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Y Combinator files brief supporting Epic Games, says store fees stifle startups

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Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#51

Post by ianbutler »

lloyddobbler wrote: post #4

“A 30% revenue share can easily be the difference between a company that can afford to scale, hire new employees, and reinvest in its product, and one that is perpetually struggling to stay afloat.” This brought up a fun thought exercise for me. Pretty sure that Y Combinator would argue that giving away 7% of one's company for access to intangible (but beneficial) things like funding, advisors, etc, is completely wor…

The dynamics of 7% of ownership and 30% of ongoing revenue are vastly different.

So different in fact that the comparison doesn't hold water.

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#53

Post by NoPicklez »

qcnguy wrote: post #29
sonofhans wrote: post #6

[flagged]

Probably, mobile operating systems would work more like macOS where apps can be installed directly from websites with a layer of (possibly server side) malware checking and more reliance on code signing/sandboxing. There's no inherent reason apps must be distributed via app stores.

The inherent reason initially was so that there was one central place to obtain apps/games in a mobile market that wasn't used to browsing the web for apps.

I genuinely don't think there are many people that want something different to the app store. If all of the apps I can use on my phone are in the app store from a functionality and ease of use standpoint that is the best option.

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#54

Post by jjtheblunt »

epohs wrote: post #49
dangus wrote: post #47

Earlier quoted context omitted.

You say “they would never go for this” but they do it on the Mac. It’s funny how they are their own counter example. They have no leg to stand on.

Counter example to what? Why should they not be able to run both a relatively open ecosystem and a mostly closed one? I don’t think Apple is arguing that it is impossible to allow more open ways to install apps on iPhones. I think they’re saying that they don’t want to, and that they shouldn’t have to.

It's possible they'll allow this on iOS once finer granularity logging of battery usage is pervasive, how fine is anyone's guess, so as to track down what apps, and of whatever provenance, degrade some kpi like user impression of battery life.

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#55

Post by maximus_01 »

addaon wrote: post #46
Hammershaft wrote: post #35

Earlier quoted context omitted.

Startup founders can choose between many models of funding, VCs, etc. Starups cannot choose between different ways of accessing willing customers over iOS, they have to comply with a %30 cut and a jungle of regulations that act in Apple's interest. These two examples aren't the same, even just on the basis of market power.

> Starups cannot choose between different ways of accessing willing customers over iOS What? They can offer an SPA, or a traditional web page. They can offer a hardware device. They can make an android app compelling enough to convert users.

You are really trying to say that for a startup trying to build software, say a productivity app or whatever, they should consider launching their own hardware device? They are very different things and would basically make indie development impossible (or really any software company that can't raise hundreds of millions to billions)

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#56

Post by digitaLandscape »

addaon wrote: post #46
Hammershaft wrote: post #35

Earlier quoted context omitted.

Startup founders can choose between many models of funding, VCs, etc. Starups cannot choose between different ways of accessing willing customers over iOS, they have to comply with a %30 cut and a jungle of regulations that act in Apple's interest. These two examples aren't the same, even just on the basis of market power.

> Starups cannot choose between different ways of accessing willing customers over iOS What? They can offer an SPA, or a traditional web page. They can offer a hardware device. They can make an android app compelling enough to convert users.

[dead]

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#57

Post by athrun »

chupchap wrote: post #44
doctorpangloss wrote: post #14

I don’t know. You could just as well say, “A 3% merchant fee can easily be [… ruinous to a bunch of companies]”, and I’d be talking about Stripe, a Y Combinator company. In Europe they manage to cap interchange fees at 10x less, and there’s no less “payments innovation” or more “fraud” or whatever some nice red headed LISP brothers or some insightful patio furniture guy will say is eating into the 3% merchant fees. P…

I don't understand why transaction fee is a percentage as it takes the cost of transferring money is the same irrespective of the amount. There should be a reasonable cap. For example 2% for any transaction less than $2, and $0.2 for any larger transactions. Why do we still have this charade of collecting money and then giving some pittance back to the customer in the form of credit card points?

It's about provisioning for credit losses.

Roughly speaking, when a transaction needs to be unwound, if the merchant cannot cover the reversal (for example, because it has defaulted), then the payment processor needs to pony up instead. Note that this isn't an edge case, this is something that happens every day.

If the payment processor defaults (gasp!), then the processor's sponsor bank needs to cover it. This is why a sponsor bank will have a lot to say about what a processor can and cannot do.

If the sponsor bank is unable to meet its obligations (argh!), then it's the card Network itself that is on the hook. This is why card networks have a lot to say about what a sponsor bank can and cannot do ;)

The key to understanding payment processing is to realise that the risk is very asymmetrical. The processing party collects only a small fraction of the transaction amount as fees, but is effectively on the hook for the full amount if things go pear shaped.

That is why the cost is typically proportional to the value of the payment.

You'll see fixed/capped fees mostly on payment methods that don't allow reversals (ie: not very consumer friendly), or that take place between highly trusted parties where credit risk can be handled through other ways.

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#58

Post by jchw »

epohs wrote: post #49
dangus wrote: post #47

Earlier quoted context omitted.

You say “they would never go for this” but they do it on the Mac. It’s funny how they are their own counter example. They have no leg to stand on.

Counter example to what? Why should they not be able to run both a relatively open ecosystem and a mostly closed one? I don’t think Apple is arguing that it is impossible to allow more open ways to install apps on iPhones. I think they’re saying that they don’t want to, and that they shouldn’t have to.

> Counter example to what? Why should they not be able to run both a relatively open ecosystem and a mostly closed one?

> I don’t think Apple is arguing that it is impossible to allow more open ways to install apps on iPhones. I think they’re saying that they don’t want to, and that they shouldn’t have to.

Apple volunteers the position that they couldn't possibly open the iOS ecosystem themselves, not just that they don't want to, making some very amusing claims in the process.[1] They also don't want to, but the more you dig into possible "whys", you get into a lot of troubling realities quickly.

Epic Games, on the other hand, is arguing that they actually should have to, at least to some extent. There are actually a lot of reasons why Apple's App Store practices might violate the law, and to my understanding, Epic Games is alleging that Apple's App Store practices constitute "illegal tying" whereby Apple unlawfully ties its payment processing service with its app distribution. That's far from the only potential legal issue that the App Store could face just based on current, existing law. (Note: I am not a lawyer, so take this with a grain of salt; but nothing I am saying is too original or groundbreaking.)

And of course, it's always worth remembering that what's legal today can be regulated tomorrow. I don't really believe lawmakers or the general public really have had enough time to take a look at the impact that Apple/Google app stores have had on the software market and decide if these practices should be legal. The EU seems to think they shouldn't, and while I don't agree with the EU on everything, I tend to agree.

[1]: https://observer.com/2021/05/even-craig-federighi-apples-hea...

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#59

Post by hu3 »

nickthegreek wrote: post #33
furyofantares wrote: post #13

Earlier quoted context omitted.

Is that an Apple thing? People trying to monetize anything they make seem to vastly outnumber those of us who just want to make stuff for other people to enjoy. When I turn off an adblocker I'm shocked how many hobby projects spam ads at their users to try to make a few pennies. It feels like a social issue.

Giving away free software on the appstore is gonna cost you $100/yr developer license. Sure, the more apps you make dilutes the cost, but it doesn’t seem like that inviting of a space for maintained free apps.

You'll also need a Mac computer for the happy path so it's more than $100/year.

Re: Y Combinator files brief supporting Epic Games, says store fees stifle startups

#60

Post by frollogaston »

bentocorp wrote: post #2

I recently wrote about how Apple now has the most hostile developer ecosystem of any major platform: https://www.magiclasso.co/insights/apple-development/ Good to see VCs and Y Combinator now supporting and pushing for change.

I know this isn't the biggest thing, but it's funny how even simple questions have complicated answers in Swift, ex https://stackoverflow.com/questions/39677330/how-does-string...
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