• 'BLOOD IN THE WATER' — 90% of the billion-dollar unicorn startups are in trouble
• Forbes 10 Under 10 Influencers in Tech
• Iran's blogfather: Facebook, Instagram and Twitter are killing the web
• Why Silicon Valley Should Bring Unsexy Back
• One startup's epic struggle to survive the Silicon Valley gold rush.
• Sheryl Sandberg Says an MBA Doesn't Matter in Tech
• The Silicon Valley Suicides
• Migrating to Microservices by Adrian Cockroft (Part 2)
• Migrating to Microservices by Adrian Cockroft (Part 1)
• Fast Delivery: Adrian Cockcroft @nginxconf 2014
• Microservices at Netflix: Lessons for Architectural Design
• Netflix: Architecture.
• Netflix: Context, not control.
• Netflix: Smart work, not hard work. "Sustained B-level performance, despite "A for effort",...
• Netflix's technology stack
•  The Stack Behind Netflix Scaling - ScaleScale The Stack Behind Netflix Scaling - ScaleScale
• Google Just Open Sourced the Artificial Intelligence Engine at the Heart of Its Online Empire
• Startup Playbook
• On a Scale of 1 to 10, Silicon Valley's Lack of Racial Diversity is a 7
• "Change the world" 改变世界 - Mark Zuckerberg Speech at Tsinghua University 清华大学 in Beijing 20151024
• Engineers Build Ugly Products
• Negative Gross Margins – AVC
• YC Research
• 16 Startup Metrics | Andreessen Horowitz
• PDF file
• Why WhatsApp Only Needs 50 Engineers for Its 900M Users
• LinkedIn Co-Founder's Stanford Class Reveals the Secret of Silicon Valley Success: “Blitzscaling”
• The Post-YC Slump
• Why Introverts Make Great Entrepreneurs
• A Decade of VC Funding History: Trend Analysis 2005 to 2014 | Mattermark
• Entrepreneurs don't have a special gene for risk—they're rich kids with safety nets
• Your Uber for Onesies Has Arrived

Silicon Valley beat

by hugo - Sep 1st, 2015

"... there is "blood in the water," and we are entering a 90-10 situation for the unicorn class of startups with billion-dollar valuations in which 90% of the startups will be repriced or die and 10% will make it." "[A Silicon Valley] CEO said the Valley used to be a place of "quirky people" but was now filled with "arrogant" people, so he was happy to see some of these companies falter as a way to flush out some of the bad actors."

'BLOOD IN THE WATER' — 90% of the billion-dollar unicorn startups are in trouble
It will be ugly in the short term for startups.
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Forbes 10 under 10!

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"But hyperlinks aren’t just the skeleton of the web: they are its eyes, a path to its soul. And a blind webpage, one without hyperlinks, can’t look or gaze at another webpage – and this has serious consequences for the dynamics of power on the web. More or less all theorists have thought of gaze in relation to power, and mostly in a negative sense: the gazer strips the gazed and turns her into a powerless object, devoid of intelligence or agency. But in the world of webpages, gaze functions differently: it is more empowering. When a powerful website – say Google or Facebook – gazes at, or links to, another webpage, it doesn’t just connect it , it brings it into existence; gives it life. Without this empowering gaze, your web page doesn’t breathe. No matter how many links you have placed in a webpage, unless somebody is looking at it, it is actually both dead and blind, and therefore incapable of transferring power to any outside web page. Apps like Instagram are blind, or almost blind. Their gaze goes inwards, reluctant to transfer any of their vast powers to others, leading them into quiet deaths. The consequence is that web pages outside social media are dying." "The stream, mobile applications, and moving images all show a departure from a books-internet toward a television-internet. We seem to have gone from a non-linear mode of communication – nodes and networks and links – toward one that is linear, passive, programmed and inward-looking. When I log on to Facebook, my personal television starts. All I need to do is to scroll: New profile pictures by friends, short bits of opinion on current affairs, links to new stories with short captions, advertising, and of course self-playing videos. I occasionally click on the like or share button, read peoples’ comments or leave one, or open an article. But I remain inside Facebook, and it continues to broadcast what I might like. This is not the web I knew when I went to jail. This is not the future of the web. This future is television."

Iran's blogfather: Facebook, Instagram and Twitter are killing the web
Hossein Derakhshan was imprisoned by the regime for his blogging. On his release, he found the internet stripped of its power to change the world and instead serving up a stream of pointless social trivia
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"Already in today’s crowded startup ecosystem, a new company that can’t make inroads outside the Silicon Valley bubble is bound to fail. In a survey by venture capital database CB Insights, 42 percent of tech startup founders cited “a lack of market need for their product” as the main reason for their company’s failure. Just look at Secret. The VC-backed anonymous messaging service was a Silicon Valley darling — but folded last April, having failed to take off outside of the tech-industry fairyland. That’s a trend that’s likely to accelerate in upcoming years. Most of today’s fast-growing tech companies are created by and for a small, affluent, urban population — the 1 percent. But these users’ share of the market is contracting. By 2020, four out of five smartphone connections will be in developing nations, where efficient pizza delivery is often less of a concern than access to clean drinking water. And woe to the tech company that doesn’t prepare itself for this change."

Why Silicon Valley Should Bring Unsexy Back
Neckties embedded with QR codes. Pants that make drum noises. “Uber for medical marijuana.” These are just a few of the goofy startup ideas that have..
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Old article dated 04/2014, but still very relevant. "“The problem in 1999 was that to get $5 million you didn’t need very much.” He talked as though he were chewing on mouthfuls of nuts. “You needed one or two Stanford résumés, an idea for a prototype, and a live body to give the money to.” It’s hard to get that $5 million now in part because it’s so easy, as it was for Nick and Chris, to get $500,000, especially if you’re coming out of an accelerator. One way to look at it is that the $5 million that went to one company of 10 people in 1999 is now going to 10 companies of two people. “You’ve lowered the bar 10X.” Which means you’re getting a lot of people starting companies who shouldn’t be starting companies. Another investor I talked to called this “buying a cheap call option on a guy who doesn’t know that’s what you’re doing”—on a guy, that is, who thinks you’re investing in his success, not betting on the high-risk, high-yield chances of it. You know the odds on any given company’s success are long, but that’s why you make a lot of bets. In the first dotcom boom, the risk was largely carried by the investors, but now the risk has been returned to the youth." "All the while, Martino’s ultimate warning—that they might someday regret actually getting the money they wanted—would still hang over these two young men, inherent to a system designed to turn strivers into subcontractors. Instead of what you want to build—the consumer-facing, world-remaking thing—almost invariably you are pushed to build a small piece of technology that somebody with a lot of money wants built cheaply. As the engineer and writer Alex Payne put it, these startups represent “the field offices of a large distributed workforce assembled by venture capitalists and their associate institutions,” doing low-overhead, low-risk R&D for five corporate giants. In such a system, the real disillusionment isn’t the discovery that you’re unlikely to become a billionaire; it’s the realization that your feeling of autonomy is a fantasy, and that the vast majority of you have been set up to fail by design."

One startup's epic struggle to survive the Silicon Valley gold rush.
Nick and Chris no longer cared about "killing it." They were too honest and too tired for that language and that posturing. At this point they just wanted to survive. They had about a month to raise $1 million or they would no longer be able to make payroll.
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“While I got great value from my experience, MBAs are not necessary at Facebook and I don’t believe they are important for working in the tech industry,” Sandberg wrote. She said her MBA helped her get a basic sense of business, which might be instrumental “for some people and in some situations,” but dismissed the notion that the training would offer a leg up at Facebook. “I believe—and at Facebook we believe—that degrees are always secondary to skills. In hiring at Facebook we care what people can build and do,” she wrote. The need for an MBA in Silicon Valley has been the subject of intense debate for years. Peter Thiel, who co-founded Palantir and PayPal, has railed about the uselessness of business school for entrepreneurs—sometimes while speaking to crowds of MBAs. At a gathering of MBA candidates in San Francisco last year, Thiel noted that business schools tend to churn out people who bet on innovations only after those ideas are past their prime. MBAs rushed into junk bonds in 1989, a year before industry king Michael Milken went to jail, Thiel noted. And most MBAs did not want anything to do with Silicon Valley until 1999, just before the tech industry collapsed, he said.

Sheryl Sandberg Says an MBA Doesn't Matter in Tech
The Facebook COO, a graduate of Harvard Business School, said in an online Q&A that the degree doesn't go far in her industry.
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The dark side of Silicon Valley. "The 10-year suicide rate for the two high schools is between four and five times the national average. Starting in the spring of 2009 and stretching over nine months, three Gunn students, one incoming freshman, and one recent graduate had put themselves in front of an oncoming Caltrain. Another recent graduate had hung himself. While the intervening years had been quieter, they had not been comforting. School counselors remained “overwhelmed and overloaded” with an influx of kids considered high risk, says Roni Gillenson, who has helped oversee Gunn’s mental-health program since 2006. Twelve percent of Palo Alto high-school students surveyed in the 2013–14 school year reported having seriously contemplated suicide in the past 12 months." This is surely a statistical outlier. Root cause is possibly due to the drive for external kind of success- common in the Valley. The parents' priorities become the kids' priorities. This attitude creates a highly competitive and highly stressful environment for the kids. It also makes them suffer from a lack of agency. They feel like they have little choice and no sense of control for their own life.

The Silicon Valley Suicides
Why are so many kids with bright prospects killing themselves in Palo Alto?
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"As the Director of Web Engineering and then Cloud Architect, Adrian Cockcroft oversaw the company’s transition from a traditional development model with 100 engineers producing a monolithic DVD-rental application to a microservices architecture with many small teams responsible for the end-to-end development of hundreds of microservices that work together to stream digital entertainment to millions of Netflix customers every day." Best Practices for Designing a Microservices Architecture: - Create a Separate Data Store for Each Microservice - Keep Code at a Similar Level of Maturity (create a new microservice for the new or changed code) - Do a Separate Build for Each Microservice - Deploy in Containers - Treat Servers as Stateless

Microservices at Netflix: Lessons for Architectural Design
Learn design principles and best practices for microservices architecture from Adrian Cockcroft, former lead Cloud Architect at Netflix
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Netflix: Architecture.

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Netflix: Context, not control.

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Netflix: Smart work, not hard work. "Sustained B-level performance, despite "A for effort", generates a generous severance package, with respect." "Sustained A-level performance, despite minimal effort, is rewarded with more responsibility and great pay."

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Netflix's technology stack

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The Stack Behind Netflix Scaling - ScaleScale The Stack Behind Netflix Scaling - ScaleScale
As we research and dig deeper into scaling, we keep running into Netflix. They are very public with their stories. This post is a round up that we put together with Bryan’s help. We collected info from all over the internet. If you’d like to reach out with more info, we’ll append this post. Otherwise, …
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“What we’re hoping is that the community adopts this as a good way of expressing machine learning algorithms of lots of different types, and also contributes to building and improving [TensorFlow] in lots of different and interesting ways,” says Jeff Dean, one of Google’s most important engineers and a key player in the rise of its deep learning tech.

Google Just Open Sourced the Artificial Intelligence Engine at the Heart of Its Online Empire
In a dramatic departure, Google is open sourcing software that sits at the heart of its online empire.
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"To have a successful startup, you need: a great idea (including a great market), a great team, a great product, and great execution." Can't agree more with Sam Altman's advice on ignoring the nay-sayers. At the end of the day, you have to be the #1 believer in your mission and that what you are doing WILL create value for the world. No one really knows what will happen until you build it, including the smartest people and the best VCs in the world. History has proven that times and times again. No one can really predict the future. But we can reason from first principles, BUILD & BELIEVE! (And even in the very worst case- you will still gain skill for building things. Trying and failing is a lot better than second guessing yourself, doing nothing and learning nothing.) "Speaking of telling people your idea—while it’s important the idea really excites some people the first time they hear it, almost everyone is going to tell you that your idea sucks. Maybe they are right. Maybe they are not good at evaluating startups, or maybe they are just jealous. Whatever the reason is, it will happen a lot, it will hurt, and even if you think you’re not going to be affected by it, you still will be. The faster you can develop self-belief and not get dragged down too much by haters, the better off you’ll be. No matter how successful you are, the haters will never go away."

Startup Playbook
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“Silicon Valley is still too white, too male, and too focused on solving the problems of the young, single, and wealthy."

On a Scale of 1 to 10, Silicon Valley's Lack of Racial Diversity is a 7
Ten is the worst.
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Good speech by Zuckerberg. Most important take away: Solve important problems. And make darn sure you care about them more than anybody else in the world.

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This is why engineers need product and design people. "Building a usable product is about collecting ideas, trying them out, playing with them and seeing what works. This is the part that excites engineers. But the second part, in many ways, is harder; it’s about letting things go, making choices and stripping out functionality which, from the user’s perspective, isn’t needed and isn’t interesting. Many features released by engineers don’t strip things down, which is why they are cluttered, confusing and have no clear purpose."

Engineers Build Ugly Products
Why do engineers build ugly products? What is it in the nature of engineering or the software development process that leads to user interfaces that are..
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Bill Gurley: “I do think you’ll see some dead unicorns this year” Mike Moritz: “There are a considerable number of unicorns that will become extinct.” Fred Wilson: "...most of the companies out there who are growing like weeds using a negative gross margin strategy are going to find that the capital markets will ultimately lose patience with this strategy and force them to get to positive gross margins, which will in turn cut into growth and what we will be left with is a ton of flatlined zero gross margin businesses carrying billion dollar plus valuations."

Negative Gross Margins – AVC
There’s been a lot of talk coming out of silicon valley lately about fast growing companies with high valuations that are going to face problems in the coming year(s).
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YC Research: "Our mission at YC is to enable as much innovation as we can. Mostly this means funding startups. But startups aren’t ideal for some kinds of innovation—for example, work that requires a very long time horizon, seeks to answer very open-ended questions, or develops technology that shouldn’t be owned by any one company. We think research institutions can be better than they are today. So we’re starting a new research lab, which we’re calling YC Research, to work on some of these areas."

YC Research
Our mission at YC is to enable as much innovation as we can.  Mostly this means funding startups.  But startups aren’t ideal for some kinds of innovation—for example, work that requires a very long...
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"Investors more highly value companies where the majority of total revenue comes from product revenue (vs. from services). Why? Services revenue is non-recurring, has much lower margins, and is less scalable. Product revenue is the what you generate from the sale of the software or product itself."

16 Startup Metrics | Andreessen Horowitz
A common mistake is to use bookings and revenue interchangeably, but they aren’t the same thing.
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How Facebook handles the 'scale' problem: scaling its workforce. Simon Whitaker, Facebook software engineer. "So why 18,000 classes? We’re an engineer-led company, and at our core is the belief that hacking on things yields fast, awesome results. We don’t have software architects, at least not that I’ve found yet. We don’t have a committee who decides what can and can’t go into the app. Duplication: almost certainly. - Two engineers writing essentially the same thing for two different teams - Intentional: A/B testing Old code? Of course. Chat heads is an example. Awesome stuff? Yes! e.g. Lots of really nice UI work, pushing the boundaries of what’s possible in iOS. There’s also a fair amount of code that re-implements stuff that Apple gives us for free, and that most apps don’t have to re-implement themselves. So, why would we re-implement stuff Apple has already provided? Let’s talk about scale. “X can’t handle our scale” is a phrase you hear a lot at Facebook. It explains something of the culture, and also some of the binary size. It often leads to us having to reinvent a lot of stuff. But you might be wondering: how does this assertion even make sense in the context of a mobile app? Mobile is the very opposite of “programming at scale”. Surely the scale is all on the server side. Well, yes and no. We’re not talking about scaling load here. We’re talking about: - The scale of our employee base: when hundreds of engineers are all working on the same codebase, some stuff doesn’t work so well any more - The scale of the app’s complexity: like the increasing complexity of the UI widgets that appear in your news."

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Its approach to engineering was unlike any he had seen—in part because it used Erlang and a computer operating system called FreeBSD, but also because it strove to keep its operation so simple. “It was a completely different way of building a high-scale infrastructure. It was an eye-opener to see the minimalistic approach to solving … just the problems that needed to be solved.” The company has succeeded by hiring engineers who are adaptable—in more ways than one. Asked to explain the company’s secret, Mahdavi’s response seems far too simple. But that’s the point. “The number-one lesson is just be very focused on what you need to do,” he said. “Doing spend time getting distracted by other activities, other technologies, even things in the office, like meetings.”

Why WhatsApp Only Needs 50 Engineers for Its 900M Users
One of the (many) intriguing parts of the WhatsApp story is that it has achieved such enormous scale with such a tiny team.
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Blitzscaling: “We’ve beaten the drum very well—and a lot of people have heard—that it’s good to build a small team that is willing to take a bold risk, to assemble some knowledge and some capital and really take a run at it.” What the rest of the world has yet to grasp, he says, is that success—true success—requires something else. In a modern market accelerated by the long reach of the internet, once you have something that people want, you also need the means and the wherewithal to expand your operation at ridiculously fast speeds. “What most people don’t appreciate about why so many great companies come out of Silicon Valley is the knowledge of how to do scale-up. It’s not just that you build an app and everything works out,” says Hoffman, a partner with Silicon Valley venture capital firm Greylock. “What first mover means is first mover to scale. If you don’t play the move-fast game, you can frequently lose out to someone who is.” Rapid growth requires far more than technical know-how. “Most centrally, it’s about scaling an organization.” "...the dynamic changes as you expand from dozens of employees to hundreds, from hundreds of employees to thousands, from thousands to tens of thousands. At each of these levels, Hoffman explains, you must hire differently, communicate differently, manage differently."

LinkedIn Co-Founder's Stanford Class Reveals the Secret of Silicon Valley Success: “Blitzscaling”
LinkedIn co-founder Reid Hoffman says the secret of Silicon Valley success is not the startup. It's the scale-up.
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"In general, startups get distracted by fake work. Fake work is both easier and more fun than real work for many founders. Two particularly bad cases are raising money and getting personal press; we’ve seen many promising founders fall in love with one or (usually) both of these, which nearly always ends badly. But the list of fake work is long."

The Post-YC Slump
At the end of a YC batch, the general consensus among the partners is that about 25% of the companies are on a trajectory that could lead to a multi-billion dollar company.  Of course, only a...
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"... the unique skills that introverts bring to the table—the ability to focus for long periods, a propensity for balanced and critical thinking, a knack for quietly empowering others—that may make them even better suited for entrepreneurial and business success than extroverts."

Why Introverts Make Great Entrepreneurs
From deep thinking to careful listening, a look at the skills that make introverts make entrepreneurs
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Are we in a bubble? Here's some interesting data.

A Decade of VC Funding History: Trend Analysis 2005 to 2014 | Mattermark
Inspired by a post from Andrew Parker of Spark Capital titled “Series A Investment Pace Across Select VC Firms” we have published our report on venture capital industry trends over the past 10 years on Slideshare. It was originally released earlier this year to paid Mattermark subscribers, and for those looking to do your own analysis you … Read More
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True to some extent. You can't deny the fact that having a fallback option makes you more risk-tolerant. "... the most common shared trait among entrepreneurs is access to financial capital—family money, an inheritance, or a pedigree and connections that allow for access to financial stability. While it seems that entrepreneurs tend to have an admirable penchant for risk, it’s usually that access to money which allows them to take risks."

Entrepreneurs don't have a special gene for risk—they're rich kids with safety nets
The cult of the entrepreneur teaches us the wrong lesson.
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Uber for Onesies :-)

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