
President Obama schools SV CEOs on why government is not like business - var_eps
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-obama-silicon-valley-20161017-snap-story.html
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AndrewKemendo
He didn't school anybody, he apparently doesn't appreciate real technology
development, which he should because the DoD is the largest single purchaser
of it.

 _if all I was doing was making a widget or producing an app, and I didn’t
have to worry about whether poor people could afford the widget, or I didn’t
have to worry about whether the app had some unintended consequences_

Yet again we see the results of people outside of tech focusing on these
technologies that get headlines.

Quality Tech does deal in affordability, fail safes, and unintended
consequences. Tesla specifically took this approach, as does Apple, palantir
etc... not to mention myriad companies focusing on verticals across income and
accessibility levels.

I think this statement, especially in light of the recent document published
by the govt on artificial intelligence, is likely political more than
indighting tech for being myopic.

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mslkmdf
> Tesla specifically took this approach, as does Apple

Wait, the two companies with some of the most expensive products in their
industry took the affordability approach?

> palantir etc...

Palantir has consumer products?

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Grishnakh
Good point on Apple (their stuff is overpriced and underperforming--their
screens are crap, for instance), but with Tesla, yes: their cars aren't that
expensive, that honor goes to companies like McLaren, Rolls-Royce, Bentley,
etc. You can easily get a Tesla for well under $100k. That's a lot compared to
a Honda, but not compared to a Ferrari or Bugatti or a high-end BMW or
Mercedes even. There's no shortage of cars topping $100k out there.

More importantly, Tesla's whole approach is to aim at the higher end of the
market (people with $70-110k to blow on a car) to fund their R&D so that they
can push to the middle portion of the market ($30-40k is the target price of
the Model 3). So they haven't gotten there yet, but all indications are that
this is where they're going in the next couple of years, so yes, affordability
is a key component of their decision-making.

Even Apple isn't _that_ bad: their phones are overpriced, but their direct
competitors aren't that much cheaper for the main product (phones or tablets).
Apple makes a bunch of money by trapping its customers into its walled garden
and making profits off the apps they buy, the music they buy, profits from
overpriced accessories like cables and headphones, license fees from 3rd-party
accessories by using proprietary patented connectors, etc. So there's a
certain focus on "affordability" there too: they try to price their stuff low
enough that fashion-middle-class people aren't going to completely balk at it
(monthly payment plans linked to carriers help a lot here), but high enough to
get a good profit, while using the other tactics I just listed to get really
obscene profits overall.

Almost every company has to worry about affordability to some degree. The only
exceptions are ones which cater to truly wealthy people, companies like Vertu
(horrifically expensive phones costing $20k!), Rolls-Royce cars, various
handbag companies, etc. If you want the middle class to buy your stuff,
affordability is going to be part of the design process somewhere, to some
degree.

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mslkmdf
Not sure why you're comparing Teslas to Bugattis, McLarens and Ferraris. They
have a completely diffrent target customer base I'm talking about mainstream
consumer cars, not specialized racing and/or luxury cards.

~~~
chillacy
Isn't that the point? In business in order to capture the entire market you
have to release products at different price points. Some people want to pay
Ferrari prices for their car, some people want to pay civic prices.

Apple does this: even though the 7 is the current line, they still sell the 6
and SE. You have to figure people are actually buying these older models, even
though they're not that much cheaper (the SE starts at $400 and has the iPhone
5s design)

I'll add another example: Campbells makes soup in three tiers, from the cheap
condensed stuff, to the premixed stuff, to Campbell's Slow Kettle Style which
comes in nicer packaging and better design (I haven't tried it, maybe it
tastes better too)

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spaceflunky
"You don't understand government, because you've only been in business."

-Said by the guy who doesn't understand business because he's only been in government.

~~~
kafkaesq
For one thing, that's not what he said. That's not even a paraphrase of what
he said.

Also, (aside from his non-governmental community organizing activities), he
was a partner in a DC law firm for 3 years, and served on various foundation
boards after that. So it's not like he's Elon Musk -- but it's safe to say he
probably has more "business" experience than your average (which is to day:
heads-down, "monitor tan") techie.

And it's fairly safe to say - _orders of magnitude_ more money-managing
experience.

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spaceflunky
>For one thing, that's not what he said. That's not even a paraphrase of what
he said.

Did you even read the article? That's pretty much exactly what he said.

"Government will never run the way Silicon Valley runs...,” Obama said.

I'm guessing Obama knows this because he's also run a few successful startups
in SV....

“Sometimes I talk to CEOs, they come in and they start telling me about
leadership, and here’s how we do things. And I say, well, if all I was doing
was making a widget or producing an app, and I didn’t have to worry about
whether poor people could afford the widget, or I didn’t have to worry about
whether the app had some unintended consequences … then I think those
suggestions are terrific."

So again we have the guy in government who's never been in business
"schooling" the guy in business.

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joeyespo
> But there’s lots of collateral damage inherent in the free market — in
> “blowing up the system,” as Silicon Valley entrepreneurs like to say. Such
> explosions are great for the bomb manufacturers, but not so much for
> innocent bystanders.

This seems to be the overlooked point here. In business, it can be profitable
to disrupt and go after sweeping changes. In government, you can hurt real
people in large numbers by doing so.

Also, the article isn't implying that companies can't or won't do good.
Companies can certainly work well across income ranges. The point is, that's
still a different goal than working well across _all_ income ranges.

