You Can't "Win" in Tech Unless You Cheat | Hacker News Reader

You Can't "Win" in Tech Unless You Cheat

joanwestenberg.com

35 pointsmidzer25 comments

> PayPal started by paying people to sign up. Their viral growth came from essentially bribing users with $10 to join and $10 for each referral. That’s not innovation — it’s buying market share with venture capital.

Traditional banks used to give out toasters. My credit union gave my kid a piggy bank and regularly offers referral bonuses.

Paying people to sign up is an advertising expense. Having a useful product is what keeps people around. Spending the advertising budget to get users before the product is ready to keep users and provide a return is a pretty easy mistake for lots of products.

If this was the biggest dirt they decided to write about, I don't think they dug very far. I think PayPal avoided getting banking or money transmitting license for quite some time, which would be more in line with the title of the article. There's lots of reports of at least untransparent, if not unfair account closures and it's credibly claimed that PayPal does not return account balances in a timely fashion in these cases either.

Similar with the amazon complaint. There's got to be something better to complain about that they invested investor money in building a business that needed continual invesment until they found their niche.

Michael Moore found banks that gave out rifles.

At small scale, demand must be incentivized, even if that means temporarily dropping the price below zero to reach sufficient scale to be self-sustaining.

The title of this article does not align with its actual content.

A more accurate (albeit less enticing) title would've been "Some companies in tech win by cheating. Some do not. Which will you choose?"

Agreed. It makes out tech to be a static, malicious, and socially-Darwinian hivemind of freeloading scofflaws. There are nonzero people in tech who do live their and work towards values with integrity that exist on a spectrum including from democratic socialism leanings all the way to including nearly Marxism. If you want to be at least moderately successful on a long time horizon, it is required to both be and appear to be honest and to have integrity.

Notwithstanding modern time, Google is notably absent in this article because it provides a good counter to it.

And Amazon didn't break the rules any more than its maligned and bigger competitor, Walmart. Am I wrong? I think they grew by running a tight ship.

Amazon breaks "Deploying capital as a weapon."

Basically their entire shopping ecosystem didn't make money for years and years and years.

Because they plowed their revenues back into the company, using their capital productively. https://www.youtube.com/watch?v=0HiJXb8S58o

Amazon is the poster child for cheat to win. They grew fat by circumventing state sales tax for many years.

"Amazon.com originally collected sales tax only from five states as of 2011, but as of April 2017 collects sales taxes from customers in all 45 states that have a state sales tax"

Case law at the time was that mail order sales didn't need to collect sales tax unless there was a nexus in the state. Amazon may have done some funny business to claim no nexus in some states, I seem to recall allegations that had Kindle development in the Bay Area under a subsidiary and didn't pay sales tax in California. But mostly, they kept their warehouses and distribution centers outside states they didn't want to pay sales tax to, and that followed case law (but case law changed when it was relitigated)

IANAL, but SCOTUS finally decided "every business must pay sales tax everywhere" in South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018).[0] (Where ___ has a preliminary value of 162.[1])

0. https://supreme.justia.com/cases/federal/us/585/17-494/

1. https://www.supremecourt.gov/opinions/preliminaryprint/585US...

Sure it wasn't exactly foul play, but it was a major legal exploit that has since been patched. If the exploit didn't exist in the first place, then Amazon probably wouldn't either.

I don't think there's any evidence that this is true. Avoiding sales tax is nice, but it's -not- the reason online retail took over the world.

Outside of math, science, and law, proof and evidence are tricky words. Instead I merely offer a quote for your consideration, from Brad Stone's book The Everything Store (2013):

""" Bezos chose to start his company in Seattle because of the city’s reputation as a technology hub and because the state of Washington had a relatively small population (compared to California, New York, and Texas), which meant that Amazon would have to collect state sales tax from only a minor percentage of customers…. [T]he University of Washington produced a steady stream of computer science graduates. Seattle was also close to one of the two big book distributors: Ingram had a warehouse a six-hour drive away, in Roseburg, Oregon """

In other words, Bezos was well aware of the sales tax advantage from the start.

I mean, it was settled law from 1992. Certainly, SCOTUS ruled differently in 2018, and SCOTUS rulings aren't always moral or fair, but nobody is going to pay a tax if there's case law that says they don't have to.

Better prices wasn't the only reason for Amazon's sucess. A wider catalog was also a big deal, and paying sales taxes wouldn't have impacted the size of the catalog. Afaik, they also did well in states where they had nexus and paid sales taxes from early on, too.

https://en.m.wikipedia.org/wiki/Quill_Corp._v._North_Dakota

Amazon started as a bookstore and famously didn't see profit for years. The larger catalog didn't come into play until after the business model and technology were battle tested. Yes the catalog helped by triggering their hyper growth, but they were well established by that point.

It had a larger catalog for books too. Same process to buy current best seller and anything else in print. As opposed to going to the book store and if it's not there you've got to find someone who can order it, and then it arrives at the store and not your house.

Oh yeah, I remember the '98 Internet Tax Freedom Act (ITFA). It drove adoption of e-commerce because it undercut local sellers. Such were the days of the Wild West before the final nail in the coffin, South Dakota v. Wayfair.

Do they?

I thought they break "misusing user trust". Google is the ultimate surveillance capitalism engine.

They also regularly get in trouble for anti trust.

Google is actually a pretty good example.

They provided a lot of value initially but now any remotely commercial query has only sponsored links above the fold. If you want to sell anything on the internet, you're probably paying them or facebook a hefty vig. They also used their position in search to push their other products, they make you pay to buy keywords for your own trademarks, they aggressively track you in order to build an advertising profile, etc, etc.

Enshittification is well documented in tech. There is some initial value or innovation and then it always turns into gatekeeping and value extraction.

Boring, yawn, etc. Every mega-successful company ever lied, cheated, and stole their way to the top. That's how they win. Do you think Standard Oil and JP Morgan was a paragon of ethics? Why do you think tech would be any different? The article doesn't make any new or unique points against tech as an industry, its just making boring socioeconomic commentary on how every human system has worked, ever.

The CIA literally overthrew the democratically elected leader of Guatemala to protect the interests of an American banana company. But, Paypal paying their users $10 to sign up is spooky, yeah.

What I understand from here is that these companies, that are praised as innovative, do not grow by innovation, but cheating.

> See the pattern? The biggest tech successes of our era didn’t win through superior technology or innovation.

- PayPal won by creating technology that makes it easier / possible than any alternative to send and receive money via the internet.

- Uber won through creating an app that lets you hail a ride and creating a marketplace for that.

- Airbnb won through innovating on the social idea of paying someone and creating a marketplace for that.

- Facebook won through creating an innovative social networking technology and creating an ad marketplace on top of that.

- Amazon won through creating an innovative website and marketplace for goods that offered innovations to the consumer like quick shipping times and risk-free purchases via easy returns.

- Tesla won through literally creating a product (EV) and charging network for EVs that people are willing to pay for.

This article is arguing in bad faith. All of these services won because they created something that solved a problem and created value for millions or billions of people, either making plenty of money along the way, or with high potential to make money at any given point in time. If this is cheating, then all of capitalism and the innovations that scale and improve life for the world via capitalism are all "cheating". Build something people want and whatnot.

> While Silicon Valley plays Monopoly, a parallel universe is growing in the shadows. Developers building open-source tools that generate $50k monthly. Newsletter writers earning more than startup CEOs. Product creators who never touch venture capital but build sustainable wealth.

I mean, have any of these truly won yet? It seems to early to tell.

This is what I'm trying to do since 2017 [1], except the earning are merely 5k a month.

From what I can see around me, the rate of oss dev who make a living out of their project is similar to amateur / pro football player, with the big star everyone talk about, namely redhat & gitlab. I only know personally 1 other oss dev who is doing better but still way under what you get working for someone else

If you're doing oss and managed to get things to work, please reach out to me, I'd love to talk to you.

[1] https://github.com/mickael-kerjean/filestash

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