Rastin

[Rastin @RastinRassoli]

@budwindruid @assylunicorn @SaaiArora Left SF for a few weeks 🫠

[Elliot Daigneault @hrh_elliot]

Once again the Canadian government FAILS to understand the problem

I would know, I founded and ran a tech company for a decade and raised MILLIONS from investors

And it was HORRIBLE doing business here

Let me explain

This isn't a "money issue"

This is a regulatory, economic and taxation issue combined with a deep cultural problem

Back in 2015 I founded a tech company, using my own money from working in the Alberta oil field

We developed our MVP in Montreal and launched our proof of concept right here in the West Island

Our first ever investors were our own first clients. We raised $150,000 from them

But things got harder when it came time to raise our seed round

I met with EVERY SINGLE VC in Montreal.

All told us NO

Why?

Too risky

lol... its the very definition of Venture Capital

They wanted a pitch deck, projections on 5 years, cashflow, business plan, go-to-market strategy, communication strategy, marketing strategy, Tech reviews, C.V. of founding team, financial disclosure etc

We spent more time preparing documents for them than we did scaling our business

Worse of all, they all wanted something different and would give contradicting requirements

I remember this interaction at the Espace CDPQ, the headquarter for all Venture firms in Montreal

ie:

Investor: How much do you need
Me: $1 Million
Investor: So if you only raise $750k what happens?
Me: Well we'll adapt XYZ
Investor: So then never EVER tell me a fix number. Give me a range. $750K-$1.5M or else you look foolish

I went home, reworked the pitch deck

The very next day:

New investor: How much you need
Me: $750K-$1.5M
New investor: What... you don't even know your number???
Me: well... yes but what if we raise less or more
New Investor: No, you look foolish

We said screw it. Approached American Investor

Our first was a VC firm out of Houston, Texas

Took less than 1 month from initial pitch, to closing.

In USD. For more money than what Canadians wanted to offer.

Best of all, they understood the fluid nature of a startup. No onerous and rigid plan. No overburdened documentation. Every second wasted on non-operating activities was sucking productive time away from scaling.

But Elliot... what about BDC and other AMAZING institutions in Canada

We did business with the BDC. a $250,000 loan. Which I had to personally guarantee.

Which 25 year old has assets and the balls to guarantee that amount? Very few. It's prohibitive. And reduces capital available to our homegrown companies

And this was AFTER MONTHS of explaining to them what we were doing. It was clear the BDC was setup to support traditional brick-and-mortar companies only.

Think Manufacturers or Commerces. But a tech startup? They could NOT wrap their heads around it.

Canadian banks? Forget it. Outright. Too risky

Then I watch fellow startups do the same. And move to the US.

Why wouldn't they?

In Quebec, I had to pay an extra 15% on top of my payroll as taxes. QPIP, QPP, FSS, CNESST... all to satisfy the government non-stop appetite.

Consequences: Well for a startup where every dollar counts, this means lower salaries thus harder to attract top talent (vs American competitors)

or

I simply hired less staff... thus slowly growth for both my company and the country's economy.

But wait it gets worse.

Revenue Quebec and CRA both required a plethora of compliance documents filled monthly or quarterly. GST and QST tax fillings, CNESST Salary equity (yes lol) documents, Source deduction documents, RL-1 fillings, Income tax (both QC and CAN), Workplace sexual harassment policy, OQLF policy, CNESST training and certification... the list goes on

At least 1 day a month was spent by me and some of my executives preparing and fulfilling these documents. This means we were't scaling our business and instead working for FREE for the government.

Then there is the tax burden.

Why would top talent want to come here and get taxed at up to 52% marginal rate?

While a Miami startup offers higher salary and the State taxes you 0%

Finally investor behaviour

In Canada... safe. steady return. Great for a Series C. Great for an established companies. No desire for risk. No understanding of the ecosystem.

HORRIBLE FOR VENTURE

Meanwhile the U.S. , they understand the ecosystem. 90% of their investment will go down to 0. But the few that survive will go on to earn them BILLIONS and change the world.

So this new announcement of $1.75Billion won't change the underlying issue that makes us uncompetitive.

At best, it will go to startups who will flee to the US the very second the money hits

At worse, it will just be another slush fund given to friends of the government

and I fear its the latter as usual

[Rastin @RastinRassoli]

@TheMingjie

[Jerry Jiang @TheMingjie]

I'm running for Mayor of Waterloo.

We're a city of makers who build for the world and never advocate for ourselves. Waterloo needs someone who will.

Voting is Monday, Oct 26.

If you're a student here, you can probably vote here. I built a tool for you to check in 30 seconds: https://t.co/mGtmxm2XQP

[Brenda @librendaa072]

Come by and meet very interesting people.

Whether you’re working on LLMs in a lab, ex-lab, or building your stealth company.

Good connections are made every single time.

Private event. Select attendance only.

Thanks for posting @arankomatsuzaki! I look forward to seeing you there.

[Rastin @RastinRassoli]

@budwindruid

[Brenda @librendaa072]

Coming to sf during tech week, crashing with @RastinRassoli, @KCarol_Amor, Shiv, Igor, @quantbagel and others was eye-opening.

Huge thank you to @veer_ukrani and @slashapp for sponsoring our sf popup house.

Thanks to @budwindruid, @McCauley (sorry can't find your handle, @scotthsutw1, @MiniUlisse and many others for coming all the way to Daly for a dinner we threw with 1h notice.

We
- built a green robot with Derek;
- attended an event sponsored by @PalatialSim and chatted with a Berkeley researcher about tactile data;
- watched atlas' unveiling;
- ingested papers on inference and social robotics data in the most delicious french cafe; scheming
- visited the most beautiful grocery store with Seungmin and another Derek @simantic and got treated to delicious conveyor belt sushi; and
- bumped delightfully into @NaomiWalch on the plane here; and jumped in the ocean with @quantbagel, @RastinRassoli and @KCarol_Amor (would recommend)

and much more...part 2 coming along.

[Rastin @RastinRassoli]

The RL llm envs will be completely different than robotics envs. It doesn’t make sense when we compare them. The costs, structure, needs are completely different. LLM RL is a talent market, robotics RL is factories, sensors, detailed twins, x100 slower, more expensive.

[Chetan Kulhari @ckxyz_]

same ingredients as llm rl envs: env, task, verifier.

what's sold depends on the lab - if they already have their robot twin and sim stack, they're buying content. scenes, assets, tasks and verifiers in a format that plugs in.

if they don't, they need a platform with the robot, scenes, and infra built.

the hard part is the sim2real gap for dexterous manipulation. we're cooking something here, stay tuned!

[Eric S. Raymond @esrtweet]

[continued]

I say "almost" because there is going to be one way to maintain secrecy. Software as a service with the executable hiding behind a network connection to the cloud. But as of now, we must assume that anything shipped as an executable, or even a firmware image, is as transparent as glass. It won't keep its secrets for any longer than it takes for somebody to be motivated to throw an LLM at it.

I did not see this coming. When I wrote down the theory of open source, 30 years ago now, I thought closed source would be gradually driven towards extinction by cost gradients, but survive indefinitely in certain niches. I did not foresee it being wiped out in a technoapocalypse.

Ironically, I thought one of the application areas in which closed source would persist longest was games.

There are still some obstacles. In US law, decompilation of a binary is a derivative work of the binary that falls under whatever copyright it had. However, it is also settled law that if you decompile binary code to a precise specification of what it does, then generate fresh code from that without looking at the decompiled stuff, you're in the clear. This was the case law that allowed PC clones to exist, after Phoenix Technologies reverse engineered the original IBM PC BIOS.

The two-step process - binary to specification to unencumbered code - will no longer takes a large number of programmers and years of development time. With an LLM, it's now a thing you can do in a day. Ubiquity will make it impractical to prosecute all the people who might skip the specification step.

Source code can also be covered by patents. You can be able to see their source code for a patented technique and not be able to use it without violating the law. Linux has evolved practices for dealing with this problem - one is not shipping patented video codecs, but requiring you to download them as plugins from jurisdictions where U.S. patents can't be enforced. This presents patent holders with the impractical challenge of individually suing millions of end users, assuming it can even figure out who they are. To date, AFAIK, this has not been attempted.

And that's about it. If there are any other ways left to retain software secrecy and lock-in than SaaS or patents, I can't think of any. Well, you could epoxy-pot a firmware ROM, I suppose, but that can be defeated with a heat gun and a dental pick. Device manufacturers will learn not to pay for an assembly step that has become useless.

Forced migration from shipped binaries to tied cloud services will be tried - Adobe pioneered this, and Microsoft is pushing it as hard as they can given that their OS is a binary that has to run locally. Both companies are seeing massive user revolts over this. There is good reason to doubt that it's a strategy that can hold customers in the long term.

Also, a lot of things can't safely be tied to the cloud at all, because they can't tolerate a random network outage. Machine tools, medical devices...

A whole lot of proprietary software business models are going to collapse. Hard. One that I think might survive is tax software; being able to decompile it doesn't necessarily do you a lot of good because its actual value is tracking a ruleset that changes over time and has to be maintained by vendor specialists. But cases like this are unusual.

I think some dirty laundry is going to get aired, too. It has long been rumored that the reason graphics card manufacturers are so stubborn in their secrecy is that they've all been committing massive intellectual-property theft on each other for decades. If this is true, it will be exposed, and the lawsuits will be entertaining.

We're entering a new world, with a lot of ancient comfortable assumptions being blown up. It's going to be fun to watch.

2/2

[Rastin @RastinRassoli]

💅🏼

[Rastin @RastinRassoli]

@librendaa072 @KCarol_Amor @Cyxx12345

[Rastin @RastinRassoli]

@librendaa072 @slashapp @veer_ukrani Brenda is COOKING (anyone has an apron?)

[Brenda @librendaa072]

@RastinRassoli @KCarol_Amor 🍉🍊

[Brenda @librendaa072]

Come ‘round to our house tonight :).

Shoutout to the homeboys at @slashapp and @veer_ukrani. Beautiful folks, always supporting Waterloo and founder community.

Expect…us to ask you uncomfortable questions.

Building robots.

Talking about fine-tuning an open-source model and distilling Astra

[Adrià Martinez @adriamatz]

It took me 5 minutes to get into the Claude Startups program

And you don't need VC funding anymore

What you get:

- A year of Claude Team
- API credits
- Priority rate limits
- Deals on the tools a startup runs on

How to apply:

- Create a Claude Console account (the API one, not the app)
- Use a company email, not Gmail
- Go to https://t.co/Gp7G1lGpAR
- Fill in the form with what you're building on Claude

Easiest trade I've made all year

[Brenda @librendaa072]

House is incredible. 7 bedrooms, here until the 9th!

[Brenda @librendaa072]

Hi we need VCs to sponsor this

Founders in sf hub
Building across…

World models
Human behaviour simulation
Inference for agents → agent chips with perimeter institute

And more…

It’s like 3K cad rn we’re using founder money for this

[Brenda @librendaa072]

hey throwing together a poker night in sf during tech week.

who is people’s favourite poker team for actual dealers (e.g. spice king)

[Rastin @RastinRassoli]

@interplayus @realfigmafiend @librendaa072 @KCarol_Amor they are calling for us? 😆

[Rastin @RastinRassoli]

@realfigmafiend @librendaa072 reserve my spot btw... - want to contribute to socialization of humanoids