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How Wizards of the Coast distributed equity as a startup

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Re: How Wizards of the Coast distributed equity as a startup

#111

Post by TDL »

stephencanon wrote: post #72
Qworg wrote: post #70

Earlier quoted context omitted.

For new startups? A cult (of personality or of the religious persuasion)? A warparty? A pirate crew? All are good options.

> A pirate crew? I. Every man has a vote in affairs of moment; has equal title to the fresh provisions, or strong liquors, at any time seized, and may use them at pleasure, ... IX. No man to talk of breaking up their way of living, till each had shared one thousand pounds. If in order to this, any man should lose a limb, or become a cripple in their service, he was to have eight hundred dollars, out of the public sto…

Peter Leeson wrote a paper on the economics of pirates, possibly of interest:

[PDF warning] http://www.peterleeson.com/an-arrgh-chy.pdf

Re: How Wizards of the Coast distributed equity as a startup

#112

Post by TDL »

Qworg wrote: post #70
tptacek wrote: post #65

Earlier quoted context omitted.

How else would you model companies and their staffing?

For new startups? A cult (of personality or of the religious persuasion)? A warparty? A pirate crew? All are good options.

I don't know if a war party or a pirate crew are good options. Startups are attempting to create wealth. War parties and pirate crews aren't engaged in wealth creation, they are involved in wealth destruction. This is an important distinction that often gets lost in comparisons of business and warfare.

Re: How Wizards of the Coast distributed equity as a startup

#113

Post by JoeAltmaier »

negativeview wrote: post #79
JoeAltmaier wrote: post #74

Earlier quoted context omitted.

Well, they're garbage if everything that comes after is inflated. That's my point.

You said that they release more and more "to obsolete the old." My point is that was not their goal. Their goal was always to have spells and creatures roughly balanced. Their original thinking was that creatures were a repeatable source of damage and thus should be costed as such. Turns out they overestimated how much rarity mattered and underestimated the power level of creatures. As a result, we get pretty mediocr…

Ok, rather than simple inflation they've invented a way to 'pump' the cards, alternating powerful and weak by category. Even better profits! You don't have to be the least bit creative to do that; you just wait for the old cards to get worn out then reprint them in cycles. Great.

Re: How Wizards of the Coast distributed equity as a startup

#114

Post by Udo »

anonymoushn wrote: post #82
DonHopkins wrote: post #43

Earlier quoted context omitted.

Sounds like they're on the right side of the Dunning-Kruger effect.

Hi, The Dunning-Kruger effect doesn't actually cause people who are good at a thing to say they suck at it and people who are awful to say they are good. In the paper, most tests found that estimated ability was positively correlated with ability, but had a lower slope. Thanks.

When used to describe a cognitive bias that causes highly skilled people to underestimate/under report their competence level, it is absolutely valid to refer to that as the Dunning-Kruger effect - which is exactly what DonHopkins did. Not only was he correct in using that term conversationally, the format of your reply is also unnecessarily abrasive.

Re: How Wizards of the Coast distributed equity as a startup

#115

Post by Qworg »

baddox wrote: post #102
Qworg wrote: post #70

Earlier quoted context omitted.

For new startups? A cult (of personality or of the religious persuasion)? A warparty? A pirate crew? All are good options.

Do you actually have a model for cults, warparties, or pirate crews? The reason the phrase "model a startup as a market" even makes sense is that reasonably well-accepted and well-defined models do exist for markets.

Certainly. Most of these are arguments for why people would make irrational decisions that break market models.

Cult: A singular leader or small group of leaders convince people who are looking for something to believe in/want to change the world of their worldview. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

Warparties: A leader/small group of leaders convinces a group of people who are looking for something to believe in that they're on a holy mission: kill X. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

Pirate Crew: A leader/small group of leaders convince a small group of people that they're special - and that they're going to work together to make a ton of cash. This is not necessarily true. The followers are willing to make non-optimal decisions in order to be a part of something greater/be close to the leader(s).

Re: How Wizards of the Coast distributed equity as a startup

#116

Post by Qworg »

TDL wrote: post #112
Qworg wrote: post #70

Earlier quoted context omitted.

For new startups? A cult (of personality or of the religious persuasion)? A warparty? A pirate crew? All are good options.

I don't know if a war party or a pirate crew are good options. Startups are attempting to create wealth. War parties and pirate crews aren't engaged in wealth creation, they are involved in wealth destruction. This is an important distinction that often gets lost in comparisons of business and warfare.

I used those terms as flavor more than anything. That said, the core argument of each (we're going to kill X, we're going to make a ton of cash because we're just better and faster) is a typical conceit.

Re: How Wizards of the Coast distributed equity as a startup

#117

Post by jdcarter »

waterlesscloud wrote: post #87
aagha wrote: post #84

Earlier quoted context omitted.

> Probably not, or that already would have happened. It hasn't. There was a time when convertible notes hadn't happened, or become main-stream, until they happened.

Agreed. That's the worst possible argument against this happening. I think HN is getting old. Certainly more conservative in how it views future change.

I'd say "cynical" rather than "conservative." Most people here aren't against change, it's that we've all been burned by these things, time and time again.

Re: How Wizards of the Coast distributed equity as a startup

#118

Post by negativeview »

JoeAltmaier wrote: post #113
negativeview wrote: post #79

Earlier quoted context omitted.

You said that they release more and more "to obsolete the old." My point is that was not their goal. Their goal was always to have spells and creatures roughly balanced. Their original thinking was that creatures were a repeatable source of damage and thus should be costed as such. Turns out they overestimated how much rarity mattered and underestimated the power level of creatures. As a result, we get pretty mediocr…

Ok, rather than simple inflation they've invented a way to 'pump' the cards, alternating powerful and weak by category. Even better profits! You don't have to be the least bit creative to do that; you just wait for the old cards to get worn out then reprint them in cycles. Great.

Yes, they make profit. No, they aren't somehow evil, vindictive, or manipulative while doing so.

This line of conversation is not at all productive. You're convinced that they're evil incarnate and will switch from one ill-informed claim (endless inflation) to another (just mindlessly reprinting old cards) on a whim. I'm not interested in getting into an endless Internet argument.

Re: How Wizards of the Coast distributed equity as a startup

#119

Post by gibybo »

shalmanese wrote: post #110
gibybo wrote: post #109

Earlier quoted context omitted.

>options are always more valuable than the underlying asset with the degree of premium based on the volatility of the asset. No, you have this backwards. Options are always LESS valuable than the underlying asset. The degree to which they are less valuable is inversely correlated to their volatility. The more volatile they are, the closer in value they are to their underlying asset. I.e. a January 2015 call for Apple…

I was curious if companies ever did fire employees to claw back vesting so I asked on Quora a couple of years ago: http://www.quora.com/Equity-Compensation/Do-immensely-succes... and apparently the answer is, outside of Skype and Zynga, the practice is rare.

It's not just firing them or taking back their options. The incentives change such that the company doesn't really have to put any effort in retaining them anymore. Bonuses/raises/soft perks/etc that the company might normally provide would be less likely. They don't necessarily have to worry about keeping you happy with what you're working on which is not something you normally think about when considering the value of equity.

It's hard to predict exactly what will happen, but the broken incentives are clear. A better model would have them aligned much better.

Re: How Wizards of the Coast distributed equity as a startup

#120

Post by DonHopkins »

JoeAltmaier wrote: post #113
negativeview wrote: post #79

Earlier quoted context omitted.

You said that they release more and more "to obsolete the old." My point is that was not their goal. Their goal was always to have spells and creatures roughly balanced. Their original thinking was that creatures were a repeatable source of damage and thus should be costed as such. Turns out they overestimated how much rarity mattered and underestimated the power level of creatures. As a result, we get pretty mediocr…

Ok, rather than simple inflation they've invented a way to 'pump' the cards, alternating powerful and weak by category. Even better profits! You don't have to be the least bit creative to do that; you just wait for the old cards to get worn out then reprint them in cycles. Great.

Is criticizing Magic the Gathering as being evil, vindictive, manipulative and profit oriented a way you've invented to 'pump' your Kickstarter project?

Why aren't you also criticizing MTG for blatantly promoting Satanism, or does your card game to that too? ;) http://church-of-illumination.com/mtg-satanic-evidence

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