Locklin on science

In which I stomp on some of our glorious “green shoots”

Posted in finance journalism by Scott Locklin on October 13, 2009

These are apparently America’s top under-25 entrepreneurs. Allow me to summarize: they are:

  1. A guy who rents airplanes to wealthy bored people. Not a bad idea, but … being the Avis of aviation nerds doesn’t sound like it has a lot of growth potential to me. Maybe there are more aviation nerds than I know.
  2. Some dudes who are attempting to sell something google gives away a better version of for free. Inspired by this, perhaps I’ll start selling canned Berkeley air.
  3. A marketing consultant and expert in twitter judo. She apparently wrote a thesis on why people use things like twitter and facebook. I wonder if she noticed rampant barking narcissism has anything to do with it?
  4. Three “green energy consultants” whose services are so in demand … their combined revenues are smaller than one middle class salary slinging HTML. If their success keeps up, maybe they’ll be able to afford to move out of their parents basements.
  5. Some chick who makes webpages; cool, someone who makes stuff. However, my pal Mischa makes them with clever database back ends. He also didn’t need a grant to get started, probably makes more money and I’m willing to bet his poker games are more fun, therefore he wins the coveted, “Scott’s top under age 25 most excellent Bay Area entrepreneur of the decade” award, which consists of me giving him a noogie the next time I see him.
  6. Someone who places coffee fetching slave^H^H^H um, interns, using the connections she made by doing an impressively insane sounding 15 internships herself. Get this: she charges applicants money to sell them into slavery, and she charges companies money to list their internships. Brilliant! Someone go get me a cup of coffee while I figure out how to steal her business model. Maybe I’ll be the first Quant pimp who charges candidates for a “pre-screen,” capitalizing on all the connections I made at failed bank interviews.
  7. A sort of hierarchical etsy knock off -far and away the most promising of the lot, and the most likely to contribute to national wealth. It even yanks on my small businessman heartstrings the way their business benefits people who design clothes and can’t break into the NYC/Paris axis of evil. May they profit tremendously and help get Americans out of our collective proletarian uniform of jeans and t-shirt.
  8. An ebay for people who want to cheat on their college exams. OK, really, it’s described as a sort of note-sharing service, where you charge money for your notes. This seems sort of like belonging to a college fraternity without the additional benefits of beer bongs and date rape. Let’s face it: if this idea flies, it’s because people are paying money to get an unfair edge. Probably a lot of growth potential here: more than half the population has some college, and they can’t all be above average.
  9. A service where some woman (who isn’t under 25 or very well dressed herself) plays “queer eye” for a dude over webcam and demeans him into buying her choice of clothes. The sadist in me loves the psychological component in her sales pitch, but ultimately, going to Brooks Brothers is going to be a similar experience, and I’m likely to get a better fit from the mean Serbian lady on Post Street. Better yet: support people who know how to cut a suit rather than the Americano fashion for purchasing a pup tent with shoulder pads.
  10. A crappy blog/twitter knockoff that doesn’t know how to sell online ads or make any money. You have to love those businesses with no revenue stream, hoping an adult will buy them and make them rich. I thought those went out in the late 90s, but I guess not. I will give them some free advice: sell ads.

Dear America: you can’t have an economy based on narcissism, good intentions, marketing, catering to rich bored people, really excellent webpages, and selling underpants on the internet. I’m afraid you’ll have to make something of value. If this is the best the “almost under 25″ generation is able to come up with, we are well and truly screwed. I may as well prepare my emigration papers to Singapore, stat. Perhaps I can get a job for their Sovereign Wealth Fund. My job would be simple: buy stocks in nations which make stuff using paper money you get from nations whose main exports are Ivy League educated swindlers trying to sell baloney as a service.

Believe it or not, I admire each and every one of these entrepreneurs, despite my sneers at the vacuousness of their ideas. They are all brave and vigorous people for trying to strike out on their own, particularly in this insane business climate, and some of them may very well some day create something of value. The problem is, other than the one marginal exception making markets for clothing designers, what they’re doing is fundamentally worthless, and these guys are presumably the best American youth has to offer -as nominated by Business Week. Nothing described above is an actual innovation which improves human power over nature, productivity, or any aspect of the human condition. By contrast, Philo Farnsworth built his first working model of the television at age 21. Bill Gates wrote a BASIC interpreter and founded Microsoft at age 20. Nikola Tesla invented the AC motor which powers civilization at age 25. I’m not saying every entrepreneur needs to be continually struck by thunderbolts of sheer genius the way Philo Farnsworth or Nikola Tesla was. I’m not saying that their money making activities need provide some obvious benefit to humanity. None the less, you’d figure at least one of the ten best in America might do something which adds to the aggregate national wealth. We’re not going to fund any sort of economic recovery by providing new ways to cheat on college exams or by telling people to unplug their DVD player when they’re not using it. The present situation of “not quite such a rate of utter collapse” isn’t an economic recovery: it’s a profusion of paper money at best.

Someone send me some optimistic or happy links so I don’t hurl myself from one of those new buildings the Glorious People’s University is bankrupting the state of California with.

Edit add: since none of you were able to cheer me up, I actually went back and clicked on the slide show. Many of the business ideas not featured in the main article are reasonable and will actually generate wealth. I don’t know why they picked such stinkers to feature in the main article.

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70 Responses

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  1. Kuas said, on October 13, 2009 at 10:51 pm

    “as nominated by Business Week.” Would that be the same Business Week which recently sold for an estimated $2 to $5 million? Perhaps BW was hoping one of these child entrepreneurs would buy them with their seed money.

    • Scott Locklin said, on October 13, 2009 at 11:13 pm

      Um, holy schmoke; I had no idea this had happened. Perhaps their editorial standards have slipped a little in the transition. That article was very much worth making fun of. I don’t know how anyone could read it and adopt their happy-chirpy, “look at all the young geniuses we found” attitude.

  2. Zardoz said, on October 14, 2009 at 12:15 am

    Agree 99.9% but are you absolutely sure we can’t have an economy “based on catering to rich bored people”? I think they’re the only ones left with any spending power… The whole new-gilded-age thing suggests we can, at least for a while.

    • Scott Locklin said, on October 14, 2009 at 1:59 am

      Well, I figure we’ve been an oligarchy for years now; people are only beginning to notice. I guess my point is, you can’t have a growing economy based on catering to rich bored people.

      Awesome icon, BTW. One of the best movies ever made about modern life.

  3. Roridge said, on October 14, 2009 at 8:07 am

    Number 8: AKA Books!

  4. Gaw said, on October 14, 2009 at 8:52 am

    This may cheer you up: decadence can be culturally interesting. You just need to shift your focus from science, technology, business and other worthwhile endeavors.

    • Scott Locklin said, on October 14, 2009 at 1:48 pm

      I think it only appears that way from a safe remove.

      • Gaw said, on October 14, 2009 at 1:54 pm

        Yes, say, a couple of hundred years?

  5. ha ha said, on October 14, 2009 at 9:07 am

    someones jealoooouuuuusssss.

    • Scott Locklin said, on October 14, 2009 at 1:47 pm

      I guess it would be nice to be under 25

  6. Abhilash atiw said, on October 14, 2009 at 9:08 am

    Totally agree. I don’t see why people don’t seem to notice, they need to prove to themselves there is a real market out there. Maybe that’s because it’s hard to be too hard on yourself. Maybe it’s because a lot of us don’t wanna know when to let go, just wanna keep doing what we are doing, and hope someone buys us and we get rich.
    Maybe these people need to read a little more on things like wealth (http://www.paulgraham.com/wealth.html).
    Maybe they just took it to their heart that you need to push even when you can see there is no market.
    “Build it and THEY will come” only says they will come, it doesn’t quantify how many are THEY. I hope these guys either get profitable soon or someone shines a light on the fact that they need to move on and build something of value.

    • Scott Locklin said, on October 14, 2009 at 1:55 pm

      I once went to a local “entrepreneur meet up.” It struck me that a lot of the younger participants were people who were punching a card in order to be taken seriously later in life; sort of a play acting exercise as part of their MBA. Maybe these guys are the same way.

    • Scott Locklin said, on October 14, 2009 at 2:14 pm

      That’s really one of the more sensible things ever written on the subject.

      Honestly, as I said, I’m happy these guys are trying. Trying is great. I’m just not happy that they’re allegedly the top-10 under-25’s who are trying in America.

  7. David Stark said, on October 14, 2009 at 10:00 am

    Um. What did you do to the links in your article? I can’t cmd-click on them to open them in a separate tab. It works on the other links on your site, but the article links insist on opening in the same page.

    • Scott Locklin said, on October 14, 2009 at 1:49 pm

      Works for me, dude.

  8. Scott said, on October 14, 2009 at 12:26 pm

    Dunno… I’ve never taken any entrepreneur under the age of 35 very seriously. You might get an occasional media-darling outlier, but nearly all of the good stuff comes from people who have tried a few things, failed badly, learned from it, and moved on. (Yes, yes, we can all name a half-dozen rockstar companies started by kids, especially at each new technological revolution, but the other thousands of meaningful companies were done by “mature” people after the wave broke and real life had set in).

    • Scott Locklin said, on October 14, 2009 at 1:52 pm

      I mostly agree with you … except I personally know several guys who invented important stuff while they were young. I didn’t take them seriously either, but they did come up with important things. Maybe 2009 is just a particularly bad year, or the authors of the article just included their pals or people who bribed them. It just struck me as being … well, particularly “off.”

  9. rps said, on October 14, 2009 at 12:42 pm

    I disagree with your assessment of these companies. None of them are earth-shattering, and they’re really not very impressive, but most of them, if they work as advertised, help somebody in some way. Most of these companies are charging money for their product, which means that, if the company is successful, somebody found it worth paying for. Some of them are intended to make things we already do quicker and easier, which is the definition of productivity.

    I especially disagree with your assessment of the college note service. Lectures are a waste of time. Why is it cheating to get the information in writing instead of listening to a lecture and writing it down? You still have to learn the material.

    • Scott Locklin said, on October 14, 2009 at 1:57 pm

      Well, I guess you can disagree all you like. Disagreeing ain’t much substance for economic growth either.

      Lectures are a waste of time? Hey; why not just give everyone with the right amount of money a bachelors degree from MIT? Quite a lot of their lectures *and* notes are online!

      • rps said, on October 14, 2009 at 4:44 pm

        If you a point, you’re not making it.

      • rps said, on October 14, 2009 at 4:51 pm

        I don’t know how they do things at MIT, but at most schools most lectures consist of listening to somebody read a powerpoint to you, which any literate person can do themselves. Sometimes the professors tell you which slides are not going to be tested, or they say something that wasn’t on the slide – usually left out on purpose so that students have to show up and listen so the teacher doesn’t feel like he’s talking to himself. That’s the way it is in the majority of undergrad classes.

        MIT provides a lot more than lectures. They preselect smart students, give them lots of homework and projects, and assess them.

        • Scott Locklin said, on October 14, 2009 at 8:33 pm

          So you don’t like college. I don’t disagree with you at all. Most people are wasting time in college, and the actual learning process certainly happens elsewhere. In fact, I’d say college, any college is going to be a waste of time for 95% of the people who go there. It wasn’t a total waste for me, but I probably could have learned everything I needed to in 2 years, rather than a decade. If you really want to increase aggregate national wealth, go set fire to all the colleges. Seriously: burn them down. They’re keeping smart people from productive work. While starting a business catering to colleges is a waste of productive effort, starting a business is better than going to college.

          • rps said, on October 15, 2009 at 11:45 am

            That’s mostly right. Given that you’re right, in lieu of burning down colleges, finding a way to get out of going to lectures is a good thing, which is why I’m sympathetic to the note service.

  10. Sjoerd said, on October 14, 2009 at 12:45 pm

    It is very easy to make every company look dumb, especially if you drench your article in sarcasm and give your own biased and negative description of every company. Stop complaining and bitching on everybody. It helps nobody. Spend your time doing something positive.

    • Scott Locklin said, on October 14, 2009 at 2:03 pm

      Thanks for the advice: maybe I’ll take up punching people when I read incredibly stupid magazine articles instead of making fun of them. That way we can generate more economic growth by racking up lots of doctor’s bills and prison for me.

    • sharpend said, on October 29, 2009 at 12:28 am

      Ridicule is political technique with a rich history. When law is not applied in an individualist society and when meritocracy is nowhere to be found, why not try a little shame and ridicule? Granted, it is not nice to kick someone powerless. But Mainstream Media is not powerless nor are many of the people who are above or outside the law. Maybe they don’t feel shame, having been raised in a Western society.

      Why not take them to task? It is a fairly peaceful.

      I guess I see this rant as an attack on the article, less so on the entrepreneurs. They say no publicity is bad publicity and if you agree with that then there is no harm in poking fun at these businesses

  11. si2 said, on October 14, 2009 at 12:50 pm

    great write. just proves the old point that you can do anything you want if you put your mind to it. also this is what happens when people are told to ignore what others may think. Some of these ideas are ridiculous, but I like that they are out there.

    The bad economy is what made people break down and become resourceful with these ideas; this is what is available at the time, and here is how people are exploiting it.

    • Scott Locklin said, on October 14, 2009 at 2:09 pm

      I like the fact that these people are out there and trying, and more power to them. I know how hard it is psychologically to do something on your own. Some of them, I’d even consider investing in.

      I don’t like the fact that all the “ideas” seem trivial or silly, rather than something hopeful I could bet the next 20 years of economic growth on.

  12. Jesse said, on October 14, 2009 at 4:28 pm

    This was my comment about the article on HN:

    http://news.ycombinator.com/item?id=881272

    ====
    Also, none of them are entrepreneurs and none of his examples are examples of entrepreneurship — they’re examples of inventors inventing things.

    And that is great. Maybe there’s something intelligent to say about how we need fewer entrepreneurs and more inventors, or what the difference is, or why hardly anybody knows two of those three inventors, or any number of other things.

    Instead he went for the easy article and decided to piss all over everyone. Gratifying, to be sure, and there’s going to be a coterie of people saying, “Yes, right on. Here are other ways in which all these people suck,” but I think everyone is a little worse off for
    having an article like this written.

    It was mean and no less venal than the entrepreneurs he is criticizing.

    • Jesse said, on October 14, 2009 at 4:33 pm

      I then added this edit: [Edit: to be clear, Gates is an entrepreneur, but “writing BASIC at 20″ doesn’t make him an entrepreneur, it makes him an inventor. Starting a company around that invention and organizing the capital to get it off the ground makes him an entrepreneur.]

      • Scott Locklin said, on October 14, 2009 at 8:50 pm

        Well I replied to you there: yeah, I’m a mean bastard. So?

        Everyone knows Gates made a useful object and then went on to sell it (also at age 20, unless I am mistaken) and become one of the richest men on earth. Were he featured in a businessweek top 10 in 1975 or whatever, anyone could recognize that selling computer doodads for the new microprocessor technology was probably a pretty good idea.

        • Jesse said, on October 14, 2009 at 11:18 pm

          He wrote a version of BASIC for the Altair. Apple had their own version, too, for example, and there’s a funny story about Woz not wanting to implement floating-point arithmetic in their version and Apple having to license that technology from Microsoft.

          So, it wasn’t “Bill Gates wrote BASIC” it was “Bill Gates and Paul Allen wrote a BASIC interpreter for the Altair.”

          I can imagine you writing a snarky sentence about that. Oh, blah blah, a version of a toy computer language on a toy computer.

          I agree that a lot of the other companies featured were more interesting. I think we’d agree on a lot.

          I guess one thing we don’t agree on is the most productive way to respond to an article like this. I agree the article isn’t helpful and that, perhaps, it puts on a pedestal people who don’t deserve to be there. Or, in any case, that there are other people doing more interesting things who deserve to be featured instead.

          Those people, however, don’t deserve to be pissed on just because BusinessWeek decided to write the piece.

          My question is this: what was the goal of your article?

          From my perspective you went for the cheap shot, the easy laugh, the fart joke. It’s ego-gratifying and will get you all over HN, Reddit, and the other usual places, but I’d expect an article exhorting entrepreneurs to do more (or, really, mocking them for not doing enough) to live up to its own standards and bring something new to the table.

          For example, I would have been interested in reading a series of articles that goes through company-by-company, outlining their market, their challenges, and two or three things you think they could be doing better.

          An article about the “The Top Under-25 Entrepreneurs BusinessWeek Should Have Listed” would have been interesting, too.

          Finally, what if you reached out to the entrepreneurs on the list you DID think were interesting and conducted interviews with them? That would have been great!

          I realize all of those would have taken a lot of time, effort, and research, but doesn’t everything worthwhile?

          • Scott Locklin said, on October 14, 2009 at 11:29 pm

            Are you actually criticizing me for writing a different article than what you would have preferred? The only response I can muster to that is, “fuck you, you totalitarian twit!”

            I don’t get paid for this; I do it for laughs when I’m not spectacularly busy, you know, actually creating things. You want commentary which caters to your peculiar, and to my mind very nellie, politically correct and weak-sauce way of looking at the world: go find yourself a magazine which has all the piss and vinegar drained from it and buy it. There are many to choose from; it seems Business Week is one of those.

            You want nunchaku kung fu action from a man with properly functioning gonads; read my blog.

            • Jesse said, on October 14, 2009 at 11:48 pm

              No, I’m criticizing you for being a hypocrite.

              You want entrepreneurs to be daring and work on real problems, building businesses and products that matter, like the entrepreneurs of yore (or perhaps the unfeatured entrepreneurs of today).

              And yet you write a blog post in exactly that mould. Snark is easy. You went for the cheap laugh, and from the above comment I guess you’re ok with that.

              • Scott Locklin said, on October 14, 2009 at 11:53 pm

                Do you even realize what a totalitarian dimwit you are? I am a free man: I am free to write whatever I like, and I’m free to criticize things I do not like. If you don’t like it: don’t read my blog, shit head!

                You just wasted several minutes of my life reading and responding to your imbecile “I know you are but what am I,” argument, which makes you a lot more guilty of the “sin” of hypocrisy than I am, as I’m trying to do important math in Lisp.

  13. Mary Kennedy said, on October 14, 2009 at 5:22 pm

  14. DefunktOne said, on October 14, 2009 at 5:37 pm

    Hilarious and true. Nice rant. we are in a disastrous cycle of creating products and services that marginally improve existing products and services. Yikes!

    • Scott Locklin said, on October 14, 2009 at 8:51 pm

      I’d be happy if the ones I mentioned improved on anything. I mean, great: a marketing consultant. Awesome idea. Why is that idea in the top-25 of anything?

      • DefunktOne said, on October 15, 2009 at 6:27 pm

        Funny headline from a post by Mark Cuban on the subject of consultants.

        Success & Motivation – If(Cash In < Cash Out)= You are a Consultant

        http://blogmaverick.com/2009/07/08/success-motivation-ifcash-in-cash-out-you-are-a-consultant/

        • Scott Locklin said, on October 15, 2009 at 8:08 pm

          The great thing about Mark Cuban is he’s a regular guy who knows he kind of won the lottery with broadcast.com. I also highly approve of bailoutsleuth.com and sharesleuth.com. Downside: I think he’s obviously wrong in some cases. People made a stink about Amazon’s “market share” strategy. Now that they sell everything … those guys who said it was dumb were kind of wrong. Cuban is also wrong about bittorrent -Bram will figure out how to monetize somehow, and it won’t be by selling out to Cuban.

  15. Miguel said, on October 14, 2009 at 5:38 pm

    “Dear America: you can’t have an economy based on narcissism, good intentions, marketing, catering to rich bored people, really excellent webpages, and selling underpants on the internet.”

    Quite a statement coming from someone working on “problems in quantitative finance.” Not sure which adds less value, high frequency trading or (insert any activity on earth here).

    • Scott Locklin said, on October 14, 2009 at 8:35 pm

      I’m sorry you don’t understand finance; maybe you should try reading some of my more educational articles.

      • Miguel said, on October 14, 2009 at 11:49 pm

        I tried reading some of these more educational posts of yours. To quote you:

        “Making money is not always a sign of moral turpitude; some people actually earn their dough by providing things that other people want. There are plenty of looting scumbags in our society who richly deserve vilification. High frequency guys? Innocent until someone comes up with a good reason why they’re guilty of anything but selling people stuff they want. It’s too bad there is no great champion of high frequency traders out there to stand up and say, “non mi rompere le palle, non mi scazzare i coglioni,” but in the meanwhile, leave my high frequency paisanos alone. They got a job to do.”

        • Scott Locklin said, on October 14, 2009 at 11:54 pm

          Very good: now that you’re properly educated in why HFT’s provide stuff that people want, I accept your most abject and humble apologies for wasting my time.

          • Miguel said, on October 15, 2009 at 12:02 am

            OK sorry I should have spelled it out for you…in your post above you talk about how making things people want is not enough, and that these entrepreneurs should be aiming bigger. Yet your entire defense of HFT is that it provides stuff people want and that fact alone should be justification for its existence.

            You concede that your profession is a joke and that it is a haven for capitalist parasites, and you think these entrepreneurs are what is dooming America? Hilarious.

            • Scott Locklin said, on October 15, 2009 at 12:06 am

              I concede you’re incapable of parsing a simple statement in the English language, and that you are a rude git who has further wasted my time.

              You know; I really don’t mind people disagreeing with me substantively. Just try not to be such an idiot about it the next time. You don’t think finance is useful: enjoy your new life in North Korea. I hear the food is awesome … when you can get it.

              • Miguel said, on October 15, 2009 at 12:12 am

                Finance is useful of course, but not HFT.

                Editor: yes, and unlike the guy who writes this blog you are obvious a big expert on that subject. Moron.

  16. Andre Stechert said, on October 14, 2009 at 6:43 pm

    Hi,

    Loved the wryness of your article, but you’re looking in the wrong place for the fresh ideas that are going to power the next generation. When I need inspiration of this sort, I scoot myself on over to either MIT’s Technology Review or Chris Anderson’s TED.

    Sadly, many of the inventions are now funded by large institutions instead of individual entrepreneurs…

    Cheers,
    Andre

    • Scott Locklin said, on October 14, 2009 at 8:37 pm

      The self-congratulatory smugness and ultimate vacuousness of TED makes me want to set things on fire. I’ll check out MIT’s technology review one of these days, but unless it’s making someone money, it ultimately ain’t worth nothin!

  17. Ilya said, on October 14, 2009 at 6:49 pm

    Here’s the thing–most entrepreneurs don’t have the money to open a factory, or other sort of manufacturing shop.

    These days, most entrepreneurs are in the technology industry, because all you need is people with exceptional computer skills and free, open-source software.

    In my case, I was an OR person with only marginal exposure to computer science. I wasn’t one of the three silicon valley engineering majors (comp sci/electrical engineering/comp engineering).

    But if I did have crazy programming skills to code up anything I could imagine, I can tell you *exactly* what I’d do with them.

    I’d try and revive the edutainment computer games that I loved so much.

    Remember Super Solvers Gizmos N’ Gadgets, anybody?

    I couldn’t get enough of that game.

    If I had the coding skills, I’d try and restart those kinds of computer games–especially because currently, I feel that the U.S. is in *dire* need of them, instead of garbage like World of Warcrap.

  18. John Mount said, on October 14, 2009 at 10:35 pm

    So Scott, I take it you would not be in favor of awarding a Nobel Prize in Physics to one of the many exciting String Theorists that have been profiled in so many magazines and newspapers (or just switching it from the Nobel Prize in Physics to the Nobel Prize in String Theory)?

    • Scott Locklin said, on October 14, 2009 at 10:57 pm

      One of my dearest friends was deeply involved in the genesis and evolution of noodle-theory. He’s never been featured in any newspapers or magazines, presumably because he’s too busy kicking other people’s intellectual asses. They never talk to Ed Witten either.

      Still: there will be no Scott-approved Nobel for the noodle guys until they come up with something which gets proven in an experiment. In fact, I consider the entire field a travesty of science. It’s the largest and longest intellectual project in physics history, and it has yet to produce anything of actual physical value which is testable by experiment. Physics in general is a towering wreck of central planning, and putting off results of your work comfortably after tenure; a topic for long and angry rants on my part. Lee Smolin wrote a pretty good book called “Trouble with Physics,” which I should really review on Amazon. Woit’s not even wrong website and book is also excellent,though he doesn’t see the big picture like Lee does.

  19. […] In which I stomp on some of our glorious “green shoots” – eine eiskalte “Abrechnung” mit den Young Entrepreneurs der USA. Dieser Artikel macht sich über einen anderen lustig, der die Top under-25 Unternehmer in den USA auflistet, leider in den meisten Fällen unbegründet. […]

  20. […] can be a narcissist’s playground. The bigger you come, the quicker you’ll rise, and eventually, the harder you’ll fall. […]

  21. James Bowery said, on October 20, 2009 at 12:37 am

    The moment IBM made the decision to distribute MS DOS with its first PC, MS DOS could have been purchased under eminent domain by the government and reassigned to just about anyone in the software industry, and that person would have become the world’s richest man.

    Gates didn’t even write MS DOS. He merely brokered a deal based on information available only to a select few — involving his family connections.

    The fact that Gates added value to MS DOS after the deal with IBM is a silly rejoinder to my statement that reassignment of ownership of MS DOS to just about any software professional subsequent to the deal he brokered with IBM, would have resulted in that software professional becoming the world’s richest man.

    Just about any software professional would have added as much value to MS DOS, including building a vertical market using office productivity end users.

    The sole value of MS DOS, a substandard OS for the era in any case, was the economic rent stream it provided the owner based on third party dependence on it to operate on the same platform with other third party software — and that dependence was created by IBM’s ability to produce its PC in volume, not by anything Bill Gates contributed.

    The positive feedback that monopolizes the operating system market is pretty simple to understand. If you’re an application developer, you want the highest return for your investment. You have a choice of “platforms” to which you can write your application — meaning operating systems that can potentially run your application.

    You know customers don’t like to reboot to run applications so you write your application to run on the most widely deployed platform.

    IBM’s choice to distribute MS DOS with its first PC, and charge extra for other operating systems, is what led application developers to write use MS DOS.

    Windows 3.1 was a delayed reaction to the Macintosh and subsequent advances were reactions to others who had superior systems.

    In almost every case, Gates followed rather than led the other technical and market leaders, and used his monopolistic position to take over their niches. This is the classic case of economic rent destroying the marketplace and rewarding rent-seeking over innovation. It is an icon of the hypocrisy of the supposed “free market” that refuses to charge a fair fee, in the form of net asset taxation, for the use of property rights that would not exist in the absence of government’s legal infrastructure.

    • Scott Locklin said, on October 20, 2009 at 12:51 am

      Gates certainly managed monopolistic business practices. Mostly because he was a better businessman than everyone else. Any number of competitors could have destroyed him in the first 10 years of Microsoft, had they proper bloodthirsty management. Digital Research in particular was perfectly placed to destroy MS, as was Geoworks, Commodore, Symbolics, Sun, Corel, Atari or any other company I could name. Gates won because he was a better knife fighter.

      While Gates company certainly has destroyed valuable software (including some I was involved in writing: thanks a lot, dudes), he added plenty of value and innovation as well. For that matter, his development environment makes every other one ever created, with the possible exception of Symbolics Lisp, look like a bad joke.

  22. Lauren Berger "The Intern Queen" said, on October 22, 2009 at 6:41 pm

    Hi Scott,

    Thanks for the mention.

    Lauren Berger
    “The Intern Queen”

    • Scott Locklin said, on October 22, 2009 at 7:53 pm

      Best of luck with your business.

  23. maggette said, on October 25, 2009 at 6:52 pm

    My english is quite limited ( I’m german), so maybe I got the “tone” of this article completely wrong, but IMHO Scott wasn’t bashing the young start ups, he was bashing the magazine which considered them “top something”. Right?

    Anyway….
    IMHO setting up bullshit ideas that have no real value and trying to sell them on the web is an absolutely solid business concept….restricted to the cases where implementing these ideas won’t cost you much money, time or other resources (which isn’t the case in many of these “top 25″ list concepts).

    Let’s just assume for a second creating web sites and some marketing hype for a maybe quite stupid web service that probably nobody really needs wouldn’t cost anything! It would be an kind of arbitrage situation (paying nothing initially for something that has a cash flow C>= 0….with 0 beeing the state with the highest probability ).

    My point is: history has shown that big companies tend to buy small start up stuff for prices nobody would ever have dreamend off (cuban style). Since nobody can forcast these hypes, why not take a shot when it doesn’t needs a lot of money and risk taking to set it up? You don’t even have to believe in the business concept you are selling. You just have to believe that somebody might think it is worth spending money on (think Keynes beauty contest..)

    cheers

    edit: really cool stuff on this blog…please keep the articles comming Scott

    • Scott Locklin said, on October 25, 2009 at 8:50 pm

      Thanks Maggette: and, right. Good for them dudes starting dumb companies. I have a dumb company. Top-25 of anything? How do the three dudes telling people to unplug their DVD players beat the uplifting awesomeness of zombocom?

      http://zombo.com/

      I agree with your arbitrage argument, but only in the absence of the trading cost of pride. I bet I could start a dumb facebook or lazyweb thing and get it funded; I know all the right people to do it. I’d have to be comfortable with hating myself though.

  24. maggette said, on October 25, 2009 at 10:21 pm

    100% agree….it might not be as bad as selling land mines to conflict zones or producing another Britney Spears album ….but it comes quite close!!!

    So if moral and self esteem factors in as a resource, it isn’t an arbitrage opportunity anymore.

    cheers

  25. […] Locklin, in a rant on an article devoted to America’s top under-25 entrepeneurs: Dear America: you can’t have an economy […]

  26. Wes S said, on February 23, 2010 at 5:33 pm

    Stumbled across your blog when searching for some physics references. Excellent stuff here. I read the blog and comments about Lee and his colleagues. While I disagree with several of your points – not important – I agree with the tenor and general rant about the state of particle and theoretical physics; there’s pretty much no room for new ideas unless one is prepared to be labled a quack. I read a book a few years ago by João Magueijo and his VSL theory. What I found so striking was not his originality of thought – which was interesting – but rather the fact that he had to spend more than half the book hammering on the “establishment” and his obvious bitterness engendered by his training. So this leads me to the fact that I long ago became disillusioned with the science establishment. I stopped my formal training when I took the physics GRE and was posed with the question “What type of pump should one use to create a vacuum of XX torr?”. Is that really important to know off the top of your head? Look it up. This establishment is like any other except that it is more hypocritical than some. It preaches ideals that are not followed. Scientists who piously claim to be searching for the truth have too many of their own agendas and little patience for those with alternative explanations. And many of these scientists are intelligent and can brow beat people people like me with supercilious arguments that are difficult to refute. So I find myself reading mostly science fiction now … ;-)

    • Scott Locklin said, on February 23, 2010 at 9:18 pm

      João Magueijo is a FOAF, and his popular book was very inspiring indeed. He’s absolutely on the money in decrying the way physics bureaucracy crushes original thought. I’d say it’s even worse than he says; he’s a famous, eloquent and well regarded guy, and he ran into problems. Imagine what cubical man has to deal with!
      There is one good thing which physics grad school can do for you -some wise old bearded sage told me this once. It can teach you how to learn about pretty much anything. There are other tricks you get out of it too, but that’s the big one. Of course, most career people just stick to ploughing the same little furrow, but if you want to learn about how to learn hard stuff, physics grad school ain’t bad.

  27. Wes S said, on February 25, 2010 at 4:51 pm

    You hit it. Few schools teach critical thinking (no child left behind? really?). You have to go to grad school to learn that skill. I went to a small liberal arts college with only 2 other physics majors and received basically one-on-one training from a wunder-kid professor who went on to greater things. We did not learn by rote hence the comments about the GRE and disillusionment. I work for a smallish analytical instrument company making instruments for food & ag analysis. On the occasions we do work with Universities, I’m always amazed at how poorly grad students are regarded – so much cattle. It seems mostly about hoop jumping. 20 years ago, I would not have known to look for the right professor and not the right institution. But then I am your definition of cubicle man (though in my defense I work from home) having worked for this company for 18 years. And I watched my wife be tortured in medschool and residency for no other reason than tradition. So, I wouldn’t mind going back to grad school, but I’m pretty sure I don’t have the math, patience, or legs for the jumping. For inspiration:

    • Scott Locklin said, on February 25, 2010 at 9:57 pm

      Har, great courage wolf video. Some very famous guy was kind enough to sit through my thesis presentation, and he offered the following words, which contain much wisdom:

      “Grad students can be abused unspeakably because they have underdeveloped nervous systems, and they can’t experience pain. Once they can experience pain, we let them graduate.”

  28. Wes S said, on March 1, 2010 at 6:01 pm

    Oh Scott. Are you are part of the problem? One must be properly potty trained in order to play … ;-) … Painful experiences can be obtained in many ways and not just grad school. But then there is a need to weed out nuts.

    I had the chance to speak in depth with a Nobel Laureate in Physics. He told me “All of the great discoveries in physics have already been made. Don’t waste your time on theoretical physics.” I laughed out loud, and he thought me rude.

    I enjoy your humor and thoughts and will keep reading as long as you don’t tell me to fuck off and call me a totalitarian dimwit. That would hurt.

  29. […] can be a narcissist’s playground. The bigger you come, the quicker you’ll rise, and eventually, the harder you’ll fall. […]


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