How Diaspora Found Its Tiger Stripe in the Midst of a Paypal Fiasco
blog.diasporafoundation.org
blog.diasporafoundation.org
Something smells rotten and it's Diaspora. $200,000 and over one year later and they have nothing to show for it and they're still begging for money. They promised a finished product for $10,000, they received $200,000 and they're still not done. Why are people still giving them money? If a contractor said $10,000 to replace my roof and I gave him $200,000 and he came back saying he needed more I'd call the police and sue, not give him another $45,000
So what happens when they get another 20k or 60k or 200k and they say "oops that's not enough", everyone gets a refund? Or does Diaspora walk away? Or do they hold another donation round in a year?
Sooo disappointed in Diaspora, so many startups could have been created with $200k but they burned the money and now they're back asking for more, like watching a homeless guy buy alcohol with the 20 you just gave him and he comes back asking for more money.
Zuckerberg was just an average programmer and he made Facebook with almost no funding while attending college, these four get $200,000 and make nothing.
I'd love to know what these donators are thinking, can anyone give me a good reason why it's a good idea to keep giving Diaspora money when they already show no progress from the first $200,000 they were given? If you're a donator how will you feel when they receive another 20 or 200k and Diaspora is still a flop?
...over one year later and they have nothing to show for it
and they're still begging for money.
[1] http://diasporafoundation.org/get_involved
[2] https://github.com/diaspora/diaspora/wiki/Community-supporte...
I understand their overall procedure to avoid abuse, absolutely; but Diaspora is a somewhat famous project, an absolutely legit operation. You can say what you want on their deliverables, but it doesn't matter: PayPal got a nice cut out of donations to a public and very well-documented project, then turned around and said they'll keep it all for an extra 6 months.
That's not cool.
I haven't, but from what I can see, if you want a distributed Facebook alternative Diaspora is, for all its faults, really the only game in town. In the real, non-HN world it has buzz way beyond Appleseed, Friendika et al. An impressive number of my non-tech friends are excited about Diaspora, and don't have a clue about its competitors.
That's interesting. Last time I looked I got put off by the confusing pod options but I will try to pay it more attention.
"...We had raised $45,000 in just a few days, and then PayPal froze our account."
Not so mysterious. Believe it or not, no payment service is going to allow you to collect tens of thousands of dollars in a few days with just a name and an e-mail to identify you. The criminal abuse would be rampant. If that doesn't raise the red flags at the risk department of any processor they'd be out of business in no time.
Just another rehash of the same story we've seen on HN a dozen times this year, as recently as ~2 weeks ago with the game developer taking preorders for an undeveloped game -- who eventually satisfied PayPal and later wrote a post about how Google Checkout was worse and PayPal was not so unreasonable after all.
"Yes, you heard that right. PayPal gets to earn interest on all of our donations for 6 months"
If PayPal's agreements with its underwriting banks are anything like the rest of the merchant processing world, then reserve accounts are always non-interest-bearing to prevent any incentive to create them without proper justification.
Using the email address and name is hardly the best way to evaluate the trustworthiness of Diaspora.
There are lots of reasonable questions about how to scale underwriting systems, and how this might work generally, but we shouldn't neglect the fact that in this particular situation 1) Diaspora not being able to receive donations is a bad outcome, and 2) there isn't exactly a paucity of public information about them.
It seems that Diaspora weren't unwilling to verify their identity.
try harder.
from TFA:
Even though we’ve complied with every PayPal request, including providing them with our certificate of incorporation, they still won’t give us an explanation for any of their moves.
First, PayPal had zero verified information about the identity of the account holder at the point the account got frozen. The information Diaspora sent happened after PayPal requested it when their huge increase in incoming funds triggered the account review. That was posted just yesterday, PayPal probably hasn't even had a chance to look at whatever they sent yet.
Second, this same comment was already made and responded to an hour ago.
your right, sorry.
You all are probably way more involved in creating software and doing private finance than I will ever be, so I can't speak to those areas.
I've been using Diaspora for about a month now - maybe a little while longer and while there are growing pains, I've been really impressed with the way the service works.
While there are lots of people who use Diaspora and Facebook, I ( hopefully ) deleted my Facebook account as I got tired of being the product and use Diaspora exclusively.
And like I said, I'm no tech guru. Any operational questions that I posted were answered promptly and courteously. The folks there are still claiming its alpha, and it works pretty well for me.
Oh, and to the registration question - I Scroogled ' diaspora pod ' and the first listing was for https://github.com/diaspora/diaspora/wiki/Community-supporte.... The fourth listing is the pod that I belong to diasp.org - I had no problem signing up the first day I tried.
Try it for yourself and then let us know what you thought
> Obviously, PayPal’s behavior is unacceptable, which is why we have asked our lawyer to get involved.
oh wait, that's where any money is going to go.
Also, the creators of benchmark-setting open source projects like Linux, Apache, etc. didn't ask to be paid to write open source software - they just went and did it.
None of this is doing the Diaspora team's reputations any good whatsoever, by the way.
If you look at the commit logs of any popular open-source project (whether it's Linux or Apache) you'll notice 1 thing...
That the people who do the majority of the work are directly sponsored or employed to do that work by companies, who profit from the work on that project.
This whole "it's made by 1000s of people who do it in their free time" is pure marketing bullshit.
Your statement takes everything away from the people that drive the project and gives it all to the pure consumers, the fanboys, and the people who remove the extra space in some printf statement in the codebase.
No it's not. Projects like Linux were started by people doing it in their free time. It was only later, when people started using the software in corporate environments, and open source became acceptable, that companies started paying people to contribute to those projects because it was in the companies' interests to do so.
Contrast Diaspora with something like Retroshare which is developed by people in their free time. The only difference between between Diaspora and Retroshare is that Retroshare didn't manage to catch the hype wave and raise $200k like the Diaspora team did.
Sorry, I tell a lie - there's one other key difference: Retroshare works.
v0.1 of project X was not the version where 99% of the work was done, nor is the latest version just a incremental & minor update to that first one-person release.
You can, at the same time, praise the founder(s) and assign credit where it is due.
Yes, they were built for free, by people spending time in their off hours, and were not sponsored by any corporations. That much of the development is sponsored now should not diminish the efforts of those who bootstrapped the open source world with grass-roots, if any support.
Furthermore though, while the majority of operating-system and application type of things might be sponsored, that typically isn't the case in web applications, which is a better comparison.
Most of the components used to build diaspora (Ruby, Rails, Apache [maybe], etc.), were built without the budget that the Diaspora team has commanded. Drupal, which is a similar-level web application, though far more mature, was bootstrapped I believe.
Hell, there have been entire businesses that led to multi-million dollar exits with less than $200k.
Take Canonical for example. They have around 30-80 people working on Ubuntu. Do you really think that's NOT where 95% of the work gets done? Yet Ubuntu has this arora around it as it's some kind of a community built distro where everyone contributes a bit, and all those little bits add up to make the whole. Pure marketing bs.
I'm not saying you should not praise Linus for the early work he did. Just that there is more to it. He is still and was since the early days paid to develop Linux. But an entire industy now contributes to Linux who are paid to do so.
And your webapp suggestion just does not stand up at all. Wordpress, Drupal, Joomla, phpBB, all have corps around them that are now the primary funders and drivers of the projects.
How much money did Drupal start up with? How much money did Wordpress? How about phpBB?
The distinction I might have failed to make is that the corporations came AFTER the product. They spawned industry around the product. Yes, Drupal et al have become commercial, but they were bootstrapped products to the best of my knowledge.
Again, $200,000 is a lot of money, and should have been a near infinite amount of money for a lean startup whose members are straight out of college. That they're only to the point that they are with the funding they've had, and that they're asking for more funding is ridiculous.
They were all bootstrapped by individuals working in their spare time. I get that. I accept that. I have no issues with that.
What I'm arguing is that the above current projects are more a product of corporate development and drive than anything else.
And the commit logs are on my side.
I've now given up and moved on, not really interested in them anymore and won't take up the invite if offered.
If you're not shipping physical products within a day or two of accepting the money, and shipping them via a service which allows you/your customer/paypal to track the deliveries, then you're in the category who should expect Paypal to decide to hang on to any money put into your account.
Surely anybody who's got access to Google can find that out before getting caught out by it?
Everybody is allowed to receive the occasional donation (pretty generous of Paypal, as they don't charge commission on that), but if you build a "business of receiving donations" you need to proof you are a non-profit.
It's that obvious.
But, I'd still _strongly_ recommend you don't keep any sizeable sort of float in your Paypal account. Sweep it into your bank account every day or two (for the seriously paranoid, sweep it into a connected bank account, then transfer it out of that one too - technically your agreement with Paypal (at least in .au) allows them to transfer money back out of a connected account "to correct errors"). And at least have a plan for what you'd do to keep accepting payment if Paypal did decide to freeze all you payments for 180 days.
Seriously - _lots_ of people get caught out with this. It doesn't mean Paypal is useless or evil, it just means you need to be aware of how much risk you're allowing yourself to be exposed to by Paypal, and if that risk is high enough to have plans in place to minimise them.
I'd suggest anyone who's likely to feel the need to write a blog post about how badly Paypal are treating them - was clearly allow themselves to be exposed to unacceptable risks without having risk minimisation plans in place. In mu opinion, anybody getting "caught" with Paypal withholding $45k in funds was being outrageously foolish in allowing Paypal to be in a position to do that. Anythng more than a few thousand dollars in a Paypal account needs sweeping into your bank account asap - even if that means doing it manually several times a day.
While I don't approve of PayPal freezing payment's I can kind of get it with a conference which may or may not take place. They need to protect themselves from having to hand out potentially thousands of dollars in compensation.
What I don't get is why they would freeze an account getting donations. It is a donation. You are not paying for a service which may or may not arrive. Seem's very very strange.
Even if they are bonafide donations, if there are expectations attached to those funds (that the company is going to build a product or perform a specific service, or put it towards a certain cause) and there's a risk those expectations won't be met, then there's a risk for PayPal that some of those donors are going to be upset and do something about it -- like cry fraud and charge back the payments. PayPal has to carefully manage its chargeback rate like every other merchant.