Mistakes You Should Never Make • Hacker News Board

Re: Mistakes You Should Never Make

#261

Post by calibraxis » Thu, Jul 24, 2014, 10:24 PM UTC

jacquesm wrote: post #252

jlevy wrote: post #250

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax issues, given that YC has funded excellent companies that specialize in accounting and payroll for small businesses, such as Indinero and Zenpayroll. The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC…

Thank you for this note, good to see YCs position on stuff like this. But to clarify the point the OP made about being 'naughty' had to do with a different part of the narrative, the one where promises were made to customers, not the part where they do not pay the withheld payroll taxes (the illegal component).

That's YC's public-facing position, almost certainly not its real position.

Virtually every corporation I know regularly lies. Structurally. This is because speech is an act, and they pursue actions which maximize profit (and/or marketshare); and deal with competitors who have the same basic incentives. If they didn't lie, they'd often be replaced by those who do.

Re: Mistakes You Should Never Make

#262

Post by jacquesm » Thu, Jul 24, 2014, 10:33 PM UTC

calibraxis wrote: post #261

jacquesm wrote: post #252

Earlier quoted context omitted.

Thank you for this note, good to see YCs position on stuff like this. But to clarify the point the OP made about being 'naughty' had to do with a different part of the narrative, the one where promises were made to customers, not the part where they do not pay the withheld payroll taxes (the illegal component).

That's YC's public-facing position, almost certainly not its real position. Virtually every corporation I know regularly lies. Structurally. This is because speech is an act, and they pursue actions which maximize profit (and/or marketshare); and deal with competitors who have the same basic incentives. If they didn't lie, they'd often be replaced by those who do.

I'm not exactly in the YC alumni camp (even though I know plenty of them) and I think that you're way off base here.

YC has made a couple of such statements in the past and from what I've seen they stand by them both in further communications and in actions.

I recall PGs writings about installmonetizer as one example, and a few others which I won't be repeating here to avoid tearing open old wounds.

In general, of all the start-up accelerators out there YC is by far the most transparent about what kind of behavior they are proud to be associated with and what kind of behavior is definitely un-acceptable and they are not afraid of making that known, to past, present and future YC alumni alike.

If you don't believe me read: http://www.ycombinator.com/ethics/

And then come up with instances where YC has continued to back a company that violated those rules willingly.

The OP is by his own admission clearly in violation of a whole bunch of those and has a number of very hard choices to make (resignation being one option).

Re: Mistakes You Should Never Make

#263

Post by chaqke » Thu, Jul 24, 2014, 10:41 PM UTC

tspike wrote: post #93

danielweber wrote: post #74

Earlier quoted context omitted.

Since you are competing against people who will tell you that the feature they want already exists, people who are too honest in this area will quickly get filtered out of the marketplace. It sucks, but there are lots of markets where the customer says "please lie to me" and gives their business to the person with the most reassuring lie.

This philosophy seems to imply that trust and relationships are worthless in business. If you perpetually promise features that don't exist, you'll eventually promise something that either can't be implemented at all or has to be implemented sloppily to deliver. How can you possibly sustain a long-term business when you're so willing to damage business relationships?

Many startups don't become long-term businesses.

However, the startup that (wins a big contract with a big promise && delivers on its promise) certainly has a larger chance to become a long-term business than the ones that short circuit themselves out by not winning contracts.

Re: Mistakes You Should Never Make

#264

Post by calibraxis » Thu, Jul 24, 2014, 10:47 PM UTC

jacquesm wrote: post #262

calibraxis wrote: post #261

Earlier quoted context omitted.

That's YC's public-facing position, almost certainly not its real position. Virtually every corporation I know regularly lies. Structurally. This is because speech is an act, and they pursue actions which maximize profit (and/or marketshare); and deal with competitors who have the same basic incentives. If they didn't lie, they'd often be replaced by those who do.

I'm not exactly in the YC alumni camp (even though I know plenty of them) and I think that you're way off base here. YC has made a couple of such statements in the past and from what I've seen they stand by them both in further communications and in actions. I recall PGs writings about installmonetizer as one example, and a few others which I won't be repeating here to avoid tearing open old wounds. In general, of al…

Fine; you think I'm off base, but that's not my problem. :)

Contrast your emphasis on a couple statements for PUBLIC consumption, vs. the article's claim: "One of the big values of Y Combinator was that we were able to hear strictly off-the-record stories of many successful startups' WFIO [‘We’re Fucked, It’s Over’] moments."

In any case, many of us have been inside corporations, and observed the clear dynamics.

Re: Mistakes You Should Never Make

#265

Post by 7Figures2Commas » Thu, Jul 24, 2014, 10:47 PM UTC

MortenK wrote: post #232

It's absolutely astonishing to me that SV investors and incubators pass along ~4 million USD to a team of people with so little business experience, as to neglect hiring an accountant. End result being unpaid payroll tax for almost 3 full years! No one ever asked what accounting firm Amicus used? No one ever just glanced at the finances and thought hey, where's the frigging payroll tax? Is valley capital so readily a…

> It's mind blowing that investors can be so careless with their cash. I wonder if it's a common occurrence or if this is an outlier situation.

There is way too much capital chasing too few opportunities today. The bar for who and what gets funded at seed stage is extremely low. Social proof and accelerator cred clearly often substitute for due diligence.

Exacerbating this is the prevalence of party rounds in which lots of investors put in relatively small chunks of capital. For obvious reasons, if you're raising a $6 million Series A from two or three name firms on Sand Hill Road, you're probably going to be subjected to a lot more scrutiny than if you're raising a $3 million round from a group that consists of upwards of 10 angels and/or super angel funds. In the latter scenario, the amount invested per investor tends to be so small that none of the participants have a real incentive to perform rigorous due diligence, which costs money and takes time.

According to CB, 15 investors participated in Amicus' $3.2 million round in 2012.

Re: Mistakes You Should Never Make

#266

Post by davindra » Thu, Jul 24, 2014, 10:50 PM UTC

jlevy wrote: post #250

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax issues, given that YC has funded excellent companies that specialize in accounting and payroll for small businesses, such as Indinero and Zenpayroll. The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC…

> "The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality."

That's interesting to know. So when a founder makes a mistake that unintentionally breaks a law, YC ceases their support.

Re: Mistakes You Should Never Make

#267

Post by ameister14 » Thu, Jul 24, 2014, 10:51 PM UTC

exacube wrote: post #221

ameister14 wrote: post #202

Earlier quoted context omitted.

That's not really true, though. If I'm walking in a forest and I pick up an apple, prior to my picking it up, it did not belong to me. Upon picking it up, it now belongs to me. You can claim things that did not belong to you prior to said claiming. I get what you're saying but it only applies in situations where everything is already owned by someone.

That's too technical of an argument and takes away from the idea that Tactic is trying to convey. Most people don't find that apple-picking from a forest is stealing. My take on Tactic's explanation of stealing is that the guilt you should feel from stealing should also be from having taken something that isn't yours from someone, instead of just the guilt of depriving someone from the thing you stole. Although both…

>having taken something that isn't yours from someone

I agree that this is likely what he meant. It's a much easier way to get children, who likely are too young to have a complex moral framework, not to steal or even come close to it.

However, we're also talking about adapting that lesson to adults, who should have that moral framework. By maintaining the black and white view, you're depriving yourself of the full use of your rights, or potentially contributing to the denial of someone else's.

Children actually innately understand some of this; if you're not using your blocks, why can't I use them? In a more adult sense, if you're not using your land, can I use it?

It's a bit of a tangent, but I think it might be just as important to impart the lesson that you should use and maintain the things you own or claim, or potentially be subject to their loss. There are significant advantages to understanding the communal claim on many types of property, and they don't just apply to individuals but the community as a whole.

(edited for clarity)

Re: Mistakes You Should Never Make

#268

Post by jacquesm » Thu, Jul 24, 2014, 10:53 PM UTC

calibraxis wrote: post #264

jacquesm wrote: post #262

Earlier quoted context omitted.

I'm not exactly in the YC alumni camp (even though I know plenty of them) and I think that you're way off base here. YC has made a couple of such statements in the past and from what I've seen they stand by them both in further communications and in actions. I recall PGs writings about installmonetizer as one example, and a few others which I won't be repeating here to avoid tearing open old wounds. In general, of al…

Fine; you think I'm off base, but that's not my problem. :) Contrast your emphasis on a couple statements for PUBLIC consumption, vs. the article's claim: "One of the big values of Y Combinator was that we were able to hear strictly off-the-record stories of many successful startups' WFIO [‘We’re Fucked, It’s Over’] moments." In any case, many of us have been inside corporations, and observed the clear dynamics.

I have a few of those WFIO stories myself and I would not air them because there is no use crying over spilt milk and I like to protect the reputations of my co-founders and employees alike.

That's perfectly ok. You're not required to spill the beans or air your dirty laundry in situations like this.

In fact, the whole thread here is because the OP decided to come clean (for some value of 'clean') about all this, and as with any communication of this nature it has multiple components: communicating the state of affairs, trying to control the narrative and performing a service for other entrepreneurs in terms of warning them for pitfalls they might not be aware of.

It should not be lost on you that you are using that as a way to discount the rest, but you have no insight there at all so you're not in a position to draw such conclusions.

If you have information that is not currently public and that corroborates your view then more power to you but all I see is a huge assumption. You are extrapolating from the companies that you know to a company that you apparently do not know. Just like people companies should be evaluated on a case-by-case basis, generalizations are usually pointless.

Re: Mistakes You Should Never Make

#269

Post by nyc_str8tsh00t » Thu, Jul 24, 2014, 10:58 PM UTC

jlevy wrote: post #250

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax issues, given that YC has funded excellent companies that specialize in accounting and payroll for small businesses, such as Indinero and Zenpayroll. The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC…

Good to see YC step forward on this. I'm not a HN regular, but I've been following this thread all day because I have a friend who worked at Amicus, and several others who have worked with their software. I know there are always many sides to any story. I wasn't there, just like most of you weren't there, but all I can say is Seth's version of this story does NOT fit with what I've heard, and everything I've heard has been from honest, cool people who - unlike Seth - don't have a history of lying about really important shit.

Seth absolutely deserves to have a forum to tell his version of the story, but I find it more than a little annoying that after everything he's done, he's still able to leverage his position as a YC Founder to ensure that his version of the story gets more attention than anyone else's.

Based on everything I've heard, I'd say this post is essentially about admitting to lesser crimes so the world forgives him before we even know what he really did or did not do.

I'd urge the media powers that be to try and get some former employees, investors,customers, etc., on the record. And if they don't, then all of us should probably just move along and forget about this guy. Sounds like he already duped a lot of people into believing in him - I for one don't intend to be his next victim.

Re: Mistakes You Should Never Make

#270

Post by beagle3 » Thu, Jul 24, 2014, 11:06 PM UTC

tptacek wrote: post #33

Of all the financial mistakes you can possibly make running a company, withholding payroll taxes and then failing to remit them is probably the worst. Be thankful you caught this before the liability exceeded your available funds, because company operators are apparently routinely held personally liable when there's a shortfall, and I'm not sure that debt is even dischargeable in bankruptcy. What's worse, minor versi…

A couple of months ago, there was an HN discussion about "business friendly places", and if I am not mistaken, your pov was that the US is the most business friendly place; And when I mentioned that the US tax system is worse than most, your response (again, if I recall correctly) was along the lines of "it's just a line item in your expenses, make sure you pay an accountant to take care of it". And you're very consistent... however,

Don't you think the ease with which you can get into this kind of trouble (which may not be dischargeable in bankruptcy, and which may IIRC become a criminal matter) should factor into the "business friendless" score of the US? In every other tax regime I'm familiar with (several European and the Israeli one), everything which is not outright fraud gets you no more than a small fine.