31–40 of 216 posts
Ummm... He can't believe the point was to make a bunch of money?!?!
I think this point is important. Mint was adding value to an existing set of services rather than creating from scratch. This made its offering relatively easier to replicate. IMHO this point is not given adequate importance when considering why Mint chose to sell.
Please. $170 million is "fuck you" money. Aaron and I'm guessing many of the top founders/executives made enough money to never ever have to work again. Fake revolutions are cute and all, but think of how awesome it would be to never ever have to work for the man again. They can do anything they want...for profit, not for profit, TBD (Y Combinator). This wasn't some BS talent acquisition; this was an absolute shitloa…
"Fuck You money" is such a myth. More on this soon in another post.
Jason's point is broader than the business deal, he's making a critique of the Silicon Valley culture. While I have the utmost respect for the capabilities of the Mint team, I agree that it's disingenuous for the community to wrap itself in the flag of "We're in this for the revolution, not the money" and then be just so damn quick to take the money. That said, Mint seems like the exception out here. Facebook and Twi…
Okay, I'm not in the Valley, but businesses are in business to do business - to make money for their shareholders. Arguing against that as a reasonable motivation is disingenuous. You can disagree with the business decision; that essentially amounts to "I think their expected value is >$170m and I'd take their risk profile". Fair enough. But if you're arguing it on any other basis than that, then you're substituting your morals for economics, and what's more, your morals for those of all the individual shareholders. Not cool.
Isn't it easiest to just assume that Facebook and Twitter haven't been bought because their equity holders think they make more money doing it their way? They've got a case too; as Twitter's paper valuation climbs past $1bn, the crew there get proved more and more correct.
Please. $170 million is "fuck you" money. Aaron and I'm guessing many of the top founders/executives made enough money to never ever have to work again. Fake revolutions are cute and all, but think of how awesome it would be to never ever have to work for the man again. They can do anything they want...for profit, not for profit, TBD (Y Combinator). This wasn't some BS talent acquisition; this was an absolute shitloa…
Flipping a company is just one way to say FU to the man.
I've said FU to the man lots of times, even when all I had was some cash I had saved up from working really hard and long hours at a salaried job.
There's a sense out there that you need lots of cash to break free, but lots of homeless people break free all the time and many of them are way happier than those receiving big exits for startups. That is not hyperbole.
Breaking out of the machine is about mind not money. If you believe it is about money, you'll never break free even if you have lots of money.
Even with lots of money in the bank, you get bored. You end up wanting to go back into the system, to be part of a team, to do something productive. FU money is not all it's cracked up to be and it's mostly those who have never had it who think the world of it.
Is it me, or is 37 signals being disingenuous. They rail against people who take VC money. At the same time they take money from an investment firm. They they say that their taking money was okay because they wanted the advice of the investor: http://37signals.com/svn/archives2/bezos_expeditions_invests... Other people taking money to get access to investor advice is bad and a disease. They rant against startups that…
We say don't take money up front. Money up front is the sin: You're entering into a financial arrangement when you have no leverage. It's the worst possible time to do business. Re: Eyeballs... Our problem with action for eyeballs is when you have nothing to sell the brains behind the eyeballs. Just building an audience with nothing to sell (beyond ads) is what we rail against. But building an audience that could als…
I think the real mistake is that so many people don't ever stop to really think through their business model and "selling ads" is just the default thing they fall back on.
*I might be biased since I run advertising networks, but then again my business model isn't really ads either.
If I make a magic box, then patent it, and then sell the patent, whomever I sell the patent will dominate the box making industry, since they are the only ones with a magic box. This is what the author thinks is happening, but it is not analogous.
If I open a factory for making boxes, and I sit in the front office and monitor my factory, and hire great staff and motivate them to make boxes, and figure out methods and practices that help workers stay alert, motivated and uninjured, and I keep costs way below industry norms, I will have a very profitable box factory. Now, BigBoxMaker wants to buy my factory, since it is so much more efficient than theirs. They pay me $$$$$. I move to ${sunny_place}. They run the factory, but they aren't me, and they shit the place up. All they did was drive me out of the market, and in a few years another industrious soul will come in and they will have to buy their factory too, otherwise, eventually, they will be out of business.
Now, the key is eventually. They can afford to pay me what I would profit from running my awesome factory for 15 years, except it only took me 3 years. They require me to stay at BigBoxCompany for 2 years, but I just have to meet benchmarks, which is super easy since I already have the factory working at the level the benchmarks specify. So 2 years of dicking around at BigBoxCompany, doing whatever I feel like, plus a check for the amount I would make if I worked my heart out for the next 10 years, or 10 years sitting in a factory, looking at factory people, dealing with factory problems. Plus, my factory might not be successful in the long run, there is inherent risk of lawsuits, natural disaster, political shinanigans (BigBoxCompany gets your factory rezoned as an old folks home by bribing the governor, or you get EPA inspections every 10 minutes, or they bribe an employee to sabotage your equipment).
Finally, you don't have to sit around after you take the check. Perhaps you should open a bag factory (you probably agreed not to compete in Boxes), and you turn that around even faster, since you will of course take all your talented workers with you in 2 years once you are free of BigBoxCompany.
If the check is larger than (expected profit without selling out) * (risk factor) - (estimated value of your time doing other things) you MUST take it unless you don't care about maximizing profits, in which case why are you running such a great factory?
Obviously the loser is the consumer, but this is always the case. On their way up, companies are models of efficiency (that is why they are moving up, so this is a tautology). At some point they are able to use market position and branding to get customers, and so they can let efficiency slip a little, so of course it does slip. If you were guessing what an executive would do when presented with 2 options, and one option requires 60 hours a week of hard work for 6 months, and one requires a phone call and dicking around and playing golf, and both have the same outcome, which would you expect the executive to make? So of course established companies just advertise and give out free schwag and sponsor events instead of buckling down and making a better product and more cheaply, the executive only cares about profit for the period which effects his compensation, and both methods are identical if that is your only metric.
Is it me, or is 37 signals being disingenuous. They rail against people who take VC money. At the same time they take money from an investment firm. They they say that their taking money was okay because they wanted the advice of the investor: http://37signals.com/svn/archives2/bezos_expeditions_invests... Other people taking money to get access to investor advice is bad and a disease. They rant against startups that…
We say don't take money up front. Money up front is the sin: You're entering into a financial arrangement when you have no leverage. It's the worst possible time to do business. Re: Eyeballs... Our problem with action for eyeballs is when you have nothing to sell the brains behind the eyeballs. Just building an audience with nothing to sell (beyond ads) is what we rail against. But building an audience that could als…
Also, if you had a chance at a $170M exit, what would Jeff Bezos say?
Earlier quoted context omitted.
We say don't take money up front. Money up front is the sin: You're entering into a financial arrangement when you have no leverage. It's the worst possible time to do business. Re: Eyeballs... Our problem with action for eyeballs is when you have nothing to sell the brains behind the eyeballs. Just building an audience with nothing to sell (beyond ads) is what we rail against. But building an audience that could als…
Often times, companies have no choice but to raise money up front. Tesla and Facebook had to, and both seem to be well on their way to changing the way we behave environmentally and socially. Also, I really really really do not understand all the crap you guys give ad based websites/business models. Advert business has well and long been an established industry, dripping with cash. There are tons of websites out ther…
Facebook was started in some kid's dorm room, and I'm still not entirely clear on what they're selling.