An FBI Hostage Negotiator Buys A Car [audio] - <AUTHOR> http://www.npr.org/blogs/money/2012/12/21/167802325/episode-425-an-fbi-hostage-negotiator-buys-a-car <comment><USER2> Fantastic Planet Money episode. However, it is about 17 minutes long which a whole bunch of political stuff which may be viewed as fluff. Approxcript of the negotiation techniques below:

1\. "Nibbles": Reach a general agreement (agree on a basic premise). Instead of instantly accepting the deal, push for one small concession at a time.

2\. Before entering into a discussion, think about a 'BATNA' = Best Alternative To Negotiated Agreement. Are there other options? Is there a minimum you are willing to agree with?

3\. "Expanding the pie": While certain points in contention may be very inflexible (salary, job position), "expand the pie" and seek out other areas which may be more flexible (vacation days, compensation). This also serves to clarify the central hinge of the negotiations.

4\. Disarming Empathy. Essentially, the act of being empathetic (in a sort of self-deprecating way perhaps?) so that the other side bargains against themselves while you do not budge from your initial offer.

<comment><USER3> I was looking for this kind of summary, thanks for posting it, but after reading it I fail to see how "Nibbles" and "Expanding the pie" are not basically the same thing.

<comment><USER4> "Nibbles" are when you extend an agreement with further small concessions. Works best when the other side is under more pressure than you - they were happy to get to your yes, and the pain of losing your agreement is something they will avoid.

"Expanding the pie" is more like changing the game. You have one thing you're negotiating on, and it's a zero-sum situation. One winner and one loser. But what if you bring other things into the negotiation, to turn that into a win- win situation? Then it's easier to find agreement.

<comment><USER3> Yes, I get that, but "Nibbles" still seem like after having concluded some sort of initial deal, you "expand the pie" by asking new stuff (instead of negotiating on the salary, you negotiate on salary+holidays+benefits).

<comment><USER5> It's called expanding the pie when a change in the terms of the negotiation generates an even greater win for all parties involved.

The actual example in the podcast was over pumpkins. There was only one person selling pumpkins in the village the negotiator was in during her time in the Peace Corps. She wanted to buy all four of them but the farmer would only sell her two. She even tried offering double but the farmer wouldn't budge.

The customer took the position of buying all four pumpkins because she needed them in order to make enough pumpkin pies.

The farmer took the position of keeping two pumpkins because she needed the seeds to plant for next year's crop.

Once they got out of positional bargaining and discovered the root of the problem, the solution became clear: The customer gets all 4 pumpkins at the original price, but first the farmer opens them all and takes the seeds, which the customer would have thrown out anyway. Thus, both got more than they would have if they'd stuck to their original positions.

</comment></comment></comment></comment></comment><comment><USER6> _This is hastily-written, sorry_

Step 1: Decide what car(s) you want to buy, down to the color, trim, options, etc. Type it all out in concise list form.

Step 2: Visit Edmunds.com, etc and get a general idea of local fees, taxes, and costs.

Step 3: Find the dealer websites within 120 miles or so, and write down their "Internet Sales" and "Fleet Sales Manager" email addresses.

Step 4: Compose an email to each of the email addresses you wrote down. Say that you are sending this out to several dealers within 120 miles and you will be selecting the lowest cost for the following list (which you created in step 1). Ask them to give you their "walk out the door" price. This price will include all fees, taxes, costs, etc.

Step 5: Wait. Maybe 30% of them won't reply, but that's OK.

Step 6: Take the lowest quote and tack it to the wall. Send another email to the next 2 or 3 lowest quotes saying that the guy tacked to the wall is quoting you $true_value (don't lie). See if they come down in price.

Step 7: Pick the one.

This has worked 3 times for buying a new car. No haggling or even stepping into the car lot until negotiations are done. You don't necessarily have to take the lowest quote (it's nice to pay a little more for a dealer closer to home) but it sure does drive the price down.

<comment><USER7> I've seen this approach backfire, because the dealer says he has the exact make/model as-quoted, but doesn't. Tries to pass it off as a simple misunderstanding, then says "But we have this other one over here which is close to what you asked for..."

IOW, only works if dealer is honest.

<comment><USER8> In my experience, this usually happens with high-demand cars that are hard for the dealer to get or brands with a limited area presence.

VW has 2 dealers in my region. Want a TDI Jetta with a manual transmission? Let the games begin -- they get 3 a month and the sales manager won't let it out the door for a good price.

Toyota used to have supply constraints for certain Camry models (some trims were made in Japan exclusively a few years ago). Want one of those? Good luck -- my dad had the guy demand a deposit to be on a waiting list, or take a lousy deal on one of the other trims.

Another thing that happens is that dealers need to trade with other dealers for specific cars. Sometimes these deals fall through, and the dealer who promised you a car is actually being honest -- he doesn't have it for reasons out of his control.

<comment><USER9> Yep this tactic doesn't work well for anyone that wants manual transmission cars in the USA. Most places get so few of them its hard to get deals on those specific types of cars.

<comment><USER10> I would not have believed this if I hadn't helped a friend shop for a car recently. It was surreal to both of us that his only hard requirement was a manual transmission and, despite visiting every dealership we could find, few had them at all.

Interesting note: Be very careful about believing a dealer's website or phone description of a car as a "manual." We ran into multiple dealerships that misidentified paddle shift or "manumatic"/"tiptronic" cars as manuals.

He ended up with an RX-8, but that's an entirely different set of stories... :)

</comment></comment></comment></comment></comment><comment><USER11> I let my girlfriend do it. The last time I bought a car, I decided what I wanted and shopped around the local dealers and got a good offer at $18,000. I told my girlfriend about the deal, and she said, "Way too expensive."

She gets on the web and looks at all the dealer in Northern CA, and finds one of those lo-ball one-only offers in San Francisco. She calls the dealer and gets him to hold the car for her, since we would have to drive 240 miles to get there. Then she starts calling local dealers to find one that would match the offer. The nearest one wouldnt, but one an hour away would. She got me the car for $14,000.

A few years earlier we bought a house and needed a new refrigerator and dishwasher. We go to Sears and find what we want. She then proceeds to negotiate several hundred dollars of the sticker price. I didnt even know you could bargain with Sears.

The downside is that I cant make a simple purchase any longer. She makes me go for the best deal.

<comment><USER12> I totally understand where you're coming from. My wife does all the negotiating for us. She negotiated the price for the diamond for her engagement ring. She almost walked away from the perfect one because the seller refused to go down another $200, even though she had already bargained down to a great price. I told her "honey, let me handle it, I'll get down another $200." I just gave the seller what she was asking for...

<comment><USER13> > She negotiated the price for the diamond for her engagement ring.

<http://www.edwardjayepstein.com/diamond/chap20.htm>

on HN before:

<http://news.ycombinator.com/item?id=4535611>

<comment><USER12> It wasn't clear in my post--we bought the diamond on the secondary market. Diamonds are like cars in that way--they depreciate tremendously the minute you drive them off the lot.

On the other hand, the stuff about the DeBeers monopoly is quite inaccurate today. DeBeers has gotten in anti trust troubles, but hasn't been an actual monopoly for a long time.

<comment><USER14> I found the original story quite fascinating.

Do you have a link for updated info about their current practices and market position?

<comment><USER12> See this article: [http://money.cnn.com/magazines/fortune/fortune_archive/2001/...](http://money.cnn.com/magazines/fortune/fortune_archive/2001/02/19/296863/index.htm). It's from 2001, so when it refers to things that happened a "few years ago" it means the late 1990's.

<comment><USER14> Wow. Thanks. No less fascinating than that story from long ago.

</comment></comment></comment></comment></comment></comment></comment><comment><USER15> Nerd moment.

This reminds me of the part in The Hobbit (the book, not the movie) where Gandalf takes the dwarves to meet Beorn, the skin-changer. Before entering his house, Gandalf warns the dwarves that Beorn is tempermental, and that in order to get him to help them, they should stagger their entrances.

Gandalf initially only enters with Bilbo, but as he tells Beorn about the adventures they have had so far, he repeatedly references an increasingly large number of dwarves. e.g. "You have mentioned a dozen, yet there are only ten dwarves here!", to which Gandalf replies by having two more dwarves enter.

In the end, master businessman Gandalf gets Beorn to house all 16 in their party, by means of exactly this "nibbles"-like negotiation strategy.

I really do think Gandalf has a lot to offer the business community as an astute and personable negotiator.

<comment><USER16> _I really do think Gandalf has a lot to offer the business community as an astute and personable negotiator._

"Wait, no, I have a better idea, how about this. You sell me the gray Prius for 2.5% under factory invoice with the 2% APR financing we talked about earlier, or I summon the great worm Catyrpelius from his resting place in the Abyss to digest your entrails over a thousand years. What? Sure, I'll wait here while you run it by the sales manager."

<comment><USER17> I'm imagining this whole scenario in his voice. Golden.

</comment></comment></comment><comment><USER18> If you enjoyed this podcast I can recommend the book "Getting to Yes":

<http://www.amazon.com/gp/aw/d/0395631246>

It's a little bit dated but an excellent introduction to negotiation and overlaps with a number of the topics discussed in the show.

<comment><USER19> <http://www.amazon.com/dp/0395631246> (link to the desktop version)

</comment></comment><comment><USER20> My dad does something similar every few years when purchasing a family car. This is what he does:

1\. Decides ahead of time what exactly he wants and how much he wants to pay(via internet, friends etc.)

2\. Calls up area dealerships that have the exact model/make

3\. Asks them to skip the pitch. No, he is not visiting the dealership. Yes, he is damn serious about purchasing this car.

4\. Tells them to write down his number, which is the price he is willing to pay.

5\. Requests them to call when they can sell him for that number. Promises to buy it if they do so.

How it works out:

Typically he will get multiple calls back trying to get him to reset his price. He stays firm and politely informs them he is serious about that price and that he is _ready to purchase_. That part is very important because dealerships get a fair share of timewasters. He usually ends up with a dealership that can chalk up his sale as an easy one even if the margins were low/non-existent.

I'll emphasize that my dad, like the negotiator in the story, will not budge. This is harder than it seems but the key for him is to keep the conversations short and set a no-bullshit attitude up front. He has had instances when the dealership will lure him in and then try to do a switcharoo. He will laugh or express disappointment depending on the day but in either case, he _will_ walk out.

That said, he is a reasonable party. If it is $100 more, he will likely accept it--but even then, only as a final compromise. If it is $1,000 more than his price, he will almost certainly walk away.

Another key point is that my dad does his homework in figuring about the lowest he feels a dealership can go while still having interest in selling it to him.

Also, his being a doctor may help him in being taken serious, though it also makes the salesman more aggressive in trying to get additional $ out of him.

<comment><USER21> I did something similar with my last car purchase, with a little bit more back-end research. I found dealers with the exact car I wanted on their lot. I put copies of the window stickers of these cars onto my iPad, which I brought with me during the negotiations. I also knew the exact MSRP and margins of each of these cars, as well as the price paid for similar cars in the area (truecar.com was very helpful). I walked into the first dealership and showed them the sticker of the car I wanted and said, "I want this car, this exact car, I'm paying cash, and I want to drive it off the lot today." We talked (argued) for at least 30 minutes about price and they wouldn't come down. At one point there were two other salesmen and a manager at the table with us right in the middle of the showroom - apparently we were the main event. Each of them tried their own pitch (one actually tried to sell me some random used car that wasn't anything close to what I wanted). For each of their arguments I showed them the data on my iPad and said my offer was fair, I wasn't budging. They got angry, they yelled, they called me a liar and a thief and talked about their kids who had to eat. Eventually I just stood up and started walking out without saying a word, at which point they called me back and said they would do my offer. The salesmen tried to give me a pep talk while the GM approved the offer (at which point I caught him in a huge lie and I thought the kid was going to have a breakdown right there). They presented me with a written offer and I picked it up, folded it and put it in my pocket, and said I would be back (they're not supposed to let you out of the dealership with their written offer). I drove straight to the next dealer, presented him with the window sticker of the exact car I wanted on their lot, gave him the offer sheet from the previous dealer and told him I would be paying cash today. 10 minutes later I had the exact car I wanted at the price I wanted to pay. If you're informed and persistent, there are deals to be had. Also, everything you hear about all the tricks car dealers use are completely true, yet not difficult to overcome.

<comment><USER22> The "huge lie" was about the vehicle? It's not entirely clear why you went to the second dealer after getting the terms you wanted out of the first.

<comment><USER21> He practically begged me to accept their offer and said I would be helping him out, meaning my purchase contributed to his sales commission. He told me he "was having a really bad month [for sales]" and had earlier on the phone tried to forge a personal bond based on our mutual hometown, despite completely forgetting who I was when I arrived on the lot. The problem was it was July 6th, and because of the holiday, the month had really only just begun. I reminded him what day it was and he admitted his lie. Low offer or not, that statement was typical of the attitude of all the sales people there (who yells at a customer who is trying to pay cash for a car on the spot?). I had already decided I wouldn't buy the car there since I didn't want to reward them for their poor treatment and didn't want to have to return there for service. The dealer I ended up at was the polar opposite - polite, accommodating, and not pressed to make a deal.

</comment></comment></comment></comment><comment><USER23> The nibble technique reminds me of how clients drive freelance web developers insane.

<comment><USER24> Well, the reality is that the client has what the freelancer needs: money, so they are always going to be in the position of power in the negotiation.

The only way to take the position of power is to not need (much) money, which leads to the ironic situation where, by not needing work, you end up getting paid more for it. Call it the Paradox of Need, you can see it in many different socio-economic situations.

The fact that living a low cash-burn lifestyle also improves you morally, is environmentally positive and gives you personal freedom are side benefits to this approach.

<comment><USER25> _Well, the reality is that the client has what the freelancer needs: money, so they are always going to be in the position of power in the negotiation._

OTOH, the client is talking to the developer because the developer has something the client needs: skills to provide something of value. It helps to (politely) remind clients that they are free to spend more time looking for a less-expensive developer while in the meantime nothing gets done and the client possibly loses money, or loses an opportunity to make money, and may then still end up with a less-skilled developer who will not deliver adequate results.

 _The only way to take the position of power is to not need (much) money, which leads to the ironic situation where, by not needing work, you end up getting paid more for it. Call it the Paradox of Need, you can see it in many different socio-economic situations._

I and many friends have found that best time to find a girlfriend is when you have girlfriend. Some goes for finding a job; it's better to currently have one while looking. Partly this signals capability (i.e. There _must_ be a reason you do not have a job/girlfriend|boyfriend|whatever, even if I can't see it), partly it allows you to act with some (possibly attractive) aloofness.

So if you can _act_ like you don't need the job/money/whatever then you can gain an upper hand.

I'm not a big fan of fronting in order to start a relationship, and if I got the feeling that a possible client was going to try to weasel me on cost because they think having money makes them the boss then I'd seriously consider walking away. Of course, if I was in fact in _serious_ need of money then the game changes, but past experiences tells me that clients who are lording money over contractors are a big risk of refusing to pay.

<comment><USER26> >>OTOH, the client is talking to the developer because the developer has something the client needs: skills to provide something of value.

Yes, but freelance developers are a dime a dozen. Therefore clients will always have the upper hand in business transactions.

<comment><USER27> > Yes, but freelance developers are a dime a dozen. Therefore clients will > always have the upper hand in business transactions.

Once you finally accept that clients are also a dime a dozen too, it'll become a lot easier to only accept the good clients, and only accept good pay.

</comment></comment></comment></comment></comment><comment><USER28> Slightly misleading, because there's only audio of him talking about it, but no audio of the actual conversation.

<comment><USER29> He did get quite an impressive result, though, and there's some interesting (to me, at least) discussion of negotiating tactics that people who do this stuff for a living actually get taught.

<comment><USER30> Without knowing the invoice value of the car or what he paid, there's no way to know if he got a good deal. There's a good chance he still overpaid for that car. I worked at a car dealership for a summer. There were plenty of times when a customer would start off with a reasonable offer but we'd still negotiate back and forth multiple times. We did this not just to increase our profits but also because we wanted people to walk away feeling like they'd won. If the sales guy had accepted his first offer right away the customer would have walked away feeling screwed (which is bad for repeat business and referrals). My job was to make everyone walk away feeling like they'd out- negotiated me. In reality, no car would leave the lot unless the dealership was making money. This doesn't discount the value of the technique, just remember car salesmen also negotiate for a living.

<comment><USER31> Worth noting here that "invoice" is a meaningless number too. "The dealers are provided with incentives by the manufacturers", which is another way of saying that the invoice prices are a fairy tale. Invoice is the new sticker.

There's a pretty good EconTalk with Russ Roberts talking about the fine details with a dealership sales manager. You have to read between the lines (Roberts is not such a great interviewer that he gets a car salesman to torpedo their own best interests) but it's pretty illuminating.

As in all things, it's mostly about the market. There are makes/models where sticker isn't even the real sticker; for instance, cars with waitlists are unlikely to get purchases under sticker. On the other hand, you can capture much of the dealer's incentive if you choose the right time of month to make an offer on a car the dealer would like to get off their lot.

</comment></comment></comment></comment><comment><USER32> I don't have experience in a lot of negotiations but I have used similar methods many times. I bought a bike a couple days ago and got them to throw in a few extra things for free. I didn't negotiate the price of the bike but I made a point of needing a light and a helment.

First, I asked for a light that would be go great with the bike and the sales person put one he had laying around on the bike. I said it looked great. Then I asked for a helment and found one for me that I liked. I put on the helment and did a test ride with the bike. I told him I'll take the bike. Then I asked, how much for the helment & light? He gave me the price. I said "That's not bad but honestly, I don't have the money for everything. What can you do?" He offered to give me 20% off the helment & light. I again said that was a great deal but couldn't do it. A few more back and forth and me throwing in that I would need another bike (for my gf) and wanted to come back and buy from him, he eventually threw in the light and helment.

What I knew was roughly how much profit they were making from the bike. I knew roughly the mark up of accessories and I knew how they wanted to sell the bike.

It worked out really well for me and the business. I love the bike and the business now has a new loyal customer.

<comment><USER13> I bought a bike too last year. I paid list price, had them install kiddie seats, I paid list for those too.

The last place I would drive a hard bargain would be in a bike store.

For one, I can afford the bike + extras, otherwise I wouldn't go out to buy it, we're talking relatively small money here. I simply set a budget and didn't exceed the budget, which may have influenced my choice of bike but that's fine.

When I went back a few weeks later with a small problem (crank play) the guy instantly dropped what he was doing, fixed the problem immediately (obviously no charge) and asked how my kids liked the bike. We talked for a bit more and he asked me to come in any time there is anything wrong with the bike right away.

I love the bike and that guy running his small business.

I wonder how he would have treated me if I had decided to haggle with him over the price of the seats or the bike using my negotiation skills. Relative to my income that guy is working a lot harder for a lot less.

Maybe my perspective about bike store owners changed when I worked for a bike store when I was 15 (newspaper route + working in the bike store paid for my first computer).

Car dealerships I approach in an entirely different way.

<comment><USER32> I'm not sure if you've ever been to a bike shop when they are having a sale. The bike shop I was at had some bikes listed for $999 on sale for $739. That's more than $200 off a bike and they're still making money. The guy selling me the bike doesn't lose that $200 difference. They are making higher profit ratio on a bike than a car dealership does on a car.

If you get treated differently if you have issues in the future because you bargained then that's an issue with the business not the price you paid.

Btw, I paid full price for the bike as it wasn't on sale. My guess is they made 30% profit from the $800 purchase.

<comment><USER33> It's more likely that items on sale are sold at a net loss. The cost of simply having stock is more than you'd think. As an example, I ran an ecommerce site for a hardware company and after 30 days in stock laptops were no longer profitable, even if sold at full price.

My understand is that bikes have a pretty slim margin and stores make their money on accessories and servicing.

<comment><USER13> You got it just about right. Bikes now have annual updates, just like cars do. Any bikes not sold end-of-season will be worth roughly their second hand resale value the next year. Hence the stock clearance sales. This effect is stronger for racing bikes and mountain bikes than it is for evergreens (for obvious reasons). If a bike store is borrowing at 7% (good deal with the bank) to buy their stock then a $500 bike that retails for $649 (30% gross margin) will have cost the store ~20 bucks in interest after half a year. If they sell it during clearance they will probably drop the price to $549 or $499 depending on how much inventory they have to move. At $550 they're still making some money, at $499 they're losing.

And they still have to put the bike together, give it the '0' service (mostly checking if everything is tight, re-inflating tires and setting it up for the customer) and a warranty. And clean it up after every jerk that goes puddle hopping with a new bike during their test-drive, after which they won't buy it.

There is not a whole lot of money in selling discounted bikes.

Then after the first year you have hopefully a loyal customer that can't fix their own punctures and that keeps coming back over a long time for fixes and eventually an upgrade. It isn't rare for a sale to make more on accessories than on the bike itself, compared to the price of a bike a bag set, seats, lights (usually mandated by law to be on every new bike) and clothing are sold at much higher margins.

</comment></comment></comment></comment></comment><comment><USER34> FWIW, the FBI agent's favorite car color, salsa red pearl, offered by Toyota:

[http://i125.photobucket.com/albums/p80/02limited/Picture002....](http://i125.photobucket.com/albums/p80/02limited/Picture002.jpg)

</comment><comment><USER13> FBI hostage negotiator is given the feeling he just made a good deal. Salesman pockets his commission, dealership sells a car and makes money. Everybody happy.

<comment> shawn-butler This is why I generally dislike salespeople, marketers, and lawyers (especially divorce lawyers).

If anyone in a deal is walking away happy it means some other party is suffering whether they know it or not. Any equitable deal is one in which every party is just a little bit unhappy and accepts it for the greater good.

What the aforementioned practitioners do is to convince someone that they are happy and the further they can push them away from reality the more advantage they take. Usually if not always a false scarcity of information is employed.

Tim Ferriss is the worst kind of con artist in the regard.

<comment><USER35> _Any equitable deal is one in which every party is just a little bit unhappy_

Then I don't want to live in an equitable world. Sounds like an equitable world means everyone is always just a little bit unhappy.

<comment> shawn-butler Which is counterbalanced by the happiness found in collaborative aims achieved by negotiated, equitable unhappiness. Kind of the definition of work I suppose.

Everyone wants to be happy; the extent to which we do so at the expense of others is pretty staggering in recent history.

<comment><USER35> Oh yes, because before modern days we were so much more empathetic and loving of our fellow man. Fiefdoms are an excellent example of this...

</comment></comment></comment></comment></comment><comment><USER36> If you haven't read it yet I can really recommend the book "Getting more" by Stuart Diamond. He covers all of the techniques mentioned in this talk and much more, with hundreds of brief examples from the everyday life's of his students and himself. It takes training and time to apply these principles (at least for me) but it has transformed how I think about everyday negotiations. Amazon link: [http://www.amazon.com/Getting-More-Negotiate-Achieve- Goals/d...](http://www.amazon.com/Getting-More-Negotiate-Achieve- Goals/dp/0307716899)

</comment><comment><USER37> I negotiated my last truck purchase by text message. I drove the salesman nuts by not responding quickly. I was at a happy hour in a pub, so I would only respond once per beverage. I got the price I wanted with no hassle. I avoided going to the dealer, they delivered. I avoided the dreaded Finance and Insurance guy that always tries to upsell, and I got them to buy the interest rate down too. The best part was the lack of stress for me.

</comment><comment><USER38> Bought from a guy on craigslist '00 Chrysler Concorde 3.2L for $2000 back in 2009 when we just moved into USA and desperately needed any car. Still drives. This car has really nice leather interior, huge trunk and actually is quite reliable. But because it is "domestic junk", price was very low. I am going to drive until it dies. And once it die, I will buy another "domestic junk" car and will be driving it for next few years :))

</comment><comment><USER39> Information is Power==Money!

One thing I always believe helps is having information about the thing that you want to buy. For eg:- If you know that the car that they are trying to sell has been sitting in the lot for more than 2 months, then you know they are desperate to get rid of it, so you can come up an appropriate(much lower) ask price!

In all fairness, adding in the nibbles may annoy or piss of the person you are dealing with(in some cases). In a way, you are sort of pushing them into a corner.

However, expanding the pie and looking out of your tunnel vision is a useful hint!

Also, in the case of FBI negotiator, not everybody will let you sleep over their offer when they have matched your ask price without you giving them any wiggle-room.

</comment><comment><USER40> Techniques explained in NPR episode:

1\. _The "Nibble"_ \- ask a little more into the offer, especially if not directly related.

2\. _"Best Alternative To A Negotiated Agreement (BATNA)"_ \- ensure there is a viable alternative, preferably before negotiation.

3\. _"Expanding the Pie"_ \- offer can be often improved or agreed on parts of an item or service rather than assuming it applies only to the whole.

4\. _"Bracketing"_ [my term] - offer low to point of anger but not withdrawal, then praise counteroffer and negotiated item/service while claiming cannot afford counteroffer.

5\. _"Defer Immediate Agreement"_ [my term] - on best offer, defer immediate agreement with any reason so can gain time to check the offer or for other offers.

</comment><comment><USER41> The last time I bought a new car, I used AAA's prenegotiated purchasing service: <http://www.aaa.com/AAA_Travel/NewCar/buying_car.htm> (this was in california; it doesn't seem to be available everywhere). So I don't have a cool story or any tips, but it was about the least stressful purchase I've ever made and was done pretty quickly.

</comment><comment><USER42> Good examples for the discussed techniques.

I am actually surprised though, that the car sales man didn't ask how much he could pay. If the FBI negotiator still stuck with his initial offer, I guess he would have suggested some kind of monthly rate or a similar kind of loan that would "fit his lifestyle better".

<comment><USER43> The way we bought our last car was much simpler (not sure it was better, but i don't know if i could pull it off). We picked the car we wanted and then emailed every dealership within a hundred miles what we wanted and asked for quotes. Once we had quotes we liked we treated the tradein as a nibble. Best car buying experience ever.

<comment><USER30> Did you use CarWoo or did you do it manually? This is a smart approach because it's the only realistic way to comparison shop with dealers who are trained to slow you down and drag out the process before giving you a number.

<comment><USER43> Did it myself on the advice of a friend. It worked like a charm, no bullshit involved on either side.

Funniest thing was we had gone to a local dealership to attempt a test drive and they wouldn't even talk to us. The guys who won our business then sourced the vehicle from that same dealership -- they drove it up to our house with the local dealer's plates on it, for something like $6k less than the dealer's sticker price.

I left out one detail -- we ran our offer past the other dealers who had responded and none would match it.

</comment></comment></comment></comment><comment><USER44> But then, when met with disarming empathy, what do you do if you have no backup? Walk-away?

<comment><USER13> Sure. Your batna of last resort is 'no deal'.

</comment></comment><comment><USER45> the "nibble" reminds me of scope creep. :)

</comment><comment><USER46> Very interesting. Being from the UK, I've never listened to NPR before (aside from the Tiny Desk series), can anyone recommend some good weekly shows worth listening to?

<comment><USER47> Depends what you're after. Some of the programming is quite similar to Radio 4 - the daily 'Morning Edition' is basically 'Today', 'All Things Considered' is 'PM', and then there's 'Marketplace' (no prizes for guessing what that's about!). Outside the daily news shows you've got:

* _Wait Wait...Don't Tell Me_ , basically the US equivalent of Radio 4's _News Quiz_

* _Tech Nation_ , the title of which should be fairly self explanatory

* _Car Talk_ , a call-in show about cars. I am not a car person, and I enjoy it (the show stopped production a few months ago, but should be widely available online)

* _This American Life_ , does eclectic long-form journalism.

* _Science Friday_ , which is part of a daily call-in series _Talk of the Nation_ , but all about science.

If you're into science and tech, Radiolab (radiolab.org) is also well worth a listen, it's not technically NPR (there are several different public radio groups in the US), but it uses really innovative production and I _wish_ Radio 4 would broadcast it here in the UK!

Hopefully other people can add their own favorite shows...there are quite a few of them, and I've just highlighted a few that I find interesting as a Brit. I'm in the US a fair bit, and tend to listen to public radio where I can so these are all shows I've just stumbled across and enjoyed.

<comment><USER46> I love the News Quiz, so I'll give Wait Wait a go, and I'll give This American Life and Radiolab a go, they both look great

</comment></comment></comment><comment><USER48> For those who have purchased a house before (I may be about to start the process) do the same techniques apply, or is it a different ballgame?

<comment><USER49> Yes. I bought my house when the UK market was still booming, and sellers were used to houses going substantially over the advertised price. Instead we negotiated 10% off the advertised price, and I don't think we did particularly well even though the estate agent we dealt with seemed rather shocked to get an offer that low. In terms of picking the area, we did well - current value has increased at least 10% more than the average for London in the time since we bought.

We could likely have started lower, and we messed it up by using some repairs that needed to be done (that were clearly priced into the advertised price) as an argument for dropping the price when we ought to have been able to get that price drop _and_ make the offer contingent on the seller having some of the repairs done on their dime.

The key thing is to be able to move quickly. They picked us because the alternative would have been to wait for other offers, while we turned around and started negotiating as soon as we were sure, offer an agreement in principle subject to a survey right off the bat if they could meet our price, had an agreement in principle from my bank, and had been renting so we stressed that we could move on everything immediately.

If you can stress to the sellers estate agent in particular that you can move quickly, keep in mind that it will be in their interest to get a quick, trouble free sale vs. hanging on for weeks for 10% more commission, and that will influence how they deal with their client (conversely, it is in your interest whether selling or buying to be very wary when an estate agent pushes you to accept an offer - there's been some survey where it turned out estate agents typically hold out longer and sell for more when selling their own houses than their clients do).

</comment></comment><comment><USER50> For the last method, it is difficult to find the line between finding the best deal vs. offending the seller so they move on to another buyer.

</comment><comment><USER51> All those guys teach negotiation at university but never attended that class in my CS degree.

Any book or online class recommendation?

</comment><comment><USER52> if you're really interested in negotiations, i recommend beyond reason by roger fisher and daniel shapiro

</comment><comment><USER53> Any opinions on carsdirect.com?</comment>


What Microsoft is this the Altair Basic of? - <AUTHOR> http://paulgraham.com/altair.html <comment><USER3> This reminds me of my experience with Microsoft very early in my career. Way back when MS was working on Windows 1.0, I was working for a start up company and we were developing network management software for SNA Networks and Mainframes. It was very advanced for the day and used a GUI but was done on Mainframe computers and terminals. The company sold out to IBM and I chose to take the money and run. A friend of mine referred me to MS because they needed people with graphics experience. So I met with one of the team leaders and went over and talked with them. At the time, Windows was very very primitive, they had not yet figured out how to make the windows overlap and re-paint (which we had figured out a long time before that). I actually felt sorry for them at the time because I just could not imagine how they would ever catch up with Apple, the Mac was just so much more advanced. It seemed to me like there was no doubt that they would be out of business in a few years completely replaced by Apple, it was just so obvious at the time to me. They offered me a job but it was less money in terms of salary than another offer I had from a Fortune 500 company, but at the time MS had a great stock option plan, but I felt that was worthless based on my brilliant analysis of their prospects. So I took the safe bet. I tell this story occasionally to younger people who are trying to decide about what to do in terms of career choices. Sometimes the wiser choice is to take the risk and follow the more exciting path. It is no guarantee of success, but neither is taking the safe choice. Do what excites you and put your energy into that. Just my view from the cheap seats.

<comment><USER4> > Sometimes the wiser choice is to take the risk and follow the more exciting > path. It is no guarantee of success, but neither is taking the safe choice.

It's really just dumb luck. One thinks one can extract a lesson from this hindsight, but how was the situation that led to your decision any different than the 99 other startups that were just as lame but didn't make it?

> Do what excites you and put your energy into that.

Absolutely.

<comment><USER3> True true. But if it is all dumb luck, then what the F, do want you want. I guess that was my point.

<comment><USER5> It's not dumb luck. MS made a fortune from marketing and business politics, not from cool technology.

MS was never primarily a tech company, it was a sales-and-marketing-and-M&A company that happened to sell tech products.

So the 'Does this company have a future based on this product?' question is misleading.

The important question is - how are they marketing the product? What relationships do they have? What relationships are they building? What's the sales and marketing culture like?

MS are poster children for this. Time and again they've marketed the crap out of technically mediocre products with - mostly - great success.

AirBnb weren't exactly light on the marketing either. (Etc.)

<comment><USER6> If you completely dismiss their product then you would have missed Microsoft because it's highly likely that at that point their marketing etc wasn't great. That's the trap the article is warning against.

The more expert you are at something the more likely you will dismiss things. PG recognises this bias and is trying to keep his mind open. You have fallen straight into your own trap which is narrow mindedness presenting itself to you as expertise.

They did have a product and they did go on to build many products. Many of them are far from crap and solved really difficult problems including running on all kinds of hardware, maintaining backward compatibility, rewriting their main OS from scratch. Microsoft is not Coca Cola. PG is trying to see that in other companies at a very early stage. (not giving him a free pass - I think he still has other blind spots that annoy me - I have many more no doubt)

edit: No doubt, it's probably that combination of being an expert at something but having a somewhat open mind that got PG started on his adventures in the first place.

<comment><USER5> I have no idea if I would have dismissed the product. In retrospect, MS BASIC had a 4K footprint which also included floating point. That certainly made it stand out from the competition.

But I wonder if an investor might have noted that Gates had an interest in aggressive market-building and income generation, as suggested in the scrappy and public fight with the tape sharers and the eventual battle between MITS and MS over royalties.

I wasn't paying attention at the time, but looking for similar patterns today - in, say, Uber - suggest that there's a clear interest in aggressive and cut- throat behaviour, which probably bodes well for future investment returns. (If that's your main interest in a tech company - it's not mine).

I certainly don't think MS were crap at everything. But there's also no denying that the user experience with many MS products was - and still is - shockingly bad.

Office and XP were good-enough, with a few nice tweaks. But you have to balance that against a long string of horrors (insecure VB macros, IE6, the ribbon, Win 8 tiles, Win 95 series bugs, and on and on.)

So historically, the focus has always been on sales and using legal and corporate lock-in to sell poor-to-good software.

It clearly hasn't been on creating state-of-the-art super-products and assuming that quality will sell itself.

So I think the point stands - look at business culture and management attitude to market building as a primary predictor. Product quality is not a predictor, as long as it's good enough.

Being slightly better than average doesn't hurt, but there's no commercial need to be a technical marvel.

</comment></comment></comment></comment></comment></comment><comment><USER7> Hah, the first time I met Bill Gates was at Percomp '78 in Long Beach California. This was a pretty small personal computer conference, but Microsoft was there pushing Altair BASIC. I had a Digital Group Z80 system (which I considered to be waaaaay superior to the Altair in the way that only a male high school student can project.) Bill was selling BASIC for $399, I had paid $900 for my entire system (as a kit). He offered to let me work for him and port it to the DG system, I declined. After all this guy was going nowhere, who in their right mind would pay more than half the price of their computer for BASIC right?

Looking back on that I cannot see any way in which I would have concluded differently, given the information I had available, but that experience has since given me insight to never dismiss an idea simply. I like to have solid reasoning behind my mistakes :-)

<comment><USER8> Shows that he believed in what he was doing, and kept at it no matter what. Sounds like he got dismissed by a LOT of people seemingly (from reading posts like yours, and other articles over the years). Pretty good effort I'd say!

All I could think of after reading your post was: ouch!

<comment><USER9> Not to detract from his success, it also may have helped that he was financially independent (had a big safety net) having come from a wealthy family.

Things are different if you're worried about putting food on the table a couple of months from now.

<comment><USER10> If this really had anything to do with it, why did he keep going at all? After all, what's the point in trying to start a company if you already have a wealthy family and a safety net?

<comment><USER11> Because you want to, and not because you have to tread all the time to stay fed and sheltered.

<comment><USER12> This theory is invalidated by Paul Allen.

They didn't have to worry about staying fed and sheltered, because they generated revenue immediately. They built a real business.

<comment><USER10> Exactly. If you look at the kids of wealthy people that don't have to ever worry about money, they don't start their own businesses.

</comment></comment></comment></comment></comment></comment></comment><comment><USER13> I think there's a lot of survivorship bias in the statement that lame ideas turn out to be visionary.

Just because many successful companies are built on ideas that at first seemed ridiculous doesn't mean that ideas that seem ridiculous will be smash hits. Actually, most ideas that seem ridiculous _are_ ridiculous.

If, however, a new market, technology or cultural bend turns up, an idea that exploits it might seem ridiculous because it breaks with social norm or accepted technological limitations but actually be viable. When Tesla started building electric cars they were ridiculed because few people understood that both the technology and the social acceptance was now at a point that made it possible. Had they started ten years prior the idea _would_ probably have been ridiculous.

The trick is to be able to see the difference between the snakeoil salesmen, mad hatters and crazy inventors and the true visionaries. What makes this really difficult is that noone, including the founders, knows whether they're one or the other. There's a lot of luck and timing involved.

I'd also wager that the reason that mindblowingly successful companies often start out as seemingly ridiculous ideas is that if they don't have any competition in a niche that they can exploit. Microsoft, for example, were the first to sell software. IBM laughed them out of the room because software was just something that came with the hardware. The idea that you could sell software seemed as crazy as selling sand in Sahara. But because of a technological and cultural shift it was a good idea, and because it seemed ridiculous to "real" companies they had the market to themselves for the first vital years. Had they not been so lucky (or smart) with their timing noone would know who Bill Gates is.

I think you might be able to conclude the following:

" _If you want merely to be well-off start a company that isn 't based on a ridiculous idea. If you want a small chance of changing the world start a company based on a ridiculous idea_"

<comment><USER14> I think the article more useful to VCs than to founders.

Good VCs worry about being pitched on the next Apple/Microsoft/Facebook/Google and passing on it because of their own prejudices or lack of vision. I see the article as an effort to consciously counter those prejudices.

But VCs have the luxury of being able to invest in a lot of companies. When you have that luxury, you can afford to say "let's let a few lame ideas in because they could grow huge".

You're right that potential founders don't have that luxury. Sinking 5-10 years of your life into a lame idea is overwhelmingly likely to have little payoff for the founder.

<comment><USER15> > "let's let a few lame ideas in because they could grow huge"."

Which seems to be the strategy used by most VCs anyway. The primary difference is that may not (at the time) see some of those companies/ideas as 'lame' themselves. But "invest in a large number because X will fail and we need one homerun" seems to be the prevailing MO.

</comment></comment></comment><comment><USER16> I have to strongly disagree with this article. Altair BASIC was not lame for it's time. It was GREAT! There was no OS, there were barely any assemblers, you would have to toggle switches to binary representation to enter code in home brew computer.

Without BASIC, You do have to first of all learn assembly programming, learn to assemble it by hand and translate to hex/binary then flip it in. BASIC was amazing for the time, anyone could and can program in BASIC.

Google was not lame for the time, search engines sucked, no one saw/used google and said why? The first time we all used google we were hooked, we didn't have to AND OR NOT our results, it found meaningful results from the get go.

Now Facebook we could argue that about if it would take off, you might say, why? There's already myspace. But I don't know that the Microsoft BASIC or google search was lame in any way shape or form. If we all folks did was hear about the idea, then yes, they would easily be brushed off, but after implementation, it was a no brainer. Kinda like Tesla, all electric cars have really sucked until Tesla showed you could make electric cars stylish, fun to drive and with range.

<comment><USER17> I was in college when google first launched. I remember distinctly at the time AltaVista was the best search engine, but I still rarely got relevant pages from searches. I dont think that in the early days I remembered getting much better results from Google, but eventually it was pretty clear cut for me. I do remember in around 2004-2005 some folks I worked with were thinking of starting a "new" search engine, and that it would far surpass Google. I can say I thought that was a pretty lame idea. Of course to a large degree I think that Uber and AirBnb are a bad idea, but you cant argue with valuations....

<comment><USER18> >I was in college when google first launched.

I was working in a company at the time. Happened to be one of the early people there to know about Google. Tried it out. A few days later told a friend, who was sitting at the desk next to me, about it. He tried it with a search; results came back in 0.x seconds (even in those days, 1997 or so), then muttered: "That's fast."

</comment></comment></comment><comment><USER19> This seems to me a clarification of the strategy PG proposed during a talk at PyCon 2012 and an essay called "frighteningly ambitious startup ideas". It is a great way to think about and frame how to judge startup ideas.

Mainly centering around high potential technology, overlooked ideas and opportunities that these startups can take advantage of.

My question becomes, and it seems PGs, how can you do this without the value of hindsight. One one hand, you could sit and reason why startup x or your startup idea is the Microsoft in this scenario. But you can also easily delude yourself.

Pebble, IMO, is shaping up alot like early Apple did. They are entering a competitive industry with a new product, facing a goliath and have a huge emphasis on their design & focus on developer. Which makes me believe history will repeat itself. That if we have the Apple for wearables, there should be, or soon, a Microsoft for wearables.

Just a thought, would love any point for/against.

For reference:

[http://paulgraham.com/ambitious.html](http://paulgraham.com/ambitious.html) [https://www.youtube.com/watch?v=R9ITLdmfdLI](https://www.youtube.com/watch?v=R9ITLdmfdLI)

<comment><USER20> _PG proposed during a talk at PyCon 2012_

That was a great talk. Everybody should re-watch it. Even if just for the one off question "why does HN violate the HTTP spec by sending invalid line endings?" (Answer: "because it works for me!")

</comment></comment><comment><USER21> Did MS start out to just write BASIC for the Altair? Or if asked would they have said they were going to write software for computer users? The second phrasing doesn't sound so lame. And I imagine you can come up with a lame sounding subset for many companies.

Edit: I get the point that companies might have a larger scope and to look out for it but deliberately trying to come up with a lame tagline seems... Off? Did AirBNB really set out just to offer a single place with air mattresses? Like no plans?

<comment><USER22> I don't know for sure, but AirBNB had the weird domain name airbednbreakfast.com or something, and it still has pretty weird company name too. It's not really what you would choose for disrupting the hotel industry.

By decades of media coverage, "Microsoft" evokes images of a behemoth. But try to imagine what the name "Microsoft" must have sounded like -- it doesn't sound very ambitious. It sounds a little lame. If you planned to be the biggest company in the world, would you name your company "Microsoft"?

Microsoft was started when Gates was 20 or something. I think a lot of 20 year olds are just trying to make something interesting. Some are dreaming of taking over the world, but those are the types that probably don't actually do it.

I think you can see a similar thing with Linux. If you look at Linus's original mail announcing Linux, it doesn't sound like he has any goals to run on the majority of servers, mobile phones, many desktops, and tons of embedded devices.

He even insisted it would never be portable past i386!!!

I agree with pg that a lot of these people are living in the future and don't necessarily realize that they're going to be riding this hockey stick growth. Even if you're doing it, I'm sure it's hard to predict. There's hundreds of decisions and improvements you have to make along the way. There's no one idea or feature to implement to get that big.

<comment><USER23> > But try to imagine what the name "Microsoft" must have sounded like -- it > doesn't sound very ambitious. It sounds a little lame. If you planned to be > the biggest company in the world, would you name your company "Microsoft"?

They certainly were no match for the ambitions of Intergalactic Digital Research.

<comment><USER22> Ha! I didn't know Digital was originally called that. That's a beautiful irony.

[http://www.digitalresearch.biz/HISZMSD.HTM](http://www.digitalresearch.biz/HISZMSD.HTM)

</comment></comment></comment></comment><comment><USER24> _" What Microsoft is this the Altair Basic of?"_

... then figure out, _' Which IBM will let itself be duped?'_. If MS hadn't made the DOS deal with IBM PC, would the Microsoft we know now, have happened? This is of course counter-factual, because MS was a raging success.

It's a great question to ask though.

</comment><comment><USER25> While he didn't know Microsoft would pioneer it, Bill Gates says he knew that there'd be a software industry.

While he didn't know Facebook would pioneer it, Mark Zuckerberg says he knew that all software would be social.

While he didn't know Google would pioneer it, Larry Page said he knew that the fast growing web would eventually need a good way to search.

While he didn't know Viaweb would pioneer it, Paul Graham said he knew that ecommerce sites would eventually be created by software.

And so on....

I respect the fuzziness and path dependence of startup growth but boy do I respect people who can see the future now, make it happen and end up being correct. Even more props to people who make it happen multiple times [e.g. Joel Spolsky, Elon Musk]

<comment><USER26> While he didn't know WebVan would pioneer it, Loius Borders says he know ecommerce would rule the world.

...that doesn't quite have the same ring, does it? There is a _lot_ of survivorship bias at play here. Thousands of individuals had convictions that their instincts were right as as well - but it turned out poorly for them. Luck and timing plays a big part in success, but more often than not, hn ignores this.

<comment><USER25> How does this change the point that there are entrepreneurs who have instincts about the market AND timing that turn out to be right?

The broader point is Peter Thiel's --> You are not a lottery ticket.

The best example might be Jeff Bezos and his business plan. Elon Musk has been consistent for ~ 20 yrs about the areas he set out to work on since college and he's followed that through. It's not dumb luck. It's skill + luck. The skill part of the equation is oft dumbed down in favor of the randomized success algorithm. People who are able to repeat their successes multiple times e.g. Joel Spolsky, Elon Musk, David Duffield, Rich Barton are especially skilled and it would be disingenuous to attribute their successes to some luck/timing that they were not ultimately mostly responsible for creating or noticing.

<comment><USER27> To counter your example: on their second, third, fourth companies repeatedly successful entrepreneurs have all the benefits from the first success. As a result, they are far less reliant on luck in relation to funding, talent, getting the word out, etc. For your example to fully prove your point, you would need to find entrepreneurs who have repeatedly changed their name and identity between each of their successes.

</comment></comment></comment></comment><comment><USER28> Selection bias and post hoc rationalization. You can always frame success in any way you want- it'll sound good, because if the company's successful then your argument proves itself. How many successful companies don't fit the mold that was just described? I can think of many examples that had fairly straightforward road to success: Facebook, Dropbox, Stripe, usw.

The real measure of a theory is how successful it is at predicting whatever it predicts. So out of all of the companies that you predicted could become the next "Microsoft of X", how many did? If your method doesn't perform better than randomized selection, then it's worthless. I suspect that's the case here.

Of course, the law of large numbers combined with the high returns offered by tech companies means that even if investors aren't performing better than a randomized process, they feel like their theories about what makes a successful companies/entrepreneur are valid.

Here's an experiment that will never happen, but that I'd love to see YC perform: for a given batch, select who makes it to the batch randomly from the pool of preselected applicants (you want preselected applicants and not all applicants because it's fairly likely that the 90% of people who are applying with their "Facebook for cats" idea that they came up with after beers 2 hours before the submission deadline won't make it. Or will they?). Then, look how that batch performs. It wouldn't be surprising if the batch performed no worse or no better.

</comment><comment><USER29> Give Bill Gates more credit: his vision certainly went beyond BASIC. They had a directed effort to provide microprocessor versions of all popular (or business significant) languages. For example, they had Fortran and Cobol before they had MSDOS.

</comment><comment><USER30> How does framing the question this way lead to deeper thinking or rather, yield different answers, than the typical questions of 'whats the bigger picture' or 'whats the company vision' ?

<comment><USER20> Reasoning based on concrete examples is easier to convey to other human meat brains for understanding and retention. If you start off with "big picture" or "vision" you're already into meaningless buzzword territory, and any discussion quickly derails practical advice/progress/suggestions.

Examples first, details later.

The Altair->Microsoft example also emphasizes the minimum condition necessary. What seems small but could be big (given the proper market growth and a mother who's also an IBM executive to get you free connections+business)?

Also see this great example: [https://news.ycombinator.com/item?id=9082844](https://news.ycombinator.com/item?id=9082844)

</comment></comment><comment><USER31> My own side project sounds so comically bad that I don't even bother describing it to folks anymore. Usually when they ask why anyone would use it, I just pretend to be surprised and say, "Oh, I guess we never thought about that." Multiples times people have gotten so angry by how bad they think the idea is that they've actually started visibly shaking, which is a lot of fun in public at meetups or whatever.

The good thing though is that it keeps us totally focused on building our MVP.

I think part of the issue is that the most successful startups aren't successful because of new hardware or software, but because of the new social practices they enable. And while Apple releasing a new iPhone every year has gotten people really good at evaluating new hardware and software, most people don't have the same level of proficiency at evaluating novel forms of social interaction. (Even though it's totally learnable.)

<comment><USER32> Well you can't just dangle that out there and then not actually describe your idea!

</comment></comment><comment><USER33> Read this:

* Bill Gates's memoir/vision book, _The Road Ahead_ (1995)

* Paul Allen's memoir book, _Idea Man: A Memoir by the Cofounder of Microsoft_ (2011)

Watch this:

* _Pirates of Silicon Valley_ TV movie (funny but accurate, based on _Triumph of the Nerds_ interviews)

* _Triumph of the Nerds_ (TV docu, 1996, by R. Cringely)

* _Nerds 2.0.1_ (TV docu, 1998, by R. Cringely)

<comment><USER34> Appreciate the "read / watch" recommendations, but to what specific end / meaning?

<comment><USER33> The early years of Microsoft, a history lesson.

</comment></comment></comment><comment><USER35> They're not all the same - two of those companies - Facebook and Google initially had no clue about funding their companies. MS and Apple sold actual products that people could buy. As startups they did the really really hard work of convincing a bunch of people to open their wallets and pay hard cash for a product. I think this is a far more valuable exercise that attempting to create something that's popular by giving it away for free, and then selling some advertising product/platform/service that has a nebulous value which is often supported by spying/data-mining users. (aka Investor Story time [http://idlewords.com/bt14.htm](http://idlewords.com/bt14.htm))

</comment><comment><USER36> PG sounds like it's okay to invest time, effort, code, money, etc. in a project without having any idea why it might work, and his justification is Microsoft, Facebook, Google, etc.

Okay:

I grew up not far from a nice public golf course. It had some par 3 holes. Sure, on such a hole, it's possible to make a hole in one.

Okay, for a year track all the hole in one successes and see how many were by expert golfers and how many were by people lucky to have a round at 10 over par.

So, conclude from this that for a hole in one it doesn't help to be good at golf? Nope! Instead, on that course there were so many more poor players than expert ones that, likely, net, just from luck, there were more successful hole in one shots from the poor players than from the expert ones.

Or, case #9,284,387,437 of how to lie with statistics!

But, let's consider some other examples:

Ike wanted some pictures of the USSR and sent some U-2 airplanes. Too soon one got shot down, and then someone called Kelly Johnson at Lockheed, and he noticed a new engine developed by Pratt and Whitney in their Florida operation: The engine was a turbojet until about Mach 2.5 at which time it became a ram jet and, thus, could go on to Mach 3+ without overheating the engine.

So, get some titanium, design some aerodynamics especially good for supersonic flight, and get an airplane that could fly at Mach 3+, at 80,000+ feet, for 2000+ miles without refueling. Then the US got a lot of good pictures, and the Lockheed plane, the SR-71, never got shot down.

There are many more examples from GPS, the F-117, the first Xerox copier, etc.

These examples are cases of hole in one with high payoff and low risk from just routine work after the initial planning and review of the plans.

Commercial version?

Okay: Xerox, the IBM System 360, the Intel 386, Cisco IP routers, the Bell Labs work in optical fibers and Ga-Al-As heterojunction lasers, the Sony work on Blu-ray optical disks, etc.

Lesson: It really is possible to pick a good target, plan carefully, execute with low risk, and be successful. For just one team, poor work and luck are not better.

</comment><comment><USER37> Could someone please rephrase the title of the article to me? thank you.

<comment><USER38> How might this company turn into something huge, the way that Altair Basic turned into Microsoft?

</comment></comment><comment><USER39> Its a fun thought experiment, but I think it falls down when you start to consider how many "right bets" Microsoft, Apple and Google made. The other examples are no where near as mature and, to me, are still working on their initial idea.

The 3 I mentioned I think much of their success comes from implementing their first ideas very well and attracting the excellent talent which allowed them to pivot or broaden when other things came along.

Of course that then lands you back on another familiar YC idea of investing in teams rather than ideas.

</comment><comment><USER40> The thing is, any of those early tech companies could have been an Apple or Microsoft. There was nothing special about Altair Basic. Other companies didn't because they made disastrous mistakes along the way - see "In Search of Stupidity" by Chapman.

Microsoft grew into a behemoth by making crucial decisions at several key turning points, and avoiding making disastrous mistakes.

</comment><comment><USER41> But how do we account for the perennial bad ideas? The 15th time we get pitched "stock market for small businesses" or "social network for coupons"?

Are these good ideas that are just too boring to have attracted a good team yet? I've heard these ideas going back and forth for 10 years now. After 10 years, _nobody_ has gotten it right? Or are they lazy ideas that appeal to get-rich-quickers who think they can play the startup game? What is it?

I understand the value of "don't make fun", and it's something I really struggle with in my own life. I've (unfortunately) been on both sides of that exchange, and frequently feel bad about my involvement in it. It's a weird world we live in where you can't just keep your mouth shut sometimes. It's probably a sign of internet addiction. I digress.

But I also have to consider things from the standpoint of someone who is being pitched by non-technical founders on these ideas. "It _might_ be a good idea" isn't enough.

<comment><USER42> Companies can fail because of bad idea, but also finance/capitalization, personal issues, bad execution...

Want a huge fight? Assign the dreaded smart watch to one of those reasons for past failure and likely near future. Or "the smart house". Or "voice control" or alternative UIs in general.

If you can convince a couple people the only reason the cuecat failed was their capitalization structure, then the world is doomed to a flood of plastic cat barcode readers and barcodes all over legacy media. Not all the different from QR codes (aren't they officially dead now?)

</comment></comment><comment><USER43> With 20/20 hindsight it is easy to connect the dots that led to Microsoft's dominance of the PC industry. And although the Altair Basic may have led to it - it in itself was not enough to catapult them to their future success. Their big break came from their deal with IBM for the Operating System. And that deal was literally gifted to them due to a confluence of many factors - <USER2> luck playing a huge part in it.

In fact Gates directed IBM to approach Gary Kildall of Digital Research for the OS. But Kildall skipped the first meeting with IBM and his team at DR dilly-dallied on signing a standard NDA with IBM and could not reach an agreement. IBM went back to Gates for an answer for the OS. [1]

Had DR not dropped the ball on the IBM deal, the future would have been very different for Microsoft, and for DR and for the world. It is all of course counterfactual - but who knows - the world may have been running on CPM/2015, and Gates and Allen would have been running a successful PC software company - selling compilers and languages for it.

It Gates and Allen's ability to turn this fateful second chance into what we now know to be the deal of the century. In fact, Microsoft used this chance to sell QDOS (Quick and Dirty OS) - from a lone programmer (Dave Patterson) working across the lake in Seattle on a port of CP/M to 8086 - to IBM. IBM was not aware of this small company (Seattle Computer Products). Later it was found that QDOS literally "stole" CP/M code and function calls. DR sued but IBM settled the suit with DR by bundling CPM/86 with the PC - but selling it for $240 as opposed to $40 for PC DOS. CP/M never had a chance. And the rest as they say is history...

[1] [http://en.wikipedia.org/wiki/Gary_Kildall](http://en.wikipedia.org/wiki/Gary_Kildall)

EDITS: typos

</comment><comment><USER44> The Google and AirBnB references seem on point, but were people skeptical of Facebook being a good idea? Sure there were naysayers who thought Facebook couldn't beat MySpace or break out of the college campuses, but people did love Facebook pretty early on and weren't hating on the product (it was "cool").

<comment><USER20> The 0th version of facebook was literally "illegal stalking as a service." Outgrowth from that, and from ignoring the "we're accessing your systems illegally and you can't stop us" part, grew the horrible monster choking the Internet today.

</comment></comment><comment><USER45>
       > Often the founders themselves didn't know why their ideas
       > were promising. They were attracted to these ideas by
       > instinct, because they were living in the future and they
       > sensed that something was missing.

This is confirmation bias

</comment><comment><USER42> Youngsters are notorious for thinking history began when they got involved. See also, sex, drugs, music, dance...

Anyway I am sad to report that PDP8s and Decmates were widely available (if you had friends in the right places, surplus, repaired scrap, etc) but DEC insanely wanted to charge $3000 or whatever for the OS8 license. I think even Fortran and basic were separately licensed and billed products. It was nuts. You could get an old -8 for free, more or less, (back then, now they sell for thousands on ebay) but legal software was insanely priced. Microsoft disrupted the market at a mere $300. That's what made them interesting right from the start, the dinosaurs of the industry didn't understand the imploding ratios of hardware cost to software cost. Sure the hardware is dropping in price so something that cost a corporate buyer $10K in '63 might only cost $1K in '73 but its not like software was getting even on dollar cheaper so if legacy corp buyers will pay $3K per seat for OS-8 I guess we'll keep right on charging $3K till they go away or we go away. Well guess how that turned out?

The above is based on my Dad's experiences although I was a kid watching watching it all unfold at that time.

</comment><comment><USER46> It would be cool if PG could reveal whether he used this test, and what the answer was at the time, for any of the YC "big successes" (Which I'm defining as Airbnb, Dropbox, Stripe, Justin.TV/Twitch, Heroku and Reddit)

</comment><comment><USER47> I still think Uber sounds lame. But really, aside from the survivor bias, is what PG trying to say, very similar to the YC interview question [paraphrasing] "what do you know that nobody else knows?".

That question lead us to be able to define the product we're currently working on, when we had spent months coming up with a good description and totally missed it. It actually helped me sell myself (and a few of the team members) on how big our idea could be.

My guess is that each example PG gives, the founders would have an answer to that question where they would say "we're [re-]defining an industry because..."

</comment><comment><USER48> I had a similar feeling when egroups[1] was announced. We were all using mailing lists at the time, and what was clever about that? The clever bit was that end users didn't have to set up and host majordomo themselves. Now egroups itself never came to much, but the idea of taking complex applications (mailing lists, email, CRM, ..) and turning them into SaaS is pretty massive.

[1] [https://en.wikipedia.org/wiki/EGroups](https://en.wikipedia.org/wiki/EGroups)

</comment><comment><USER49> This article shows beautifully how this is all just random. Of course it helps to be an enterprising person with an optimistic outlook. Failures are far too normal to be impressed by them.

But seriously, who is really able to tell which extravagant nice-to-have (or even too-ridiculous-to-be-wanted) will be next week's must-have? If there was a way to find that out, we finally would have understood humanity.

So cheers to all with above-average stats at guessing who will be the next big Dollar Sign.

</comment><comment><USER50> The problem with advice like this is that it's not nearly as useful as it seems. The biggest problem here is that typically it takes a visionary to recognize a visionary in the early stages, before any of the vision has actually been realized. And that's only part of the equation, there's also talent, ability to execute well, and luck of course.

If you're a time traveler from the future, sure you bet on Bill and Paul, because you know how that turns out. But let's say you're a time traveler from an alternate timeline, or an alien from a more advanced planet, can you still tell who to bet on? Even if you had the knowledge to know how people would use computers in the future and what sorts of things would be most in demand, Microsoft wasn't necessarily the best bet way back in the Altair Basic era. Back then the obvious choice would have been Gary Kildall and Digital Research who had CP/M, a serious operating system that was light years ahead of the competition in the late '70s. It took several bizarre twists and turns for Microsoft to end up on top, but it was far from foreordained that they would. Other obvious competitors included Lotus and VisiCalc, folks who seemed poised to have strong offerings nestled in the bosom of a growing computer industry.

What Microsoft had that the others lacked was sticktoitiveness, adaptability, and business savvy. They were willing to do what ever it took to ride to the top, whereas other companies were satisfied with "merely" massive runaway success. And that showed up in surprising and non-intuitive ways. DR built CP/M from the ground up and invested heavily in making it the best they could. Microsoft bought a clone of CP/M that was written in 6 weeks for $75k because they needed an OS to deliver to IBM for the IBM PC, and they thought that was a reasonable business arrangement to be in. In no way does that sound like sound engineering or sound business strategy, but it turned out to be one of the most pivotal events in computing history. It was Microsoft's tenacity and their desire to make billions where others were content to make only billions that brought them to the top of the industry, things that weren't really obvious until after they happened.

For venture capitalists this problem isn't a big deal, because they can just play the lottery and invest in Digital Research as well as Microsoft and Lotus and all the reasonable bets. For people looking for "the next microsoft" to work at, the problem is much more difficult, if not fundamentally impossible.

</comment><comment><USER51> They made something easier, in a growing market.

Their big break was DOS. Getting offered to do an OS for the PC was luck, but they scrappily exploited it to the hilt: they didn't even _have_ an OS; their license terms allowed them to sell to (future) clones; they sold it far cheaper than the competition.

</comment><comment><USER52> There's some serious sharp shooter fallacy going in this article.

The bottom line is that most of the startups based on a lame idea are, indeed, lame. It's all too easy to focus on the ones that succeeded.

</comment><comment><USER53> Starting a company to make a paid browser when Mosaic is already free.

<comment><USER54> Free and pretty crappy & limited. When you can do better than the free crappy shit, people will pay. It was the same with Athena vs Motif.

</comment></comment><comment><USER55> Perhaps as harder call is, which MS-DOS is this the CPM-86 of?

</comment><comment><USER56> I got the article and it's nice. However I am having a hard time trying to understand(english wise) this sentence - What microsoft is this the Altair Basic of?

How to parse it?

<comment><USER57> What [future gigantic corporation] is this the [first small product] of?

<comment><USER56> Thanks :)

</comment></comment></comment><comment><USER58> Any idea sounds awful if you phrase it right. Any idea sounds good phrased right. I don't think this is a good metric at all to evaluate a start-up.

</comment><comment><USER59> [http://en.wikipedia.org/wiki/Accidental_Empires](http://en.wikipedia.org/wiki/Accidental_Empires)

</comment><comment> pi-squared Unusually short, and I feel very biased essay with examples from 3 big(est) companies out of hundreds of thousands (more?). #NotConvinced

</comment><comment><USER60> The title would have been better worded as follows:

"How does this Altair BASIC become a Microsoft?"

</comment><comment><USER61> What Microsoft was Aereo the Altair Basic of? :)

(The problem of silent evidence.)

</comment><comment><USER62> As long as that realization is tempered with this one:

"The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."

<comment><USER63> what, are you saying Bozo the Clown wasn't a success? :)

<comment><USER62> Sometimes something is laughed at not because it is out-of-the-box genius which will do well defying all expectations, but because it is actually ridiculous and will fail.

</comment></comment></comment><comment><USER64> Wrong wrong wrong. For example, the guys at Google spent years doing research in the field before starting their company. Clearly MS achieved success with a different product than they had begun with.

</comment><comment><USER65> How many times can he make this same blog post with different wording?

</comment><comment><USER66> I think that the lesson you'd draw from many of these successes is something like this:

        1. Find a specialty or niche that you care about.
        2. Excel in it.
        3. ????
        4. Profit!

First, look at #1. For Microsoft, this was putting a modern (by the standard of the time) language on microcomputers as the PC era began. For Facebook, it was improving the way people manage and form weak ties. For Google, it was improving search.

These ideas seemed "lame" for businesses because they were hobbyist projects, but done to excellence because of the passion that was behind them. Still, hobby + excellence doesn't always make a business. You need a lot of help, and that help can be hard to summon.

Of course, there are also counterexamples. If Evan Spiegel excels at anything, it's writing creepy emails to his frat brethren. He's clearly not a technologist, and that applies to most of the VC darlings in this round, which is why it's going to be horrible for a lot of people when the chickens come home to roost and these P&D fake-tech companies have no buyers. But enough about that...

Where there's confusion, I'd say, is at step #3. To what extent is excellence (even in something that seems "lame", insofar as being impossible to build a business on, like fixing web search) going to get noticed and draw enough backing to overcome the extreme "pointiness" (as opposed to well-roundedness) that comes with narrowly-focused excellence (which seems, to most, to be a hobby project at best and obsessive at worst). And what are the odds? I don't know what the answers are.

I did #1 and #2 when I optimized hand-luck out of a trick-taking game, Ambition. ( [https://docs.google.com/document/d/1S7lsZKzHuuhoTb2Wj_L3zrhH...](https://docs.google.com/document/d/1S7lsZKzHuuhoTb2Wj_L3zrhHZh5IEKBDf56ExgErv4o/edit) ) It's been published in a few gaming magazines (mostly abroad, as in Hungary and Japan) but generally hasn't caught on, and I doubt it'll ever make me rich. I guess you can say that step #3 isn't automatic. But I'm not sure that that's a bad thing. Excellence doesn't need to produce wealth to be valuable, and doing something to make money makes excellence almost impossible in practice, anyhow. (Excellent products can make money, but products that are optimized for money-making are rarely excellent, because value-creation and value-capture are separate disciplines and antagonistic toward one another at the highest levels of performance.)

One thing I admire about Paul Graham (despite differences) is that he does place a value on excellence, as you can see in his work on Lisp. He understands excellence as a virtue (which is admirable) and believes that the market will reward it (which is debatable; we agree that there is correlation but would disagree on its strength). For his part, he tried to make an excellent Lisp (Arc) and showed a strong aesthetic sense. It didn't catch on. Rich Hickey made a Lisp that was, at the time, uglier but because it ran on the butt-ugly JVM, and you had a lot of S-expressions that looked more like (.addEventListener thingy other-thingy) than (map (comp f g) list).

Eight years later, most of Clojure is beautiful (unless you peer into the innards) because of the work it has attracted. All I'm saying is that it's hard to predict who'll win. If it was 2006 and someone told you that in half a decade, the best Lisp would be on the JVM, you'd laugh in that person's face. And yet... that's what happened.

I think we can agree that excellence, because of the narrowness of focus it often (and not always, but often) requires, will lead a person to be thought "lame". (There is also the extremely slow process through which true excellence is recognized.) In 2006, many would've written Rich Hickey off as a barely-employed ex-musician trying to do the impossible (write a beautiful Lisp on top of the JVM) and unsellable (who'd buy it)? And yet Cognitect has shown that Clojure's excellence _is_ sellable. From the statically typed world we seem similar slow uptake: Haskell's over 25 years old and just starting to be recognized as a practical language for "real programming". Full agreement exists on #1 and #2.

What about #3: the "????" term that leads from focused, diligent excellence to freely flowing money? Before Silicon Valley, I feel like Americans were more honest about the _lack of_ a strong relationship between excellence and financial success. People understood the "starving artist" concept, and that writers of trash novels (e.g. _Fifty Shades of Gray_ ) would economically outperform people writing genuine literature. (That said, don't write off Tolkien, King, or Rowling just 'cause they do "genre lit"; they're fantastically skilled.) The problem with Silicon Valley exceptionalism is that these people believe that they've transcended the nonexistence of a causal arrow between excellence and financial success. That leads to a naive optimism at first, and later to a self-serving sense of "meritocracy" that's divorced from reality. The _truth_ about item #3 in the above is that it's _very_ random and we have almost no insight into how it actually works, and that's upsetting but I don't know what to do about it.

</comment><comment><USER67> "lame" is an unfortunately ableist choice of words (it appears five times in the article and many times here the comments).

for information on why it's problematic try this: [http://www.disabilityandrepresentation.com/2013/09/14/ableis...](http://www.disabilityandrepresentation.com/2013/09/14/ableist- language/)

</comment><comment><USER68> "If you're going through hell, keep going." \- Winston Churchill

<comment><USER69> in a way self-proved in context. Thank you.</comment></comment>


A List of JavaScript Tools and Libraries - <AUTHOR> https://www.codefellows.org/blogs/complete-list-of-javascript-tools <comment><USER3> I was pleased to see Knockout.js listed (inappropriately as an MVC framework) on the image, but then there was no mention of it at all in the descriptions section. For a list sluggedly touting itself as the 'complete-list-of- javascript-tools', it really is missing a lot of information.

<comment><USER4> I was looking for Knockout.js also, it's not in that list

by Google trends it should be second after AngularJs

</comment></comment><comment><USER5> Is there a list of the best lists of javascript tools and libraries? If so, what list is at the top of that list?

</comment><comment><USER6> This is written in a way that suggests that APT came from/for Ubuntu. Get your facts right kid.

(nevermind the fact that this has nothing to do in a list of javascript libraries/tools, why not add Vim, and Unix, then?)

</comment><comment><USER7> Cool little diagram, couple of nits

\- Assertion libraries aren't a backend thing. Jasmine is very useful on the front-end \- If you're gonna have underscore under templates, and underscore and lodash under "functional programming", you better put lodash under templates too ;p \- I wouldn't call Knockout a MVC framework, it's really just a 2-way data binding library.

</comment><comment><USER8> Nice list, I've used most of those tools at the previous startup I worked at. Shameless plug: You might find this tool I wrote useful in plenty of situations: [https://github.com/SGrondin/bottleneck](https://github.com/SGrondin/bottleneck)

</comment><comment> at-fates-hands How come nobody looked at this list and said, "Holy shit, why do need 6 templating libraries?", or "Why is it we have 6 libraries that are build tools?"

At some point I would've thought some of these would get consolidated, but instead all we have is more and more and more libraries popping up. Instead of just building in features, we're just simply building new libraries to address some need a developer had which wasn't in an existing library.

I'm all for an awesome set of tools, but at some point, shouldn't we really think about combining some of these and just build one or two tools with all the features a developer needs?

<comment><USER9> Except, you have to get one of the existing ones to clearly win, or else you end up here: [https://xkcd.com/927/](https://xkcd.com/927/)

</comment></comment><comment><USER10> Title is a bit misleading, this is a list of _development tools and libraries with a focus on Javascript_. There are quite a few non-js tools in there.

<comment><USER11> Seriously? You should try programming JavaScript without an operating system or a browser.

<comment><USER10> Yes, seriously. So by your logic we should be listing the browsers, the operating systems, the compilers, the linkers.

No. The title is misleading, I clicked on it expecting a good breakdown of the current can't-do-without javascript libraries for web application programming.

MongoDB? PostgreSQL? Why don't we mention Python too since not every Javascript programmer is using NodeJS, oh wait - maybe we should start mentioning Haskell to JS compilers too, yes, because those are Javascript tools and libraries.

All of those things are interesting but the title mislead me and I made note of it.

Get off my back.

<comment><USER12> > _MongoDB? PostgreSQL? Why don 't we mention Python too since not every > Javascript programmer is using NodeJS, oh wait - maybe we should start > mentioning Haskell to JS compilers too, yes, because those are Javascript > tools and libraries._

I don't understand this slippery slope argument. One can mention tools relevant to JS developent that are not themselves written in JS, without going to the extreme of listing everything under the sun.

Even if it's a little fuzzy when you stop, MongoDB is known to be a great tool for NodeJS projects, whereas everybody understands that the linker and the compiler is not really relevant to the discussion.

<comment><USER10> It's pretty easy to understand and it's not a slippery slope; what is slippery is bringing in tools and libraries that have _nothing to do_ with Javascript.

Also, this whole argument has gone on far more than I intended - <USER2> pointing out that the title was misleading and the reason why I thought it was misleading has suddenly turned into a holy jihad (proof given by the downvoters) to defend MongoDB's inclusion in the list (which is sad because MongoDB isn't a great DB either but that's not part of this argument).

I hold on to the fact, though, that it was indeed misleading and my desire for clarity is important to me and meaningful writing; when people criticize my writing for the smallest or the largest of reasons I want to hear it. Misleading title? Okay, why and what would you suggest?

</comment></comment></comment></comment></comment><comment><USER13> It's nice, but things like listing node.js as a server along with express.js make me feel like somebody isn't 100% on what node.js is.

</comment><comment><USER14> I don't understand, where's Curl.js or Require.js? Isn't modular, namespaced code a priority for any large project?

<comment><USER13> they mentioned browserify :)

</comment></comment><comment><USER15> Any lib list that refuses or neglects to recognize Enyo is not a list.

</comment><comment><USER16> Why is this amateur list important? It doesn't say anything new and it even makes stupid mistakes.

<comment><USER17> Probably because there are a ton of people getting started on full stack JS who need a list like this.

</comment></comment><comment><USER18> I could Google JavaScript tools or libraries and turned up more results

</comment><comment><USER19> I did not find this list particularly useful. It is a nice attempt, but the way it categorizes libraries can be deceptive. I do not think anyone would consider bower and npm to be comparable projects, except in the most abstract sense. The same applies with node and express; one may as well conflate ruby with rails.

That said, a lot of the tools are really good. I would, personally, argue that underscore is the most important javascript library in existence. It transcends frontend and backend, server and client. It is data manipulation at its finest. It brings functional programming paradigms to javascript. It is beautiful.

After spewing this mantra, one of my colleagues wrote a blog post about it that presents a nice introduction[1]. I would also highly recommend Michael Fogus's book, Functional Javascript[2], that heavily relies on it.

1\. [http://singlebrook.com/blog/simplify-your-javascript-with- un...](http://singlebrook.com/blog/simplify-your-javascript-with-underscorejs) 2\. [http://shop.oreilly.com/product/0636920028857.do](http://shop.oreilly.com/product/0636920028857.do)

<comment><USER20> When I went to that list I was specifically looking for underscore.js and date.js. Seeing a serious project that does not use these libraries makes me twitch.

<comment><USER21> Maybe you couldn't see underscore.js because it was written as "Underscore"? Or maybe you didn't read the article…

<comment><USER20> Yeah, underscore was there but date wasn't. I guess my point was that there wasn't a date.js or some reasonable equivalent time library because date/time programming sucks.</comment></comment></comment></comment>


QEMU advent calendar offers mystery VM every day until Christmas - <AUTHOR> http://www.theregister.co.uk/AMP/2016/12/06/2016_qemu_advent_calendar <comment><USER2> Here's a direct link. Looks awesome.

[http://www.qemu-advent-calendar.org/2016/](http://www.qemu-advent- calendar.org/2016/)

Warning: don't open the doors too early ;)</comment>