JonFish85

Congrats either way!

One thing to keep in mind, with something like this, employees' stock is almost certainly worth $0. There will likely be some sort of retention plan for some set of employees, but their stock in GA probably won't be worth anything. The founders will likely have some sort of bonus, and the investors will make some money (not home-run money, but money). I guess they deserve a congrats, but to me it's worth remembering that most likely employees, who viewed their stock options as a part of their compensation, will be left with nothing but a thank you.

"the main ones you care about are: revenue, expenses, total burn and cash in the bank"

That's part of it, but not all of it. Total number of outstanding shares (including warrantable shares!) can change the complexion of things a lot. And then there's the question of preference -- deals that a company made years ago can make for a big difference in share value.

Unless a company has an incredibly clean cap table, a rank-and-file employee will never really know how much their shares are worth until they are either worthless, or have a cash-in-hand buyer. What you're talking about is the general case of "things are moving in a pretty good direction", and that's important. But to really gauge value of a stock option is much, much more complex (and is constantly changing!). Even if an employee were able to come to a reasonable estimate of common stock value, one bad month can wipe that away (an emergency $5m round to make payroll? a loan backed by stock? a long-term lease backed by stock?).

"This is one area that YC has a strong incentive to act in, but hasn't."

This is an interesting thing to consider. If you look at the current president of YC (sama), at least from an outsider's perspective, he's the beneficiary of exactly the type of behavior you're trying to get away from. Based on his company's exit, he is now a VC, but his company was acquired for essentially what it raised, meaning the employees' stock was likely worthless. I have absolutely nothing personal against sama, but let's remember that YC doesn't exist as a charity, it's a business.

"isn't it also being loaned out as well"

Hm? In the stock market, you pay a current stockholder for their share(s). The company sees no money from the transaction. It sounds like what you're thinking of is banking, which is something different.

Just to play devil's advocate on this, the money in the stock market (i.e. any stock transaction outside of a public offering) is generally not being invested in companies that actually build things, it's getting stored.

A different way to look at it might be that in most cases, an illegal deed might be overlooked simply because someone didn't have the funds to see it through the court system. It's one thing if someone is funding endless lawsuits just to drive someone out of business, it's another for someone like Hogan to have a legitimate case, and for Thiel to fund his lawsuit. Thiel's funding of the case did not influence the judgement against Gawker, it simply allowed it to proceed further than if Hogan ran out of money.

I agree with what I think you're saying, that we should be careful about allowing someone to sue someone out of business simply out of spite; however, I think there's something to be said for someone with deeper pockets funding a legitimate suit. It might be comparable to things that the EFF funds, or that the ACLU takes on -- they have deeper pockets, and can take the financial hit that someone with a legitimate claim may not be able to take.

Imagine if Gawker published the same thing of some average middle-class person. They can't afford a high-priced lawyer, so likely Gawker gets away with something that, if it went to court, they would lose. In this case, the bully ran into someone who actually could fight back. As far as I know, Thiel didn't fund endless lawsuits just hoping to run them out of money. He funded a legitimate lawsuit that ended up with Gawker being found in the wrong for.

I think that this is a natural consequence of a world in which it's impossible to have a dialogue about some things. There are some topics in which it's essentially impossible to have a reasoned discussion about things that we disagree over.

This article talks about one: it's impossible to have this discussion with most people (including friends and family) because as soon as someone questions the generally accepted opinion, they're put on the defensive (in this case: "OMG why would you defend a molester?"), and the entire discussion becomes one of trying to defend yourself, and not about what you're trying to discuss.

The same thing happened with the Googler who questioned the idea of whether the tactics used for trying to improve Google's male-vs-female pay discrepancies. Instead of anyone responding to points he made in any sort of rational way, the discussion was immediately turned into "how can you defend someone who says women are worse than men?" -- not at all the case, but a quick way to avoid a factual discussion by pigeon-holing a person who dares to deviate from the generally accepted opinion.

This has also spread to politics: it's impossible to have any sort of reasoned debate about "hey, maybe <insert your favorite politician here> isn't literally the devil across the board" -- the conversation immediately becomes one of trying to undermine the person ("OMG I can't believe you're defending Franken, a man who has assaulted women!").

It also happens when people try to debate things like whether the "Yes means yes" laws are useful, reasonable or effective; I've never seen a reasonable discussion about this (online or in real life), because if anyone questions it, they're immediately on the defensive, trying to argue that no, they're not defending rapists, and no they're not against a safe environment for women. Politically, it's brilliant marketing, because there is absolutely no way to argue against it without being immediately pigeonholed as a rape-defender, and then spending all of your time trying to dig out of a hole that you've been put into.

It's unhealthy, and I think leads to echo chambers -- no one dares to voice an opinion unless they know people will agree with them. And this ultimately makes the problem worse, I think, because without a reasonable dialogue about issues, and without being able to accept the fact that people may have logical reasons to disagree with you, I don't really understand how things will get any better.

Edited: Dialog -> dialogue

I thought Prisoner's Dilemma was more about the inability to have good information: the prisoners can't communicate with each other, and therefore have imperfect information about their decision. To me, this supports my argument: if the prisoners are free to communicate and gather information as they see fit, they can make a good decision. What it sounds like you're saying is that the government should tell the prisoners what to do. I prefer the former, because I think it keeps the responsibility still on the prisoner ("consumer" in our case).

You keep using the word "coordination", and I guess I just don't see it applying in the way I think that you mean. There are other, perhaps better, ways to coordinate than governmental intervention. You've said that boycotts don't work, but I'd say that if the market doesn't want a product, it will fail; why does a government have to enforce that? A boycott may fail because a loud minority isn't representative of the overall market; isn't that the behavior you want?

You may find the references to some communist revolutions distasteful, but I think it's an appropriate comparison in that folks see government as the solution to a problem that markets solve really well. I specifically didn't say that what you're espousing will lead to 50m deaths, but I do think it's a useful tool for showing where government can take on too big of a role with regards to things that markets are very efficient at doing themselves.

"I suppose I'm fine with that static-ness."

Isn't Hacker News full of people that explicitly disagree with this? That static laws are a big tool for incumbent companies to build their moat, and entrepreneurs try to break those down in ways that are intended to be better for everyone. Maybe you disagree (which I respect), but in many ways, static laws look good on the surface but have real downsides in the long run.

aka smart homes that secretly advertise to you.

I don't think that these things should be done secretly. I think companies should have to make this information available to consumers, and I think the government should enforce this to some degree (e.g. if a company is recording my phone calls to send back to their headquarters, absolutely it should be known).

Soundcloud exists, but is likely on life support[1].

1. https://news.ycombinator.com/item?id=14990911

Google and Apple have that too -- YouTube and iTunes have been around longer than Spotify, and likely have similar data sets.

Isn't the point of an IPO generally to raise funds? In this case, it's just allowing people to sell their shares to the public, right? From the company standpoint, this is almost certainly a negative: additional oversight & reporting to do, no funds raised. I guess a positive is that shareholders can cash out, but as an investor, isn't that a giant red flag?

I guess as an investor, I don't see why I'd buy Spotify shares from an existing shareholder -- my "investment" is not going to the company, it's a bit like buying shares on the market of a mature company, except Spotify isn't that -- it's a money-hole with a highly questionable future. Is there any reason for someone to buy existing shares to expect things to turn around? They aren't getting a capital infusion, it's business as usual except with the additional burden of being a public company.

I'm not sure how the Prisoner's Dilemma applies here? I agree that consumers should be educated and have the ability to make informed decisions; in many ways, this is what makes a market more "fair": make sure that consumers have access to information, and let them make the best decisions they can.

I believe the same things about markets/government. Why should we purposefully handicap ourselves to the individual realm stuck with Echo with ads when we can go to the collective realm to grant ourselves a better outcome.

This is something I think we disagree on: I don't see this as a handicap at all. I also disagree that the better outcome is to grow the government's role in something like this. To me, this is a case where the so-called "invisible hand of the market" is the way to go: ensure that consumers have access to the information they need, and let consumers make the best decisions for themselves.

If the people collectively decide that then yes.

I think we have to be very careful about how this is used; people collectively decide silly things all the time ("Pink Slime" comes to mind, for some reason), and we have to be very careful about how we encode things into law. Once the government is responsible for something, it's hard to walk back on that. Leaving things to the market leaves things in a more fluid state, in my opinion.

To me, a useful way to think of markets is as a very sharp knife: it can be extremely useful in the right situations, but you can really hurt yourself if you're not careful.

This may be true to some degree, but it aligns pretty well with people's changing opinions and wants/needs. If we're careful about some things (e.g. monopolies, access to information, etc -- things that allow markets to work efficiently), we can avoid having to bring out the sledgehammer when it's not needed. Some of the early 20th century government involvements led to humanitarian crises (the Communist revolutions in China and Russia); that's not to say that governments necessarily lead to the worst situations, just that sometimes markets are better at things than government involvement. This is a case where I believe this to be especially true.

"Luckily humans have developed a great coordination mechanism called 'democracy' and we can use it when coordination in the market place has failed."

I find that sort of thinking pretty scary. I'm incredibly hesitant to expand the purview of the government into whether products should succeed or fail. It sounds like what you're saying is that people are too stupid to make decisions for themselves, so we should enact government regulations to think for them. This is something markets are very good at, as others have stated. Expanding the government's role in things should be an absolute last resort, to me.

If people are willing to trade their personal information for cheap, cool gadgets, then who is the government to step in to say "no, you're not allowed to do that"? By the same token, you could flip it around: could the government step in and say "you don't want this gadget that's always listening to you, but you have to have it because some group you don't agree with tells you to"?

I want to be careful not to go too slippery slope, but should the government step in and shut down Google, because they exist to serve ads? What about Facebook? It's the same thing there: people trade their personal information for perceived value in other places (Facebook: keeping in touch with people, Google as access to information). Should the government be the ones to decide who should be allowed to make decisions about their information?

It's scary because once the government gets to decide what people should and shouldn't be allowed to use, or what products should or shouldn't succeed, it can be used as an incredibly powerful tool. To me, a useful way to think of government is as a very sharp knife: it can be extremely useful in the right situations, but you can really hurt yourself if you're not careful.

"Do people really believe that infrastructure is not the purview of the government?"

I don't think anyone is arguing that the government shouldn't be responsible for certain infrastructure, it's the degree to which the government should be involved, and what its role should be. If I put on my more conservative hat for a minute to make an argument, I think the idea is that the government should be somewhat of a last resort for things, and that less is more when it comes to government involvement.

Part of the reason for that is that once the government is involved, it changes the incentive structure quite a bit. Using other infrastructure projects (e.g. roads, bridges, etc) for examples that others have pointed out, they're a great way to raise taxes earmarked for those projects, but then that's when politicians start to play games and move money around to their own projects, and now the roads are falling apart, so we need to raise taxes to pay for the roads!

It's also somewhat tricky because once something is a government project, it's basically that forever. It's fairly rare for something to go back to the private sector once it has become a government program. What is more likely is that the solution is more government involvement, and that's something that conservatives tend to view as a bad thing.

Obviously I'm not speaking for all conservatives, and this isn't even necessarily my own viewpoint, but I wanted to push back against the idea that "conservatives just want what's worst".

According to MacRumors, it's a deal "that could be worth $400m". If I were to guess (based on just public information which is almost nothing), the stock is not going to be worth much. Obviously Apple is going to pay the least they can, so I wouldn't be shocked if they're paying exactly what investors need to either get their money back or maybe a slight profit (if the recent investors had conditions for it). Employees will probably get nothing, except a new plan. The total sum of that new plan would depend on hitting some very aggressive numbers, that are unlikely to be hit (no idea what they'd put the metrics on). And the bulk of that is probably going to the CEO who has to stick around for 4 years to cash in.

Is it actually profitable? "Profitable" is a fun term to throw around to make your business look good, but it can mean a lot of different things (net margin profitable, gross margin profitable, pre tax profitable, etc). I'd be surprised if they really were all that profitable (meaning they would end each year with more money than they started with).

If you own the share (exercised the option to buy it, were granted a share, what-have-you), you'll get a letter once the deal is finalized. If they were bought for $100m, you'll likely get a letter saying that your share is worth $0.

Basically it's who you'd think. Some investors will get their money back, some will get a bit more than others. The founders will be fine, but probably more due to their role than their stock.

Common stock will probably be worth $0, and the employees Apple wants to keep will get a new stock vesting schedule for Apple stock.

Why is that interesting? After working for 40 years, saving religiously, it’s entirely possible that they’re living a solid middle class lifestyle not much different from someone else who also lives the same lifestyle but rents and doesn’t save money.

I'm not thinking just SS. Imagine in 30-40 years when SW engineers are retiring with their $5m 401k, but their neighbor is still barely making rent at their service-level job. I imagine there are many more people who have foregone retirement savings to pay off their massive college loans.

Politically, the story would be something like this: why should you, a multi-millionaire SW engineer who hasn't paid taxes on your 401k not pay your fair share so that these other folks can spend some time with their families? After all, they were the victims of predatory lending! Close the loophole that allowed your opulent lifestyle!

And remember, 401ks are a multi-trillion dollar market of untaxed dollars. Do you really think tomorrow's politician in 30-40 years is going to miss that, never mind their constituents?

To me, this is another implementation of the housing bubble:

- People see college graduates making a lot of money

- Politicians make it a priority to make it easier for people to get loans to go to college

- More people take out loans to go to college

- Colleges realize there is no downward pressure on price and raise tuition.

- Politicians continue to make it easy for people to go to college

- People take bigger loans to go to any school they wish

Until the music stops, things are sort of OK. People's kids can go to any school they can get into, regardless of cost. Colleges can raise their tuition with no consequences.

Politically it's a difficult problem, because the old solution of making more money available is getting out of hand, but what politician wants to stand up and tell people they can't go to the college of their dreams just because they can't afford it?

During the housing bubble, it was the cycle of "people want to own a home" => "politicians say everyone should be able to own a home and make loans available" => "companies make money packaging up these loans" => "prices go up" => "people can't afford homes" => "politicians make more money available". Until the music stops, everything is great -- everyone is making money, everyone is getting what they want. Then it unravels...

People who came from my alma mater who majored in drama can't say the same.

Don't worry, your salary gives them a way out too. And I'm not just saying that to be snarky, I think it's very likely what will end up happening: you'll end up paying for their poor choices one way or another. If it's not directly via taxes to pay off their student loans, it'll fund their retirement.

"Don't settle for common stock"

Unless you're a C-level employee, you're not going to have the choice. And even then you're probably still not going to have a choice except in very rare cases (e.g. Uber's new CEO might have some decent protections). If you're "just" an employee, you're going to get laughed at if you demand anything besides common stock.

Others have mentioned similar things, but there are a few things to consider.

Remember, $80k/year now may seem fine, but you have no idea what the future holds. First, you may average $80k/yr, but remember that volatility can be rough. If you got your $2.2m in 2007, you'd see losses for several years, and a decade before it recovered -- can you afford not to draw down on principle for a decade?

And then if you're aiming to live off of $80k/year, that's today's dollars. It sounds like you're pretty young (college), so if you're expecting to live another 60-80 years, you have to account for inflation. For example, if you had $100 in 1937, you'd need $1,666 today to have the same purchasing power[1]. If you do the same math going forward, you'll need $1.3m/year in 80 years to have the same purchasing power.

On top of that, there are other things to consider: having kids, unexpected costs, health care, rising taxes, etc. As has been posted even here on HN recently, a wealth tax would almost certainly blow your plans up in a big way. And if you have kids, they're not going to qualify for financial aid, because you're a multi-millionaire! So you'll be in an interesting pickle there.

This isn't to say that you shouldn't aim for this goal, just wanted to mention some things to at least consider...

[1] http://www.in2013dollars.com/1937-dollars-in-2016

From the perspective of trying to get the budget balanced, taxing wealth is probably the single most efficient way to do it.

Why? As a total layman, wouldn't it be incredibly inefficient? If we tax the wealth of, say, the top 100 richest Americans, wouldn't that cause some pretty terrible downsides? If we force them to sell their holdings, wouldn't that ripple through the economy?

Take Jeff Bezos--if you forced him to sell a significant portion of his stock, wouldn't that depress the Amazon stock price, which affects a significant number of other individuals and businesses?

This proposal seems like the equivalent of a failing startup diluting the crap out of its employee pool to raise a gigantic round.

If that's possible, that's probably the right thing to do; if the company is failing, who cares about diluted stock? 0.0075% of $0 is still $0.

Outside of the "how to pay for it" question (which has never been addressed beyond vague "tax the rich" promises) there's another problem: how to save people from themselves. One could think of this as an annuity, and try to cash it in for total cash value today (e.g. lump sum payment): get $200k today, and sign over the rest of the checks you get for life. Then what do you do with bankrupt folks? Sorry, you had your chance, now you starve in the streets? Of course not -- so you still need another safety net for those people.

"Apple provides a black box with iOS, they have full control. Maybe the next iOS update comes with privacy intrusion because it's more lucrative."

This is true, but it's also potentially worthwhile to consider that Apple has positioned themselves as a hardware company (i.e. the majority of their money is based on selling units of hardware), whereas their main competitor here (Google) is an ad company (i.e. the majority of their money comes from selling their users' data). Apple has chosen to highlight their commitment to privacy partially because they feel it helps their market position, whereas for Google, it would hurt it.

Certainly it doesn't mean that Apple is infallible, just that I think it makes it easier to accept that Apple is more likely to protect privacy more than Google.

I'm pretty biased towards Apple, so obviously this may not work for everyone; if you need source code to feel secure, then by all means, go for it. For people who are looking for less work but some of the benefits, I think that Apple is a decent way to go.

"What he basically did was say, "don't ever print anything negative about a billionaire because they can take down your entire business""

No, he didn't. Gawker died on its own merits; in an alternative world where Gawker continued to flaunt the law because someone couldn't afford to fund a lawsuit, I'm OK with this outcome. Not to mention, Gawker did themselves absolutely no favors, from ignoring a federal judge to flippantly answering questions under oath, they garnered no pity from me.

It may be an interesting exercise to think of how this can be turned "against" you. If you wanted to play armchair politics, you could spin this:

- Highly paid engineer walked away from a 6 figure salary

- Takes a job at a small company where he gets equity that could potentially be worth millions.

- Complains that he may have to pay taxes on a significant portion of his compensation.

Put those together, and you have someone probably still making more than double the national median wage complaining that his favorite tax loophole is being closed. Meanwhile the local plumber / school teacher / single mom is struggling to make ends meet; why shouldn't you pay your fair share so that they can get a tax break?

FWIW, this is just an exercise, I'm not saying this is true. Just something to keep in mind though, that many (most?) of the people on HN are being paid significantly higher than most Americans, and complaining that their stock is being taxed differently isn't going to garner much support.