Zenefits Was the Perfect Startup, Then It Self-Disrupted • Hacker News Board

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#71

Post by BinaryIdiot » Mon, May 09, 2016, 4:57 PM UTC

maxerickson wrote: post #39

BinaryIdiot wrote: post #33

Earlier quoted context omitted.

You sir are correct. I'm curious though; are there any really good solutions to this type of problem? You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply. Seems like there isn't really a good way to prevent companies from breaking the law. Well unless you do some sort of regular inspecti…

What's wrong with putting companies out of business? I understand that it ends up having impacts on people that aren't necessarily involved in the misbehavior, but it provides officers and investors a significant incentive to avoid wrongdoing.

> What's wrong with putting companies out of business?

Well you have to decide what is or isn't worth destroying a business entity. Let's say Startup X breaks a law that, while illegal, has little to no impact on the general public. Let's say Startup X isn't found out until 5 years in and they're doing $300 million in revenue but without breaking that law they would be at some unknown number less than $300 million. Is that worth putting them out of business? If so, why? If not then what is the appropriate punishment?

Seems like a really hard problem to be fair all the way around.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#72

Post by toomuchtodo » Mon, May 09, 2016, 4:59 PM UTC

icebraining wrote: post #27

tsunamifury wrote: post #25

Earlier quoted context omitted.

I think there is a stage where a genuine innovation is in a regulatory grey state because society simply hasn't processed its effects yet. That wasn't the case here... but it is in many other situations. Sometimes ex-post-facto the innovation is ruled against regulation and sometimes not. Take Tesla as an example -- a company who has tried to sell cars online. Since many states hadn't seen that before, they tried to…

Since many states hadn't seen that before, they tried to rule that it was illegal due to dealer-sales regulation. I don't see what being online has anything to do with it; the spirit of the rule - preventing the manufacturers from competing with dealerships - is valid anyway. I personally disagree with this rule, but the "online" part is just Tesla trying to get off on a technicality.

> I don't see what being online has anything to do with it

States regulate auto manufacturers from competing with their dealerships; Tesla selling online would be a federal issue (interstate commerce).

Ergo, Tesla gets around bad regulatory capture by using a law that supersedes state law.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#73

Post by cloudjacker » Mon, May 09, 2016, 4:59 PM UTC

GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

I've struggled with this in the past as well, having been raised differently.

I was able to unlearn these less effective set of rules by studying different schools of ethics.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#74

Post by mindcrime » Mon, May 09, 2016, 4:59 PM UTC

maxerickson wrote: post #39

BinaryIdiot wrote: post #33

Earlier quoted context omitted.

You sir are correct. I'm curious though; are there any really good solutions to this type of problem? You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply. Seems like there isn't really a good way to prevent companies from breaking the law. Well unless you do some sort of regular inspecti…

What's wrong with putting companies out of business? I understand that it ends up having impacts on people that aren't necessarily involved in the misbehavior, but it provides officers and investors a significant incentive to avoid wrongdoing.

There's a big difference between "illegal" and "wrong" though.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#75

Post by st3v3r » Mon, May 09, 2016, 4:59 PM UTC

pkaye wrote: post #20

GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

Actually this how many successful people do it. It is better to break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains. I've learned this long time ago (watching coworkers, family, etc) but will probably never do it myself because I'm just not that kind of person.

Which is why the fines should be relative to the amount of money made breaking the rules. As in, all of that money.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#76

Post by icebraining » Mon, May 09, 2016, 5:00 PM UTC

toomuchtodo wrote: post #72

icebraining wrote: post #27

Earlier quoted context omitted.

Since many states hadn't seen that before, they tried to rule that it was illegal due to dealer-sales regulation. I don't see what being online has anything to do with it; the spirit of the rule - preventing the manufacturers from competing with dealerships - is valid anyway. I personally disagree with this rule, but the "online" part is just Tesla trying to get off on a technicality.

> I don't see what being online has anything to do with it States regulate auto manufacturers from competing with their dealerships; Tesla selling online would be a federal issue (interstate commerce). Ergo, Tesla gets around bad regulatory capture by using a law that supersedes state law.

Being a federal issue doesn't preclude it being a state issue as well, as far as I know.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#77

Post by mindcrime » Mon, May 09, 2016, 5:01 PM UTC

jsprogrammer wrote: post #40

BinaryIdiot wrote: post #33

Earlier quoted context omitted.

You sir are correct. I'm curious though; are there any really good solutions to this type of problem? You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply. Seems like there isn't really a good way to prevent companies from breaking the law. Well unless you do some sort of regular inspecti…

Why should a company that shouldn't have been in business be protected from being put out of business? You can't really prevent people from breaking the law (why have the law if it's impossible for anyone to break it?), but predetermined consequences could be played out when the law is intentionally broken. It seems that RICO would apply to this situation. Multiple individuals and companies/funds conspired to commit…

Because sometimes you're dealing with a bad law.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#78

Post by [deleted] » Mon, May 09, 2016, 5:01 PM UTC

icebraining wrote: post #76

toomuchtodo wrote: post #72

Earlier quoted context omitted.

> I don't see what being online has anything to do with it States regulate auto manufacturers from competing with their dealerships; Tesla selling online would be a federal issue (interstate commerce). Ergo, Tesla gets around bad regulatory capture by using a law that supersedes state law.

Being a federal issue doesn't preclude it being a state issue as well, as far as I know.

[deleted]

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#79

Post by carsongross » Mon, May 09, 2016, 5:01 PM UTC

GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

You know how to feel about it.

But you rightly recognize that there is a prisoners dilemma when it comes to moral behavior. Your stomach is tempting you to defect. Your heart is telling you not to. And your head is wondering how the game could be structured to favor your heart over your stomach.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#80

Post by richmarr » Mon, May 09, 2016, 5:02 PM UTC

pkaye wrote: post #20

GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

Actually this how many successful people do it. It is better to break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains. I've learned this long time ago (watching coworkers, family, etc) but will probably never do it myself because I'm just not that kind of person.

> break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains. I've learned this long time ago (watching coworkers, family, etc)

Sounds like family christmas was a hoot :)