Comment by paultopia | Hacker News Reader

Comment by paultopia | Hacker News Reader

This is the sort of thing that a decent corporate lawyer ought to be able to handle. Obviously not giving legal advice to anyone's specific situation here (and I don't have a current bar card, though I am a law professor), but generally there's an implied contract law duty of good faith.[1]

Dirty tricks like writing a contract that says something like "you can cancel at the end of a term, but you have to have a meeting with us," and the contract doesn't say anything about availability of meetings... then the company only offers meeting times after an automatic renewal in order to cheat people into giving them more money... well, that smells like a really good excuse for a lawyer to argue that the duty of good faith has been breached. And even if the company is honest that they were just unable to schedule a meeting beforehand, a decent lawyer might be able to come up with enough of a theory for recovery to negotiate something fair.

[1] https://www.americanbar.org/groups/business_law/resources/bu...

I really, really think folks are overthinking this.

This isn't a Comcast subscription. This is an enterprise software deal that costs many multiple thousands of dollars. Anyone that thinks that Carta was ever going to go "Oh, sucks to be you, you couldn't schedule your cancellation meeting before the renewal date, well, tough cookies, you have to pay us $18k for your next contract year" simply doesn't know how enterprise software deals work. There is no need to get a lawyer involved because all you have to do is call up Carta and say "Your shit is broken, there are no cancellation meetings for weeks."

To emphasize what I put in some of my other comments, sure, Carta needs to fix their shit, and I think the Techcrunch article is making it more about the fact that you have to have a cancellation meeting in the first place (which is a valid compliant), but this idea that it's some deliberate form of "dark pattern gotcha" just belies a misunderstanding of how enterprise software subscriptions work.

This is correct. While there are certainly dark patterns and pain in the ass retention process hoops the company might try and make you jump through, putting in email that you want to cancel, calling and escalating until you talk to someone who will cancel your account, etc. will get your subscription cancelled. Should we have to do this as customers? No, but vote with your wallet and make a note you’d never renew until this kind of shit is fixed and they’ll at some point get the message.

Worked at a few SaaS companies and there are playbooks for retention, upselling, renewals, etc but if a customer wants to cancel, the company will cancel.

I’d put more weight on Carta in this example just having a broken process that I’m sure this negative press will incentivize them to respond and fix.

No one is overthinking anything. Carta's behavior is poor, self-serving, and definitely using a dark pattern. If they cannot promptly schedule a meeting, they should wave the meeting requirement.

Here are some other thoughts:

1) Canceling a subscription should be easy and take less than 3 minutes. There is nothing special about enterprise software subscriptions.

2) Requiring a meeting to cancel and then scheduling the meeting after the customer is charged a renewal fee is outrageous. This should never happen.

3) Customers tried to contact Carta and could not get help. This means they could not just "call up Carta" and tell them "Your shit is broken, there are no cancellation meetings for weeks."

It seems you've misunderstood my comment, as I mostly agree with your points. I'm just saying that the idea that startups need to get a lawyer involved to cancel your subscription is unnecessary. This seems like a pretty clear case of a fuck up on Carta's side, and usually when fuck ups are this obvious if you just point them out the company goes "Oh shit, sorry, we fucked up", which is essentially what happened here.

Did it? The response from Carta, as quoted in the article, was basically 'You still need the meeting, but the scheduling is was a one-off and we should be good now, otherwise you can always chat with us online'. I definitely don't see any 'Oh shit, sorry, we fucked up', it's definitely still 'That was just a glitch, all is well, continue to trust us'.

As a purchaser of a lot of enterprise software, I typically start thinking about renewal/cancellation 3-4 months ahead of the contract expiration. Sometimes earlier if we know we want to cancel.

But honestly, I always redline the auto renewal clause anyway so they want to speak with me.

This is it. I’m not sure what manner of business you work in/at/for but I do feel that there is a set and forget expectation with enterprise software in startup land. Once you’ve been around the block a few times on finance/operations, you just expect that things might not work efficiently/automatically and build in safeguards. That isn’t to say that Carta can’t do better…

> This is an enterprise software deal that costs many multiple thousands of dollars.

Really? I have some small angel investments and use Carta. The companies are seed stage. I’ve never considered it enterprise software.

> simply doesn't know how enterprise software deals work

You have highlighted an even scarier issue... enterprise software deals, if they all work like this, are scummy and the "way it works" isn't okay.

> This is the sort of thing that a decent corporate lawyer ought to be able to handle.

I'm not saying you're wrong, but given that plenty of quite small companies seem to use Carta for handling their shares, it seems pretty ridiculous to have to pay for a lawyer to be able to cancel a subscription. Do early startups really need to keep a lawyer on retainer or be forced to pay by the hour for something like this?

Yes. Startups need and should be accustomed to working with a lawyer. They are needed very frequently in any real business.

I agree and I'm consistently flabbergasted at how many "entrepreneurs" see this as controversial or even wasteful. It's like the same take that "insurance is a scam". (I would not be surprised of these opinions were strongly correlated)

What kind of insurance because both health and auto insurance absolutely are. I don't think it's a coincidence that these two forms are also mandatory by law.

Insurance where there's a well defined insurable event that has a known in advance payout are great, life insurance for example. "Insurance" where the insurance company gets to decide if and how much to pay out is flat out bullshit. Everyone with auto insurance has experienced the— we decided the value of the car we declared totaled is $x where the cost of buying your exact car same year same mileage is at least $2x, usually $3x.

My favorite health insurance story is the one time I had to have an operation out of network because there were no in-network doctors that could do it. I got all the right paperwork, insurance said they would cover it, got it done and the cost was well beyond my out of pocket max. I called up insurance asking where my check was for the difference between my oopm and what I paid. Well guess what, the insurance company "decided" that the operation actually cost exactly my deductible so they owed me $0. The breakdown was hilariously bad, they claimed an anesthesiologist costs $17.

auto insurance definitely isn't a scam. it's not to protect the policyholder, it's to protect the people who the policyholder might run over.

I guess my disconnect isn't that I think startups shouldn't be accustomed to working with a lawyer, but that I expected they shouldn't need one for something like this. Maybe there are enough areas where a lawyer is needed that having one on retainer already should be something startups do, so asking them to help with this wouldn't be onerous.

Decent corporate lawyers are exactly the lawyers who are effectively bundling Carta into their services when you onboard with them. You get some VC investment, you meet with a lawyer from Cooley, and they set everything up for you. Part of that is Carta and it’s pitched as “everyone does it, it’s what investors expect.” I don’t know if they get kickbacks for this, but they really push hard for it. And then when you’re closing down your company, the Cooley lawyers are nowhere to be found unless you’ve set aside $30k for closing costs. So I wouldn’t expect them to come to your rescue when your bank account is nearly empty and you’re trying to cancel your Carta subscription. Oh and don’t forget you signed the rights of “transfer agent” over to Carta when you onboarded with them, so they control your shares.

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