
In Defense of Bad Ideas - as89
https://surjan.substack.com/p/12-in-defense-of-bad-ideas
======
jkhdigital
Bad ideas are magical when they come in the form of long call options (bounded
cost, unlimited upside).

Bad ideas destroy companies/nations/civilizations when they come in the form
of short put options (bounded benefit, unlimited downside).

~~~
thaumasiotes
> long call options

> short put options

I tried to think of what a "short call option" or a "long put option" would
be, and I don't think the concepts exist. Do they?

~~~
ekelsen
If you buy a call option, someone has to be on the other side of the contract.
They are the short position.

~~~
thaumasiotes
Sure, but they don't have a call option. All they have is an obligation.

~~~
brewmarche
Short just means they have a negative amount of that, in this case a negative
amount of options.

~~~
thaumasiotes
No, short means your position is predicated on the idea that the future price
of something will be lower than the current price.

Owning a positive number of put options makes you short the underlying stock,
which is presumably why the comment upthread described put options as "short
put options". Selling put options gives you a long position, not a short
position.

I wanted to analyze this in terms of the original comment, in which "short put
options" have limited upside and unlimited downside, but put options do not
have unlimited downside for either the buyer or the seller. The buyer can't
lose more than the price of the option, and the seller can't lose more than
the strike price. Put options are a case of "limited upside, limited downside"
from any perspective.

Call options are the ones with unlimited upside (for the buyer) and unlimited
downside (for the seller).

~~~
projektfu
You have to think of the futures definition of long and short, not the
equities definition of short. In every futures contract, the long is paying
money and the short is receiving it for the contract. Every options contract
has a short, the writer, and a long, the buyer.

~~~
homeless_engi
In this case, the original commenter explicitly (erroneously) stated
"options". Options cannot have unlimited downside; you can always choose not
to exercise the option.

~~~
projektfu
If you write a put option, it has downside limited only by the underlying zero
price of the security minus the premium. If you write a call option, your
downside is theoretically unlimited. If you buy a put or a call your downside
is limited to the option premium.

edit: i should say writing a put option (short put) your potential downside is
the difference between the strike price of the option and the premium, if the
underlying security goes to zero.

~~~
thaumasiotes
If the underlying security goes below zero, that doesn't increase your
potential downside. The option you sold will force you to buy the security,
but it won't force you to sell it.

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adwn
The article assumes that SpaceShipOne's design was actually a good design. It
wasn't.

To be precise, it was a good design to satisfy the artificial requirements of
the prize, but nothing else. The design doesn't scale. The hybrid rocket motor
has been the source of countless headaches, lousy performance, and more than a
decade of delays, the feathering mechanism has already cost the life of a test
pilot, and the need for a pilot plus co-pilot severely reduces the payload
capacity.

Now, the article's thesis – that good and bad ideas are sometimes hard to
distinguish before they've been tried – is still true, but the author chose a
bad example.

~~~
darkerside
It's a great example. The only reason these factors clearly outweigh the
positives is because the benefit of hindsight. Or do you imagine the brightest
minds of NASA just weren't thinking clearly for decades?

The killer feature of the shuttle was supposed to be the cost savings from
being able to make multiple trips using the same equipment (sound familiar?).
It turned out not to be a feasible solution from a technical cost standpoint,
but if people can't clearly estimate the cost of adding a new feature to a
website, I totally believe would have been indistinguishable from a good idea
at the time.

~~~
pdonis
_> It turned out not to be a feasible solution from a technical cost
standpoint_

The shuttle turned out not to be a feasible solution because it was loaded
down with other requirements that had nothing to do with the killer feature
you describe. A key one was the requirement from the US Air Force that the
shuttle have enough cross range capability to be launched into a polar orbit
and then return to the launch site after one orbit [1]. That was what drove
costs up to the point where the shuttle wasn't feasible any more in terms of
the killer feature.

[1]
[https://history.nasa.gov/sts1/pages/scota.html](https://history.nasa.gov/sts1/pages/scota.html)

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perl4ever
I'd forgotten about that stuff, but it seems like _the_ bad idea was the prize
itself.

I mean, the winner did just enough to get the prize, and stopped, and nothing
further ever came of it, right?

Just because of how SpaceX overshadows everything in retrospect.

~~~
as89
No, they're still going at it. Partnered with Virgin to make further
iterations of the Spaceship One concept under The Spaceship Company. They're
shooting to do private spaceflights under the name Virgin Galactic.

~~~
perl4ever
Orbit though?

~~~
PopeDotNinja
Sub-orbital. Think getting the craft up to altitude of 100+ km, hang out for a
few minutes, and descend back to Earth. SpaceShip One, the prototype inspiring
the Virgin Galactic fleet, was capable of reaching speeds of 0.9 km/s. [1]
Escape velocity to get into orbit from Earth's surface is 11.2 km/s. [2]

[1]
[https://en.wikipedia.org/wiki/SpaceShipOne](https://en.wikipedia.org/wiki/SpaceShipOne)

[2]
[https://en.wikipedia.org/wiki/Escape_velocity](https://en.wikipedia.org/wiki/Escape_velocity)

~~~
thesz
Escape velocity is a velocity to escape gravitational field. Orbit velocity is
a velocity to orbit a thing inside its gravitational field.

For example, ISS has orbit speed of about 7.7 km/s at 350 km above the ground.
Orbit speed "at the surface" of Earth is about 8km/s, I believe.

~~~
PopeDotNinja
Thanks for the clarification.

~~~
perl4ever
My point, not to be overly disrespectful, is that suborbital flights are so
different from what SpaceX has done that they seem like party tricks, not
stepping stones.

In the big picture, it's not a huge amount wasted, I was just remarking on it
being less significant in retrospect than one might have hoped.

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hliyan
Reminds me of the strange aircraft designs of Burt Rutan, the closest thing
the 80-90's had to an Elon Musk: [https://www.flyingmag.com/photo-
gallery/photos/awesome-airpl...](https://www.flyingmag.com/photo-
gallery/photos/awesome-airplanes-burt-rutan/)

~~~
taneq
If you're referring to SpaceShipOne, that's because Rutan's company built it:
[https://en.wikipedia.org/wiki/SpaceShipOne](https://en.wikipedia.org/wiki/SpaceShipOne)

------
bluedino
I've always wondered how terrible automotive designs make it to production.
Engines or transmissions that quickly fail, cars that are just garbage in
quality...nobody along the years of development stopped to say "maybe we
shouldn't build this..", or perhaps someone did?

Did the company building this get their moneys worth when it comes to lessons
learned?

~~~
Cthulhu_
When it comes to mechanical failures like that, it's never due to
incompetence; it's due to cost cutting concerns (e.g. using less material,
cheaper / inferior material) and / or planned obsolescence. Automotive
engineers are highly competent, and most will have had a lot of education when
it comes to materials, strengths, stresses, wear and tear, etcetera. And car
companies build up that knowledge over the decades.

Definitely not a problem with all cars, but the better built cars are more
expensive.

I want to say "you get what you pay for", but at the same time I know nowadays
there are a lot of products (e.g. electrical tools) where the brand is bought
up and the new owner makes big cost cutting measures to maximize their profit
margin, the money coming from "brand inertia", that is, a brand is known for
being good for a couple years after they start reducing quality and
durability.

~~~
reactor4
Nissan's CVT seem to be a counterexample of everything in your first
paragraph.

I could also bring a lot of counterexamples to your second paragrah (e.g.:
many german cars).

~~~
michaelcampbell
"better built cars are more expensive" is not the same as "expensive cars are
better built".

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krm01
Would have loved to read a longer writeup exploring that premise (which I
agree with). The difference between Bad ideas and Good ideas, is determined by
the outcome. Something that seems bad but ends up working
(milliondollarhomepage, pet-rock, etc.) ends up being brilliant, in the eyes
of the public.

~~~
cycomanic
I would argue that Walter Benjamin's "History is written by the winners"
(rephrased) is someone a longer write-up of the same premise, albeit not in a
technical area.

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jotm
That rotary rocket looks like a design that could work, tbh

Instead of rocket propulsion, first stages could in theory deploy helicopter
wings and get a decent slow down even before spinning them up to full speed
(with autorotation the blades act like a parachute/wings).

Seems like it would be a harder implementation than the high precision control
with a rocket, though.

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pathhandwaving
Some ideas are just bad Example: Should I take this unmarked pill a stranger
just handed me? No you probably shouldn't Example 2: Should I jump off this
cliff with rocks at the bottom? Is it higher than 2-5 feet. Probably not.

Example 3: Should I eat this raw meat product that has been sitting out on my
counter for more than a day. Probably no. I understand the point here, but
some ideas are just bad ideas.

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wojtczyk
Does anybody know, why the rotary rocket body did not start spinning itself
once it lifted off the ground? There’s only one propeller.

