I know the Collisons are brilliant founders and I have long admired Stripe (I've used their Golang API client as inspiration many times in my own code) but it's kind of unfortunate how founder lore really minimizes employees. Stripe has 4,000 people working there, this article mentions only two other employees in passing (the CPO and CFO). Surely many others were brilliant contributors to Stripe's becoming a $95B unicorn, and staying one, beyond just the Collison Brothers. A culture in our industry that made employees feel more ownership would likely help with retention and recruiting.
lifeisstillgood 688 days ago [-]
I think that this is not just a story-telling problem.
It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees.
Why is he getting 100,000 from each employee ? Not because those employees send him a cheque. But because of particular outcomes of share capital, and corporate law. Decisions made in UK / US legal circles since before the USA was a USA.
These decisions have been part of 200 years of the most phenomenal growth in global human wealth ever, so there is a lot of baby in the bathwater. But look at say the German mittelstand - a different approach to local business banking. And compare european social-democracy to US welfare states.
There is a lot of room and flexibility between "totally dampen growth and human innovation" and "more equal sharing of life's burdens".
Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. So the last 200 years of growth can be seen as a story of government funded and directed scientific achievement, given reign to rollout in a benign business climate, and the workforce provided via mass education and health programs, all of which funded by taxing the successful companies.
Is that an over simplification - hell yes. But so is "young founder has great idea and works hard".
philwelch 688 days ago [-]
> It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees. Why is he getting 100,000 from each employee?
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
notfromhere 688 days ago [-]
By its nature, you get more value out of an employee than you pay in wages. Otherwise, there would be no point to hiring anyone.
jollofricepeas 688 days ago [-]
Exactly.
Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.”
The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion.
If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then….
- Senior engineers would make NFL wages
- And quants would be making NBA/NFL wages
edanm 688 days ago [-]
> - Senior engineers would make NFL wages
That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc.
The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team.
And at the top end, the best players are a massive draw that makes teams tons of money.
Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.)
Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
xmprt 688 days ago [-]
> If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome
I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
philwelch 687 days ago [-]
> I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players.
This is a popular enough theory that it's been tested multiple times. In the successful cases, the rival league still ended up trying to poach the top players and ended up merging with the other top league. In the less successful cases, the league went out of business.
edanm 687 days ago [-]
Absolutely. I think it's worth thinking through the difference to software - because it's a competitive field, as you said, the relative rank matters, and therefore getting the best player is important for your team, unless they are for some reason no longer playing. E.g. Michael Jordan was a huge draw when he was playing, and made his team relatively better off (and the league as a whole).
In software, that's not the way it works. Or at least, the competitive business aspect of it is largely out of engineer's hands. Few businesses ultimately succeed because they wrote better code, IMO. Though interestingly, a bunch of startups only get big in the first place by having great code that allows them great speed/flexibility/etc. Stripe itself got big originally because its API was really great, which I'd attribute more to product than to engineers, except in this case it's kind of a merger of the two.
listenallyall 686 days ago [-]
The AFL, WFL, USFL, XFL, AAFL, 2nd XFL and 2nd USFL would likely disagree.
"March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
philwelch 685 days ago [-]
We also have a third XFL coming soon!
The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
xmprt 685 days ago [-]
I mean that if the NFL didn't exist then the AFL would be popular. A better example would be Japanese Baseball. A lot of those players are great but very few of them ended up transferring to the American leagues, yet the sport is still extremely popular in Japan.
France_is_bacon 688 days ago [-]
sumedh 688 days ago [-]
> And at the top end, the best players are a massive draw that makes teams tons of money.
What is so special about them?
specialist 687 days ago [-]
> The reason NFL wages are so high is...
...because they formed unions.
edanm 687 days ago [-]
Doctors also have a union and for the most part aren't making nfl wages.
I don't understand what makes people think that software engineers are so valuable that they'd get wages that are multiples of doctors.
specialist 686 days ago [-]
Scarcity is not necessary for leverage. Preventing defectors from collective bargaining is.
> Scarcity is not necessary for leverage. Preventing defectors from collective bargaining is.
"Preventing defectors from collective bargaining" is also, more or less, the definition of what an economic cartel does.
notfromhere 671 days ago [-]
Companies are an economic cartel for capital, but we’ve don’t take their existence as a controversy
thrixton 687 days ago [-]
I doubt this to be honest.
If you could hire 2 or 5 of the next best engineers for the price of a top pick 'NFL' engineer, you'd be ahead in output in most situations.
The same does not go for the NFL.
izgzhen 688 days ago [-]
While senior engineers don’t make NFL wages, the executives do (including some former senior engineers). Would it be fair to compare execs to NFL player instead? (While engineers are those work behind the scene to support the game)
kortilla 688 days ago [-]
You used that employee’s labor in conjunction with a bunch of other things to produce more value than the wages. If the value was in just the work alone and not the work directed at the right things in the right environment, there would be no point in working for Amazon and you could just collect the entire revenue yourself.
This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.
tjs8rj 688 days ago [-]
This is the answer and why the labor theory of value tends to fall flat without due consideration to the labor of managers and the cumulative returns of labor.
If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money.
This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
tsimionescu 688 days ago [-]
While you're right that you have to account for the entire organization, not just the engineers (obviously), the gap between what the owners earn compared to all other employees combined is still wildly disproportionate.
It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
tjs8rj 687 days ago [-]
This same argument also applies to owners. If the org makes $100k in revenue and the owners take $10k of that, why don't you just leave to start your own firm and keep it all?
It's because there ARE contributions from the owner, even a passive owner has what I called "dividends from stored labor": they took on the risk, created a functioning company solving a problem, did the work of organizing the systems/structure that run the thing, and so they are entitled to a piece of the revenue as well (as that revenue couldn't have been earned without their contributions either).
tsimionescu 687 days ago [-]
No one says that owners are not entitled to a piece of the revenue, obviously they are, and doubly so when they are also doing their own work for the company.
My point was that owners currently get a disproportionately large piece, and that the gap between what owners get vs what workers get has been widening with time. And not only is it widening, but it is doing so while the relative contributions to the business' success are often narrowing (give the huge increases in worker productivity in most domains).
philwelch 685 days ago [-]
You're not taking risk premium into account. Owners run the risk of working for several years and getting absolutely nothing in return. Sometimes they put their own money into the company and never get it back.
kareemsabri 688 days ago [-]
No, on AVERAGE you get more value out of each employee than you pay in wages, if you turn a profit (let's put aside investing in growth / VC funding for simplicity). That's how you stay in business. That does not mean for each employee you are efficiently paying them based on the value created for the business, some may be underpaid and some grossly overpaid.
philwelch 687 days ago [-]
By its nature, the employee's wages are more valuable to them than the time and effort they are expending on the job. Otherwise, there would be no point to working.
What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.
CryptoBanker 687 days ago [-]
On average that is true, but certainly employees who make minimum wage contribute a higher percentage of their salary than someone who earns 6 digits, to the point that the weapon who earns 6 digits may actually come out ahead depending on how many employees there are
oh_sigh 688 days ago [-]
On average, yes, but any given employee may be a net negative and not really earn their keep.
At the same time, the proposal has to be better than what others companies offer, or nobody would accept the position.
lifeisstillgood 688 days ago [-]
It's about how and why the deal was structured that way.
Amazon is structured so that there is net 100,000 dollars of wealth in the deal betweeen you and him that goes to him (whatever goes to you, he also gets 100k.
I am sure you have no complaints, but why the 100k? why can't that be 50k to him and 50k to you.? Or 33, 33 and 33 extra in tax? or ...
And is the particular arrangement something that is fundamental and inviolable to creating the wealth Amazon did? Or is it just that because it was that way Amazon could beat the alternative universe Amazon ?
what is the phase space of "still generate wealth" and "society looks different"?
philwelch 687 days ago [-]
Fine, so what's stopping you from starting a business that does exactly the same thing Amazon does, except you make less money and you pay your employees more, and then you go ahead and poach Amazon's entire workforce? If that's actually possible, you should do that, because if you only end up half as rich as Jeff Bezos, you'll still be rich and all of your employees will be better off. What's stopping you?
lifeisstillgood 686 days ago [-]
I can see you are angry - this is not about me.
If Amazon had had a competitor back in the day that had done just that - everything Amazon did, only shared more, then probably we would all be buying from ... err ... Mississippi.com. But this competitor would have had to pull all the right moves - as well as sharing differently.
And one day, yes there will be some innovative new company that will do to Amazon what they have done to Walmart. And maybe that company will have a competitor that will be a co-op and maybe they will have the edge. It has worked ok in the UK for John Lewis. But the lesson from John Lewis is they have to be good at all the basic stuff - and only then do they get to pick staff based on the nicer governance / culture / slight pay gap.
Building a company is hard. Building something like Amazon is freakishly hard. Which is why this "treat employees well" is basically never left up to the market and just tacked on afterwards in regulations.
And finally - yeah would Bezos exactly be hurting if he was half as wealthy. Neither of us think so - which kind of is my point. If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
The phase space available to us is larger than we think.
philwelch 685 days ago [-]
> I can see you are angry
I'm not angry. I'm just making a point.
> Building a company is hard. Building something like Amazon is freakishly hard.
And that's the point.
> If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
I don't want to fixate on Bezos in particular, but there are probably a lot of founders who would be hesitant to start a company if, once that company became valuable enough, they would be forcibly divested from it by law and therefore be at risk of losing control. Even if you're a vision-focused founder who is intrinsically motivated by wanting the company you are founding to exist in the way that you want it to exist, with no regard to your own personal wealth, you're going to be hesitant with that sort of confiscatory regime. And that's setting aside the fact that building a large company is not only "freakishly hard" but also tremendously risky. If you have a wealth cap of 10 billion dollars thinking "10 billion dollars is enough motivation for anyone", sure, but there's a risk premium involved and the expected value is nowhere close to that number.
specialist 687 days ago [-]
That's the easy part. Though I doubt investors will ever again allow 90s era Microsoft level of profit sharing
Amazon's secret sauce was cheap capital. Both tax holiday/avoidance and persuading Wall St to forego profits. A combo that's unlikely to be repeated any time soon.
philwelch 685 days ago [-]
There were hundreds of other e-commerce companies that were started around the same time, all of which had those exact same benefits. Most of them died in the dotcom crash.
CallMeJim 688 days ago [-]
Do you genuinely believe that dividing net wealth by total employees gives a meaningful figure?
If Amazon employed me tomorrow, would their revenue immediately and automatically increase by $100k?
lifeisstillgood 688 days ago [-]
That depends on what the figure is used for. That's almost like "do you really believe in statistics"
It is always useful for fish to ask what is water.
Otherwise people accept knee-jerk political phases like "free market" or "business friendly policies", without considering if it is optimal
There is a continuum of ways to arrange government, labour and private ownership. The particular point labelled "USA early 2000s" is not the only one.
That is what I genuinely believe - and I want to look around to see what the rest of the continuum looks like - the good and the bad parts
onion2k 687 days ago [-]
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did. Jeff got $2.8m, you $200k. On paper it's unfair, unreasonable, and unbalanced, but you agreed to it, and without Jeff you would have earned less. Maybe it's fine.
philwelch 687 days ago [-]
> If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did.
This was early in my career, and I didn't work on anything customer facing, but there's still no guarantee of that. What if I'd worked on the Fire Phone?
pjbeam 688 days ago [-]
Same here.
VWWHFSfQ 688 days ago [-]
> It is a wealth-sharing problem as well.
The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.
wbsss4412 688 days ago [-]
That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area.
The distinguishing factors here aren’t simply European regulations and taxes.
VWWHFSfQ 688 days ago [-]
It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
jhugo 688 days ago [-]
I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
tluyben2 688 days ago [-]
I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.
greenhorn123 688 days ago [-]
And if perchance they do some US company will buy them.
randomsearch 688 days ago [-]
It’s a cultural difference not regulation, at least according to every VC and mentor I’ve ever met who has worked in both the US and Europe.
I know of American VCs who have been just as ambitious investing with U.K. startups as with American ones.
beaned 688 days ago [-]
There might be a bit of observational bias here (better technical term?). HN is overwhelmingly about the tech industry, but most US companies are started outside of SF/California.
wbsss4412 688 days ago [-]
Most are started outside of California, yes, but there are plenty of large scale companies in the EU too. So unless we are limiting the discussion to large scale tech companies of the sort that are predominately in the Bay Area, the discussion just isn’t congruent.
bogomipz 688 days ago [-]
Yes but that concentration in the Bay area has historically been because of its proximity to Sand Hill Road no? Or am I misunderstanding your point?
wbsss4412 688 days ago [-]
Well that’s basically is my point. The thesis I was responding to was that tech unicorns don’t exist in Europe due to taxes and regulations.
If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
fsckboy 688 days ago [-]
taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US.
and within the US, "why SV?" might simply have another orthogonal explanation.
tsimionescu 688 days ago [-]
> taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US.
If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York.
The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.
No offense to Europeans, but I've only heard of Spotify.
aiisjustanif 688 days ago [-]
Not hearing about Klarna and Deliveroo is surprising. Klarna is everywhere I turn in the US.
ricardonunez 688 days ago [-]
Transferwise/wise too. I use it to pay employees in Europe. I remember going to Clearwater and seeing their logo on i4 all the time. It is a known company. Revolut also known but still doesn’t work well for US costumers.
nickstinemates 688 days ago [-]
Klarna is like a layaway program? I'm like the GP never heard of these companies other than Spotify and the Klarna website isn't very helpful
cmckn 688 days ago [-]
It’s kind of like a payday loan type of micro-lending that integrates with merchants similarly to PayPal. I’ve never understood the appeal, it feels super predatory. But most creditors do, I guess. I first heard of it a few years ago when they did a huge ad campaign with a lot of the popular queens from RuPaul’s Drag Race.
pbreit 688 days ago [-]
It’s frequently way less predatory: merchants pays the finance charges and payoff time is much shorter.
bogomipz 688 days ago [-]
I don't know, perhaps they're not predatory in usuary rate sense but I feel like using celebrities like A$AP Rocky and Keke Palmer to appeal to Gen Z to load up on consumer debt feels a bit questionable.
pbreit 688 days ago [-]
Layaway is the opposite: pay now, buy later.
bogomipz 688 days ago [-]
I realize Spotify was started in Europe but they opened an office in the US in 2010. That's 8 years before they went public. And within a year they had a mega office. They were regularly in the NYC real estate news for the next couple of years after as well for adding and outgrowing existing office space. Statista shows the US presence has almost double the Swedish employees.[1]
Agreed, Spotify is a Swedish company in a pretty limited capacity. I know so many ex-Spotify people in NYC.
dcolkitt 688 days ago [-]
So that's the full list of successful startups for a developed economy polity with twice the population of America over the past 25 years... Not exactly impressive.
pbreit 688 days ago [-]
But possible.
jdavis703 688 days ago [-]
If Amazon’s board decided to reallocate the CEO’s compensation package and grant it to employees, it would increase the entry level salaries of warehouse workers from $18/hour to $18.45/hour.
Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.
jonplackett 688 days ago [-]
Don’t confuse compensation with his wealth.
CEOs often have hardly any salary. But his shares nearly doubled in value over the pandemic - increasing by $84 billion.
Divide those billions per employee instead and they get $84,000 each. And Bezos is still as rich as he was before the pandemic.
lubos 688 days ago [-]
Amazon stock price is currently back to where it was before the pandemic. Look at the charts.
jdavis703 688 days ago [-]
The CEO of Amazon has a $212mm compensation package. That’s what I based my estimate off. And I’m sure we can all agree that $212mm is more than “hardly any salary.” I could retire on that amount, have my alma matter name a building after me and still have more money than I know what to do with.
philwelch 688 days ago [-]
Jeff Bezos isn't the CEO of Amazon anymore.
jdavis703 687 days ago [-]
What is the board supposed to do then? Dilute Bezo’s and everyone else’s holdings?
philwelch 687 days ago [-]
I don't think the board is doing anything wrong, personally. I just don't think Jeff Bezos' income was ever anything close to what Andy Jassy is making, for the exact same reasons that Tim Cook's income is higher than Steve Jobs'.
pjbeam 688 days ago [-]
Divide that by 10--that's Andy's 10 year RSU grant, not his annual comp.
zem 688 days ago [-]
the issue here is owner compensation, not CEO compensation. that is, wealth accrued by virtue of "owning" a company that other people are merely "employees" adding value to, but not receiving any of that value.
daenz 688 days ago [-]
Anyone can buy Amazon stock. Then you own some of the company and will benefit financially if the value goes up!
jeromegv 688 days ago [-]
So you're advocating for employees to "buy" stock from where they work in order to get compensated?
daenz 688 days ago [-]
>in order to get compensated
That language is based on the assumption that they're not already being compensated.
Their compensation is what they agreed to accept as payment for their labor. So they're already being compensated. If they want to "own" part of the company outside of this agreement, they need to buy a piece of it. If you want that as part of your employment agreement, negotiate it beforehand, either individually, or as part of a union effort. If you can't negotiate it through those efforts, then accept the fact that the employer believes they can get a better deal on the labor.
CPLX 688 days ago [-]
daenz 688 days ago [-]
>Or you can grab some torches and sharp objects and hold them to his throat and change the terms of the negotiation.
Do all of your employees at From Day One own a portion of the company? Why shouldn't they "hold sharp objects to your throat", as the founder, to get a better deal than what they agreed to? If not, why not?
CPLX 688 days ago [-]
If they believe they’ve exhausted all other avenues for positive change, and if I personally have subverted and taken over roles best left to a democratic government, then of course they should.
This country, with its institutions, belongs to the people who inhabit it.
If they grow weary of the existing power structure and have not been given the ability to meaningfully participate in the institutions that govern the lives of themselves and their communities, then they most certainly should exercise their revolutionary right to overthrow those institutions.
You're re-contexualizing an Abraham Lincoln quote about the government to justify threatening the life of a private citizen. If you have an issue with the government not doing what you feel is its job, then maybe you should petition the government instead of advocating for some bizarre lynch mob (that, ironically, would be put down swiftly by the very government you should be petitioning). That's how "exhausting all other avenues" actually works.
CPLX 687 days ago [-]
"This country, with its institutions, belongs to the people who inhabit it."
Pretty sure the owner of the largest pile of wealth ever assembled and the top political newspaper in the country fits well within the framework of this country's institutions.
There's nothing bizarre about a mob coming for the assholes who hoard all the wealth and consign the masses to subsistence level existence. In fact this dynamic is probably the most enduring concept in human history.
daenz 687 days ago [-]
Is this how you really feel about the Fortune 500 companies that participate in your From Day One conferences? That their leaders should be lynched?
CPLX 687 days ago [-]
I'm expressing a very uncontroversial opinion, which is that the state should have a monopoly on violence, and that the state should be run of, by, and for the people. If the roles that should be assigned to government ever become so corrupted by corporate interests that the institutions that control our life are no longer recognizable as democratic they should be overthrown by force if necessary.
This is the founding principle of America, and I'd be happy to advocate for it in any forum. It sounds like you have an alternate worldview and that's fine too, perhaps we can agree to disagree on this point.
687 days ago [-]
LudwigNagasena 688 days ago [-]
> The entire concept of Amazon being a company at all is a legal fiction granted as a privilege that can be revoked as easily as it was given.
Ok, but how does getting rich because of moving boxes at Amazon rather than Walmart make more sense?
mrtesthah 688 days ago [-]
Maybe our goal as a society shouldn’t be to decide who gets rich, but rather to do what it takes to ensure fair distribution of resources such that everyone’s basic needs for food, housing, healthcare, and education are met.
That’s difficult to do when wealth is concentrated among a very small group of people.
LudwigNagasena 688 days ago [-]
That’s also difficult when people set up dichotomies like Bezos vs his workers and disregard the entire world.
mrtesthah 687 days ago [-]
No, not really. Pointing out the injustice of a company mistreating and burning out its workers in order to produce one of the richest billionaires, usefully illustrates the inequality we face globally.
LudwigNagasena 687 days ago [-]
Evidently it doesn't.
beambot 688 days ago [-]
To be fair: all laws are legal fictions enforced by the pointy end of a stick. Could just as easily end up with totalitarianism.
CPLX 688 days ago [-]
Now you’re getting it.
So when a small group of people has seized control of the laws it’s time to resort to the pointy end of the stick.
The laws are there to protect the people from those who seek to enslave them not the other way around.
daenz 687 days ago [-]
>it’s time to resort to the pointy end of the stick.
Are you planning to commit an act of political violence? Do you have weapons?
687 days ago [-]
collegeburner 688 days ago [-]
Some employees negotiate contracts where they are paid partially or fully in stock. Other employees negotiate contracts where they are paid all in cash. A lot of people don't want to wait for a payout or take on risk.
kortilla 688 days ago [-]
Owners are not compensated unless a dividend is issued. Is your problem with how much people are willing to pay for Amazon stock?m
To be fair - many people in the billionaire class don’t sell any of their shares. The reason being that they can open pledged asset lines using those stocks - and never have to pay taxes as long as they never get called on their lines.
daenz 688 days ago [-]
Not to mention the financial fallout of not having an experienced leader at the helm. Sure, it would coast for awhile without a leader, and I'm sure someone will try to explain to me how it could be run completely democratically, but eventually a competitor with a competent leader would eat their lunch.
tsimionescu 688 days ago [-]
I know one or two democratic countries that are doing OK despite being democratic.
Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
daenz 687 days ago [-]
I don't want the companies providing essential goods and services to run as inefficiently as governments do. It would be disastrous.
tsimionescu 687 days ago [-]
There are many more governments than companies providing essential goods and services. And in times of crisis (say, flooding or fires), it's the military and other government entities that have to step in to fix things, never private companies.
kareemsabri 688 days ago [-]
This is technically true, but of course there are many other methods of increasing warehouse worker pay beyond reallocating the CEO's compensation package. The pie is not zero sum. For example, stock splits often result in market cap increases due to more liquidity / access. Amazon could issue some (or more?) stock options to its employees in the warehouse or elsewhere if they desired to do so, and it's not a foregone conclusion it would adversely affect their ability to retain a top tier CEO. Who knows, perhaps Amazon would see better worker retention resulting in increased efficiency if they had a more generous package for warehouse workers (not making this claim, but I disagree with the zero sum framing here).
concordDance 688 days ago [-]
> Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue.
This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.
majormajor 688 days ago [-]
I don't really follow your examples, but I think there's a part of startup comp structures that's worth calling out in general. Equity distribution ratios are way different than salary ones.
Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.
lifeisstillgood 688 days ago [-]
Yes I think that is more or less what I am talking about.
In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc).
It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies
(hmm - there is likely to be a speed / stability / waste trade off here?)
chii 688 days ago [-]
> It is one factor in why companies are not democracies
societal democracy works because everybody is born into a society equally.
A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote.
So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
tsimionescu 688 days ago [-]
This values capital over labor to a far too large extent. The value of a (successful) company is overwhelmingly dominated by labor - including the labor of the founders and CEOs, to be clear - not by original capital investments. But, ownership is only afforded to those who contribute capital, and ~0% to those contributing labor (this does vary between companies, as some do offer equity as part of the labor contract, but typically only to certain employees; its very unlikely the cleaning person will be offered any equity, for example).
chii 688 days ago [-]
> The value of a (successful) company is overwhelmingly dominated by labor
but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer. It is this property of equity which makes capital more powerful.
you could artificially raise the power of labour by fiat law. But this law would distort the capital being spent - you might even find capital flight, if the law is very skewed towards labour.
tsimionescu 688 days ago [-]
> but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
That's only capital being spent if the company is not profitable. Otherwise, it's just reinvesting revenue back into the business. And a company that is going bankrupt may well become unable to pay employees' promised wages, which does happen occasionally.
> If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer.
While there are definitely people who are not happy with this kind of arrangement, it's not entirely unheard of either. Early stage start-ups often hire people on equity instead of wages; and co-ops where all (or most) workers are owners and only get paid if the business is successful also exist.
ken47 687 days ago [-]
Here's the thing. The average person only cares about their economic growth up to a point. Study after study has concluded that once most people have "enough" money, adding more does not bring them any more happiness (with the rare exception of a increase being so substantial that it radically improves their social status -- let's say by at least an order of magnitude).
And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy.
Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point.
Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner.
Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future.
I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.
bryanrasmussen 688 days ago [-]
>to a O(n) rounding he has 100 billion dollars and 1 million employees.
Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.
Thorrez 688 days ago [-]
>1 million employees
1 million employees right now, or all time? Amazon is ~28 years old. $100B/28 years = $3.6B/year.
dustingetz 688 days ago [-]
Ok. How?
lmm 688 days ago [-]
- Stop giving discounted tax rates for capital gains, make people pay the full income tax rate for any kind of income
- Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs.
- Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
throw123123123 688 days ago [-]
Why is the solution to "uneven tax structure" always to raise taxes? can we just lower income tax to same as capital taxes instead? Thats real money in your pocket.
lmm 688 days ago [-]
Because most of the time when there's an "uneven tax structure" it's because one special interest group got themselves a tax break. Specific penalty taxes are quite rare.
throw123123123 687 days ago [-]
relatively, all payroll taxes are tax penalties, and also income taxes relative to capital taxes
EVa5I7bHFq9mnYK 688 days ago [-]
Unlike wages, capital gains can be negative. And generally IRS doesn't compensate for losses, except for minuscule amount. Otherwise imagine Treasury having to refund trillions to Bitcoin bag holders. So lower rate reflects higher risk.
lmm 688 days ago [-]
Isn't the risk of losses supposedly why capital holders make a profit at all? So they shouldn't be paid twice for it.
sdf131 688 days ago [-]
The capital being invested has already been taxed at the source.
Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business. I’m the one taking the risk yet the government benefits if that risk pays off but doesn’t compensate me if it doesn’t.
lmm 688 days ago [-]
> The capital being invested has already been taxed at the source.
So? A worker has already paid all kinds of taxes in their life, but they still get taxed on their income.
> Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business.
Your original capital is yours, but if you get income from it, you should be taxed the same as any other income. My time is and should be my own to do with as I see fit, but I still get taxed if I get income from it.
chii 688 days ago [-]
> Your original capital is yours, but if you get income from it, you should be taxed the same as any other income.
capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The low capital tax is to encourage more capital investment, because those with capital has the choice to not invest (and thus society as a whole loses the potential benefits of such investment). People with wage income don't tend to have the option of _not _ working, so lowering their tax won't encourage _more_ wage income.
danschmitt 687 days ago [-]
> capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The fairy tale that no one would invest if, instead of 100%, they were only allowed to keep, say, 50% of the profits is far-fetched. The game would go on, only with more (in the optimal case) redistribution and less accumulation among the already well-off. The issue here is the relative inequality caused by capital gains, which in the long run tears societies apart, because the middle class can no longer afford apartments/houses and vacations, and the lower class can no longer afford basic needs (food, health care, mobility).
rswail 688 days ago [-]
Realized capital gains should be taxed as income. They are income.
Your second sentence applies to labor as well: "I'm the one doing the work, yet the government benefits..."
Either "all taxation is theft", or "taxation is the government charging for providing the services necessary for work and business to operate".
tjs8rj 688 days ago [-]
Think the point they are making is the repeated taxation is semi-ridiculous.
1. Work a job and pay income tax
2. Invest remaining income, capital gains are taxes when liquidated.
3. Buy a car with the remaining gains, pay sales and property tax
4. Sell car, pay sales tax again
5. Reinvest money, earn gains, pay taxes on them
6. Repeat
The same money just keeps getting taxes. His point is that the money should be taxed once and only once.
triceratops 688 days ago [-]
A lower rate for the same amount of income in capital gains compared to salary makes sense. But why is the top rate for capital gains only 20% when it's 38% for income? (plus whatever the state adds on top). Why aren't there more brackets that go higher for capital gains as well?
rswail 688 days ago [-]
> A lower rate for the same amount of income in capital gains compared to salary makes sense.
Why? This argument is often given as an axiom without any reasoning behind it.
There is often handwaving about "risk", but a worker has risks due to not being able to supply the labor that they are selling. They invested in their labor through paying for education and training.
Why is their "risk" not considered the same as capital "risk"?
chii 688 days ago [-]
> Why is their "risk" not considered the same as capital "risk"?
a worker gets paid when they worked - there's no capital risk. They took a risk when they invest in skills for the job, but that risk isn't capital risk. If you are saying that their job should compensate for the initial risk they took getting educated, then i would say this risk pay-off is embedded in the salary of the job they took.
kortilla 688 days ago [-]
> but a worker has risks due to not being able to supply the labor that they are selling.
Modern worker agreements (a.k.a most normal jobs) do not have downside risk if you can’t deliver. You just lose your job and stop gaining money. With capital investments you can easily undo 5 years of gains in 1 bad year.
mym1990 688 days ago [-]
The controversial answer might be that the wealthier brackets are more likely to be holders of financial investments, and the tax code seems to clearly benefit wealthier groups because the tax code is influenced BY the wealthier class through lobbying and the sorts.
If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.
seoaeu 688 days ago [-]
The stock market grows by an average of something like 10% per year. Mutual funds charge a couple percent fees but usually still make a profit. If you are losing money long term as an investor then you’re a bad one
France_is_bacon 688 days ago [-]
l33t2328 688 days ago [-]
To an O(n) rounding error he also has 0 dollar and 100000000 employees
polote 688 days ago [-]
> Surely many others were brilliant contributors to Stripe's becoming a $95B unicorn, and staying one, beyond just the Collison Brothers.
From my experience working at several saas unicorns, in each companies there was 2-3 max people who where responsible for the success of the company. It is not that all others were useless but they all could have been replaced easily without having any impact in the success of the company.
I know this is difficult to hear as an employee but this is the truth. 99% of us are replaceable.
In my opinion and experience, working with skilled and nice people VS working with stupid and coward people for example has only an impact on the happiness of the employees but has no link with company performance. (company culture has no impact on company performance)
kareemsabri 688 days ago [-]
It's not difficult to hear, it's just not true. I don't know what sort of companies you've worked at where employees are completely fungible, but I've had the opposite experience, working with many talented and hard working people who make major contributions that help deliver hundreds of millions in revenue. Perhaps you joined them when they were already unicorns and the playbook / moat was already developed, but at startups there's nothing BUT the people. You think the Collisons are writing all the code and conceptualizing all the new products and figuring out how to take them to market, or creating and maintaining a high performing engineering culture, or [50,000 other things that need to happen to reach $95B]?
If that were true, it would be weird that companies work so hard to acquire, retain, and develop talent.
polote 688 days ago [-]
You can be very talented and do a ton of work without having a bigger business impact than another person doing 50% less than you.
At the end whether you have a design system, if you have infinite scalability, if you use node or Ruby, having that feature or that other feature it doesn't matter. The only thing that matter is the revenue the company make.
If what matters was the people then ngo would be unicorns
Cederfjard 688 days ago [-]
Do those things have no impact on revenue (or costs)?
Sebguer 688 days ago [-]
I'm curious where you've worked to be so confident in this opinion.
polote 688 days ago [-]
At 4 saas b2b unicorns mostly between 5m and 50m arr.
+ interviews with people working in hr and culture at other ones.
And to give you more concrete data, the significant employees where :
1. The ceo founder (work hard play hard culture) b2b enterprise martech
2. The ceo founder + cto
founder (chill + excellence culture) b2b enterprise productivity software
3. The ceo founder + vp of sales (micro management culture) b2b enterprise martech
4. The ceo founder ( chill + low expectation culture) b2b smb martech
texasbigdata 688 days ago [-]
200x ARR? Not taking away from your examples but those are 2020 valuation unicorns.
pbreit 688 days ago [-]
I think polote is mostly right.
"You think the Collisons are... creating and maintaining a high performing engineering culture"
Yes.
MathCodeLove 688 days ago [-]
Delivering major value !== Irreplaceable
kareemsabri 688 days ago [-]
The OP claimed only 2-3 people in each company are "responsible" for the success of said company. You do not need to be the only person in the world who can do a job to have some, or even major, responsibility for the success of an organization.
MathCodeLove 688 days ago [-]
I think you may be misinterpreting what OP meant (or perhaps I am, that's a real possibility). I read that as "There are only 2-3 specific people whose skills and contributions were so essential to the orgs success that the org would have failed without them specifically." Where you might have a front end developer who is technically "responsible" for facilitating millions of online transaction, there are likely thousands of other devs who could have done the same work. Among the 2-3 OP was referencing, there are very few who could have done what they did.
kareemsabri 688 days ago [-]
The case I was making is, it takes many people to turn a startup into a unicorn, and many of them are integral and make massively important contributions that, without them, would not have occurred. The degree to which those people are replaceable is difficult to say precisely, as it varies per person and per company, but I don't think being irreplaceable is the bar for being considered responsible. If a fireman pulls a kid out of a burning building, we don't care that many other fireman could have also done the same thing. The individual who did the critical work is responsible.
I have been at unicorn companies with C-suite executives that are clearly useless, or worse, net detractors playing political games that the people under them have to work around to get shit done. I have been at companies where one engineer is single-handedly keeping parts of the lights on, or conceptualizing and architecting critical systems, having an outsized impact well beyond their title and compensation. There seems to be a false idea here that the way companies run is "top down" - ie. the Collison brothers set out all the goals and strategies and products, and then the employees just execute their vision like pawns. Maybe there are companies like that, but I've never seen one, particularly a fast growing one.
I guess I just disagree that the number of people who would be deemed "responsible" for Stripe's success is 2-3. That seems, frankly, unbelievable to me having worked in companies with hundreds or thousands of employees and seeing how many different people it takes to build something massive, innovative, with multiple product or business lines. Not just taking marching orders but exercising their creativity, judgement, expertise, leadership skills etc.
javajosh 688 days ago [-]
>it's kind of unfortunate how founder lore really minimizes employees
It's far easier to tell the story of a handful of people than of thousands. The only successful approach to the latter is selecting some at random and telling their stories - but that still leaves most people out. I think it's an interesting and hard problem to tell a comprehensive story about a large group, but I'm not really sure if it can be done. Even Howard Zinn focused on (usually unsuccessful) opposition leaders more than the everyman in his narrative! In any event, I'd love to see someone succeed at making such a narrative, not necessarily about Stripe, but about anything really.
kareemsabri 688 days ago [-]
For sure. I understand why stories are told the way they are. I stand by my point though. And I do think there's a happy medium between Ayn Rand'ian style hero entrepreneur and telling the story of thousands that can be achieved with modest effort, since I've read a few of them.
Admittedly the absurdity of the headline is what triggered the initial thought for me, but the article lived up to the headline in this case.
choppaface 688 days ago [-]
“Founder Lore” like this, especially from Forbes, assumes an audience of investors who have money and non-investors who have essentially no power. These articles are purely about marketing and looking for lift among those who have money. The list of names who were involved in creating the article are a lot more important than the content.
andy_ppp 688 days ago [-]
Being able to hire brilliant people is a difficult skill too. I don't suspect Adyen have the same ability to hire great people that Stripe do and while they have a lot of complex problems a payments API is not the most glamorous of companies to work for.
paulpauper 688 days ago [-]
I am sure a good chunk of those employees are millionaires will will become millionaires after the IPO.
AlchemistCamp 688 days ago [-]
> I've used their Golang API client as inspiration many times in my own code
For the last five years, I’ve requested an Elixir client.
I wish they would either build one or greatly improve the docs for people who aren’t using one of their first party API client libraries. It’s not like Stripe lacks the resources.
In fact an argument could be made that ignoring all but the most popular handful of languages runs counter to their goal of increasing the GDP of the internet. Increased friction for adopting new and productive languages means fewer do and devs remain in a slightly more ossified ecosystem.
andy_ppp 688 days ago [-]
Completely agree, I also had this problem but I guess that is one downsides of using a language that isn't particularly mainstream. Still with thousands of programmers it would be worth the return on the small investment.
reducesuffering 688 days ago [-]
They have libraries for: iOS, Android, React Native, Javascript, Ruby, Python, Go, PHP, Java, .NET. Have you seen how prevalent Elixir is statistically? It's actually pretty niche and downtrending[0]. Where do you draw the line? Where's the Nix, Julia, Nim, Rust, and Crystal libraries? It's good to express the desire for it so that it might be next in line, but these comments make it seem like it's an expectation, even when those libraries are all open source and are able to be whipped up by the community. You're correct that these are the downsides in building on something that isn't very mainstream.
I don't think it's down trending at all. Just look at the most recent Hiring thread on this forum!
Based on what I've been seeing, Elixir has been growing faster the past year or two than it was previously. Elixir Forum's posts and active users are going up and that's where people tend to ask their questions, rather than Stack Overflow. In fact, the lack of support from companies like Stripe is the single top complaint I hear. Most users are very happy with the language, tooling and community.
FWIW, I'd like to see a Stripe Rust lib, also. But it's far more important to just be make the guides better for people who aren't using a Stripe API client and maybe even make a guide for making a compliant API client. That way, you can be programming in something truly niche like Janet and still have a great experience with Stripe.
The information is all there, but it takes way more digging than it should to get at it.
andy_ppp 688 days ago [-]
I wonder if there is a format for API -> client automation that can be good enough, in the end Stripe have a rest API, with enough description it should be possible.
Okay so after a quick google it appears Microsoft are the "Simpsons already done it" of the programming world: https://github.com/Azure/autorest/
It'd probably be a good idea to add an Elixir backend for that and point it at the Stripe's API here: https://github.com/stripe/openapi
AlchemistCamp 688 days ago [-]
Interesting... I've spent a fair amount of time looking at Stripe docs while working on various projects over the years and never seen the openapi link before!
Purely in terms of seeing what structs are used in what what on what endpoints, the docs are fine. It's really when it comes to guides that it falls over since they invariably lean on language-specific API clients. This makes it easy to miss how headers are constructed, the required security-related details for webhooks, etc.
ZephyrBlu 688 days ago [-]
Whether ROI is positive or negative is not the correct thing to consider. Opportunity Cost is more important. Why would they create an Elixir client if there is something else they could do which has higher positive impact?
Abishek_Muthian 687 days ago [-]
>but it's kind of unfortunate how founder lore really minimizes employees
Yes it is, And none more pronounced than those involving celebrity founders like Elon Musk; The achievements of SpaceX and Tesla are often showcased like 'his' alone in media like Iron Man waving his hand and Jarvis building the products.
One thing these founders are proven to be good at is getting very talented people to work for them and perhaps lately taking credit for all their efforts.
P.S. Not implying that Collison Bros are like that, I don't know enough about them and I like Stripe as a product.
DantesKite 688 days ago [-]
> At 17, Patrick won a high-profile national competition for young scientists; his project, building atop Lisp, a programming language developed at MIT, placed second in the European Union overall. The winner: his future wife, Silvana Konermann, who represented Switzerland.
What? Are you telling me Patrick Collison lost to his future wife at 17 in a science competition? That's so cool.
civilized 688 days ago [-]
What if it's like The Social Network except more wholesome and he gets the girl at the end.
"I wanted her, so I decided to make the next big thing"
mizzao 688 days ago [-]
Well, it could be causal right...
If you can't beat 'em join 'em! (or in this case, propose to 'em)
encoderer 688 days ago [-]
Paddle buying ProfitWell is big. Paddle would also take over all my billing support. I don’t want to do a billing migration right now but if I did I probably would switch to Paddle.
The first real contender to Stripe in a long time.
samwillis 688 days ago [-]
This so much, Stripes innovation was making it so much easter to integrate a payment api. Paddles innovation is making international tax/vat a complete none issue to new businesses. They are doing everything small business want to make online digital goods sales painless from an admin point of view.
tut-urut-utut 688 days ago [-]
As someone currently looking exactly at this kind of provider, I’m curious about other Paddle competitors whose price model is only revenue based, without a fixed monthly fee.
Gumroad is another merchant of records, but developer documentation is worse, fees are higher and it seems to support only USD pricing.
Other alternatives requires a somewhat hefty monthly fee, which is a non starter for my use case.
gondo 688 days ago [-]
I am not sure if you meant to imply the opposite, but Paddle's price model IS only revenue based.
tut-urut-utut 688 days ago [-]
Yes, Paddle is revenue-based. I was just wondering about the alternatives.
Something about Paddle that I can't define is putting me off, whether it is website, wording, attitude, "contact me for the quote" and such things makes it feel old school and bureaucratic. I learned over time to listen to my gut feeling, so I'm not gonna use it.
Gumroad looks much more relaxed, although more expensive and lacks many features.
Here in this thread, someone mentioned https://www.getrevin.com, which lets you use Stripe and provides a tax shield merchant of record for 1% on top of Stripe fees, which makes it interesting.
I also found out https://www.lemonsqueezy.com which is priced similarly to Gumroad, but it lacks documentation to be able to compare it.
franciscop 688 days ago [-]
Out of curiosity, how about https://stripe.com/tax? Do they compare similarly? I was considering using Stripe ~1 year ago and my only stopper was exactly international taxes, but it seems like they've integrated tax collection since then?
Disclaimer: I'm joining Stripe in a month :)
mooktakim 688 days ago [-]
I still don't understand what Paddle offers to SaaS.
As a dev I thought maybe easier integration. But it doesn't seem all that different from Stripe Invoice.
samwillis 688 days ago [-]
My understanding is that Paddle becomes a middle man in the transaction taking on all international tax responsibility. They pay you out after paying all tax/vat local to the customer. This massively simplifies international sales, particularly for EU business.
I also believe that an awful lot of small online SASS and digital good sales by companies are committing (unintentional) tax fraud in the countries of their customers.
I hate trying to understand vat/sales tax on digital goods, to the point that it has until now discouraged me from starting that sort of business on my own. With Paddle I wouldn't have to even think about it.
jokethrowaway 688 days ago [-]
A simple solution is to do a b2b company only and thanks the EU for complicating the situation so much. Another thing I used to do was to just sell to everyone except European customers (explicitly written on the website).
The funniest thing is that the EU ostensibly did it to make "Amazon pay their fair share" while most small merchants that used to run e-commerce have moved to sell on Amazon or eBay just not to have to keep up with all the regulations and bs.
samwillis 688 days ago [-]
I believe that two some extent these sort of regulations are lobbied for in the background by large corporations in order to make it harder for small business to enter the market. If they are going to get regulated anyway best make it to their own advantage!
fredsted 688 days ago [-]
EU generally can’t make good (tech) legislation. Cookie law is the goto example. It’s too complicated. Too many cooks.
wewxjfq 688 days ago [-]
More like: US companies can't handle good tech legislation, which the EU makes. I enjoy my rights. And "cookie law" is very simple.
rglullis 688 days ago [-]
If your idea of "good legislation" is "bureaucratic hellpit that promises the solution to all problems to the electorate, but in reality just makes things slightly more expensive to big companies and destroys any chance of smaller players to disrupt the market", then yes, EU legislation is great.
Cookie law is "simple", but what does it achieve? How are our lives better after knowing that every website uses cookies? Is there any website you thought "oh wow, they are telling me they are using cookies, this totally changes my perception of how they operate!"?
GDPR is the same: did it make any difference in the amount of surveillance capitalism we are subject to? No! Did it make any of the sites you use to reduce the amount of data collected? No! Did it make money for a fuckton of lawyers who went after Small/Medium Businesses who had a website and had no idea if they were complying or not, leading the majority of them to just close down and move to Facebook Pages? Of course it did!
benoketamad 688 days ago [-]
GDPR: At least you have the means to hold a company accountable in the EU, without spending a shitton of money on lawyers. In the US it's like the wild west. Steal as much data as possible, without any repercussions whatsoever. Neutered congress and other amusing institutions add to the mix.
rglullis 687 days ago [-]
I think you are missing the point. You can have all the "accountability" you want, in practical terms, nothing has changed. Your data is still being taken and exploited, but now thanks to the bureaucracy we can no longer say that it is being "stolen".
It's akin to saying that assault is now okay because the people are being forced to sign consent forms before getting punched in the face.
gibolt 688 days ago [-]
They tend to take a defensive approach to restrict outsiders, since most tech innovation isn't happening locally
HatchedLake721 688 days ago [-]
How does you stopping selling in ~30 EU countries, help you with being tax and law compliant in the other 150+ countries?
You still have to know and understand your legal/tax responsibilities when selling to businesses in Singapore, South Korea, Australia etc.
jwr 688 days ago [-]
This.
(B2B Saas founder here)
People often ask me why PartsBox doesn't offer inexpensive B2C plans to hobbyists and I have to explain that it would not make business sense: the costs of dealing with the idiotic EU VAT MOSS rules would exceed the revenue from subscriptions. Plus it would take a significant amount of time, effort and maintenance to support, thus presenting opportunity costs.
If you run a B2B business, things are reasonably straightforward (although still far from obvious), but B2C is a nightmare in the EU (as a side note, I have no idea how people expect to run sustainable small B2C businesses, this is really difficult).
Also, Paddle might be the only reasonable solution, because they do the invoicing themselves. If you can accept that your customers will be getting invoices from someone else, this simplifies things a lot. There is no company that does invoicing for your SaaS correctly if you are based in some EU countries, even though many claim to do so.
yunohn 688 days ago [-]
> A simple solution is to do a b2b company only
“Simply change your entire business model or build a different product”
> Another thing I used to do was to just sell to everyone except European customers
“Just ignore the entire EU market for whatever you’re selling”
This isn’t a serious post right? Or I guess, it’s actually a classic HN counter-post.
fredsted 688 days ago [-]
Exactly. Paddle saves me so much time and money. I couldn’t even imagine what my accountant would bill for something similar.
BbzzbB 688 days ago [-]
Does the 5% + 50c include the whole payment process on top of the tax-handling? As in, the alternative is paying 2-3% anyway to someone like Stripe for integrating payments, so that the cost of off-loading all int'l VAT and co headaches is around 2-3% (the 50c is negligible for my use case)?
688 days ago [-]
gondo 688 days ago [-]
Yes.
noneeeed 688 days ago [-]
I'm so glad I've read this today. I've been thinking about building a little SaaS product and one of the aspects putting me off was the VAT/Sales Tax problem. I'm a stickler for the rules, I don't feel comfortable YOLOing something like that the way so many seem to be.
WheatM 688 days ago [-]
jokethrowaway 688 days ago [-]
They handle paying vat and sales tax for you. Your customers purchase from them. You make a single b2b invoice to paddle.
That said their API is very basic and their UX is not on par with what you can. A lot of operations are not possible (eg. Letting users change their billing details, such as company or personal, vat number, etc)
They also won't migrate your credit card data if you're too small.
www.getrevin.com looks like a much better alternative: they basically create a stripe account and add you to it. You integrate with your their stripe account and they pay you, same as paddle.
chrisfrantz 688 days ago [-]
This seems like a no-brainer acquisition for Stripe. Afaik this is the one big differentiator for paddle and this seems to solve for it with a lower fee.
seydor 688 days ago [-]
This kind of business is like airbnb for entrepreneurs. Accounting is a big hassle for small devs
pastor_bob 688 days ago [-]
lol, this is like the bat signal for pc
throwaway5752 688 days ago [-]
What the hell is a unicorn at this point? Just say "successful private company". Because of the craziness in valuations, $1B pre-public isn't that rare any more, so "unicorn" is not apt. But Crunchbase says they've had 20+ funding rounds, and there should be some limit at the D or E round.
Nothing against Stripe, Stripe is great.
lambda_lord 688 days ago [-]
Is it unusual for a successful company like Stripe to take so long to go public? It seems like their house is in order, and they are profitable, but employees aren't liquid.
SilverBirch 688 days ago [-]
I think this is almost a case of a company being too successful. The general pattern is that you grow, you raise money, you grow, you raise money, you grow, your IPO. At each stage of growth there's a different investor. Initially you have Angels and YC style places. Then you have various stages of VC, then you finally have the public market.
What normally happens is that you become too big and that's when VCs step out of the way, you IPO and everyone takes their gains. But in the case of stripe you have $100Bn company that the VCs will still happily plough money into. So there's no reason to IPO. You can get all the liquidity you need privately. On top of that, Stripe doesn't really need capital, they aren't some uber buying market share with loss making. They are real SAAS, they can scale and see a drop in their earnings:cost ratio.
taw89345 688 days ago [-]
There have been liquidity events before, which allowed old enough employees to sell shares. You will find that many a former employee has managed to leave while being able to exercise their options and have a partial cash out with a lot of money to spare. So it’s not been an exercise of keeping employees tied down. A visibility one is Will Larson: You bet that he didn’t leave without being able to sell shares to cover AMT, and getting some immediate payout.
As for why stay private, what John C has said publicly is that they still see a lot of growth to go, and that not having to provide detailed financian statements to the general public, which would include competitors, is a competitive advantage. It seems believable to me.
IPO right now is very difficult as the door is closing, and investors are wary about paying a premium like they have before. They delayed it too long and have missed the window, it is unlikely from a year from now they will be able to get any bids for the current market valuations.
colinmhayes 688 days ago [-]
I mean why didn't they IPO last year with everyone else?
Emphere 687 days ago [-]
PC has spoken admirably of Koch Industries and he thinks there's some merit to remaining private. That's probably why. I don't have the source at hand but probably one of his podcasts.
colinmhayes 687 days ago [-]
I feel like it makes sense for Koch to stay private since their work mostly focuses on fossil fuels and specifically fracking. Public markets can be a big distraction with protests and what not. Is stripe worried about being cancelled?
tomatowurst 688 days ago [-]
Your guess is as good as mine but they likely thought that the status quo in market would continue.
etaioinshrdlu 688 days ago [-]
Is there any reason they can't do a direct listing without selling any new shares?
The only downside for the company seems to be that employees would be able to sell, and that seems rather greedy for the company to not work in its employee's best interest.
digianarchist 687 days ago [-]
Considering they just emailed all former employees asking for up-to-date contact information, I think that an IPO is rather imminent.
pbreit 688 days ago [-]
It's too bad that most of the gains will accrue to private, wealthy investors instead of common public investors.
jadbox 688 days ago [-]
What happen if they never go public at this stage?
brianwawok 688 days ago [-]
There are many private companies. Some are very big. See space-X as a popular example.
tootie 688 days ago [-]
It's a really amazing case of a business going into a crowded space and building a solution to what anyone would have called a thoroughly-solved problem and still managed to disrupt it. They didn't really "invent" anything or make a new market, they just did something better than everyone else. And, I think, got incredibly lucky with entering the market at the exact right time.
ttcbj 688 days ago [-]
While I see your point, I went through several scammy credit card processing solutions (one from an intuit subsidiary, one from a local bank) back around 2013 before I found stripe.
You wouldn’t think that “it’s easy to use and not scammy” Would have been an innovation, but at that stage, I think it was.
tempnow987 688 days ago [-]
Man, we got burned with a "contracted" credit card solution, complete with horrible support, service and billing.
warent 688 days ago [-]
It is curious to wonder how they managed to lead the company this successfully. How often do young founders actually hang onto leadership this long without either imploding or being replaced? Why are the Collison brothers different?
itsoktocry 688 days ago [-]
>How often do young founders actually hang onto leadership this long without either imploding or being replaced? Why are the Collison brothers different?
Stripe is great, so I assume these guys are good leaders. But Stripe was founded in 2011. Are there not plenty of young founders of that era "hanging on" to their leadership? I don't see anything particularly out of the ordinary here.
ralston3 688 days ago [-]
IMO...value. I personally feel like it's always easier for founders to stay on when their product provides actual, tangible, objective value. It clearly shows that they (the founders) sort've know their market, and know what they're doing (to some degree). When that's the case, I feel investors are happy to get out of the way and watch their equity rise. Whereas when a service isn't providing any real differential value, it's a lot easier to try to swap out the founders for the MBA/finance/corporate type that doesn't really know the market/audience.
samwillis 688 days ago [-]
I think it's to some extent the good old Irish charm, and I say that as someone married to a much better Irish other half.
688 days ago [-]
danielmarkbruce 688 days ago [-]
Is that amazing? It might actually be the standard way.
Google - better search. Search was "solved", just not well.
Zoom - better video chat. It was "solved", not well.
Amazon - they've never done anything original, always just better. Online books was done, colo servers were a thing.
Apple - same.
Telsa - better electric cars.
Airbnb - better short term rental market.
Salesforce - better CRM.
Snowflake - better data warehouse.
And on and on and on. It seems nobody actually wants new things. They seem to want better on some dimension.
There are exceptions, but they are few.
qeternity 688 days ago [-]
I think you’re selectively choosing what constitutes “new” vs. “better”.
As Henry Ford said, if you ask people what they want they’ll tell you a faster horse. It’s not as if the automobile wasn’t new and revolutionary, but nobody cares about cars. They care about getting around. And a way to get around that was faster, more powerful and more reliable…that was new. It’s the details that matter.
If you take your view, the moon landing was hardly anything noteworthy because animals have been migrating to new lands for millions of year.
danielmarkbruce 687 days ago [-]
You just noted an exception, and they exist.
The moon landing wasn't a product.
"New" v "better" isn't saying something is or isn't noteworthy. Tesla is a hell of a story. So is SpaceX. So is Apple. So is Google. Amazing technical leaps. All noteworthy, all creating immense value.
SkyPuncher 688 days ago [-]
I've learned over the years that most people overlook the bottom part of the iceberg.
Stripe nailed everything else about the business. They made everything that sucked about old credit card processors good. It wasn't just the transaction. It was everything that led up to it (simple integration, debugging, good dev documentation, sane APIs, etc) and everything after. Eventually, they even made the transactions better with alternative methods, fraud, and recurring payment pass-through.
jonny_eh 688 days ago [-]
> they just did something better than everyone else
Wow, HN's ability to dismiss and diminish major accomplishments continues to astound me.
bcbrown 688 days ago [-]
You think saying "a really amazing case of a business [that executed] better than everyone else" is dismissive and diminishing?
jonny_eh 688 days ago [-]
"Just" implies it wasn't a big deal.
danielmarkbruce 688 days ago [-]
Warren Buffett just focuses on business all day. Tom Brady just thinks about football all day.
The word 'just' is used in many cases to show someone did one thing and not other things. Doing lots of things is often just stupid.
ZephyrBlu 688 days ago [-]
"just" has an implication, "only" or "solely" would be more neutral words.
danielmarkbruce 688 days ago [-]
Nope, people say "just" all the time for this case. You might think they should use "only" or "solely", but they say "just" frequently.
Sometimes "just" does have an implication.
If you assume the writer isn't being a dick, it's easy to see what they meant.
DantesKite 688 days ago [-]
> got incredibly lucky with entering the market at the exact right time
I also found this to be a somewhat shallow analysis, considering their sustained success over a decade.
danielmarkbruce 688 days ago [-]
It might be shallow, but it's right. Nothing wrong with getting lucky.Those guys worked hard and are smart for sure, but luck had a lot to do with it.
renewiltord 688 days ago [-]
Better execution is considered the biggest compliment in the industry. Novel ideas are sort of considered a passé path to success. In that context, it sounds more like idolization than insult.
ambicapter 688 days ago [-]
> Wordlessly offered a credit card reader, Collison says he’d rather pay cash.
wonder if it's privacy concerns like Zuck taping over his webcam
gnatman 688 days ago [-]
Yeah I wonder if, after seeing how the sausage is made on payment processing (and making $95B of sausage himself), he doesn't want exposure under some other (to him) shitty system.
It could also be some petty competitive instinct to stiff his competitors even a few cents or dollars in revenue.
daniel-cussen 688 days ago [-]
It's so basic. You gotta limit the cam. It's just too easy to do the spycam, I have a friend who did it to himself to see how hard it was. It was really easy.
It's from like 2002, when they first came out.
You know what I just did? I put a band-aid a guy sold me on the street, 2 cents, it's perfect, the cotton part over the camera and it doesn't leave residue. Restickable. Hardware kill switch right there...but for this problem, it's just a band-aid.
688 days ago [-]
m00dy 688 days ago [-]
Let's see what will happen for them in this bear market.
laluser 688 days ago [-]
This is exactly why they prefer to stay private. Stock volatility would be wild. They will have access to liquidity and funding for a while as long as they are growing a good rate, which they seem to be.
tomatowurst 688 days ago [-]
Doubtful as those sources of funding are also beholden to investors who most likely have positions in the market. There can be no isolation in modern finance, everything is interconnected.
If the rates continue to rise and market gets bearish on paying multiples on revenues, its going to run into serious liquidity crunch.
paulpauper 688 days ago [-]
The Nasdaq fell as much as it did during Covid, but without any obvious cause or catalyst for the selling. the bear market is probably over now. More likely this is the bottom.
alonmower 688 days ago [-]
...interest rates rising meaning people seeking returns have safer places to park their money?
bagacrap 688 days ago [-]
inflation? qe? rate hikes?
asd88 688 days ago [-]
More like $50B unicorn nowadays?
clra 688 days ago [-]
It's hard to tell given the private stock and all, but the article mentions that there's reason to believe the company hasn't taken quite as much of a haircut as comparable ones that are already on the public markets:
> In March, Fidelity, required to publicly update the value of its holdings, marked down Stripe by 20%. Most unicorns—startups valued at $1 billion or more—are trading on the secondary markets at 20% to 40% discounts to their last official venture capital rounds. But Stripe’s shares remain hard for new investors to obtain and in high demand, with recent transactions implying a valuation of as much as $165 billion, per New York–based EquityZen, a marketplace for pre-IPO shares.
__derek__ 688 days ago [-]
Does buying private stock on EquityZen include any due diligence? I'm skeptical that it's helping with price discovery, but I don't really understand the platform.
The topic reminded me of a good episode of Invest Like the Best with Carta CEO Henry Ward[1], which included a discussion of their CartaX platform for offering insiders a chance to sell private stock to institutions.
Can you take stock of a public competitor in the same industry and simply apply its price movements to a private valuation?
Ferrotin 688 days ago [-]
Simply, but not precisely. The same macroeconomic factors that affect the public companies’ value apply.
pbreit 688 days ago [-]
Or $200b (4x Adyen) in Stripe's case.
paulpauper 688 days ago [-]
nope. $90 billion more likely. You have to add 30-50% for the IPO pop.
paulcole 688 days ago [-]
Isn’t this just a marketing puff piece with no substance?
danielmarkbruce 688 days ago [-]
Ask yourself why.
NDizzle 688 days ago [-]
95B and they still charge me the wrong tax rate on purchases. Note that some zip codes have rural areas that use the county rate. 9.5% vs 7.5% is quite a difference.
chrisgd 688 days ago [-]
I find it hard to believe they should be worth more than Twilio. They get a cut of revenue but they are still developer focused, which limits ultimate upside. It is about making developers lives easier not about building a network that scales
kopochameleon 688 days ago [-]
I don't find it hard to believe that "Twilio, but for money", could make more money than Twilio
chrisgd 688 days ago [-]
Twilio but for accepting payments. Mostly for a bunch of DTC and subscription businesses that are not getting another round of VC funding
688 days ago [-]
napolux 688 days ago [-]
Paddle as a lot of restrictions on what to sell and what not.
I know Stripe is a darling YC company but if you look for it, you can find some usually anonymous detractors.
"+1. Also a founder of an $XB fintech. Exact same story. Patrick + John dangled an acquisition to get a look inside, and ended up re-trading on the terms. Then proceeded to target 2 of our team members to recruit. Fast forward a few years, and now they have deployed a team to directly copy one of our products.
Amongst their L2 team, Patrick and Will are described as the "killers". I guess maybe a bit of duplicity is required to build a company of that size..."
tempnow987 688 days ago [-]
And for everyone of these stories is a story of a startup that screwed its employees during a buyout by another big firm while founders walked in the gravy.
I've found a lot of the "secrets" really aren't that. The ideas are usually pretty public, and the questions come down to ability to execute and integrate etc. Stripe has a good position from which to expand linked lines.
throwy_strp_exp 688 days ago [-]
As a data point, I interviewed recently for a leadership role and had a somewhat similar experience to the link you provided. A change of the interviewer at the last minute, and the interviewer seemed to have a particular answer in their mind and was not open to engaging.
I can understand when it comes to interviewing for a leadership position, some of the interview may be based on 'fit' rather than just the display of problem solving skills w.r.t the interview question, but to me it didn't seem like they were particularly interested in testing either. I have 10+ years of experience operating in a large $XB FinTech and my expertise was an almost exact match for the work the position they were looking to hire.
I'd like to think that it was that specific group within Stripe that had that issue, but the posts on Hacker news have me thinking otherwise.
vlovich123 688 days ago [-]
> but if you look for it, you can find some usually anonymous detractors.
Seems like a vacuous statement. Isn’t that true of anything/anyone in life?
kpennell 688 days ago [-]
[removed]
pvg 688 days ago [-]
this needed to be shared
You're welcome to write your own critique of Stripe or anything else but recycling other people's HN drama is not really in the spirit of the site. Repasting an old provocative comment while withholding context (i.e. not linking it and its rebuttals) is extra lame.
688 days ago [-]
newaccount2021 688 days ago [-]
absolutely ZERO chance they could get a $95B valuation in public markets today
HN/VCs also said Uber was a $150B company...Lyft was a $50B company...Peloton was a $40B company...
if Stripe went public today, I would say they would be lucky to crest at a $30B valuation, even that may be lofty...PayPal has 3x market share as Stripe and has a $92B valuation
rvz 688 days ago [-]
> HN/VCs also said Uber was a $150B company...Lyft was a $50B company...Peloton was a $40B company...
Exactly.
The hype squad have been screaming about the valuations of these companies and now look at them as soon as they IPOed. Neither of them are profitable companies.
It just means the VCs, insiders and everyone else who got was in before the IPO made a windfall in their stock and by now cashed out. The news hyping up the IPO to retail investors and left them holding the bags again as the market drops.
I would expect Stripe to delay their (eventual) IPO.
puranjay 688 days ago [-]
I find it a little absurd that companies now take longer than human beings to start making money. In that you graduate high school/college at 18-22 and start making money - “being profitable”, so to speak.
There are starups right now that were founded before 2010, went public, and say they will be profitable in 5-7 years time
That’s 18-20 years without a profit!?!
lmm 688 days ago [-]
Cathedrals took hundreds of years to build. Basic research can take hundreds of years to put into practice. The Swedish government has a couple of nice national parks that were originally oak forests planted to supply the navy in a few hundred years.
While there are definitely advantages to the discipline of having to make a profit, I don't see anything fundamentally wrong with building a company over long timescales.
daniel-cussen 688 days ago [-]
Basic research can take a lot less than hundreds of years in special cases. So for me, I got my AI algorithm, my first one, to produce a result I did not already know about within a year of starting the code. It discovered negative modulo. That was it.
But! That was something I myself did not know. Not really important that eg wikipedia already knows about negative modulos getting the last elements of a list.
That was the point of AI. From that day I had much more confidence in the basic premise of the basic research, that this could be done and it slowly would develop.
And why did I come up with a result so fast with my own basic research? Desperation. Solitude, isolation. Silence. Single-mindedness, determination, that AI was all I actually cared about, no secondary reason to live. It got all my resources.
puranjay 688 days ago [-]
It’s an app that delivers food through contract labor earning minimum wage.
Its not a cathedral or a forest.
rswail 688 days ago [-]
> you graduate high school/college at 18-22...
> That's 18-20 years without a profit!?!
Same same, but different.
newaccount2021 688 days ago [-]
tomatowurst 688 days ago [-]
So basically every YC backed company that has IPO'd
ElFitz 688 days ago [-]
I have no idea on how to figure out a startup’s valuation.
But I wouldn’t compare an infrastructure / platform like Stripe to B2C nice-to-haves for rich-ish people like Uber or Lyft or cute expensive jokes like Peloton.
paulpauper 688 days ago [-]
yeah, Stipe is a not something that can be dismissed as a fad like Palaton. no comparison.
They were absolutely overvalued at those market caps, but it's wrong to say that "HN/VCs said those companies were worth X but they didn't reach X in public markets"
itsoktocry 688 days ago [-]
>They were absolutely overvalued at those market caps, but it's wrong to say that "HN/VCs said those companies were worth X but they didn't reach X in public markets"
Why is it wrong? You think private markets are better indicators of value than public?
lowkey_ 688 days ago [-]
No, he's saying literally they did reach X market cap in a public market. He was correcting facts of the previous poster.
nwienert 688 days ago [-]
If Shaq lifts me up so I can dunk, you can say that I dunked, but in general it's more accurate to evaluate things under more normal circumstances.
goodoldneon 687 days ago [-]
Right, but that not OP's point. OP said that insane valuations reached in private markets can't be reached in public markets. Public markets can be just as irrational as private markets
nwienert 686 days ago [-]
No, he said today they wouldn't reach it.
clint 688 days ago [-]
They reached it, but were quickly proven wrong
paulpauper 688 days ago [-]
Stipe is in a way better position than Lyft and Peloton ever were
The $90 billion is without the IPO pop. It would be worth $90 billion after the IPO pop maybe today. In late 2021, maybe $120 billion.
kolbe 688 days ago [-]
I don't know why you keep harping on this IPO pop idea. It doesn't apply to funding rounds that took place 30% ago on the Nasdaq and 70% ago in growth stage equity. Frankly, up until the pandemic, it was looking doubtful that the idea was even relevant anymore. Facebook's "pop" was -20%, and it's much easier to believe that a rush of retail frenzy in 20-21 is the anomaly, and not the rest of the past 10 years
mroll 688 days ago [-]
mroll 688 days ago [-]
Rendered at 23:20:03 GMT+0000 (Coordinated Universal Time) with Vercel.
It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees.
Why is he getting 100,000 from each employee ? Not because those employees send him a cheque. But because of particular outcomes of share capital, and corporate law. Decisions made in UK / US legal circles since before the USA was a USA.
These decisions have been part of 200 years of the most phenomenal growth in global human wealth ever, so there is a lot of baby in the bathwater. But look at say the German mittelstand - a different approach to local business banking. And compare european social-democracy to US welfare states.
There is a lot of room and flexibility between "totally dampen growth and human innovation" and "more equal sharing of life's burdens".
Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. So the last 200 years of growth can be seen as a story of government funded and directed scientific achievement, given reign to rollout in a benign business climate, and the workforce provided via mass education and health programs, all of which funded by taxing the successful companies.
Is that an over simplification - hell yes. But so is "young founder has great idea and works hard".
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.”
The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion.
If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then….
- Senior engineers would make NFL wages
- And quants would be making NBA/NFL wages
That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc.
The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team.
And at the top end, the best players are a massive draw that makes teams tons of money.
Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.)
Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
This is a popular enough theory that it's been tested multiple times. In the successful cases, the rival league still ended up trying to poach the top players and ended up merging with the other top league. In the less successful cases, the league went out of business.
In software, that's not the way it works. Or at least, the competitive business aspect of it is largely out of engineer's hands. Few businesses ultimately succeed because they wrote better code, IMO. Though interestingly, a bunch of startups only get big in the first place by having great code that allows them great speed/flexibility/etc. Stripe itself got big originally because its API was really great, which I'd attribute more to product than to engineers, except in this case it's kind of a merger of the two.
"March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
What is so special about them?
...because they formed unions.
I don't understand what makes people think that software engineers are so valuable that they'd get wages that are multiples of doctors.
The Logic of Collective Action explains the mechanics. https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action
It's basically game theory, by another name.
"Preventing defectors from collective bargaining" is also, more or less, the definition of what an economic cartel does.
If you could hire 2 or 5 of the next best engineers for the price of a top pick 'NFL' engineer, you'd be ahead in output in most situations.
The same does not go for the NFL.
This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.
If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money.
This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
It's because there ARE contributions from the owner, even a passive owner has what I called "dividends from stored labor": they took on the risk, created a functioning company solving a problem, did the work of organizing the systems/structure that run the thing, and so they are entitled to a piece of the revenue as well (as that revenue couldn't have been earned without their contributions either).
My point was that owners currently get a disproportionately large piece, and that the gap between what owners get vs what workers get has been widening with time. And not only is it widening, but it is doing so while the relative contributions to the business' success are often narrowing (give the huge increases in worker productivity in most domains).
What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.
Amazon is structured so that there is net 100,000 dollars of wealth in the deal betweeen you and him that goes to him (whatever goes to you, he also gets 100k.
I am sure you have no complaints, but why the 100k? why can't that be 50k to him and 50k to you.? Or 33, 33 and 33 extra in tax? or ...
And is the particular arrangement something that is fundamental and inviolable to creating the wealth Amazon did? Or is it just that because it was that way Amazon could beat the alternative universe Amazon ?
what is the phase space of "still generate wealth" and "society looks different"?
If Amazon had had a competitor back in the day that had done just that - everything Amazon did, only shared more, then probably we would all be buying from ... err ... Mississippi.com. But this competitor would have had to pull all the right moves - as well as sharing differently.
And one day, yes there will be some innovative new company that will do to Amazon what they have done to Walmart. And maybe that company will have a competitor that will be a co-op and maybe they will have the edge. It has worked ok in the UK for John Lewis. But the lesson from John Lewis is they have to be good at all the basic stuff - and only then do they get to pick staff based on the nicer governance / culture / slight pay gap.
Building a company is hard. Building something like Amazon is freakishly hard. Which is why this "treat employees well" is basically never left up to the market and just tacked on afterwards in regulations.
And finally - yeah would Bezos exactly be hurting if he was half as wealthy. Neither of us think so - which kind of is my point. If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
The phase space available to us is larger than we think.
I'm not angry. I'm just making a point.
> Building a company is hard. Building something like Amazon is freakishly hard.
And that's the point.
> If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
I don't want to fixate on Bezos in particular, but there are probably a lot of founders who would be hesitant to start a company if, once that company became valuable enough, they would be forcibly divested from it by law and therefore be at risk of losing control. Even if you're a vision-focused founder who is intrinsically motivated by wanting the company you are founding to exist in the way that you want it to exist, with no regard to your own personal wealth, you're going to be hesitant with that sort of confiscatory regime. And that's setting aside the fact that building a large company is not only "freakishly hard" but also tremendously risky. If you have a wealth cap of 10 billion dollars thinking "10 billion dollars is enough motivation for anyone", sure, but there's a risk premium involved and the expected value is nowhere close to that number.
Amazon's secret sauce was cheap capital. Both tax holiday/avoidance and persuading Wall St to forego profits. A combo that's unlikely to be repeated any time soon.
If Amazon employed me tomorrow, would their revenue immediately and automatically increase by $100k?
It is always useful for fish to ask what is water.
Otherwise people accept knee-jerk political phases like "free market" or "business friendly policies", without considering if it is optimal
There is a continuum of ways to arrange government, labour and private ownership. The particular point labelled "USA early 2000s" is not the only one.
That is what I genuinely believe - and I want to look around to see what the rest of the continuum looks like - the good and the bad parts
If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did. Jeff got $2.8m, you $200k. On paper it's unfair, unreasonable, and unbalanced, but you agreed to it, and without Jeff you would have earned less. Maybe it's fine.
This was early in my career, and I didn't work on anything customer facing, but there's still no guarantee of that. What if I'd worked on the Fire Phone?
The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.
The distinguishing factors here aren’t simply European regulations and taxes.
I know of American VCs who have been just as ambitious investing with U.K. startups as with American ones.
If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
and within the US, "why SV?" might simply have another orthogonal explanation.
If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York.
The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.
No offense to Europeans, but I've only heard of Spotify.
[1] https://www.statista.com/statistics/813906/spotify-number-em...
Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.
CEOs often have hardly any salary. But his shares nearly doubled in value over the pandemic - increasing by $84 billion.
Divide those billions per employee instead and they get $84,000 each. And Bezos is still as rich as he was before the pandemic.
That language is based on the assumption that they're not already being compensated.
Their compensation is what they agreed to accept as payment for their labor. So they're already being compensated. If they want to "own" part of the company outside of this agreement, they need to buy a piece of it. If you want that as part of your employment agreement, negotiate it beforehand, either individually, or as part of a union effort. If you can't negotiate it through those efforts, then accept the fact that the employer believes they can get a better deal on the labor.
Do all of your employees at From Day One own a portion of the company? Why shouldn't they "hold sharp objects to your throat", as the founder, to get a better deal than what they agreed to? If not, why not?
This country, with its institutions, belongs to the people who inhabit it.
If they grow weary of the existing power structure and have not been given the ability to meaningfully participate in the institutions that govern the lives of themselves and their communities, then they most certainly should exercise their revolutionary right to overthrow those institutions.
https://www.brainyquote.com/quotes/abraham_lincoln_101160
Pretty sure the owner of the largest pile of wealth ever assembled and the top political newspaper in the country fits well within the framework of this country's institutions.
There's nothing bizarre about a mob coming for the assholes who hoard all the wealth and consign the masses to subsistence level existence. In fact this dynamic is probably the most enduring concept in human history.
This is the founding principle of America, and I'd be happy to advocate for it in any forum. It sounds like you have an alternate worldview and that's fine too, perhaps we can agree to disagree on this point.
Ok, but how does getting rich because of moving boxes at Amazon rather than Walmart make more sense?
That’s difficult to do when wealth is concentrated among a very small group of people.
So when a small group of people has seized control of the laws it’s time to resort to the pointy end of the stick.
The laws are there to protect the people from those who seek to enslave them not the other way around.
Are you planning to commit an act of political violence? Do you have weapons?
Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.
Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.
In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc).
It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies
(hmm - there is likely to be a speed / stability / waste trade off here?)
societal democracy works because everybody is born into a society equally.
A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote.
So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer. It is this property of equity which makes capital more powerful.
you could artificially raise the power of labour by fiat law. But this law would distort the capital being spent - you might even find capital flight, if the law is very skewed towards labour.
That's only capital being spent if the company is not profitable. Otherwise, it's just reinvesting revenue back into the business. And a company that is going bankrupt may well become unable to pay employees' promised wages, which does happen occasionally.
> If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer.
While there are definitely people who are not happy with this kind of arrangement, it's not entirely unheard of either. Early stage start-ups often hire people on equity instead of wages; and co-ops where all (or most) workers are owners and only get paid if the business is successful also exist.
And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy.
Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point.
Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner.
Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future.
I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.
Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.
1 million employees right now, or all time? Amazon is ~28 years old. $100B/28 years = $3.6B/year.
- Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs.
- Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business. I’m the one taking the risk yet the government benefits if that risk pays off but doesn’t compensate me if it doesn’t.
So? A worker has already paid all kinds of taxes in their life, but they still get taxed on their income.
> Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business.
Your original capital is yours, but if you get income from it, you should be taxed the same as any other income. My time is and should be my own to do with as I see fit, but I still get taxed if I get income from it.
capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The low capital tax is to encourage more capital investment, because those with capital has the choice to not invest (and thus society as a whole loses the potential benefits of such investment). People with wage income don't tend to have the option of _not _ working, so lowering their tax won't encourage _more_ wage income.
The fairy tale that no one would invest if, instead of 100%, they were only allowed to keep, say, 50% of the profits is far-fetched. The game would go on, only with more (in the optimal case) redistribution and less accumulation among the already well-off. The issue here is the relative inequality caused by capital gains, which in the long run tears societies apart, because the middle class can no longer afford apartments/houses and vacations, and the lower class can no longer afford basic needs (food, health care, mobility).
Your second sentence applies to labor as well: "I'm the one doing the work, yet the government benefits..."
Either "all taxation is theft", or "taxation is the government charging for providing the services necessary for work and business to operate".
1. Work a job and pay income tax 2. Invest remaining income, capital gains are taxes when liquidated. 3. Buy a car with the remaining gains, pay sales and property tax 4. Sell car, pay sales tax again 5. Reinvest money, earn gains, pay taxes on them 6. Repeat
The same money just keeps getting taxes. His point is that the money should be taxed once and only once.
Why? This argument is often given as an axiom without any reasoning behind it.
There is often handwaving about "risk", but a worker has risks due to not being able to supply the labor that they are selling. They invested in their labor through paying for education and training.
Why is their "risk" not considered the same as capital "risk"?
a worker gets paid when they worked - there's no capital risk. They took a risk when they invest in skills for the job, but that risk isn't capital risk. If you are saying that their job should compensate for the initial risk they took getting educated, then i would say this risk pay-off is embedded in the salary of the job they took.
Modern worker agreements (a.k.a most normal jobs) do not have downside risk if you can’t deliver. You just lose your job and stop gaining money. With capital investments you can easily undo 5 years of gains in 1 bad year.
If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.
From my experience working at several saas unicorns, in each companies there was 2-3 max people who where responsible for the success of the company. It is not that all others were useless but they all could have been replaced easily without having any impact in the success of the company.
I know this is difficult to hear as an employee but this is the truth. 99% of us are replaceable.
In my opinion and experience, working with skilled and nice people VS working with stupid and coward people for example has only an impact on the happiness of the employees but has no link with company performance. (company culture has no impact on company performance)
If that were true, it would be weird that companies work so hard to acquire, retain, and develop talent.
At the end whether you have a design system, if you have infinite scalability, if you use node or Ruby, having that feature or that other feature it doesn't matter. The only thing that matter is the revenue the company make.
If what matters was the people then ngo would be unicorns
+ interviews with people working in hr and culture at other ones.
And to give you more concrete data, the significant employees where :
1. The ceo founder (work hard play hard culture) b2b enterprise martech
2. The ceo founder + cto founder (chill + excellence culture) b2b enterprise productivity software
3. The ceo founder + vp of sales (micro management culture) b2b enterprise martech
4. The ceo founder ( chill + low expectation culture) b2b smb martech
"You think the Collisons are... creating and maintaining a high performing engineering culture"
Yes.
I have been at unicorn companies with C-suite executives that are clearly useless, or worse, net detractors playing political games that the people under them have to work around to get shit done. I have been at companies where one engineer is single-handedly keeping parts of the lights on, or conceptualizing and architecting critical systems, having an outsized impact well beyond their title and compensation. There seems to be a false idea here that the way companies run is "top down" - ie. the Collison brothers set out all the goals and strategies and products, and then the employees just execute their vision like pawns. Maybe there are companies like that, but I've never seen one, particularly a fast growing one.
I guess I just disagree that the number of people who would be deemed "responsible" for Stripe's success is 2-3. That seems, frankly, unbelievable to me having worked in companies with hundreds or thousands of employees and seeing how many different people it takes to build something massive, innovative, with multiple product or business lines. Not just taking marching orders but exercising their creativity, judgement, expertise, leadership skills etc.
It's far easier to tell the story of a handful of people than of thousands. The only successful approach to the latter is selecting some at random and telling their stories - but that still leaves most people out. I think it's an interesting and hard problem to tell a comprehensive story about a large group, but I'm not really sure if it can be done. Even Howard Zinn focused on (usually unsuccessful) opposition leaders more than the everyman in his narrative! In any event, I'd love to see someone succeed at making such a narrative, not necessarily about Stripe, but about anything really.
Admittedly the absurdity of the headline is what triggered the initial thought for me, but the article lived up to the headline in this case.
For the last five years, I’ve requested an Elixir client.
I wish they would either build one or greatly improve the docs for people who aren’t using one of their first party API client libraries. It’s not like Stripe lacks the resources.
In fact an argument could be made that ignoring all but the most popular handful of languages runs counter to their goal of increasing the GDP of the internet. Increased friction for adopting new and productive languages means fewer do and devs remain in a slightly more ossified ecosystem.
[0] https://insights.stackoverflow.com/trends?tags=java%2Cjavasc...
Based on what I've been seeing, Elixir has been growing faster the past year or two than it was previously. Elixir Forum's posts and active users are going up and that's where people tend to ask their questions, rather than Stack Overflow. In fact, the lack of support from companies like Stripe is the single top complaint I hear. Most users are very happy with the language, tooling and community.
FWIW, I'd like to see a Stripe Rust lib, also. But it's far more important to just be make the guides better for people who aren't using a Stripe API client and maybe even make a guide for making a compliant API client. That way, you can be programming in something truly niche like Janet and still have a great experience with Stripe.
The information is all there, but it takes way more digging than it should to get at it.
Okay so after a quick google it appears Microsoft are the "Simpsons already done it" of the programming world: https://github.com/Azure/autorest/
It'd probably be a good idea to add an Elixir backend for that and point it at the Stripe's API here: https://github.com/stripe/openapi
Purely in terms of seeing what structs are used in what what on what endpoints, the docs are fine. It's really when it comes to guides that it falls over since they invariably lean on language-specific API clients. This makes it easy to miss how headers are constructed, the required security-related details for webhooks, etc.
Yes it is, And none more pronounced than those involving celebrity founders like Elon Musk; The achievements of SpaceX and Tesla are often showcased like 'his' alone in media like Iron Man waving his hand and Jarvis building the products.
One thing these founders are proven to be good at is getting very talented people to work for them and perhaps lately taking credit for all their efforts.
P.S. Not implying that Collison Bros are like that, I don't know enough about them and I like Stripe as a product.
What? Are you telling me Patrick Collison lost to his future wife at 17 in a science competition? That's so cool.
"I wanted her, so I decided to make the next big thing"
If you can't beat 'em join 'em! (or in this case, propose to 'em)
The first real contender to Stripe in a long time.
Gumroad is another merchant of records, but developer documentation is worse, fees are higher and it seems to support only USD pricing.
Other alternatives requires a somewhat hefty monthly fee, which is a non starter for my use case.
Something about Paddle that I can't define is putting me off, whether it is website, wording, attitude, "contact me for the quote" and such things makes it feel old school and bureaucratic. I learned over time to listen to my gut feeling, so I'm not gonna use it.
Gumroad looks much more relaxed, although more expensive and lacks many features.
Here in this thread, someone mentioned https://www.getrevin.com, which lets you use Stripe and provides a tax shield merchant of record for 1% on top of Stripe fees, which makes it interesting.
I also found out https://www.lemonsqueezy.com which is priced similarly to Gumroad, but it lacks documentation to be able to compare it.
Disclaimer: I'm joining Stripe in a month :)
As a dev I thought maybe easier integration. But it doesn't seem all that different from Stripe Invoice.
I also believe that an awful lot of small online SASS and digital good sales by companies are committing (unintentional) tax fraud in the countries of their customers.
I hate trying to understand vat/sales tax on digital goods, to the point that it has until now discouraged me from starting that sort of business on my own. With Paddle I wouldn't have to even think about it.
The funniest thing is that the EU ostensibly did it to make "Amazon pay their fair share" while most small merchants that used to run e-commerce have moved to sell on Amazon or eBay just not to have to keep up with all the regulations and bs.
Cookie law is "simple", but what does it achieve? How are our lives better after knowing that every website uses cookies? Is there any website you thought "oh wow, they are telling me they are using cookies, this totally changes my perception of how they operate!"?
GDPR is the same: did it make any difference in the amount of surveillance capitalism we are subject to? No! Did it make any of the sites you use to reduce the amount of data collected? No! Did it make money for a fuckton of lawyers who went after Small/Medium Businesses who had a website and had no idea if they were complying or not, leading the majority of them to just close down and move to Facebook Pages? Of course it did!
It's akin to saying that assault is now okay because the people are being forced to sign consent forms before getting punched in the face.
You still have to know and understand your legal/tax responsibilities when selling to businesses in Singapore, South Korea, Australia etc.
(B2B Saas founder here)
People often ask me why PartsBox doesn't offer inexpensive B2C plans to hobbyists and I have to explain that it would not make business sense: the costs of dealing with the idiotic EU VAT MOSS rules would exceed the revenue from subscriptions. Plus it would take a significant amount of time, effort and maintenance to support, thus presenting opportunity costs.
If you run a B2B business, things are reasonably straightforward (although still far from obvious), but B2C is a nightmare in the EU (as a side note, I have no idea how people expect to run sustainable small B2C businesses, this is really difficult).
Also, Paddle might be the only reasonable solution, because they do the invoicing themselves. If you can accept that your customers will be getting invoices from someone else, this simplifies things a lot. There is no company that does invoicing for your SaaS correctly if you are based in some EU countries, even though many claim to do so.
“Simply change your entire business model or build a different product”
> Another thing I used to do was to just sell to everyone except European customers
“Just ignore the entire EU market for whatever you’re selling”
This isn’t a serious post right? Or I guess, it’s actually a classic HN counter-post.
That said their API is very basic and their UX is not on par with what you can. A lot of operations are not possible (eg. Letting users change their billing details, such as company or personal, vat number, etc)
They also won't migrate your credit card data if you're too small.
www.getrevin.com looks like a much better alternative: they basically create a stripe account and add you to it. You integrate with your their stripe account and they pay you, same as paddle.
Nothing against Stripe, Stripe is great.
What normally happens is that you become too big and that's when VCs step out of the way, you IPO and everyone takes their gains. But in the case of stripe you have $100Bn company that the VCs will still happily plough money into. So there's no reason to IPO. You can get all the liquidity you need privately. On top of that, Stripe doesn't really need capital, they aren't some uber buying market share with loss making. They are real SAAS, they can scale and see a drop in their earnings:cost ratio.
As for why stay private, what John C has said publicly is that they still see a lot of growth to go, and that not having to provide detailed financian statements to the general public, which would include competitors, is a competitive advantage. It seems believable to me.
The only downside for the company seems to be that employees would be able to sell, and that seems rather greedy for the company to not work in its employee's best interest.
You wouldn’t think that “it’s easy to use and not scammy” Would have been an innovation, but at that stage, I think it was.
Stripe is great, so I assume these guys are good leaders. But Stripe was founded in 2011. Are there not plenty of young founders of that era "hanging on" to their leadership? I don't see anything particularly out of the ordinary here.
Google - better search. Search was "solved", just not well. Zoom - better video chat. It was "solved", not well. Amazon - they've never done anything original, always just better. Online books was done, colo servers were a thing. Apple - same. Telsa - better electric cars. Airbnb - better short term rental market. Salesforce - better CRM. Snowflake - better data warehouse.
And on and on and on. It seems nobody actually wants new things. They seem to want better on some dimension.
There are exceptions, but they are few.
As Henry Ford said, if you ask people what they want they’ll tell you a faster horse. It’s not as if the automobile wasn’t new and revolutionary, but nobody cares about cars. They care about getting around. And a way to get around that was faster, more powerful and more reliable…that was new. It’s the details that matter.
If you take your view, the moon landing was hardly anything noteworthy because animals have been migrating to new lands for millions of year.
The moon landing wasn't a product.
"New" v "better" isn't saying something is or isn't noteworthy. Tesla is a hell of a story. So is SpaceX. So is Apple. So is Google. Amazing technical leaps. All noteworthy, all creating immense value.
Stripe nailed everything else about the business. They made everything that sucked about old credit card processors good. It wasn't just the transaction. It was everything that led up to it (simple integration, debugging, good dev documentation, sane APIs, etc) and everything after. Eventually, they even made the transactions better with alternative methods, fraud, and recurring payment pass-through.
Wow, HN's ability to dismiss and diminish major accomplishments continues to astound me.
The word 'just' is used in many cases to show someone did one thing and not other things. Doing lots of things is often just stupid.
Sometimes "just" does have an implication.
If you assume the writer isn't being a dick, it's easy to see what they meant.
I also found this to be a somewhat shallow analysis, considering their sustained success over a decade.
Wonder why. Competitors’ device? Privacy concerns?
It could also be some petty competitive instinct to stiff his competitors even a few cents or dollars in revenue.
It's from like 2002, when they first came out.
You know what I just did? I put a band-aid a guy sold me on the street, 2 cents, it's perfect, the cotton part over the camera and it doesn't leave residue. Restickable. Hardware kill switch right there...but for this problem, it's just a band-aid.
If the rates continue to rise and market gets bearish on paying multiples on revenues, its going to run into serious liquidity crunch.
> In March, Fidelity, required to publicly update the value of its holdings, marked down Stripe by 20%. Most unicorns—startups valued at $1 billion or more—are trading on the secondary markets at 20% to 40% discounts to their last official venture capital rounds. But Stripe’s shares remain hard for new investors to obtain and in high demand, with recent transactions implying a valuation of as much as $165 billion, per New York–based EquityZen, a marketplace for pre-IPO shares.
The topic reminded me of a good episode of Invest Like the Best with Carta CEO Henry Ward[1], which included a discussion of their CartaX platform for offering insiders a chance to sell private stock to institutions.
[1]: https://podcasts.apple.com/ma/podcast/henry-ward-transformin...
I know Stripe is a darling YC company but if you look for it, you can find some usually anonymous detractors.
"+1. Also a founder of an $XB fintech. Exact same story. Patrick + John dangled an acquisition to get a look inside, and ended up re-trading on the terms. Then proceeded to target 2 of our team members to recruit. Fast forward a few years, and now they have deployed a team to directly copy one of our products. Amongst their L2 team, Patrick and Will are described as the "killers". I guess maybe a bit of duplicity is required to build a company of that size..."
I've found a lot of the "secrets" really aren't that. The ideas are usually pretty public, and the questions come down to ability to execute and integrate etc. Stripe has a good position from which to expand linked lines.
I can understand when it comes to interviewing for a leadership position, some of the interview may be based on 'fit' rather than just the display of problem solving skills w.r.t the interview question, but to me it didn't seem like they were particularly interested in testing either. I have 10+ years of experience operating in a large $XB FinTech and my expertise was an almost exact match for the work the position they were looking to hire.
I'd like to think that it was that specific group within Stripe that had that issue, but the posts on Hacker news have me thinking otherwise.
Seems like a vacuous statement. Isn’t that true of anything/anyone in life?
You're welcome to write your own critique of Stripe or anything else but recycling other people's HN drama is not really in the spirit of the site. Repasting an old provocative comment while withholding context (i.e. not linking it and its rebuttals) is extra lame.
HN/VCs also said Uber was a $150B company...Lyft was a $50B company...Peloton was a $40B company...
if Stripe went public today, I would say they would be lucky to crest at a $30B valuation, even that may be lofty...PayPal has 3x market share as Stripe and has a $92B valuation
Exactly.
The hype squad have been screaming about the valuations of these companies and now look at them as soon as they IPOed. Neither of them are profitable companies.
It just means the VCs, insiders and everyone else who got was in before the IPO made a windfall in their stock and by now cashed out. The news hyping up the IPO to retail investors and left them holding the bags again as the market drops.
I would expect Stripe to delay their (eventual) IPO.
There are starups right now that were founded before 2010, went public, and say they will be profitable in 5-7 years time
That’s 18-20 years without a profit!?!
While there are definitely advantages to the discipline of having to make a profit, I don't see anything fundamentally wrong with building a company over long timescales.
But! That was something I myself did not know. Not really important that eg wikipedia already knows about negative modulos getting the last elements of a list.
That was the point of AI. From that day I had much more confidence in the basic premise of the basic research, that this could be done and it slowly would develop.
And why did I come up with a result so fast with my own basic research? Desperation. Solitude, isolation. Silence. Single-mindedness, determination, that AI was all I actually cared about, no secondary reason to live. It got all my resources.
Its not a cathedral or a forest.
> That's 18-20 years without a profit!?!
Same same, but different.
But I wouldn’t compare an infrastructure / platform like Stripe to B2C nice-to-haves for rich-ish people like Uber or Lyft or cute expensive jokes like Peloton.
They were absolutely overvalued at those market caps, but it's wrong to say that "HN/VCs said those companies were worth X but they didn't reach X in public markets"
Why is it wrong? You think private markets are better indicators of value than public?
The $90 billion is without the IPO pop. It would be worth $90 billion after the IPO pop maybe today. In late 2021, maybe $120 billion.