Mistakes You Should Never Make • Hacker News Board

Re: Mistakes You Should Never Make

#211

Post by napoleond » Thu, Jul 24, 2014, 9:19 PM UTC

sethbannon wrote: post #198

xcubed wrote: post #158

This is just awful. There's owning up to mistakes, which is very "trendy" right now, and then there's being a straight up terrible, unethical, incompetent person. It's a bit gross to reference Ben Horowitz, to try to make this seem like a "classic" startup moment that every startup goes through. E.g., "most companies go through at least two, and sometimes over a dozen WFIOs in their lifetime." 1. "And so I learned th…

I see that you made this HN account only to comment on this post. I've learned that getting into a back-and-forth with anonymous posters on HN is never a good idea, but I'll respond just this once. 1. You're absolutely right. I majorly screwed up here. I say so as much in the post. 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able t…

Seth, I'm very impressed with your level-headed response here. As others have said, thank you for writing the post that you did. I've been in similar situations so I know that wasn't easy. People will be upset with you and that is their prerogative--after all, you did make some big mistakes and you know it--but the best thing you can do is make your apology, learn from it, and move on. Good luck!

Re: Mistakes You Should Never Make

#212

Post by xcubed » Thu, Jul 24, 2014, 9:19 PM UTC

sethbannon wrote: post #198

xcubed wrote: post #158

This is just awful. There's owning up to mistakes, which is very "trendy" right now, and then there's being a straight up terrible, unethical, incompetent person. It's a bit gross to reference Ben Horowitz, to try to make this seem like a "classic" startup moment that every startup goes through. E.g., "most companies go through at least two, and sometimes over a dozen WFIOs in their lifetime." 1. "And so I learned th…

I see that you made this HN account only to comment on this post. I've learned that getting into a back-and-forth with anonymous posters on HN is never a good idea, but I'll respond just this once. 1. You're absolutely right. I majorly screwed up here. I say so as much in the post. 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able t…

Thanks for responding. I actually made the account because I haven't commented on hacker news before though I read it all the time. I just feel strongly about it so I had to write a response.

I stand by my comment.

Re: Mistakes You Should Never Make

#213

Post by snowwrestler » Thu, Jul 24, 2014, 9:24 PM UTC

extesy wrote: post #194

will_brown wrote: post #75

Earlier quoted context omitted.

As a former transactional/commercial litigation attorney I too would see this issue regularly. One interesting "hack" I would see clients do regularly as owner/employees, they would minimize their own salary to avoid payroll taxes, maximizing their distributions (distributions are not subject to payroll taxes). Unfortunately for them the IRS accounts for this hack , and if an IRS audit finds the salary isn't reasonab…

How is $1 salary justified to IRS? There are a bunch of executives who have $1 salary [0], including Mark Zuckerberg. I really doubt it's considered reasonable. [0] http://en.wikipedia.org/wiki/One-dollar_salary

You don't have to justify low salaries to the IRS conceptually, you just can't use them to avoid paying payroll taxes.

I would assume that companies like Apple and Facebook have competent tax teams that make sure their obligations are fulfilled, even if that means paying payroll taxes on a portion of the stock-based compensation to their executives.

Re: Mistakes You Should Never Make

#214

Post by dragontamer » Thu, Jul 24, 2014, 9:24 PM UTC

afro88 wrote: post #207

sethbannon wrote: post #198

Earlier quoted context omitted.

I see that you made this HN account only to comment on this post. I've learned that getting into a back-and-forth with anonymous posters on HN is never a good idea, but I'll respond just this once. 1. You're absolutely right. I majorly screwed up here. I say so as much in the post. 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able t…

> 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able to export a list of our users?" Answer: "yes, absolutely". The customer signs. The sales person then runs to dev team and says "we need to build this export functionality before they launch". Did the potential customer think that feature already existed? Probably. Is anyone being h…

Agreed. It is great that he is being open and honest about his morals.

But if I ever learned that a business partner were so dishonest with me, I'd drop them in a heartbeat. Business relations are all about trust and integrity.

Re: Mistakes You Should Never Make

#215

Post by nyc_str8tsh00t » Thu, Jul 24, 2014, 9:25 PM UTC

seancoleman wrote: post #70

dreamweapon wrote: post #21

Mistake 1: Taxes This thing about not noticing that you weren't paying payroll taxes wasn't a "mistake." It was pure head-in-assery. How can you "miss" the fact that you weren't being subtracted for payroll taxes? One quarterly / annual review after another, for 3 years? It's like running a personal budget, and "missing" the fact that you aren't paying rent.

Founders get bombarded with many corporate taxes they are often unfamiliar with. As a founder, it's not inconceivable to think all the proper taxes are being paid when one slips through the cracks.

yeah, but if you google this company and see other articles about them, who their customers were, and how many people they had, it's pretty clear this was a lot mroe than just "slipping through the cracks". I'm sorry, but allowing a company to grow to that point without even the most basic handle on the books is gross negligence, not just incompetence.

Re: Mistakes You Should Never Make

#216

Post by rwallace » Thu, Jul 24, 2014, 9:26 PM UTC

nyc_str8tsh00t wrote: post #206

rwallace wrote: post #190

Earlier quoted context omitted.

This kind of comment is remarkably shitty. Someone performs the extremely unpleasant and stressful task of publicly admitting to his mistakes so the rest of us can learn from them, and xcubed responds by spitting in his face. What's the result going to be if we tolerate this sort of behavior? Well we don't have to guess, it was documented in the original post: most founders are not willing to admit their mistakes in…

Whether you agree with it or not, Xcube makes thoughtful reasoned points; you are just name calling and trying to silence critics. There are tons of supportive comments on this thread. Tons. Presumably these are all people who have exactly zero first-hand knowledge of the situation. They are taking Seth at his word that this is an honest description of what actually went down. I hardly think it's obvious that he did…

The reason I believe what Seth is saying here is that if he chose to lie to make himself look better, he could trivially have done far better than this.

If he were putting someone else down, I would agree with withholding judgment - in either direction - until we heard both sides of the story. But he did no such thing. Nothing in the article contains any hint of blame for anyone except himself.

Re: Mistakes You Should Never Make

#217

Post by pjungwir » Thu, Jul 24, 2014, 9:26 PM UTC

ColinCera wrote: post #186

pjungwir wrote: post #131

Earlier quoted context omitted.

I also took a few Harvard Extension School classes (mostly Greek and Latin, but also Distributed Computing). I didn't earn a degree, just took a few things that interested me. It's on my resume as Harvard Extension School, and I have to actively correct people who think it's more than it is. My jokey way of putting it is that HES "takes anyone with a credit card." What's really embarrassing is when someone introduces…

> My jokey way of putting it is that HES "takes anyone with a credit card." That's nice & humble of you, but it's not precisely true. There are very few requirements for taking a random course or two (or 20) at HES, but to be admitted to a degree program at HES is not so easy. You have to take a certain number of HES courses and earn a high GPA in them to be admitted to a degree program. Then, of course, you have to…

    > > My jokey way of putting it is that HES "takes anyone with a credit card."
    > That's nice & humble of you, but it's not precisely true.

Thanks for pointing that out. I meant no disrespect to the folks who sign up to HES for the long haul.

Someone mentioned that HES courses are less rigorous, and I believe that's true. (Although Greek and Latin were still pretty tough!) On the other hand, the students I met were all extremely motivated and hard-working. It changes things a lot when everyone in class is attending voluntarily on their limited free time and out of their own pocket. I'm sure we weren't as smart or intellectually curious as an undergrad Harvard class, but I had way more respect for my peers there than I did in my own undergrad setting.

Re: Mistakes You Should Never Make

#218

Post by nostrademons » Thu, Jul 24, 2014, 9:27 PM UTC

sethbannon wrote: post #198

xcubed wrote: post #158

This is just awful. There's owning up to mistakes, which is very "trendy" right now, and then there's being a straight up terrible, unethical, incompetent person. It's a bit gross to reference Ben Horowitz, to try to make this seem like a "classic" startup moment that every startup goes through. E.g., "most companies go through at least two, and sometimes over a dozen WFIOs in their lifetime." 1. "And so I learned th…

I see that you made this HN account only to comment on this post. I've learned that getting into a back-and-forth with anonymous posters on HN is never a good idea, but I'll respond just this once. 1. You're absolutely right. I majorly screwed up here. I say so as much in the post. 2. I think people can reasonably disagree here. An example: a potential customer asks a sales guy during a demo "...and will we be able t…

2. The reason engineers tend to hate tactics like this is that it shifts responsibility for fuck-ups from you, the CEO, who should be managing and prioritizing features so you get the best bang for the buck, to them, the engineers, who are now on the hook for a feature that may or may not be able to be built in the time frame you promised. Things go wrong in engineering, and there are unexpected snags and slowdowns, and a well-managed business should be able to absorb them without losing customers. There are very real costs in added stress and loss of personal time for engineers - not to mention decreased trust from customers - that come from this tactic.

As the sibling comment mentioned, just say "The feature is not ready yet but we'll take your request under advisement and let you know as soon as it is." Then prioritize the features that lots of customers want. Maybe you'll lose the sale, or maybe they'll buy anyway because it was non-critical for them. Either way, you should be operating with enough of a financial cushion that one sale won't put you out of business (as PG says, "Deals fall through!"), and being able to aggregate requests lets you build a much better product instead of continually chasing after whatever the latest customer wanted.

Re: Mistakes You Should Never Make

#219

Post by snowwrestler » Thu, Jul 24, 2014, 9:28 PM UTC

mynewwork wrote: post #157

will_brown wrote: post #75

Earlier quoted context omitted.

As a former transactional/commercial litigation attorney I too would see this issue regularly. One interesting "hack" I would see clients do regularly as owner/employees, they would minimize their own salary to avoid payroll taxes, maximizing their distributions (distributions are not subject to payroll taxes). Unfortunately for them the IRS accounts for this hack , and if an IRS audit finds the salary isn't reasonab…

There are multiple very large public companies in the US which boast that their CEO earns a salary of only $1. See: http://en.wikipedia.org/wiki/One-dollar_salary Is there some difference between the type of corporation which makes it acceptable, or could the IRS potentially go after all of those individuals?

The companies probably pay payroll taxes for these individuals on a higher "salary" number that is reasonable for their position.

Re: Mistakes You Should Never Make

#220

Post by jacquesm » Thu, Jul 24, 2014, 9:30 PM UTC

tptacek wrote: post #124

jacquesm wrote: post #119

Earlier quoted context omitted.

That's very dangerous, no matter what the reputation of the firm. The thing to do is to use separate accounts for reserves like these and to pay directly into the coffers of the tax man, lest the party that you do business with unexpectedly goes bust (they do) and you end up being liable again for the same amount of tax that you already paid to the payroll company. Don't for one second think that you're off the hook…

This may be good advice in NL, but it's sort of diametrically the opposite of best common practice in the US. Payroll being handled by payroll firms is the norm in the US, and the stories about terrible payroll withholding screwups hurting companies are, as far as I can tell, invariably the result of people trying to handle this themselves, paying "directly into the coffers of the tax man".

Does the American system have any provision for payroll companies that fail to fulfill their obligations?

(segregated accounts per client, accounts only usable for remittance of the salaries or taxes with the payroll company then taking out its slice when everything else has been done?)

I remember the Accupay affair and that took a lot of employers by surprise, and even though 'best common practice in the US' may be that payroll firms are the norm, at least in that particular case the culprit was definitely the payroll company and not any one of their multitude of clients. And there were strong indications that Accupay was not the only company that pulled that particular stunt.

All of the companies affected were held liable and had to pay (again).