did that awesomely. That phone with that app installed
| pulled things together into the next level usefulness that
| we all take for granted as obvious now.
| nerdponx wrote:
| Calling it a dead end is like calling biplanes a dead end
| because now airplanes only have 1 wing on each side.
|
| And not even that analogy is apt, because even the stylus made
| a comeback briefly.
| Raidion wrote:
| Stylus is now standard on the most expensive "non-folding"
| flagship from Samsung too.
| black_puppydog wrote:
| Hehe and Apple charge you and extra EUR130 for one. :)
| bootsmann wrote:
| Well the phone part is pushing it a bit here. I grew up after
| it but someone gave me one to hack around with as a teenager
| and iirc it had a mail client but to connect it to the internet
| you needed a cabled modem so you could only use these features
| when you were pretty much already at your PC anyways. The local
| file-transfer feature was cool tho, but again this required
| your counter-party to also have a palm.
| jen20 wrote:
| I had a Treo 600 and (more importantly) a Treo 650, which
| were direct descendants of the Pilot. In the years before the
| iPhone it meant I could read email etc on the way into the
| office - it was pretty great. Of course, the iPhone was a
| substantial leap forward, and Palm's unwillingness to realize
| that such a thing was even possible - combined with godawful
| native development tools - made it a victim pretty early on.
| PaulHoule wrote:
| I know interest rates have a strong effect on tech stocks but my
| understanding is that they have their biggest impact on boring
| but capital intensive businesses such as cars and buildings.
|
| For instance Facebook was said to spend $10 billion on the
| "metaverse" last year but spending on building construction was
| about $1.5 trillion
|
| https://www.zippia.com/advice/us-construction-industry-stati...
|
| that said, total spending on R&D in the US was claimed to be
| about $660 billion in 2019
|
| https://ncses.nsf.gov/pubs/nsb20221/u-s-and-global-research-...
| mberning wrote:
| Homes and cars are simply out of control. People are getting
| mortgage sized loans just to buy a family car. Something which
| will become worthless over 10 years of use. Getting a mortgage
| on a home is now a non-starter for a huge swath of the
| population. I suppose I can somewhat understand the price of
| homes going up. It's a durable item that, if reasonably
| maintained, has an unlimited useful life. A car on the other
| hand, no matter how well maintained, will become worthless in a
| decade. Freewheeling monetary policy does not just impact which
| cars a person is able to buy. It more insidiously impacts that
| cars which manufacturers choose to design and build. Even entry
| level cars are packed with features and electronics and carry a
| near $30k price tag. It's not going to be so easy for the
| industry to get back to building simple and cheap cars.
| xyzelement wrote:
| // People are getting mortgage sized loans just to buy a
| family car
|
| I mean... That's insane hyperbole right? Below you are
| talking about $30k cars, in what universe does that approach
| "mortgage sized"?
| Mezzie wrote:
| It's actually difficult to get mortgages for that small an
| amount. There were lots of properties here (MI) in that
| price range post 2008 and my dad ended up buying a house
| with a credit card because it was easier than trying to get
| a mortgage for that amount.
| lazide wrote:
| Depending on your selection of 'people' it isn't that odd -
| anyone financing a Tesla Model X for instance, is looking
| at $120k+ prices, and there are a LOT of them in many parts
| of the Bay Area.
| yamtaddle wrote:
| To be fair, I don't think the people dropping $120k on a
| car are also in the market for $120k houses.
|
| Now, trucks... I've seen some houses where the truck
| parked out front may well have rivaled the cost of the
| house. Of course rural-American housing in boring areas
| (no skiing or nice views or anything to draw tourists or
| vacation-homers) still being very cheap contributes to
| that kind of situation.
| mberning wrote:
| A $30k car would be something basic like a corolla or
| civic. When you start talking about larger family cars,
| $50k is really the low end of what you find on dealer lots.
| Bear in mind, the MSRP of a vehicle and what you can
| actually find to buy is quite different. And $50k is a
| common entry point. Prices escalate quickly from there. My
| point being that you used to be able to buy a new car such
| as a civic or corolla for closer to $10k than $30k. I
| bought a brand new Mazda 3 for $13k in 2006. And there were
| tons of them on the dealer lot and they worked with me on
| the price. Nowadays if you head down to the Mazda dealer
| you might be lucky to find one just under $30k.
| PaulHoule wrote:
| Funny I just was in line at my credit union and caught a
| look at their balance sheet.
|
| In October they had $281,996,350 outstanding in auto loans
| compared to $462,003,191 in mortgage loans and $68,035,664
| in HELOC.
|
| Auto loans turned out to be bigger relative to mortgages
| than I expected but maybe my credit union writes a lot of
| auto loans.
| xyzelement wrote:
| One thing that could be in play is mortgage originators
| often sell loans to other investors post-origination. I
| am talking about Fanny Mae and Freddy Mac and others, who
| hold a ton of homeowner debt on their books.
|
| 460 million of loans is about 1000 average-sized
| mortgages at issuance - if your CU's entire business was
| 1000 loans they'd probably not bother with it since the
| staff and infrastructure to do it is such a pain in the
| ass. Chances are this represents some unknown percentage
| of total issuance that just happened to not have been
| sold.
| Ekaros wrote:
| And my understanding is that rates for car loans as they
| are potentially unsecured are much higher. So burden of
| carry is higher.
| rightbyte wrote:
| > A car on the other hand, no matter how well maintained,
| will become worthless in a decade.
|
| Uhm ... my 24yo Volvo disagrees.
|
| The resale price of 120k+ mile cars is silly low compared to
| the value you get from using them. Don't tell anyone though.
| I want this market for my self.
| spaceman_2020 wrote:
| I guess the retort is that even when such projects fail, they
| leave behind something material that can be repurposed.
|
| If your manufacturing plant fails, the warehouse, factory,
| machinery, etc. are all reusable and last a long time. Heck, so
| much of the housing in major cities is built out of old
| factories.
|
| If your startup selling virtual pet food for your digital
| hamster fails, what does it leave behind?
| Shinmon wrote:
| Solutions in search of a problem (SISP) are not necessarily tied
| to low interest rates.
|
| What might be tied to them is that companies with such solutions
| live longer because money is cheap. However, if you never make
| money, noone will give you money either.
|
| I think SISPs are a typical problem for tech-savy founders who
| think some kind of solution is really cool, because it solves
| them a problem. The problem however was never real. Engineers
| just tend to automate things that they have to do once a year and
| takes them about 1h. Automating it, is just more fun than
| actually doing it.
|
| Even worse with university spin off. They almost always start
| with a technology that solves problem thought of in research
| proposals.
| nonrandomstring wrote:
| > takes them about 1h. Automating it, is just more fun than
| actually doing it.
|
| Spot on. The joy of technological skill, being a programmer and
| engineer is that you can customise, reconfigure and shape the
| world in front of you. Other people see you playing and having
| fun, and say; "Hey, can you do that for me?" What was just
| scratching an itch becomes something others want to
| universalise. And that doesn't always work.
|
| > almost always start with a technology that solves problem
| thought of > in research proposals.
|
| Such proposals are often desperately scraping the barrel for
| ideas. Anything that combines grant-worthy buzzwords in a
| barely coherent way is fit for the game.
|
| > The problem however was never real.
|
| The tragedy is that the problems _become real_. Otherwise
| intelligent people see a bunch of PhDs frobicating widgets, and
| a bunch of wealthy investors throwing money at them. They read
| the self-affirming press reports on the research and the
| marketing hype about how Widgifrob PLC are the hottest new
| thing. Suddenly everyone has a widget that needs frobnicating.
|
| Low interest + easy capital + bloated academic research machine
| = new problems. It's a problem creation machine.
| Shinmon wrote:
| Research proposals are not supposed to necessarily solve
| current real-life problems so there is nothing inherently
| wrong with that.
|
| But given the amount of startups coming out of universities,
| the mindset is crazily wrong. So many people coming with a
| technology. If it's software you can at least pivot easily
| but if you got some kind of hardware technology, it becomes
| much less simple to do that.
|
| > Low interest + easy capital + bloated academic research
| machine = new problems. It's a problem creation machine.
|
| Not sure if I understand you correctly, but academy seems to
| be more of a solution creation machine without real problem
| solving. Problem solving as in someone will pay to get rid of
| the problem because it happens frequently and costs a lot of
| money each time.
| nonrandomstring wrote:
| > > It's a problem creation machine.
|
| > Not sure if I understand you correctly
|
| It is hopefully not an obtuse point but allow me to explain
| it with a story;
|
| Teenage girl has a beauty spot. Her parents tell her it's a
| princess spot. Boys think its cute. She's happy. Some mean
| bitches tell her it's ugly and probably skin cancer. Now
| it's a problem. Nothing in reality had changed of course.
| And that's how solutions looking for problems go about the
| world creating new problems. It's in their interest to.
| javier123454321 wrote:
| Above the fold, self promotion... below the fold, a popup to sign
| up without reading it. I can't be bothered to click out. I can be
| bothered however to write this comment to complain to the state
| of the SEOfication of all content. Maybe it's good, but I'm
| immediately skeptical.
| malfist wrote:
| I thought this article had a good rule on how to differentiate
| dead end "solution in search of a problem" inventions and ones
| that might be successful.
|
| > whether the technology does something that would be useful if
| everyone had it, but is relatively useless at small scale
|
| I've often told my partner a lot of his "smart home" devices are
| solutions in search of problems. It seems to ride this line.
| Probably why despite my protests we keep winding up with more and
| I have to yell at alexa more frequently
| jchw wrote:
| I love smart home stuff, but greatly prefer open source
| compatible (Home Assistant etc), non-internet-connected smart
| home equipment that still has hardware switches. There's no
| good standard for RGBW addressability over wires here in the
| U.S. (that I'm aware of) so I do use some Philips Hue bulbs,
| but only accompanied by a hard-wired switch capable of
| associating directly with the bulb, so that all it needs to
| work is power.
|
| I will admit though that I still mostly just do it because it's
| fun. But hey, it's fun that comes in handy, too.
| makestuff wrote:
| Yeah if someone came out with a piece of hardware that could
| run the an NLP model to detect the common phrases (turn
| lights on/off, play music, etc.) and then have it prepackaged
| with home assistant it would ruin a lot of these cloud
| connected devices.
| PaulHoule wrote:
| System like X10 or power line Ethernet that communicate over
| power lines have huge transformers and I think high power
| consumption. You'd think you could have power line Ethernet
| in your PC or X10 bulbs but it is not so practical.
| jchw wrote:
| Yeah, powerline data transmission seems impractical. It
| works, but reliability has always been a huge problem for
| me, even with the most expensive adapters. Now that I own
| instead of rent, I just run ethernet for my computers. For
| smart home, I don't really care for throwing RF at every
| single problem, but ZigBee and Zwave at least do work, so I
| am just doing that for now.
|
| What would be cool is just having something simple, like
| maybe one or two wire serial, at least between the switches
| and bulbs. Today, the best solution I'm aware of for smart
| bulbs is something like Inovelli Blue Series or Embrighten
| switches, which can associate with the bulbs directly. Even
| though in smart bulb it must use RF, it can at least skip
| the hub and work when everything else is down.
|
| (Though, I am a little disappointed that I had to bypass
| the power control for my Blue Series. I was hoping I could
| have it connected to measure power usage even in smart bulb
| mode, but it seems even in smart bulb mode where the power
| is passthru you still can't have an inductive load like a
| ceiling fan motor or it will cause problems. Bummer.)
| Sohcahtoa82 wrote:
| I'm baffled at what purpose there is to voice-activated lights.
|
| Light switches are always at the entrance to a room. If I'm
| entering or exiting a room, I turn the light on or off as I
| pass the switch. This is going to be much faster than "Alexa,
| turn the computer room lights off" on my way out and then
| waiting to make sure it understood me.
|
| The only exception is my front porch light. I usually leave it
| off, but turn it on when I'm expecting a food delivery at
| night. Being able to turn it on from my computer room remotely
| could be nice, but I'm not going to begin investing into a
| "smart home" for that one purpose.
|
| My TV and clothes washer are both "smart", but I don't use any
| of the smart features, and neither have ever been connected to
| my WiFi.
|
| The only smart appliance I have is a thermostat, and even that
| one is pretty basic. It has an app that I can use to control it
| and create a schedule, but it doesn't try to learn when people
| are home.
| __derek__ wrote:
| > Light switches are always at the entrance to a room.
|
| Not necessarily. Open layouts have taken the office and
| residential markets by storm over the last two decades. Many
| "rooms" don't have well-defined boundaries, so it's common
| not to have a switch everywhere someone might enter.
| acdha wrote:
| I think a lot of this comes back to the way everyone has been
| focused on building huge mainstream businesses for a long
| time. Many IoT devices are useful to many people but not at
| the scale companies like Amazon or Google want -- people with
| vision or mobility impairments, for example, find voice
| control far more useful than other people but that isn't a
| huge market and many of them are low income. Parents with
| babies probably use voice controls more than they used to but
| that only lasts so long and then becomes a problem until they
| protect the ability to have Alexa order more LEGO sets - and
| not anything people are jumping to subscribe to.
|
| There could probably be a medium-sized business model which
| works but not the kind of hyper-scale vision that SV has
| favored. Apple seems to have the best balance putting the
| smarts in devices you were already buying for other reasons,
| and being able to concentrate more than one promotion cycle
| out which Google struggles with.
| adriancr wrote:
| > I've often told my partner a lot of his "smart home" devices
| are solutions in search of problems
|
| "smart home" things are usually hobbies at small scale, and you
| never know if something ends up being useful/useless until you
| actually try it out
| PaulHoule wrote:
| My smart home gadgets are a common source of controversy in my
| house.
|
| I have some rooms with dimmable lights that work really well
| even if there is some latency. I have other ones where there
| are chronic reliability problems usually because I tried to get
| a Sengled switch to work a Hue light or something like that.
|
| I'd say my project success rate has been about 50%.
|
| Hue made a really great switch which is piezoelectric powered
| and doesn't need a battery but these are now crazy expensive
| and hard to find. I think switches are affected by supply chain
| issues but might not be stocked at places like Best Guy because
| plenty of people seem to have a smartphone grafted to them and
| just use the phone as a switch.
| sokoloff wrote:
| What about smart home devices would be useful if everyone had
| them but useless if only at your house?
|
| (I'm a tinkerer but still reluctant to deploy most smart home
| solutions because they usually fail the household acceptance
| factor.)
| pornel wrote:
| Mesh networks, maybe?
|
| I like smart homes in principle, but the current
| implementations are _awful_. I end up sitting in the dark
| because software on my lightbulbs locks up, and a robot tells
| me "Sorry, I can't find 'lights on dammit' in your music
| library".
| ulrikrasmussen wrote:
| I think it's a false dichotomy. Supposedly the GP thinks that
| their smart home devices are already useful, so there is no
| need to consider whether they would be more useful if more
| people had them. I think the quote from the article is a bit
| strange, and the example of clocks is not very good because
| people still had a way to tell time before clocks were
| invented (e.g. looking at the sun), it was just not very
| precise. A clock is still useful for a single person because
| that person now has a faster and more reliable way of telling
| the time without having to look out the window.
| pm215 wrote:
| Yes, but it's not as useful as it is to a modern person,
| because if you're the only person who owns a clock then
| your life will have very few situations where knowing the
| time exactly and reliably matters -- so you only own one if
| you have some specific use-case where you care about exact
| time. The benefit of owning a precise and accurate clock
| becomes much greater if you are frequently interacting with
| other people who also have precise and accurate clocks
| (such as operators of railways), and at the point where
| most people in a society have an accurate clock then it
| becomes a default assumption that scheduling can be done by
| time and you will find it increasingly difficult to be
| without one. (I think the smartphone is currently going
| through a similar transition -- right now it is definitely
| still possible to live without a smartphone, but an
| increasing number of organizations are now starting to act
| on the assumption that every person they deal with does
| have one.)
| TeMPOraL wrote:
| I think the point of the analogy is that a clock isn't very
| useful for an individual, unless enough other people around
| you also have one. You don't gain much from being able to
| accurately tell the time down to minutes or seconds,
| because by far the biggest non-specialist use of clocks is
| synchronizing with other people. You'll come by the store
| at 08:00 sharp, and discover it's closed, because the day
| is cloudy and the storeowner's rooster overslept, so he
| still thinks it's early.
|
| Such fundamental technologies have also a perverse tipping
| point, a kind of strong network effect in disguise.
| Continuing with the analogy, once enough people have clocks
| and start coordinating with them, they'll start forcing
| their preference on others, and soon enough everyone _has
| to_ get a clock, or else they won 't be able to synchronize
| with the society around them.
|
| With timekeeping, this arguably happened before most of us
| were alive. But a more recent example, one that's being
| regularly lamented in bars and in press, is cellphones (and
| even more recently, smartphones): they went from a rich
| people's toy to being ubiquitous in ~decade, and these days
| there's a strong social expectation that you own one, and
| that through it, you're accessible during waking hours.
| People slightly older than I am call it an invisible
| chain/tether. Our children will probably call it "normal",
| just like my generation considers clocks normal.
| malfist wrote:
| I think there's a lot to be said about smart home devices and
| accessibility. I could imagine voice assistants controlling
| devices for those with vision impairments or mobility
| impairments would be a huge boon.
| ak_111 wrote:
| I am wondering how much of the excessive (even to the point of
| lunacy) funding of stupid ideas in tech is due to a low-rate
| macro environment as opposed to a spray-and-pray gold rush that
| naturally gets triggered whenever someone hits gold in an area.
|
| After all it is hard to argue that AdSense, iPhones and AWS are
| not hugely profitable paradigm-shift innovations that would
| thrive in even the harshest macro environments, and the excessive
| mad funding are just ill-informed speculators trying their best
| to win the power law game as often happen in gold rushes.
| makestuff wrote:
| I will be interested to see how much of a hit AWWS/Azure/GCP
| takes during this downturn. Suddenly startups are not going to
| be spending millions per year on cloud stuff stuff that they
| don't really need (ex: massive redshift cluster for your "data
| collection"). Furthermore, a large number of startups will
| cease to exist.
|
| I would guess large customers have account for a massive
| portion of cloud revenue; however, they also get much better
| pricing due to their scale. I would guess that the startups
| have to be where the gravy is since you are not getting a
| massive discount when you are small.
| ak_111 wrote:
| I would be very surprised how much of start-ups spending is
| driving AWS adoption (it's probably less than 5-10% of their
| revenue). In the UK alone a huge chunk of the public sector
| and FTSE100 corporate sector has migrated to AWS and Azure to
| the point where they are national security risk.
| makestuff wrote:
| Fair point, it would be interesting to see a breakout
| reflected in earnings reports, but I doubt that would ever
| happen.
| wongarsu wrote:
| In a sense AWS/Azure/GCP are doing startup investing, giving
| out tens of thousands of credits to basically any startup
| that asks for them, in the hope that most of them stay on
| their platform and some of those become huge (=big spenders).
|
| So if less startups are founded, startups fail earlier and
| startups build less-oversized architectures we might first
| see the effect in the beginning of the funnel, in terms of
| less free credits being spent. The hit to revenue would then
| take a couple years to fully materialize.
| lazide wrote:
| Low rates throw fuel on the fire by reducing the return on
| other viable options, and if in the presence of other asset
| inflation, helping to drive desperation for 'positive' returns.
|
| If the safe option goes from 'T-bills that don't lose you
| money' to 'T-bills that defacto lose you 3-5% a year relative
| to price inflation in every asset you care about', risk
| appetite increases.
|
| Think of it like an investing Overton window.
|
| They didn't start the fire, but boy did they make it quite the
| bonfire.
| alfalfasprout wrote:
| The thing is too... the spray and pray approach does work. The
| success of VCs is based very much on spray and pray at the end
| of the day.
|
| The other thing people are forgetting is that many "unicorns"
| that are unprofitable do have a road to profitability. But the
| investor sentiment over the last 5-10 years has been to push
| companies to grow vs. try to become profitable fast at a
| smaller scale.
|
| At the end of the day, one reason I suspect tech won't retreat
| in dominance is that the rate of return on capital is extremely
| high even when you factor in top end compensation for
| employees.
|
| The change I do predict is that we'll return quickly to a "grow
| fast, fail fast" world where investors will be less willing to
| ride out investments that don't have a clear path to
| monetization in the future. Monetization will likely be
| emphasized from the get-go for founders. It won't be an after
| thought. In the past few years, some ridiculously dumb ideas
| were getting $5-10mm investments shortly after seed stage. I
| suspect that era is done for a while.
| rr888 wrote:
| Surely Real Rates are the issue? Ie now when inflation is 7%+ and
| rates are 4%, rates are effectively lower than when inflation is
| 2% and rates are 1%. I'm not buying lots of these analyses.
| moloch-hai wrote:
| It took some time to figure out that "low rates" means "low
| interest rates".
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