I don't understand: "Sand Hill Exchange" accepted items of real value (USD and BC) that could be used to "purchase" (or bet on) things named after real securities that trade (or are expected to trade) on public markets for a profit.
I would be surprised if a regulatory body didn't come after this setup. There is a very bright regulatory line around gambling and investing in most countries that a typical person should have known about. What am I missing? Why should I sympathize with Sand Hill Exchange?
This is specifically why when we set up http://longbets.org/ we made is so the money always goes to charity. It's also why the Iowa Election Markets got a special waiver to operate. Either they're a market or a gambling operation, and both are heavily regulated in the US.
As far as I'm concerned you should have no more sympathy for them than anybody else. Even if this risk really never crossed their minds, their lawyer should have warned them of how problematic this was during their first five minutes in the law office.
The issue here isn't whether "real-value" was used or not. Technically kids selling lemonade on street corner on a Sun afternoon need a business licence. Do we prosecute them for illegal activity ? Do we arrest their parents ?
Does the punishment befit the crime. These guys had limits on what the users could do. Anybody - yes even the SEC - could take a look and see it wasn't a platform for massive illegal trading. They could order a cease and desist. Better yet "cap" the volume to its no more than "tiny gaming level". But imposing a 5 digit fine on founders who are working without pay, without funding ? That's not just stifling innovation, but fear mongering.
The title says they only got a $20k fine. Am I misreading it? Was this a lemonade stand run by an 8 year old, or by grown adults who are able to use a search engine and Wikipedia?
You don't just write a no action letter. You hire a securitied lawyer and this can cost $50-200k. Had LendingClub asked for a no-action when they started, the SEC probably would have said no. Sometimes it's better to ask for forgiveness than permission.
Well I think sending subpoenas to everyone behind the site and their mentors, and then fining them, is a bit disproportionate as a first step. I think (from the Medium writeup) part of the issue was that the site broadcast itself as more professional-looking and “in business” than it really was. I personally hadn’t realized when I’d seen the site earlier that most of the ‘users’ engaged in ‘trading’ were actually bots for example.
Accepting Bitcoin without figuring out regulatory issues was an unwise step for sure.
I've always wondered about this with traffic tickets: How can officers have discretion on how to prosecute and still satisfy "equal protection under the law"? Or does equal protection only apply to federal statutes?
[Edit: Thank you to OP for sharing, and my heart goes out for your exp]
"Or does equal protection only apply to federal statutes?"
Actually, the 14th Amendment (where the "equal protection" clause is) applies specifically to the states:
"...nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."[1]
The 14th Amendment is applied to the federal government via a process called "reverse incorporation":
"Whereas incorporation applies the Bill of Rights to the states though the Due Process Clause of the Fourteenth Amendment, in reverse incorporation, the Equal Protection Clause of the Fourteenth Amendment has been held to apply to the federal government through the Due Process Clause located in the Fifth Amendment."[2]
thanks for answering the questions. i depend on node at my day job, so i am particularly interested in npm's future.
i understand someone has to pay for the servers and development time, but would it be possible to give a hint for the types of things you plan to charge for? Even just a rough sketch of "we will offer private repositories" or "we will offer support." I appreciate the "reassurances" that nothing will change today for me, but the ambiguity prevents my latent paranoia from going away.
I appreciate your paranoia :-) We are wary of announcing all the stuff we're planning given that we don't know how long it will take to build yet and don't want to be accused of vaporware. However, we are planning to announce at least our initial product plans pretty soon. (Probably not in a comment on a HN thread though ;-))
I just want to say that I would gladly pay for private npm hosting. Something along the lines of github's private vs public repos would be extremely valuable. Yes, we could set up our own private npm server, but this seems like an obvious thing to outsource to a service as long as the pricing is not crazy. Best of luck!
We've been using Gemfury[1] for our private modules which has worked out well, no problems in over a year of use.. though I'd probably switch over to npm if they offered private hosting.
[Edit: Keep it up, and I wouldn't describe any of this as critique!]
Slide 9, "Notice how de-emphasized Start is." Following the arrow, I see that "Find" and "Start" are the same size and believe are emphasized similarly in the header. What cue am I failing to notice that one is de-emphasized?
A subtlety that's lost is between Slides 26 and 28 the user has two separate flows and browser sessions. It doesn't come across clicking next,next,next without reading your text.
[Edit: I didn't notice there were titles, so the only recommendation I have is to put something in the center of focus -- a graphic, a blurred out gmail inbox, a "later that day" film satire, etc.]
On 35, I had a different reaction to the facebook button there. This flow seems like it's based on creating a non-facebook account -- most people here in the flow already have signaled to Meetup they don't want to use fb. Why ask again? It seems like an unnecessary widget that may carry overly strong emotions for some customers. I wonder if this hook successfully converts non-fb users to fb users.
On 44, what was the initial goal for creating an account? Wasn't it to do something specific within the group? At 44 it feels like this flow was a glorified "sign-me-up-for-the-newsletter" form instead of joining a community. Do you have any thoughts about what should be changed at this step in the flow? Should users get dropped back on the PDX meetup page? Should users get introduced to actual neighbors, much like a host would when you show up to a party? Does slide 44 always work that way for all meetups?
[Edit: Good point on 45-47, I guess I expected to see the whole page 48 be in orange pen! That flow looks very confusing to me, and I think I was trying to nudge you to call it out if you thought so, too.]
Slide 9: Good point, I was kind of unclear. I was referring to how that was the only place on the page that referred to Start, whereas almost all of the rest of page's content was Find-centric.
Slides 26-28: I kinda thought the interstitial title card alluded to that. Is there a better way you'd recommend?
Slide 35: Yeah, I tend to agree with you on that. That might have been an "orange pen" candidate. I was just commenting on their persistence, I suppose.
Slide 44: There's a chance this happened because there were no upcoming Meetups scheduled at that time. But I completely agree with you - hence slides 45 & 46.
Super interesting story, and thanks for sharing. I think you're referring to your time at DraftMix, right? Admittedly that was a really hard connection to find online [see below].
That said, quietly using partner/alumni investment as a signal for VCs doesn't quite fit the "Startups are a perfect meritocracy" narrative I'd prefer to believe...
[below]
Interestingly, searching for "Matt Maroon" (on Google, Crunchbase, AngelList, etc) yields results like [0] that only mention Blue Frog. Same for your blog. Wouldn't care otherwise, but I wanted to know if your story could be true or to dismiss as an internet rant.
However there was one interview-like-thing [1] still hanging around the Google Index that connected DraftMix [2] with a "Matthew Maroon" as the CEO [3]
...and people talk about the death of privacy like it's no big thing. Remember, the real creeps don't post their research on a public forum (unless it's for harassment).
Posting that kind of research is needlessly creepy.
People claiming to have gone though YC on HN without a known name will get called out. Hang around HN long enough and you'll know who is who.
quietly using partner/alumni investment as a signal for VCs doesn't quite fit the "Startups are a perfect meritocracy" narrative I'd prefer to believe...
What led you believe that? I'd guess startup investment is 90% social, 5% metrics and 5% technical. Witness, for example, the YC investment thesis of it being all about the team applying. Team dynamics aren't a meritocracy (except in the most broad sense I guess).
I saw you got downvoted for another comment, but in general you've got the narrative right.
Microsoft sent a patent demand letter to B&N. B&N went public as part of its defense. Microsoft countered with two separate deals:
1) Settled the patent issue privately for a revenue-sharing deal and cash payment.
2) Microsoft committed to invest in the Nook business (called New Corp by B&N) which eventually led to Microsoft purchasing Nook for a premium.
So, while the immediate settlement was probably measured in hundreds of millions, the total outlay from Microsoft shareholders to B&N shareholders was close to 1 billion even though it was spread over multiple and disparate deals.
Prior to the patent letter neither company had a significant relationship.
Very sorry to hear this outcome, and I wish the best for the team. Perhaps you can sell standalone products? There is still value in never having to touch paper, and I would have been a happy customer had I known the wait list was done. It was such a promising product!
Most interesting quote to me, and thank you so much for the candor.
> After several months of testing and refining, we reasonably concluded that we were executing well and collecting good data—it told us that there wasn’t enough demand to support the cost model. Our monthly operating deficits were too high, and even though we continued to get better at acquisition, each small success actually saw our cash curve decline further because our density remained flat. For longer than we would be willing to tolerate, we would lose money for each additional customer we gained. Despite the massive interest in our company, we learned that the product we built did not find fit in the market we targeted.
P.S. I am doubly sorry to hear that the USPS shut down the partnership due to threatening unwanted!! ad revenue... this is making me feel even more sad.
As an American who only heard of TenCent late in 2013, I also did not know that WhatsApp was a subscription service. Holy batman that feels either evil or genius.
Makes sense why the app asked for my cell phone digits when I first installed, and I'm happy I never gave it...
I was really happy when they charged me, means I knew they weren't planning on selling out or spewing ads everywhere.
I definitely get more than 69p of value out of it per year
> Makes sense why the app asked for my cell phone digits when I first installed, and I'm happy I never gave it...
How does this have anything to do with the fee? The phone number is essentially your username. It automatically adds all the phone numbers in your address book as whatsapp contacts
edit: It's also not a subscription in that it never charges you automatically, you have to pay manually every time
Wow, that is a brilliant comment I can only agree with. I disliked Whatsapp for doing this (even though it's not even sneaky, nobody knows it), but yeah you are totally right. I am usually the first one to propose "I'd rather pay than see annoying ads."
May I suggest two other narratives that don't involve politics behind "the problems being solved ... are typically addressed at other geeks, upper-middle class consumers, entrepreneurs, and the startup community."?
Why geeks, upper-middle-class, etc? That's where the perception of easy money is, and you see a lot of it here because this is one of the target audiences.
Why startup community or fellow geeks? There is a mantra to solve a problem you have, which means there are a lot of geek- or startup-related apps.
I would also ask you to believe that there are many people who are working on products outside of the "consumer app" space that doesn't advertise, per se, on this site.
I would be surprised if a regulatory body didn't come after this setup. There is a very bright regulatory line around gambling and investing in most countries that a typical person should have known about. What am I missing? Why should I sympathize with Sand Hill Exchange?