
Hard Tech is Back - firloop
http://blog.samaltman.com/hard-tech-is-back
======
dlrush
Every company doing hard tech should be considering federal funding for early
stage R&D. The US gov't has been consistently providing more early stage
capital than VC for several decades through the SBIR program. (About $2.5B
each year). Capital through the program is NON-DILUTIVE, Phase 1 grants can be
$225K, Phase 2 grants to $1.5MM, and you likely have government and private
sector customers at the end of Phase 2.

Steve Blank's Innovation Corp initiative is now working with the NIH, NSF and
Defense to help companies development product-market-fit once basic funding
has been achieved as well.

Disclaimer: My company GrantIQ.com helps companies find federal funding
opportunities & helps large companies identify breakthrough technologies being
developed through these programs.

~~~
jseliger
_Every company doing hard tech should be considering federal funding for early
stage R &D. The US gov't has been consistently providing more early stage
capital than VC for several decades through the SBIR program._

This is generally good advice, but I'm a grant writer (see
[http://www.seliger.com](http://www.seliger.com) if you're curious) and have
worked on many SBIRs and STTRs. I'll add that there are downsides as well. One
is simple timing: if the appropriate SBIR or STTR funding cycle just concluded
for that year, you may have to wait another year to apply. Then another 1 – 3
months for a decision. Then longer for final authorization of the budget. The
other day I talked to a guy whose best potential SBIR source had had a
deadline the month prior.

Second, Phase 1 grants can just be too small for the amount of effort that
goes into them.

Third, they don't come with the advice / community / expertise of good VCs.

Fourth, they take a lot of effort to prepare, and for first-time grant writers
they can be quite hard. The alternative is to hire someone like my firm. While
I'm biased towards doing that for obvious reasons, we also cost money.

While I don't want to talk anyone out of applying, I do want to note that the
downsides are considerable too.

As a side note, I used to submit some SBIR and STTR RFPs to Hacker News
(search for "seliger" here:
[https://news.ycombinator.com/from?site=nsf.gov](https://news.ycombinator.com/from?site=nsf.gov)),
but I stopped after a while because no one upvotes the submissions.

~~~
iammaxus
These are some good warnings. The way I like to think about it is that the
actual free cash available to spend from the grant is on the order of 1/3 of
the sticker price when you fully account for the costs of getting the grant,
administering it, and fulfilling the requirements which inevitablly do not
line up exactly with your business goals.

Many companies get stuck in a kind of grant hamster wheel where they end up
only producing enough from a grant to be able to get another grant, and not
advance in commercializing their technology. I think there are few companies
that make the transition from being primarily grant funded for a period into a
high growth success.

Sometimes it's your only option for funding, but ideally, it makes up 0 to a
fraction of your R&D funding so that it doesn't dilute your focus.

This advice is specific to companies that have a path to be VC-fundable, high
growth, commercial success. There are many other (most) companies that can be
funded by grants and build their technology incrementally over time.

------
jackcosgrove
I worked in industrial automation for a few years and most of the software
there is terribly outdated. It's definitely ripe for disruption. There are
"firm tech" business ideas that involve building better sensing and control
software for hard tech industries. Given the low cost of sensors and
networking these days it's not prohibitively expensive.

I think making a hard tech product for consumers is still very hard, and those
who succeed should be commended. People wanting to dip their toes in the water
might consider things like building a factory management portal like Splunk
that aggregates sensor data, or something that involves sensing and reporting
rather than actuation. Actuation can be dangerous and therefore legally risky.

~~~
caseysoftware
I think the reason these systems haven't been challenged yet is lack of
knowledge. People tend to attack areas and industries that they know a lot
about. This is why college hackathons have tons of dating, what to do, and
delivery apps. It's their world.

If you don't have people coming _out_ of the industrial automation space with
a good understanding, it's hard to walk back in with a useful product.

~~~
ogreveins
That helps but you have to understand that most industrial and utilities sites
hate new tech. They like proven tech that's been used in three other places
before they adopt anything. And once they settle on something they want to
stick with it for 15-30 years and have support for longer because everyone
knows that it's going to take another 3 years to get approval for purchase of
new components because the old stuff has been giving faulty readings the past
year and a half which requires hard reboots, the firmware is no longer being
upgraded and the guys who first used the stuff are starting to retire. Even
then they just want something that fits into the same slot.

Sorry for the runon but this is a major gripe of mine. Most managers just want
it to work and unless it doubles your profit, cuts failures and makes you
coffee for when other stuff breaks and you're working overtime to fix it they
don't want to change anything.

~~~
sliverstorm
Well, naturally. Their job is not to use tech. It's to build something, or run
something, etc.

I can sympathize, and I bet you can too. My dishwasher, my car, my garage
door... I just want these things to do their job and let me get on with my
actual work. I don't want the latest garage door or vacuum.

~~~
jfoutz
I find that kind of odd. Cooking is not a passion of mine, so i don't care
about a fancy dishwasher, i agree i want something that just works. I'm not
much of a gamer, but i completely understand friends who dump hundreds or
thousands a year into hardware, because that is something they're passionate
about.

If the whole point of the organization is to build things, it seems like they
should use the best tools for building things. Now, there's a good argument
for tried and true solutions, and if the new stuff isn't rock solid, you're
going to have wasted materials. It really _seems_ like they should be
completely geeking out over better, shinier, fancier tools for building stuff.

Maybe the costs are so high, and the margins so thin there's no room at all
for experimentation. But it can't be lack of desire. If it is indeed lack of
desire, they're going to go out of business.

------
saosebastiao
Well written and mostly agreeable but I've got a lowbrow dismissal incoming: I
disagree that Cruise could be considered hard tech. The hard tech in that
space was done by universities competing for DARPA awards, and Google after
that. Cruise took inaccessible hard tech and made it more accessible.

And that isn't an insult to Cruise. The problem space is still difficult, and
they created more value tackling that than the vast majority of startups do on
much easier problems. I happen to think that the opportunities for making the
cutting edge more accessible vastly outweigh the opportunities for cutting new
edges, and nobody should be discouraged from doing it because it isn't as
glamorous as the research on the ground floor.

~~~
billmalarky
"Cruise took inaccessible hard tech and made it more accessible."

This seems to be a standard path for businesses in the tech space. The value
many of these companies bring is not the tech itself but the ability to get
that tech to the masses (which is no small feat).

It's why the classic techie response to a tech product is "who cares I can
already do that with {insert X inaccessible technologies glued together with
shell scripts}." The original dropbox thread on HN is a great example of this.

~~~
seibelj
For those interested:
[https://news.ycombinator.com/item?id=8863](https://news.ycombinator.com/item?id=8863)

~~~
tim333
Also here's the original Cruise HN thread where some skepticism was also
expressed. Interestingly the criticisms were more that it was too hard and a
$10k bolt on box wouldn't drive safely enough
[https://news.ycombinator.com/item?id=7933045](https://news.ycombinator.com/item?id=7933045)

------
mhb_eng
As a mechanical engineer, I am excited to see more of a focus on hard tech
content here! Unfortunately, there isn't really a HackerNews for EE's or ME's
(though if someone wants to build it, I'd be grateful). So it can be tough to
find startups working on these sorts of hard problems that are looking for all
flavors of engineer (except civil, they stink and nothing they make moves /s).
Personally, I work in ocean robotics and defense, which is I think is very
cool, but mostly handled by large defense contractors and military research
departments.

~~~
noobiemcfoob
As a CE/EE myself, I feel your pain. This area of engineering seems to have
such a high barrier to entry. I imagine that is mostly because of the
production cost and most necessary software tools still being heavily license
based with their physical counterparts being prohibitively expensive as well.

It's just easier to play around with software until you find something novel.

~~~
ashwinl
If you live in the SF Bay Area, Detroit, Austin, DC, Pittsburg or Chandler, I
disagree. Try the TechShop and its host of classes.

[http://www.techshop.ws/take_classes.html?storeId=4](http://www.techshop.ws/take_classes.html?storeId=4)

~~~
Hydraulix989
It's Pittsburgh with an h at the end.

Source: Born and raised black and yellow.

------
falcolas
So, was the Cruise acquisition for the talent or the tech? How many other
"Hard Tech" startups have had successful exits, when compared to how many have
failed? How does this ratio compare to software startups?

~~~
BinaryIdiot
> So, was the Cruise acquisition for the talent or the tech?

It has to be the tech or tech + talent. Are there enough people worth $1
billion or more to do only a talent acquisition?

~~~
taneq
Yes. That's the thing about acqui-hiring. As much as we like to pretend that
with enough dollars you can buy the talent required to own a product-space,
the fact is that in certain spaces, individual mortals can create billions of
dollars of value. You just have to pick the right space and the right
individual.

~~~
BinaryIdiot
> Yes

Do you have any data showing acqui-hiring of $1 billion or more? I've never
heard of such an amount and retention after an acquisition is really, really
hard. Seems crazy to spend so much only to have people leave after 1-2 years
(or less depending on the company).

~~~
ganeumann
To take an example at the far end of the spectrum: in 1989 WPP (the world's
largest owner of advertising agencies) bought The Ogilvy Group (a very large
ad agency) for $864 million ($1.7 billion in today's dollars.) Ogilvy was
nothing but people...there was no other value (except, maybe, the brand, but
that's debatable.) At the time people criticized the deal, saying "all of
their assets go down the elevator every night." But it turned out to be a
great acquisition for WPP.

While the founders and first few employees may leave after an acquisition,
preferring to work for themselves, everyone after that is an employee and, as
long as they are managed and compensated well, will generally not care so much
who the company's owner is.

~~~
BinaryIdiot
Fair enough. Good example. I just don't hear anything near this size happening
as a talent acquisition but I guess it's possible then.

------
amelius
Now if we all just stop focusing on how to make better CSS, we might actually
create some new hard tech.

~~~
ryanSrich
No need to devalue the work of others. It's likely many of these new hard tech
problems will require software. Software that runs on the web. Software that
is styled via CSS.

~~~
collyw
CSS styles fine, it could be a lot better in terms of ease of use for the
developer.

It often feels like black magic getting something to style the way I want it,
and its not something that I can sit down and work out with a pen and paper,
instead it seems to rely on knowing lots of tricks and obscure features.

~~~
true_religion
I thought HTML/CSS was part of the design profession, and not computer-science
leaning software development.

~~~
collyw
My guess is that CSS is used by far more developers than designers.

------
pilingual
Congratulations to Cruise!

Cruise Kyle Vogt's third acquired company. It's still ambiguous as to whether
your first startup should be "hard tech" or not. I think in the case of self-
driving cars it makes sense because automobiles are a trillion dollar market
and the anxiety to stay competitive with the rapidly changing landscape is
intense.

Plenty of room in this market yet. What is the biggest competitive advantage
and who has it? Data & Tesla. Tesla is the only company with the appropriate
data to make self-driving a reality faster than anyone else (tell me when
Google starts collecting data in Norway). Data collection equipment is
relatively inexpensive. Maybe figure out how to get people to attach sonar or
lidar or tap into their car's computer to access that data. What else is a
problem, even for Tesla? How about predicting pedestrian behavior and making
eye contact -- or identifying if a pedestrian is disabled and sending a signal
to those pedestrians that it is OK to walk.

At the end of the day the market being targeted has huge weight to the
likelihood of a successful outcome.

Incidentally, if you want to get into YC:
[https://twitter.com/hunterwalk/status/708304772055441408](https://twitter.com/hunterwalk/status/708304772055441408)

------
minimaxir
I'm all for taking Medium thought pieces on the fundraising environment down a
peg, but the problem with Hard Tech is that it _requires_ a nontrivial amount
of venture capital. You can't be ramen-profitable when your startup requires
purchasing cars for testing or renting giant computing clusters for training
AI models.

In relative contrast, it is trivial and risk-free to make a lean MVP for a
generic Uber-for-X and send in a YC application.

~~~
Retric
You can go pretty far with AI using just a few GPU's.

10's of Teraflops is cheap.

~~~
hobofan
Purchasing a Titan X for 1k is still quite painful if you do a startup with
virtually no funding.

Source: I just did that.

~~~
jkyle
You don't have to get a Titan X to get to work. People were doing good GPU
work prior to 2015 and Titan's didn't even exist then.

You can get the 980 Ti w/ 6GB of ram for $600 and some change. And if that's
too much, the 970 w/ 4GB can be found for under $400.

And if even _that_ is too high, you can troll gamer forums for used cards and
cut that cost in 1/2.

~~~
hobofan
See my other comment.

You need to have a Titan X to produce comparable benchmarks, otherwise a lot
of people won't take them seriously. Also the 6GB of a 980Ti already rule out
quite a few popular networks we needed to run.

I was not really in a position to wait much when buying the card, and I didn't
want to risk waiting a few weeks to get a used card I bought on a forum, which
then comes out being just as expensive in living cost. You also as a startup
don't generally have the luxury to risk waiting.

I don't regret the purchase, I more wanted to show the reality of a "hard
tech" startup.

------
tclmeelmo
What is meant by "Hard Tech"? Hardware technology, nontrivial problems, or
something else?

~~~
3pt14159
Lasers, satellites, really accurate rifles, decade-long life extensions,
industrial meat production without a nervous system, advanced optics, cheaper
/ better sensors, swarm AI.

In contrast Facebook is largely just a couple of web forms and some Big O
problems at scale.

~~~
TheBiv
>> In contrast Facebook is largely just a couple of web forms and some Big O
problems at scale.

Yes, and Steph Curry is just a guy shooting a ball in a basket.

~~~
nmrm2
I don't think parent meant to say that the technology behind Facebook is
trivial. Just that it's trivial when contrasted with a bunch of technologies
that are at best in prototype stage.

A decade-long life extension or growing meat without animals would both
probably involve more "Hard Tech" style innovation than building Facebook.

Other observations are IMO less pat. E.g. designing cheaper/better sensors
could be either harder or significantly easier than building a Facebook.
Depending on the type of sensor and the cost improvement.

------
manx
Hard Problem: Current internet discussion technology does not allow millions
of users to participate in a discussion without loosing overview. In other
words: Current discussion protocols do not scale.

A technology providing that could help make our politics more democratic. It
could also lower the need for communication hierarchies like in big companies.

I'm doing research in this area and built several prototypes. I strongly
believe we can achieve the goal, but doing it with only one teammate
researcher makes the process very slow. We are two master degree computer
scientists and need a bigger team.

Contact me if you are interested.

~~~
mathgenius
It's not just the discussion protocols, it's the topology upon which those
protocols run.

~~~
manx
Exactly. Was that not clear from my description?

------
n00b101
Building hard core technology products is very risky and challenging for
entrepreneurs. Complicating matters further, recent financial market
volatility and sentiments being expressed in "Medium thought pieces about when
the stock market is going to crash" are amping up the fear and uncertainty
faced by newcomers.

It is therefore extremely encouraging and important to hear this message
clearly and directly from Sam, that this is indeed a lucrative area worth
pursuing and that there are investors who have the risk appetite to continue
to fund such ventures.

------
Animats
But is it compatible with YC? "Hard tech" usually means years of work and
millions of dollars up front. YC is oriented towards sub-$100K fundings and a
few months to "demo day".

~~~
dkopi
Demo day expectations would be different. The point of any accelerator is to
push you forward as much as they can during those few months, so you can show
a lot of progress and make the most out of a demo day.

$100K in funding can help you go a long way towards raising those millions of
dollars.

------
p4wnc6
> " popular criticism of Silicon Valley, usually levied by people not building
> anything at all themselves, is that no one is working on or funding “hard
> technology”."

Wow. Passive aggressive much?

~~~
argonaut
Not really. Read the other top comments on this thread. Quite a few of them
are basically along the lines of "Sam, don't kid yourself, Silicon Valley
mostly works on trivial apps."

~~~
throwaway2121
And? Ycombinator companies are using my non-trivial software for free and I
happen to agree with some of those comments.

Same as many people who have built much more than Sam Altman ever will.

~~~
argonaut
My point is, what he's saying is not passive-aggressive. He's attacking head-
on comments like yours. I'm not commenting on whether or not his argument is
valid.

------
davidw
It was always kind of frustrating to see the amount of brain power and tech
going into the place I worked in Italy, www.CenterVue.com compared with
typical 'web' startups. Those guys have computer vision, mechanical and
electriconic engineering, and lots of software of various kinds. They're doing
pretty well, but not nearly as well as plenty of way more "trivial" startups.
I put trivial in quotes because it's _never_ easy, but... you'd like to hope
there's some correlation between effort and reward.

~~~
davidivadavid
There is a correlation, but effort is a vector more than a magnitude. Lots of
effort in the wrong direction gets you nowhere. Meanwhile small effort surfing
on a trend can work quite well.

------
te_chris
This is the rationale of EF (said as someone who was in it). They've
recognised that IP is VERY valuable again and are capitalising on it in a
massive way.

------
cryoshon
Here's a several billion dollar hard tech idea that would benefit many, many,
many people: cheap/fast/efficient water desalination and purification. It's a
hard problem. Current solutions aren't cutting it.

Unlock water from the oceans, and a lot of people can be helped. I'm ready to
start this company, just need a few dozen engineers/chemists and a boatload of
funding.

~~~
chejazi
Do you have a scientific breakthrough in cheap/fast/efficient water
desalination and purification?

~~~
cryoshon
No, that needs to be invented.

That's why it's hard.

~~~
tinco
If it has to be invented it's not hard tech, it is hard science. YC has a
separate strategy for that.

~~~
cryoshon
For these kinds of projects, the line is very blurry, though I agree there is
a large science component.

Can't make use of the science portion of it if the engineering portion isn't
ready, too.

------
emcq
This acquisition fits exactly with GM's plans outlined by investing $500
million in Lyft to create self-driving car infrastructure [0].

It seems like companies who build products that have clear and significant
business value with excellent market timing are successful. Perhaps you can
extrapolate to saying hard tech is now a hot field but this is the first
successful exit that comes to mind recently, rather than private investors
putting more money on the table.

[0] [http://www.reuters.com/article/us-gm-lyft-investment-
idUSKBN...](http://www.reuters.com/article/us-gm-lyft-investment-
idUSKBN0UI1A820160105)

------
kposehn
> Leave the Medium thought pieces about when the stock market is going to
> crash and the effect it’s going to have on the fundraising environment to
> other people—it’s boring, and history will forget those people anyway.

Blunt. True, but blunt.

Hats off to Sam.

~~~
throwaway2121
Sure, but history will also forget Sam and Ycombinator (Dropbox, AirBnB, give
me a break).

~~~
rwallace
Not if they end up funding the next Ford, IBM or Intel. Hence, I suppose, the
point of this post.

------
tgb29
Good post. Congrats to Cruise for the acquisition and to YC for generating a
return on their investment. There are definitely opportunities in AI-narrow
applications using machine learning-and biotechnology right now.

------
mathattack
My impression on Appification vs Hard Tech is the length of the development
cycle.

The combination of a few trends (Predominately smart phones, social networks &
data analytics) enabled a whole new wave of technical possibilities. It was
relatively quick to monetize this via App development, so that was the first
wave to take advantage. Hard Tech can take longer (though from Cruise's point
of view, not always that much longer) so these companies are only coming to
fruition now.

When I look at AlphaGo's success, I think we are a new dawn of amazing things
from Hard Tech.

------
samstave
If I dont know anything about developing AI specifically - but have an idea of
how AI can help an industry, how could I go about making that hard idea
something with merit/velocity/validity?

~~~
rorykoehler
Learn AI?

~~~
samstave
Sure - but I'd rather bounce off someone who already knows it and can tell me
if I am nuts, first. I know its a hard problem, the idea - I just dont know if
its worth doing...

~~~
rorykoehler
If it's worth doing or not is entirely detached from the methods used to do
it. Your business brain should be able to figure that out. If you want to work
with AI/Machine Learning do a course to understand at least the basics.
Besides the fact that you won't regret it, understanding the capabilities of a
technology through how it works will help you understand how to apply it. AI
isn't necessarily obvious like a CRUD app is.

~~~
samstave
Thank you for this input. May you please point me in the right direction to
start learning?

I am pretty senior role in my tech career and have not too much time - so even
if its just a youtube channel that could start me learning by watching, I
would appreciate it.

~~~
har777
Dont do the coursera one. Try this one instead:
[https://www.youtube.com/watch?v=UzxYlbK2c7E&list=PLA89DCFA6A...](https://www.youtube.com/watch?v=UzxYlbK2c7E&list=PLA89DCFA6ADACE599)

Follow up with cs224/cs231 if interested.

------
tonylemesmer
Hardware is difficult. Investors are wary of difficult problems. They will
invest if the problem is difficult and they think they are speaking to a team
of people who can deliver the technology to market no matter what. Lots of
good inventors are terrible implementers.

If the invention is good but the team seems incapable that would be a reason
for non-investment.

Also - "hard tech" seems like the wrong thing to be aiming for. There are lots
of hard problems to solve with simple tech and disrupting markets. Are these
not valuable targets?

~~~
Naritai
The article, along with the zeitgeist that it refers to, is that all SV has
been thinking about for the last ~5 years has been "simple tech and disrupting
markets", at the expense of developing real technology.

~~~
tonylemesmer
Simple tech and simple problems are not the same thing. SV has been going
after simple (or non existent) problems.

------
conanbatt
I remember meeting one of the founders 2 years ago in a party and
congratulating him for doing a startup with truly innovative goals.

Amazing to believe 2 years later they got bought for a billion dollars.

------
tim333
>From the Summer 2014 batch, 3 of the 4 companies who have raised the most
money since graduating YC are “hard tech” companies.

So I guess that's

Cruise $18.8m

Ginkgo Bioworks $54.12M (engineers new organisms) and

Helion Energy $12.11M (fusion) ?

~~~
tclmeelmo
I wonder how significant that 3 of 4 observation is, given that "hard tech" is
requires more money all around to operate.

In context, those numbers don't feel that big to me.

------
DrNuke
It seems to me that nuclear (Gen IV), space (propulsion, moon bases) and AI
(virtual prototyping) may speed up innovation in a combined manner. Elon Musk
and Sam Altman in the US are at the top of the game here and may counter stiff
competition from China. On the other hand, my team of middle-aged nuclear
engineers & related network from Italy can't do that much but would gladly
help, if needed.

------
kornork
Is there a list somewhere of these kind of companies?

~~~
nailer
Not sure, but biggest one so far is probably Deepmind, from the UK.

Magic Pony (machine learning for reverse-compressing video data, re-adding
data that was removed during the compression process) is pretty cool.

~~~
lmm
Isn't that just a buzzword-heavy way of saying "better video compression"?

~~~
nailer
No. AFAICT, it's perceptual reverse-compression: ie, you look at a bad mp4 of
a brick wall, and even though it's shitty, you mentally figure out the mass of
pixels is a brick wall. Imagine if the computer actually re-added a crisp
brick wall there.

~~~
lmm
Video compression algorithms already optimize for perception rather than
objective measures like PSNR, so I still don't see the fundamental difference.

------
nxzero
Congrats on the exit, but the idea that GM will be around for the next wave of
innovation is what it is. To me hard tech is about building the future, not
finding an off ramp. In fact, this maybe one of the many factors killing real
change, the desire to make for the hills when a giant offers to take you.

~~~
Hydraulix989
GM has been doing great stuff. The Tesla Model 3 is already here; it's the
Chevy Volt.

------
rdlecler1
I'm the founder of AgFunder. We've worked with a bunch of agtech/hard tech
companies and it's been very very frustrating taking them to VCs because they
don't fit in their box. We had one company called SWIIM which we called the
AirBnb for water that was creating a market for water and in doing so helping
to fix a major issue of properly valuing water--enormous market, great unit
economics, but there was hardware and deployment and it didn't look anything
like VCs normally invest in. Another company we have on now called Autonomous
Tractor Company (ATC) which is basically Cruise Automatic for tractors...
There are 500,000 used tractors out that they can turn into true driverless
tractors (not just GPS assist). VCs can't get their heads around the fact that
they don't actually have to build tractors and that this is actually very
capital efficient. Kudos to YC which gives great signalling to many
misunderstood companies.

~~~
Hydraulix989
A lot of this stuff takes the form of government grants and university
collaborations. Check out CMU's National Robotics Engineering Center. If I
remember right, they were at one time partnering with John Deere to build
autonomous tractors.

[http://www.ri.cmu.edu/research_project_detail.html?project_i...](http://www.ri.cmu.edu/research_project_detail.html?project_id=760&menu_id=261)

Good luck with your funding. I can certainly commiserate.

------
lowglow
We're working on "Hard Tech" over at Playa. If you're interested in
AI/Cybernetics/ML/Ambient Intelligence come check out the platform we're
building out. Http://getplaya.com/

------
Hydraulix989
So yeah, Sam is trying to recruit people into starting these kinds of
companies.

Hard tech has always been "back" (when did it go away, Elon Musk?), but it is
quite the pivot from the YC of yesteryear that capitalized on things like
better UX for AJAX calendars, web hosting, and drag-and-drop file storage.

The really hard tech though really evokes that initial visceral reaction of
"too risky" for investors, especially if there's no real indicators in the
form of traction or an MVP ("well just wait a sec there, professor, the
problem is hard, so we haven't solved it yet").

As an investor, I certainly wouldn't feel comfortable shoveling stacks over to
some guys who told me they were going to build true AI with a decade-long
outlook. Yikes!

It's also a tougher proposition for founders. You're basically betting 5-10
years of your life on a problem that you don't even know you can solve with no
revenue/exit strategy in sight. Meanwhile, that guaranteed salary at Google
sure is looking more and more appealing.

I would almost recommend graduate school for these types of people looking to
leave their mark on the world in solving a really hard problem where any real
contribution only inches the world closer to solving it.

The struggle is real for all actors here.

For founders, the trick is finding that sweet spot where a problem sounds hard
on paper (such as self-driving cars or VR headsets, wooo!), but actually is
feasible using current technology (e.g. stick some lenses in a piece of
cardboard), but due to timing or market forces or whatever, nobody is
currently paying attention to it yet.

Then at least, you can execute just like an AJAX calendar app would and obtain
the same outcome (to vastly understate the challenges involved!).

~~~
nostrademons
AJAX calendar apps were themselves in that category when they came out. The
conventional wisdom pre-2004 was that webapps could never replace the vast
majority of desktop apps, because they required a hard page refresh and lots
of clumsy session-management whenever the user performed an action. But a few
technologies (XMLHttpRequest/IFRAMES, developed in the late 90s but not well
publicized; faster computers & JS interpreters; and cross-browser JS libraries
that abstracted away browser differences, developed in 2003-2006) had silently
made it possible to build all your app logic in Javascript in the browser, and
then just communicate with the server via a tether. This was not at all how
people made websites in the early 2000s. I still remember seeing Outlook Web
Access in 2001 and thinking "Wow, you can _do_ this?"

People think of AJAX calendars as a joke startup idea _now_ because the
techniques for doing this have been well-publicized for a decade now. The
trick to creating (what appears to be) a revolutionary startup is to find
_other_ techniques that are not well-publicized and then apply them in a new,
surprising, and useful domain.

~~~
david927
Yes, and AJAX calendar apps would definitely be in that category in the 1950's
also. That's not what he said. He said it's "quite the pivot from the YC of
yesteryear that capitalized on things like better UX for AJAX calendars, web
hosting, and drag-and-drop file storage."

YC was founded in 2005; these weren't especially hard problems in 2008.

~~~
nostrademons
YC funded their AJAX calendar app (Kiko) in 2005, before Google Calender or
JQuery came out. Indeed, in the blog post where John Resig announced that he
was working on JQuery, the first comment is by the founder of Kiko (who later
went on to found and sell Twitch):

[http://ejohn.org/blog/selectors-in-
javascript/](http://ejohn.org/blog/selectors-in-javascript/)

DropBox was also "hard tech" when it came out in 2007; it was file storage,
but it was file storage that worked by _reverse engineering the operating
system_ so it could hook into Windows Explorer, Finder, and whatever Linux
file manager you were using.

~~~
Hydraulix989
What do you mean "reverse engineering"? Linux and Darwin/Mach are open source,
and writing NT filter drivers is extremely well documented (especially for
anything MSDN documentation) [1].

Either way, I doubt Dropbox even touches the OS kernel. You can implement all
of Dropbox's functionality in userspace using things like Shell32 and file
CRUD operations over system calls.

You can't possibly tell me I need to reverse engineer my OS to write a program
that downloads and uploads files to the Interwebs? Maybe inotify is the one
mystical ingredient...

2007 wasn't exactly the dark ages of computing technology that you make it
sound like. BitTorrent was solving the "hard problem" equivalent of Dropbox in
2001, AND it was decentralized :o

[https://msdn.microsoft.com/en-
us/library/windows/hardware/dn...](https://msdn.microsoft.com/en-
us/library/windows/hardware/dn641617\(v=vs.85\).aspx#file_system_filter_driver_development)

~~~
nostrademons
They reverse engineered the Finder to get the DropBox icon onto the Dock with
custom functionality:

[http://allthingsd.com/20120815/inside-dropboxs-reverse-
engin...](http://allthingsd.com/20120815/inside-dropboxs-reverse-engineered-
company-culture/)

~~~
Hydraulix989
Do you have anything a little more technical? I'm curious.

When I messed with Finder, I could get it to do a surprising amount of things
just by editing plist files.

~~~
nostrademons
[https://www.quora.com/Many-articles-about-Drew-Houston-
say-t...](https://www.quora.com/Many-articles-about-Drew-Houston-say-that-he-
reverse-engineered-Apple%E2%80%99s-file-system-so-that-his-
startup%E2%80%99s-logo-an-unfolding-box-appeared-elegantly-tucked-inside-what-
does-this-mean)

~~~
david927
I didn't realize they had a hard time getting the DropBox icon onto the Dock.
I take it back about YC not funding 'hard tech'.

~~~
Hydraulix989
Sarcasm?

~~~
david927
Yes.

------
qaq
Any pointers on who might be a good VC outfit for SaaS type startup that
actually needs to run their own clusters as opposed to throwing everything
onto AWS?

~~~
n00b101
> Any pointers on who might be a good VC outfit for SaaS type startup that
> actually needs to run their own clusters as opposed to throwing everything
> onto AWS?

Very curious, why do you think you need to run your own clusters, to the point
where you think you need to seek unusually risk prone capital?

If your justification is that you are are optimizing for cost (e.g. maximizing
your performance per dollar), then you must think the capex dramatically
lowers opex at scale if you move from AWS to specialized hardware (say, an
FPGA bare metal cluster instead of a GPU or CPU cluster in AWS). In such a
case I would argue that you should just get enough paying customers first
using AWS, to build up enough cash-flow that would then clearly justify the
capex for scaling up and going colo. And at that point, you would not need to
shop around for wild risk taking capital, the CBA could easily be explained to
any VC and in fact you could probably even just get a bank loan to finance the
capex if it is a clear winner in reducing costs.

The only scenario I can see where you really need to run your own hardware
from day 1 is if you need to terminate some dedicated circuits for specialized
data feeds (e.g. real-time market data)... In that scenario, I would recommend
looking into co-locating the data appliance in a third-party data center that
is physically nearby to US-EAST and can run a Direct Connection into AWS for
you.

Otherwise, you may want to consider the possibility that your desire to own
your own cluster may be a case of premature optimization and scaling up too
early/too fast. It's a very expensive thing to do and an easy way to
accidentally run out of money if you don't have client contracts signed
beforehand.

~~~
qaq
We connect storage nodes via infiniband for lower latency and higher
throughput. Think RDS type service where you can have significantly larger
instances like say up 40TB DB running on 4 way box (soon 8 way) box.

~~~
n00b101
Couldn't you get at least similar storage performance from EBS Provisioned
IOPS SSDs in AWS? And maybe "scale out," instead of "scaling up," to maintain
performance within AWS constraints? The advantage obviously is that you avoid
the capex and if you don't achieve the sales that you foretasted then you can
just rapidly scale down your AWS footprint, thus avoiding financial
catastrophe. You could spring for the fancy custom bare metal hardware when
you reach a "hyperscale" amount of workload where it makes sense to switch to
your own hardware, like Google or Facebook. And if your customers really want
the fancy Infiniband clusters right now, why not license your software and
make them put up the capital to buy the hardware themselves? Just my two
cents, maybe I'm missing something and your approach makes sense.

~~~
qaq
Nope you really can't that's why RDS, Azure SQL etc. have pretty bad
limitations on max instance sizes. The service itself is integrated storage
layer (think PostgreSQL + ElasticSearch + Event Bus) that can scale far beyond
what is possible with current options.

~~~
n00b101
Well good luck, but as far as Infiniband goes, keep in mind that cloud cluster
interconnects will get better over time and AWS is at 10Mbit now ...

------
tryitnow
What does he mean by "hard tech"?

And would most engineers consider Cruise really hard tech? I don't know (I
mean that honestly, not passive agressively).

~~~
tim333
If Cruise is hard depends on the end goal. If it's a fully autonomous vehicle,
yes that's hard.

------
ecesena
Can someone expand on the definition of hard tech? With possibly examples of
what is or isn't considered hard tech?

------
untilHellbanned
Cruise is an N=1, ironic to make this proclamation. And Cruise founder had
massively successful exiting history. I wouldn't say this validates YC's
recent bets on hard tech. People who do hard tech for a living (myself
included) are more measured.

Sama sounds like Donald Trump with the "I told you so". Unlike real estate,
science can't be bullied to success. This makes me increasingly bearish on
YC's future.

------
6stringmerc
As an amateur inventor with a serious backlog of "hard tech" type inventions
(e.g. actual products, not software or 'platforms') I've done my best to
inquire and reach out to several different potential funding sources, all of
which have been extremely quick to pass. The basic reasoning is "this doesn't
fit with our preferred verticals" and I'm left to figure out what that meant
other than _We only speak app_ as a self-imagined consolation.

This article is not exactly re-assuring because the noted interests - AI,
biotech, and energy - are all extremely crowded fields more than likely
competing with large institutions, research organizations, and let's be
honest, probably a TON of regulatory hurdles to consider if planning to do
business in the US.

For context, one of my primary inventions is a mobility / utility device that
would have residential, commerical, and industrial applications. By design it
can be applied to a variety of uses. I've done basic patent research and the
pathway looks extremely good, quite tempting for me to just go ahead and file
ASAP. It's hard tech. It's not glamorous, but it's a huge market opportunity
on prima face.

I've got a co-worker pal who finally got his beverage and branding invention
patented and now he's in the marketing to local schools, catalogs, and if
early indications are correct, he may have an genuinely lucrative future with
it. In my view, he's a more likely investor target than anybody out on the
West Coast or in a VC room. I simply base this perspective on personal
experience and how this post sounds promising yet concludes with a short list
of massive goals. Might as well wrap it up with "We just want to invest in a
better mousetrap" considering the scope. Cottage industry isn't runaway
freight train profit creation, I get that, but I'd also counter that if one
wants to get into the next frothy bubble of biotech then good luck with that.

~~~
clarkmoody
> isn't runaway freight train profit creation

But YC is in the business of hopping aboard every rocket ship it can find. Sam
& Co do not want to invest in small business. They want massive payouts. It's
the only way the VC game works.

If you're dedicated to getting funding, you have to keep knocking on tons of
doors until you find an investor that matches your particular payout goals.

The West Coast / SV venture capital scene makes a ton of noise about massive
successes to entice many otherwise-profitable small business ideas to try and
become huge. When they don't reach a hyperbolic trajectory, it's a VC failure,
but the same business could have easily done well for the founders and early
employees as a lifestyle business. A stable orbit if you will, but not going
to the Moon.

Find investors who want reasonable returns from your business at your scale.
Don't think that the SV VC approach is the only way to get your business idea
funded.

~~~
6stringmerc
Oh I understand, but in this case making such a public post about "come on,
join us, we can do it" and then targeting essentially stud 'just graduated,
have other backing' type teams in massive fields is conflicting to me. I'm
basically under the assumption that any serious venture in AI, biotech, or
energy can actually compete for investments outside of the YC sphere. As in,
YC actually has more competition than these teams have to sacrifice to get
started. It is common knowledge capital is sloshing around everywhere looking
for yield and returns.

I do understand VC might not be the proper target in the purest sense but it's
a similar story for most small businesses if I'm not mistaken. Like in hard
bench science research - funding goes to those already being successful. Is it
really practical to "boot strap" a hard tech company? I draw a lot of
inspiration from the Wright Brothers, but I'm still pragmatic.

If there's a 'ground floor' arena where cottage industry would be best served,
I'm all ears and would love links, guidance and direction to make progress.
Not kidding, it's already been a few years and I've got another half a
lifetime to keep plodding away.

------
jjtheblunt
It comes across as a grotesque arrogance to assert, with no facts cited, that
people expressing opinions are usually not building anything themselves.
Citations if you please.

------
tardo99
Really, really bad deal for GM.

------
david927
_A popular criticism of Silicon Valley, usually levied by people not building
anything at all themselves, is that no one is working on or funding “hard
technology”._

Don't pretend that Silicon Valley is not superficial in many regards. Yes,
some of those silly, fluff apps have gone on to make money and that's your
metric so you defend it.

But for many people, Silicon Valley embodies a different principle, like the
one found at Xerox PARC, of people trying to make the future better and not
just drive a nicer car.

~~~
bpchaps
Entirely agreed. This whole thing is frustrating. I just went to apply to YC
but ended up closing the tab. A significant portion of the process seemed
geared towards "We want highly visible projects with highly charismatic
individuals."

For example, I'm required to post a video of myself/group talking about the
project. I'm not posting a damn video. Fine - I get that you want to be able
to see the product/s up close with the passion of the founders, etc. But, hell
- the project I'm working on is dirty, "hard", far from glamorous and isn't
very presentable - especially on camera where my strong anxieties come out.
Though, because of my personality I'm effectively disqualified, despite all
else.

If I'm missing something I'd very much like to me corrected.

~~~
jaz46
The video isn't to see the product up close, its to see the founders. YC isn't
selecting for charisma. Most founders (myself included) who submitted videos
fumbled over our words and are completely awkward on camera. We also had no
product to show at the time. What YC is looking for is that you're passionate
about your project/company and that will come through regardless.

They're also looking for you be willing to step outside your comfort zone. As
a founder you'll constantly have to do things that don't come naturally to you
-- talking to investors or customers, interviewing employees, and even firing
employees. The fact that you're not willing to make a 1-min video of yourself
is a negative signal that you won't be able to step up and do those hard tasks
that make you uncomfortable. Being a founder takes more than just being able
to build the best technology.

~~~
bpchaps
Thanks. I agree with just about everything you said. And another thanks for
not being immediately dismissive and sharing your insights from going through
the process.

I do think that there could be a middle ground, though. An explanation of the
video requirements within arm's reach would be nice. I didn't see anything
relevant on the FAQ when I looked.

~~~
mashgin
did you check this out?
[https://www.ycombinator.com/video/](https://www.ycombinator.com/video/)

~~~
bpchaps
Nope - thanks! I'll check these out.

------
freyr
> _A popular criticism of Silicon Valley, usually levied by people not
> building anything at all themselves, is that no one is working on or funding
> “hard technology”._

I'm not critical of _Silicon Valley_. Silicon Valley includes many companies
working on hard problems, or investing money into long-term moonshot programs.

The criticism is levied towards, for example, the social media giants that
pull in top engineers to work on social media problems exclusively. The
criticism is also directed at Silicon Valley VCs, who lure smart young people
to work on semi-trivial problems because it's the quickest path to profit.

It's not necessarily fair criticism. VCs have an incentive, first and
foremost, to fund successful businesses. If their surest path to success in
today's economy involves building semi-trivial apps, that's what they'll
pursue. The same can be said for the finance industry, where the most
successful players are employing our nation's top mathematicians and
scientists to extract money from public markets using high-frequency trading.
We can't expect them to self-regulate. But how can we incentivize smart people
to work on something less lucrative?

~~~
golergka
I think this criticism comes from not understanding how much of a positive
effect social media has on a modern world. There have been a lot of discussion
of the negative sides of twitter, facebook, instagram and others, but the
positive effects are either so positive that they don't warrant a discussion
or so hidden that no one really has patience to research them properly.

------
al2o3cr
"Leave the Medium thought pieces about when the stock market is going to crash
and the effect it’s going to have on the fundraising environment to other
people—it’s boring, and history will forget those people anyway."

Sam channels Baghdad Bob for a minute there - "there are no American tanks in
Baghdad. Especially not the one that just rolled by on-camera"

~~~
omegaham
I don't think that Sam is Baghdad Bob, but Medium is the exact opposite - it's
"American tanks are going to roll through Baghdad tomorrow! Run for the
hills!"

Doomsaying is only interesting when you get it right.

I think that Sam is saying, "If you have a good idea, you'll succeed
regardless of whether the economy is good or shitty." If you have a bad idea,
you'll fail regardless.

The ones who really benefit from the strong economy are the marginal ideas -
ideas that normally would not get funded, but people have the spare money to
throw at lottery tickets on the off-chance that they're missing something. Cue
Pets.com and other 90s Internet startups.

------
balls187
> A popular criticism of Silicon Valley, usually levied by people not building
> anything at all themselves, is that no one is working on or funding “hard
> technology”.

Lost all interest in saltman's point when I read this line.

It's a valid criticism, regardless if the people who are making it are
"builders" or not.

It was a turn off, because it makes the author seem bitter about (what I think
is) a valid criticism.

~~~
furyofantares
I don't understand -- you had a bad reaction to a single line in the
introductory paragraph and knowingly let this turn you off to the entire post?
Is that a valuable type of filter for you?

~~~
freyr
It's a bad way to respond to an argument, because it subtly undermines
_everyone_ who is critical of Silicon Valley. They either don't build things
(and they're unqualified to have an opinion) or they do build things (but
they're being brushed aside because they're a minority).

------
gist
> A popular criticism of Silicon Valley, usually levied by people not building
> anything at all themselves

Why can or should criticism only come from [1] people that are building things
themselves? What about the press (as only one example) or people who write
books? What about people teaching in colleges? What about people leaving
comments on HN or any other forum?

Criticism only valid if coming from someone building something themselves?
Don't agree with that. [2]

[1] Which to me by the choice of words is what is meant by this statement.

[2] If that is the case companies should never solicit any feedback from their
customers about their product or their business model.

~~~
steffan
>> A popular criticism of Silicon Valley, usually levied by people not
building anything at all themselves

> Why can or should criticism only come from [1] people that are building
> things themselves? What about the press (as only one example) or people who
> write books? What about people teaching in colleges? What about people
> leaving comments on HN or any other forum?

Another interpretation is that while criticism can come from any source, those
who are _not_ building things themselves necessarily have a different
perspective than those who do, and therefore their arguments should be heard
in that context.

~~~
gist
> those who are not building things themselves

Also there are people not currently building but that have built something in
the past (or assisted others who have done so). Such as sama or pg.

> have a different perspective than those who do, and therefore their
> arguments should be heard in that context.

That perspective could also be more valuable in some cases. Keep in mind that
many of today's "disrupters" are people outside a traditional industry who
actually do great things exactly because they have little experience and are
not jaded. Fresh outlook not restrained by traditional thinking.

The problem that I had (if you want to call it that) was not that sama made
that statement. It's the fact that I feel he implied a negative which was not
warranted. Plus the use of "usually" when the truth is nobody is in a position
to know the exact experience or background of someone offering criticism
particularly what they have done in the past. [1] [2]

[1] There could be people even here on HN who have extremely significant
backgrounds in building things that prefer to remain anonymous.

[2] I am now thinking maybe this is why PG has others read his essays. So he
could simply change a sentence or insert a word and avoid criticism and
excessive footnotes.

------
profeta
press release at the top of the front page?

i thought Ycombinator self-posts were not "votable".

this is hardly hard-tech since the same thing is being done in a garage with
off the shelf parts [http://www.bloomberg.com/features/2015-george-hotz-self-
driv...](http://www.bloomberg.com/features/2015-george-hotz-self-driving-car/)

------
FussyZeus
> A popular criticism of Silicon Valley, usually levied by people not building
> anything at all themselves,

I have to take issue here. I don't need to be a "builder" to see that what a
given startup is building is either worthless or an attempt at solving a non-
problem.

I'm not a helicopter pilot, but if I see a helicopter stuck in a tree, I don't
need to be one to know that the guy screwed up.

~~~
lmm
Sure, but a lot of people like to complain that snapchat/tinder/etc. are
wastes of time or poor uses of talent when really they make a lot of people's
lives a lot better.

~~~
FussyZeus
It's far from an objective observation, I'm merely pointing out that the idea
that you need to be doing a thing in order to criticize someone else's thing
is hogwash.

~~~
softawre
Hogwash? I don't use that word, but I still think you using it is
jibberwasocky.

------
vegabook
Sounds like a desperate scramble to rebalance the portfolio which,
reputationally, is far too long of last decade's, now-stalling, strategies.
Problem is the brand is not 'hard tech', it's irredeemably soft tech. The
brand is consumer biz disruption and social. YC is a short (if only it were
listed) just like the rest of the web stack, for reasons of acute oversupply.
It is woefully ill positioned on hard technologies. Kudos for trying, though!
Heroic effort.

------
MicroBerto
More technology for sending dick picks?

Jeez, can we _please_ move on and do something that actually benefits this
world with our talents?

------
msoad
ZOOX[1] is another self driving car startup that is up for acquisition.

[1] [http://zoox.co/](http://zoox.co/)

------
graycat
"Hard tech"? Okay. I have such a project.

Big ass problem: Found one, where a the first good solution is a _must have_
for nearly everyone in the world with Internet access.

"Hard tech" solution: A bunch of applied math, with advanced prerequisites,
some original, for a unique, really good, fun to use, interactive and
_addictive_ , by far the best in the world solution \-- Did that.

"Hard"? Silicon Valley has more hen's teeth than entrepreneurs who could
understand the theorems and proofs of my math even if I explained it to them.
Why? They didn't take the prerequisite pure/applied math courses in grad
school. Neither did more than a tiny fraction of computer science profs.

Code: 80,000 lines of typing, running, in alpha test -- did that.

"We hope to hear from you."

You did, and you ignored it.

Using my HN UID, look up my submission in your records. If you are interested
now, then let me know.

~~~
amit_m
What is the problem you are solving?

~~~
graycat
My post is for Sam. Do you represent Sam and YC?

I invited Sam to contact me, and from my HN UID his records will give him my
e-mail address so that he can contact me.

Sam requested that anyone with "hard tech" contact him. Here I'm taking "hard"
as difficult, challenging, or technically advanced and not necessarily 'hard'
as in 'hardware'.

I do intend to announce, say, my beta test on HN, but for the current alpha
test that seems a bit early.

Sam asked people to contact him, and here I did and reminded him of my earlier
submission that he might be interested in now.

At least for now, the next step is up to Sam.

