I think even for those who do not subscribe to any election fraud conspiracies, this will seriously shake confidence in the election. If a mistake like this went by unnoticed until the results were posted, what other monkeying about with the database goes on?
The main value of token compensation is liquidity. People frequently underestimate how long it will take until exit and their equity becoming cash.
Tokens for a good project are liquid immediately on numerous exchanges, and likely will be worth at least something. Don't neglect the time value of money.
There's no such thing as a free lunch, though. In the case of token compensation, it's only liquid if you can easily find another buyer, and the main thing that would be driving the ease of finding a buyer for tokens right now is that there are so many people who are eager to buy literally anything that smells like crypto. So, yeah, it may be easier to dump in the short term, but in return you end up with an additional way for the cash value of your compensation to be driven to zero. Actually, make that three, because thinking about how future SEC activity could impact this sort of thing is the stuff that headaches are made of.
That might not be a consideration at all if the company's chances of long term success isn't a part of your thesis for taking a job there. But why would you take a job at a company that you don't expect to be successful?
Not only to enable sales, but to also show the business problem you are fixing is important. I've been in enterprise deals where if the price tag is too low, the executive doesn't think it's important enough for him/her to fix. It can sound crazy, but once you've tried to fix big problems at that level it makes some sense.
The lower your price, the more your product and sales process needs to be self-service, because you can't afford to send a salesperson out for a $1000/yr contract (airfare + hotel + rental car + their time, annnd you're over any possible return, even before including R&D and support costs)
With SaaS, LTV is a more important metric than ACV since you need to take into account average retention, up/cross-selling opportunities, and more. If you take into account CAC even better.
Armando Mann over at RelateIQ uses Cohort Growth to measure LTV for each customer within a cohort to ensure the business is growing taking into account the bottom line.
This is a non-obvious point that took me a long time to grok: the way you sell your product is a function of its price, not the other way around. The more you charge, the more high-touch you can get when selling (i.e. with an outside sales force).
Most people on HN exist in a very different world from the unbanked population. Credit scores mean nothing to these people. Many can't even get approved for a checking account and rely primarily on cash equivalents and prepaid products.
Sometimes getting rid of the debt means that you can begin to restart. Of course, it won't help you afford a non-free checking account nor pay bills, but it can lead to marginally better jobs and nicer housing for the price. Sometimes that price is worth it because it brings a bit more piece of mind - no more phone calls and letters. A good number of unbanked aren't even as poor as you might expect - things have happened and they can't get to a point to restart.
And some people, no. No they wouldn't care. Like most people, it depends on life situation.
I'm not in SV. My cofounder and I own 100% of the business.
And that's the way it works in most of the world. The SV approach of giving early employees shares as an incentive is actually fairly tech-centric. Whoever heard of a restaurant's first waiter getting shares in the business?
I'd actually love to see examples of companies in SV giving equity to people who are not even clued in and recognize that they need to or should be given equity. And would gladly work for a normal pay check.
Anecdotal there are stories of the early janitor getting stock (or something like that) as if they wouldn't work for just a salary.
The line that I've heard is that it's a way to get people to work for less money than they would get paid if they didn't get equity. [1] But is this really true and how often in actual practice? (Comments?). I mean in a way if it is true you are taking advantage of the naivete of "the janitor" or "admin assistant" who may not even have a clue at all the probability of that equity even being worth anything at all. Because all they know about is what they read of the big wins that everyone talks about and they think they might actually stand a good chance of hitting the jackpot. Why is this right? To me it isn't (even if you believe it yourself as a founder).
Separately with domain name deals there is always a push on the part of sellers that I have noticed to try to get some upside equity when selling what they consider to be a valuable name. In general since the seller isn't taking that much of a haircut on the price anyway it's is usually a bad idea. It's almost pure upside with nominal downside.
[1] Along the lines of your comment "Whoever heard of a restaurant's first waiter" that would be the almost equivalent of the admin assistant or maybe customer service rep. Otoh anyone can easily see a new restaurant offering equity to people who work in the kitchen. Especially the the person in the kitchen (or several) need to be lured away from another job they are at.
That is one philosophical position -- a classist and strongly capitalist one dividing members of a company into owners and employees. This leads to division of society into workers (who sell their labour) and capitalists (who collect rent).
An alternative, more progressive position is that all workers should be entitled to some ownership of the fruits of their labour. That is to say, everyone involved in an enterprise, no matter how big or small, is entitled to receive ownership proportional to the impact of their contribution to the success of the endeavor. In this world view there is no division between owners and employees, and unearned rents are minimized.
This is really a philosophical / moral / political debate.
Yeah, the communist "everyone owns the labour" approach has been tried, I think you'll find, if you open some history books.
There are some seductive ideas in communism, but making ownership a function of direct contribution sure as hell isn't one of them. The fact that the setup is biased towards owners is the very reason why so many people go and try to start their own business.
Starting your own business and making it successful is extremely hard and risky work. The entire point of putting that hard work in is that at the end of the day, you own the system, and can retire on the fruits of the system you gave birth to.
If ownership decreased to be a proportion of direct contribution, apart from the fact that it'd be very hard to measure that, it would also demotivate most entrepreneurs, myself included, from lifting a finger to start a new business.
"Starting your own business and making it successful is extremely hard and risky work. "
And, in fact, while it might surprise many people on HN, there are many people who are quite satisfied with working for someone else and collecting a paycheck without all the worry and uncertainty that comes with owning a business. (And I'm excluding the people who talk a good game and say they'd like to be their own boss but would never even come close to actually taking the chance or pulling the trigger..)
"If ownership decreased to be a proportion of direct contribution, apart from the fact that it'd be very hard to measure that"
I'd say it would actually be near impossible to measure that actually. And even if you could measure it if it diluted the owners equity to the point where it didn't pay them to operate the business it wouldn't even matter.
I'm reminded a a guy, quite valuable, who worked for me many years ago in another business. After working for 3 months he walked in and asked for some ownership. Although I viewed him as quite valuable I said no, that I'd pay him more but I wasn't going to give him ownership (various reasons for this). Part (and only part) of my logic was that first he wasn't going to pay in for the equity (he just wanted it) and also if the business failed he could just walk away and get a job elsewhere. So he could afford to take risks and chances that I couldn't take.
For a very short period (between businesses) I worked for another company and remember how I couldn't believe how different it was than being the owner. All sorts of things that I had worried about as owner didn't matter anymore as an employee. It was almost like being on a vacation it was that easy.
They really should amend Godwin's Law to include mentions of Communism these days.
There's a marked difference between everyone owns the labor and everyone owns their labor. You don't even have to check the history books. There are plenty of examples of functional, profitable, worker-owned cooperatives in the wild today.
>a classist and strongly capitalist one dividing members of a company into owners and employees.
But you don't have to divide it as "owners" and "employees". The underlying category is the division between those who favor high-risk-uncertain-reward, and those who favor safety-and-salary. I'd argue the varied risk profile is rooted in the psychology of economic participants instead of being born of any classism. The employee that wants to be an owner can be an owner. The owner that wants to be an employee can be an employee.
>An alternative, more progressive position is that all workers should be entitled to some ownership of the fruits of their labour. That is to say, everyone involved in an enterprise, no matter how big or small, is entitled to receive ownership proportional to the impact of their contribution
These types of appeals always leave out the other major factor: owner's capital at risk. We want the workers to get benefits of ownership but never discuss how employees should also bear the same financial risks as the owners. It's an incomplete call to action. The founders/owners are the ones depleting their life savings and maxing out their credit cards to help fund their (sometimes crazy) business idea. If the business goes bust, is there any realistic discussion of employees giving back their salary to help pay off creditors? Of course not. (And rightfully so; the employees took a salary and don't want to deal with any of that -- that's the owner's problem!) The discussion only talks of employees benefiting from additional upside without taking on any additional downside.
If the business was inherited, I can be more aligned with employees sharing more upside. If Joe Dilettante owns business he got from dad, he could run it into the ground without competent employees keeping things profitable. However, since this is Hacker News and the "startup" crowd, we're usually talking about creating businesses from scratch.
> In this world view there is no division between owners and employees,
There already is no division. If an employee wants to be an owner, he can do so. For California, here are the forms:
Pointing out those forms is not a snark. I'm emphasizing that there is no "classism" preventing anyone who happens to be an employee now from becoming an owner tomorrow. Submit those forms, and go create wealth. Instead of asking for ownership percentage from other owners, you can simply get the State of California to grant you ownership of your own company. You give ownership to yourself. The avenues of ownership are already available to everyone.
Is this not in the spirit of the Hacker News demographic or am I reading things wrong?
However what I'm talking about is something different -- e.g. language in options contracts that cause you lose your shares if you leave the company unless you immediately exercise them, which most people are not in a financial position to do. This has caused many early employees to lose out on windfalls that would have been theirs if they had the same terms as founders (actual vested equity).
The following may or may not apply to your specific situation, but this is what I would be thinking in your case. You have two options:
A. Accept failure, fold the company now, return remaining investor funds and get a job.
B. Do whatever it takes to get profitable in the next 60 days.
This is a possible game plan for option B.
1. If you're doing enterprise sales, your problem is likely as much about cash flow as it is revenue. Collect as much cash as you can now. Get customers paying monthly/quarterly to pay annually. Make big prospects an offer they can't refuse to prepay in advance.
2. Get revenue any way you can. Become a consulting company. Do things that don't scale. Sublet your office. Hold events at your office and sell tickets. Sell some Aeron chairs. Just get some more cash coming in.
3. Cut costs ruthlessly. With 2-3 months left, there is no way you should have 10-15 employees. Assume you have 3 months left to live. Do you really need all of them that badly? It will be tough and heartbreaking to let people go, but it's better to let half go with warning than to have everyone find out they're not getting paid a couple months down the line. Cut benefits immediately. Yes it will be tough and unfair, yes it will hurt morale, but you're at the end of the line. Do it. 3 months of runway with 15 people could become a year of runway with 3 people.
4. Mine your CRM and personal network for leads. Strip mine it for whatever value it has left. From now on, everyone on the team is spending at least 30% of their time on the phone with customers. Either you get some sales, or you get some great feedback about customer pain points and problems you can use for your next effort. Stop coding. This is one problem you won't be able to code your way out of.
5. Unless you have amazing revenue traction, forget about raising more money. The one thing VCs hate most is a rock that is rolling downhill. Fundraising will be a fatal distraction. Instead, go back to your bootstrapping roots and do whatever it takes to get profitable now.
Exception: Your current investors may have some capital in reserve to support you. Ask them for it. If they don't re-up, your fundraising prospects are good as dead.
Feel free to shoot me an email with more specifics, happy to give other advice if you think it's useful: ilya [at] mixrank.com.
Thank you for the thoughtful reply. I will definitely consider taking some of the revenue generating steps you suggested.
We have internally been looking at what a shell team looks like for Plan B and when we'd need to start throwing the chairs out of the plane but also had been trying to consider the signal that sends to investors. We are launching a new sales effort in the next week and there is a chance it could prove promising, so Plan C is bet the rest of the company on it. We have been upfront with current investors and they don't want their money back, they want us to keep it rolling, but the ride is about to get bumpy.
Like it or hate it, there is a sea change happening in how governments treat cryptocurrency.