I think this is a great point. A routing layer on top of a deeply feature rich set of underlying providers is probably not a good idea. I think that's why API Gateways are kind of "meh"
I think routing layers need to be super thoughtful about this. How will I architect my system to ensure this isn't the case? Or doesn't matter? Or just doesn't happen?
The key - for us - is to be not just a routing layer, but a huge value add in addition to being a routing layer.
We provide workflow management, decisioning, analytics, etc and those are things that all clients need. Underlying providers of various things know they will need to be integrated into something like that (whether homegrown or built by a vendor), so being part of an ecosystem like ours that ensures success is critical. Homegrown implementations of the same vendors vs. using those vendors in Alloy stops less fraud, causes more manual work, is more opaque, approves fewer good customers, takes longer to get live with, etc.
Importantly, we don't pitch either side (vendors or our clients) on using Alloy to compare vendors - rather to make the most of them (now and as their needs change). It's not just
"I can switch this at any point"
it's
"I will have a best in class system now and the peace of mind that I will have a best in class system tomorrow as my needs change, without needing to engage in 5 enterprise sales cycles to get there"
Indeed. My understanding is that most socio-economic housing segregation is deliberate (on the part of those that can afford it). The ethno-racial segregation is a byproduct. Potential allies of reforming the latter are de facto opposition due to the former.
Racial segregation in the US is at least partly a direct descendant of New Deal and postwar housing policy that mandated segregated housing projects. Segregation was a deliberate policy and a massive social engineering effort.
There is nothing natural about the current amount of segregation in the US.
Not a descendant. Redlining was explicitly part of the New Deal era’s HOLC’s mission. There’s a great podcast on the topic from a couple years ago here: https://castro.fm/episode/UxCiQp
Segregation was a deliberate policy and a massive social engineering effort
Segregation happens naturally as well. In Singapore after few race violence instances government made it mandarory for all government provided housing have a similar make up as the population in general.
it shouldn't be more challenging if each locality addresses this problem on their own on the local level.
the problem with doing a nationwide campain is that they tend to be pushed from above with a one size fits all approach: if it worked in seattle, then it must work in miami. but really, each locality needs to approach this on their own and find a locally appropriate way to solve it.
as you say finding out, at a very micro-level, how to solve it
I just can't stress this enough: if you're reading an economics article that relies on anecdotes from owners in the service industry, DO NOT READ IT!
You can find a service industry business owner to shit on literally anything local government does. If there aren't hard numbers in the piece, into the trash it goes.
In the city where I grew up, they implemented a Bus Rapid Transit system that has definitively helped the businesses on its corridor. However, from the moment it was announced, article after article would come out where business owners would blame the BRT for their declining business or even failure. The evidence never backed these claims up.
The case that the minimum wage hurts the service industry, in particular, makes sense to me. In fact, I'm sure it's somewhat true. However, when the best an article can do is a 2018 survey saying that the majority of businesses have increased prices (curiously - no numbers about any negative impact on their bottom lines) - toss it in the garbage. No thanks.
In Toronto they did something wonderful. DATA. When they implemented transit priority on a previously more car-centric road, of course you had some small business owners screaming murder, saying their sales were down like crazy (we heard 30-40%) and wanted compensation. Majority of business actually supported the new project because it was about bringing more people total (more people fits in transit than would fit on a parking lot).
Turns out that the city had a partnership with the credit card processors to measure the change in spending before and after the implementation of the project (on a aggregate level for all the shops on that street). Surprise surprise, a year later, they were able to prove there was no drop in business. We never heard again from those business, and surprise, they are still open.
Yeah there's tons of data on this, it's essentially not controversial if you care about data/what's real. Cars destroy business in every city in the world where they're dominant.
That rules. There are lots - LOTS! - of local regulations that hurt small businesses. But they're not all headline grabbers and they're certainly not all ideological battlegrounds like the minimum wage.
We actually have a lot of data on this stuff and we should use it :)
Yeah the vision of "local business guy says" doesn't seem all that useful.
A local business group supported some transit options in my area. I thought that was nice until I realized that they only supported politicians who wanted to cut state spending across the board. So of course no transit project...
After ten years of lobbying they finally got their transit projects.... from the opposite party. You would think they learned something but they haven't changed.
I'm really skeptical about "what local business guy thinks" type information and if they even really know what is in their best interest all the time.
There is an audience for "minimum wage kills jobs" articles and you can't write an article without a source. It's sad but true that the majority of the service industry is in perpetual failure mode, therefore, you can always find multiple business owners (they're "experts" right?) who will blame their failure on whatever the latest bogey man is.
Again - I genuinely believe hyper-local minimum wage hikes are especially stressful to the service industry. But articles like this make me almost more skeptical of that belief, because if this is the best they can do to make the case.....
Yeah one of the more prominent local "too many taxes" guys who loved to put up makeshift billboards around his restaurant about taxes was recently arrested. He was a fixture on local news always ready to give a quote.
Turns out he wasn't paying his taxes, or employees at times... ;)
Granted plenty of local business guys who certainly can have those opinions and they pay their taxes.
Ignore what he says, but pay attention to what he does. If the article is truthful, some employers are lowering their operating costs by either cutting hours or terminating employees; others are raising prices of their products. The former is bad for employment, the latter for customers. As prices elevate, they approach the marginal value of eating out. Eating out is very elastic, so if the prices rise too high, the companies could fail, causing more unemployment.
It's a fine line. My personal opinion is that minimum wage was never meant to be a living wage, but more for entry level, part time jobs for teenagers etc. If we raise the minimum wage to a level that provides a living wage (assuming 40 hour work week), then it becomes complicated since a lot of jobs are part time. To earn a living wage, someone would have to have multiple jobs, which generally sucks if you work in the food industry. It's a complicated problem, with lots of legacy baggage and viewpoints. Providing a living wage sounds great, but I think there's lots of issues when you're dealing with transient employees who don't want to work full time, don't have many skills, etc.
The only stat they cite is that some employers are raising prices. There are no other stats cited - only anecdotes.
In the ideal pro-minimum-wage world, prices go up slightly but the impact on those who get the minimum wage bump is bigger than the impact on those people from price changes OR the impact on other people for those price changes.
That's the tradeoff pro-min-wage people would expect and want so if that's happening, no news there.
The tradeoff they would not want would be massive hours cuts, businesses going out of business (although some would want that - not me!), or this turning into an excuse for the businesses to cut costs and/or automate. We would need data of some kind to understand if that's happening.
I wasn't really focusing on causation so much. People say a lot of things about who/what they are and what they value. But what they do is really a better determinant of that than what they say.
It's not intuitively clear to me what the point of this article is. Is it challenging the premise that building more housing stops the growth (or reverses the growth) of housing in urban areas? It seems to be but then most of what is talked about is not that.
The evidence for "more housing = slower rising or shrinking housing costs" is so strong in places like Brooklyn and Seattle that it seems almost impossible to really to challenge it.
The article's thesis is that building more housing does not reduce wealth inequality. Which makes sense. However, that's not why people are demanding more housing in places like San Francisco. They want more housing so that housing prices and rents will stabilize or decline. This allows people at lower income levels to have better quality of life. They are, of course, still at lower income levels. The article calls this a failure. Others may call it a success.
i also found the article confounding for not stating its positive thesis clearly, rather than this passive "‘Build More Housing’ Is No Match for Inequality" phrasing.
"so what is the match?" is the natural next question to answer, but the author simply doesn't even acknowledge such a question could exist. cortesoft points to one answer[0]: induced demand. the article hints at underlying land value rising because of the concentration of wealth in city centers is one reason.
like probably many others, i think affordable housing requires a combination of many economic thrusts: upzoning, reducing unnecessary regulatory costs (e.g., reduce bureaucratic friction rather than loosen safety codes), improving mass transit (reduce construction costs here too), mixed-use as default, encouraging small local businesses, last-mile transportation innovations, strengthening labor, progressive tax reform, etc.
I would guess it has more to do with many of the "best" angels who would round up syndicates just raising their own funds, first from the syndicates they would round up and then others. I have several investors that fit this mold and know of a bunch of others.
As a founder on the ground even in late 2015 (NYC), it was very hard to get a single angel check when we were trying to raise $500k. Ended up raising $2m from funds instead - which was the right thing but also very weird.
Fellow founders with companies that would have traditionally been at more "angel" friendly stages have had a similar experience recently - either funds invest or they can't raise more than $150k. Less true in smaller markets.
The electric vehicles item here is disingenuous without including how massively subsidized their oil-based competitors are. I understand why urban transit people target electric cars to counter the "electric cars will save the world!" narrative but it falls flat to me in an otherwise compelling list.
The way you get to the multiple is a combination of how fast the revenue is growing, how long you think that will keep up, and the margin of the revenue.
Craftsman Tools, for example, was probably not growing much or shrinking and likely had low margin revenue but I don't know.
Those issues end up being reflected in the multiple.
Revenue * multiple is just a common way of talking about it, especially because companies within the same industry tend to have similar multiples. In reverse if you notice two public (since the information is easy to find)companies with seemingly-similar businesses that have very different multiple, you can start looking into why, and the quarterly financial reports with high-level numbers like cash burn, outstanding debt, profits, or net income would be a great place to start :)
> Revenue * multiple is just a common way of talking about it, especially because companies within the same industry tend to have similar multiples.
This is the common way media talks about it, either because they are (1) uniformed or (2) they only hear of top line revenue.
Companies are typically acquired for EBITDA * Multiple. However when their is a "strategic" acquisition (which this one is) then there is all sorts of weird math that potentially goes on.
Examples: (napkin math)
- Company being acquired has $100M in revenue, and $20M in EBITDA. Post close, they realize $20M in synergies, so they might buy the company at 20x * $40M Adjusted EBIDTA ($20M EBITDA + $20M new EBITDA from synergies)
- Company being acquired has $100M in revenue, and $20M in EBITDA. The acquirer is going to remove 100 engineers post close (100120k/yr = $12M) and therefore the new EBITDA is going to be $32M, and the company gets bought at 20x $32M EBITDA
At the end of the day, the ROI is really what matters.
It's also worth noting - most M&A does not realize the hypothesized deal value. So yes people are right to be critical, but without full details, being precise about what the true value of a company is nigh impossible.
I said the multiple is based on the margin of the revenue, aka, how profitable the revenue is.
Revenue is the proper starting point as it is the thing that can or can not be optimized and grown. Profitability of the revenue (now vs. future) is obviously a huge driver but it is not the right starting point.
In the formula you provided how is the number for the multiple arrived at? Is that the multiplier that will be realized at some future date based on the current rate of growth? If so what would that future date be - the next round of funding, an IPO, something else?
It all factors in but realistically with SaaS there is little in terms of fixed assets.
Most likely a lot of the additional factors for the valuation multiple calculation are going to be around efficient customer acquisition, sales cycle payback periods, and different income percentages (operating, net). X factor would be if other competitors of the acquirer are also bidding on the acquiree.
Depends on the business. Something like Zipcar or similarly asset-heavy would incorporate assets in an MnA valuation, but SaaS would not unless they're flush with valuable patents.
I think routing layers need to be super thoughtful about this. How will I architect my system to ensure this isn't the case? Or doesn't matter? Or just doesn't happen?