

What the Bubble Did to Technology - aheilbut
http://blog.mises.org/archives/010450.asp

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dantheman
I don't really think that article contributes much, and it sounds like sour
grapes. People still actively share and work on hard cool things.

In fact, I think the more people involved in technology whatever their
personal reasons is a good thing. The more technology developed by others the
less I have to develop myself.

~~~
TomOfTTB
I'm not sure I agree with his point but I can see it. There are projects that
require a long term commitment to bring to fruition and there are very few
people in the Valley these days who are willing to take on those projects. The
"get options and get rich" mentality has everyone trying to build the next
quickie web service or iPhone app rather than looking at real improvements.

Worse people seem to be putting their faith into large companies and their R&D
departments to deliver innovations and that strategy has a shockingly poor
track record. Other than Xerox Parc and the early AT&T labs there aren't
really many R&D success stories. Microsoft, for example, spends $7 billion a
year on R&D and you have to ask yourself "what do they have to show for it?" I
mean, I actually like MS Surface but when you've spent $7 billion dollars and
the best you've managed to come up with is an iPhone the size of a table
something's gone wrong.

Again, I don't think the situation is as terminal as he makes it out to be but
I do think the opinion has some merit in getting us all to look at areas our
industry is neglecting.

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johnnybgoode
I believe the author is idealizing the pre-bubble era a little too much, but
he is right about the destructive effects the bubble has had on the technology
industry.

For more on this, see:

<http://news.ycombinator.com/item?id=726174>

<http://news.ycombinator.com/item?id=727396>

and especially <http://news.ycombinator.com/item?id=652562>

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bsaunder
I think the author is essentially arguing that the recent bubbles have eroded
the entrepreneurial community's sense of creating value. He seems to suggest
that in the recent bubbles it was apparent value rather than actual value that
was being created. The latter can only be achieved through hard work (he
argues).

In part, I see his point. Though I don't think that hard work is necessary for
innovation and creating actual value. In particular I think you can create a
lot of value by combining things in previously unforeseen ways which may not
be a lot of "hard work" is certainly innovation.

I think his fundamental gripe about businesses not creating value is true and
much wider spread than the technology industry. I've noticed a rising trend of
what seem to me to be almost fraudulent revenue models by some companies that
certainly don't seem to create much value for the consumer but certainly take
their money (like the rebate programs with onerous filing procedures, or banks
changing account types and sneaking in fees). There seem to be lots of things
that you can pay for if you are a sucker (or just less informed). These
schemes seem to be distorting the notion of creating something or doing
something that actually has the value advertised for the consumer.

~~~
jdlegg
You point out that his argument is a rather simple one: hard work is the only
path to innovation and therefore value. I totally agree with you regarding
this simplicity, but I also understand the inclination to idealize hard work.
In part because, as the article emphasizes, hard work has become unfashionable
and tremendously underrated.

There's a reason the great innovators of the past are ripe with cliched quotes
about "inspiration and perspiration." You are right that combining things in
unforeseen ways is a legitimate path to innovation, but additional effort
could only serve to enhance the process, don't you think?

The difficulty is that what I consider "hard work" may differ from you. One
can work "very hard" selling toxin-removing footpads by inventing clever
stories and concocting fictitious demonstrations. They may even become the
best damned footpad salesman in the northeast and others will laud them for
being such a go-getter. Though they're in the business of deception, they have
no problem putting food on the table. They're acting wholly rational under the
rules of capitalism.

Many people, even the highly-educated and successful, no longer consider these
"bigger questions" in a thoughtful and introspective manner. Instead, they
neutralize them with denial in the form of some unbelievably prevalent
utilitarian cliches like "whatever floats your boat" or "there's a sucker born
every minute."

My point is that gripes about businesses not creating value can actually tap
very deep philosophical nerves, but, in an almost Orwellian sense,
contemplation of these things is not what modern societies consider a worthy
use of time.

~~~
bsaunder
I think you are correct, but I'm disappointed about that.

I think the crux of my disappointment is your statement:

 _They're acting wholly rational under the rules of capitalism._

Yup, they are. Unfortunately companies have many more resources (time and
money) to expend creating this kind of value than most consumers have to guard
against it.

If we could remove this kind of "value" from our system we would all have a
lot more free time (and less jobs). A good or a bad thing depending on your
perspective on the necessity of having a job.

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lsc
Nice article. I should pass it along to everyone who tells me I need to raise
prices and spend more on marketing.

Edit: I mean, I see the 'don't focus on value, focus on perceived value'
attitude every day, and I find it irritating. that's not the business I want
to be in. I'm pretty happy with the current profitability of my company. Sure,
I could double or so, and I'd be much happier, but I think there is value to
trying to provide a product that is of the same quality as the competition,
but at a lower price. Commodities are good things. I think it is reasonable to
focus on building something better rather than on selling something better,
and ultimately, a 'commodity' service is far better for the consumer than
something proprietary.

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abalashov
It may sound a little like sour grapes, but I think the author's analysis of
the VC-underpinned "web economy" is fundamentally very correct.

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borism
I think this is the key thought:

"The fallout of the bubble persists today."

Indeed. And it will take a long time to clean up this radioactive mess - I
believe we're not even half way there.

