Flipping is Good. (aka Memo to Jason Fried: Sorry, You're Fucking Wrong.) | Hacker News Reader

Flipping is Good. (aka Memo to Jason Fried: Sorry, You're Fucking Wrong.)

500hats.typepad.com

127 pointsprakash79 comments

This was hilarious. The only thing missing was "You have until 1:36 p.m. on October 4, 2009, to BUY NOW!" (But that would have required a little js.)

This is a great example of how not to blog:

  - Challenge a blog post of a successful member of the community.
  - Wait 2 weeks before responding to that blog post.
  - Insult him as often as possible, in as many ways as you can.
  - Swear like a sailor.
  - Brag about swearing like a sailor.
  - Co-opt images that have nothing to do with your point.
  - Have no point.
  - Make sure some of those images are vulgar.
  - Use red letters.
  - Use green letters.
  - USE ALL CAPS.
  - Swear some more.
  - Argue with your only commenter.  (That oughta generate more feedback :-)
  - When all else fails, show your resume.

I find nothing wrong with challenging a successful member of the blogging community. Just because the guy started blogging a few years ago and has a successful startup does not mean that everything he says is always right.

The other points are spot on though.

Sometimes, taking on someone like Jason or Graham or Spolsky just comes across like coattail-riding. It's not that it's wrong to challenge them; it's that the mere fact that you're standing up to them shouldn't be the value proposition of your post.

I don't think Dave needs to "stand up to Jason or Graham or Spolsky" to give more value to his opinion. He's got enough star power by himself, though oddly the people posting on here at the moment seem to be blind to it. See http://500hats.typepad.com/500blogs/about-dave-mcclure.html

oddly the people posting on here at the moment seem to be blind to it

Thank you. I was blind, but now I can see...

Dave barely graduated from the Johns Hopkins University in 1988, with a BS in Mathematical Sciences Engineering and a minor in frisbee, billiards, and foosball.

Foosball? I had no idea. I take it all back.

In the future all disagreements between foosball players should be settled on the table where they belong. Does Jason play?

You're highlighting the throwaway line about 20 years ago at the end of a lengthy and impressive resume. I appreciate that you disagree with him, but that seems like a cheap shot.

I wasn't joking. I'd love to play any of these guys in foosball. For geeks, foosball is like golf for executives or football for Kennedys. I like how a 20 year old "throwaway line" can still bring us together. The only cheap shot intended here was my bank shot off my opponent's 3 man and into his goal.

Fully agreed on this. Foosball, boxing, or ping pong.

Meh, you're probably right. I'm just saying, edw's point doesn't require us to believe that we should back down to "authorities".

Dave doesn't appear as eloquent as J,G&S so that probably explains why he looks like an upstart ranter by comparison.

I didn't read that at all from the guys post. While the guy did slam Jason, he also rebutted his claims of a VC controlled acquisition.

The thing is he might have actually made some good points in his post. Him typing out something like that doesn't really encourage people to read the entire post. I didn't read the entire post, and I'm guessing a lot of others did not too. So while it may appear to be coattail-riding, it may actually not be (not that the author helps his case much).

Dave McClure is himself a "successful member of the community".

I have to say, to hear Jason Fried defended like he is at the moment on this thread (considering his propensity for viciously attacking other people, including start-ups, via the popular 37S blog) is very weird.

fonts & fucks aside, i'm pretty sure i did make a point -- 3 of them to be exact, and enumerated them quite clearly. and the images actually were specifically chosen for each section. but if you don't like the format or style (which is intentional), you're welcome to cut & paste it into notepad.

re: the 2-week delay, as one other person noted i was leading a group of ~20 entrepreneurs & investors around europe for http://GeeksOnaPlane.com and decided to wait until getting back home to pen the rebuttal.

anyway, my style isn't for everyone. hopefully some folks found it useful. if not, then hey at least it made for some entertainment this morning.

peace out,

...but if you don't like the format or style...

It's not a matter of liking it or not. It's just that your style overwhelmed your message so much that I had trouble discerning what it actually was.

For anyone who didn't know about GeeksOnAPlane (me), it looked like you were reaching back for something to pick on. Two weeks here is like two years anywhere else.

I often use your suggestion of cutting and pasting difficult to read blogs (mainly because of color or resolution), but I was having so much fun with yours, I didn't even think of it.

I'll run your content through my parser and de-fucker and read it again. It won't be as much fun, but maybe I'll learn something :-)

thanks for the extra effort... hope it's worthwhile

(btw, it's been my experience that when people find something fun, they are more likely to spend time educating themselves on what they're having fun about ;)

>> "This is a great example of how not to blog:"

Not really, I found it quite entertaining, and agreed with most of it. It was certainly a better blog post than most of the stuff that comes out of 37signals (IMHO).

You forgot:

-When all else fails, close rant with offer to buy said successful community member a beer

I believe the reason it took too long for Dave to respond was that he was doing Geeks On A Plance (GOAP) that took him to the East Coast and Europe.

oh, really? maybe he should have written more about it then, instead of only posting a photo and this idiocracy.

But what you fail to understand is that the fonts and fucks were probably used specifically to make a splash. How else was he going to get his stuff on the main page of HN? ;)

The writer of the blog post wasn't the poster of the article.

I didn't say that the writer of the blog post was the poster of the article. What I mean is that the writer of the article choose to use obscene language and obscene fonts deliberately because he know it would get a rise out of people. Hence the article gets submitted to Digg, to HN, to StumbleUpon, to Reddit, etc.

Its a famous technique, and very effective. To attract attention be a troll.

I think the combination of mentioning Jason Fried and 37signals as well as being semi famous himself and an investor in Mint almost guaranteed posting here.

That too.

Is there anybody in this thread actually reading this essay seriously and weighing its merits, instead of dismissing it on superficial stylistic reasons?

The man brings up interesting points regarding the Mint.com merger and how 37signals handled the news, f-bombs be damned. Especially in regards to the differing metrics of incentives for startups, VCs and preexisting competitors.

Agreed. If you actually read the article instead of dismissing it based on its content, you'd find that Dave makes a great point. The Mint sale may not turn out to be great for Mint users, and it certainly wasn't amazing for (most) of their investors that were hoping for a home run -- but I know with certainty it was amazing for Aaron, personally.

Saying that the VCs forced Aaron to sell is an absolutely ludicrous statement.

Having now sold a company (albeit for nothing like the scale of Mint) the value of simply having the stripe is immeasurable.

People get confused between what the right thing is for a company's customers or the "ecosystem" and what the right thing is for the entrepreneur (even taking account of the other two).

As a Mint user I'm really sorry Mint sold to Intuit. I also think it is a bit of a waste for the ecosystem as Mint was positioned to do something pretty amazing that probably won't happen now.

However, the decision was very sensible indeed for the founder. Mint may never have sold, he could have been ousted as CEO. Now he's a great bet for future investors and employees and he is cash independent (both as an individual and an investor).

Knowing when to stick and when to twist is invaluable. I am interested though why the VC's cash him out $20M and keep in the game as Matt Mullenweg's did. That way he would have hedged his risk and everyone swings for the fences.

I can't agree more. That kind of sell is a life changing amount of money for most people. I would have sold and moved onto the next venture.

Superficial stylistic reasons

Style is an indicator of content. If someone uses five different colors and five different ways to emphasize text (I'm not exaggerating: count them) in the first few paragraphs of a blog post, then I expect the content to be equally lacking in thought.

These 'interesting points' have already been made a zillion times by a zillion different persons in the time since the Mint acquisition. Instead of shortly restating the argument, he seems to think he needs to repeat it a number of times in a row, with small variations. This certainly doesn't deserve the term 'essay'.

Have your expectations ever been proven wrong? I try to keep an open mind and pay more attention to the message than the messenger. I must say it's given me a few pleasant surprises (because I am not a buddha and naturally still have prejudices).

While I do agree that ridiculous colors and font sizes do lower the deemed quality, it doesn't hurt to hear similar statements, though slightly revised, from an adviser close to the company. If anything, his 'interesting points' help to keep us levelheaded after reading Jason's rally cry.

I think on the internet you have to separate the message from the delivery regardless of the source, this author seems to be making a pretty good effort at making that harder.

That said, I can see the humor in answering a post with a very provocative title in an even more provocative way.

It's just that I think that delivering the message is more important than the 'lol' factor, and maybe in this case the message is important enough that it would have been better served by some more moderate language.

Sure, we're all adults and so on, I'm no shrinking violet myself but I would think twice before writing like that. It's simply not conducive to getting your point across.

And, that's a fact, the points are pretty good. Even if Jason Frieds original article gets misrepresented a bit.

Jason brought that on himself by making his point in a vacuum, after all he had no idea of the backstory, so he shouldn't have used it as the main point of support for his argument.

The trouble now is that Jasons original argument is threatened to be lost because of that, and that's a pity because it too had merit.

Its not just his style, his content is generally suspect too. His articles tend to focus on really obnoxious and tired metaphors: Metrics for pirates: http://500hats.typepad.com/500blogs/2009/10/startup-metrics-...

Hard for a web 2.0 pimp: http://500hats.typepad.com/500blogs/2009/02/its-hard-out-he....

And in general seems to be a big proponent of that really tired "Im a rockstar ninja coder because I write facebook apps in rails" attitude. ( http://500hats.typepad.com/500blogs/2007/07/kottke-is-wrong.... )

For someone who is a self-styled "master of 500 hats", he could work to be at least a 5 or 6 in writing and text layout.

sorry you feel that way, but i'm actually quite proud of those posts... to each his/her own i guess.

for me, both entrepreneurship & technology are about passion. to remove that passion from my writing would seem to miss the point.

Agree.

Dave can be very blunt sometimes.

I saw him on a panel earlier this year and he's just very direct. It's refreshing to get very honest answers. Some people just play too nice just not to offend anybody.

Here we go again with the fallacious nice == indirect argument. I've heard this over and over again and it never makes sense. Why do you think that it is necessary to go on an offensive rampage in order to be honest? Guess what? Some people actually don't hate everyone who disagrees with them and these people can be very blunt and honest without petty insults.

Somehow, adding various conjugations of the word "fuck" and the like into a blog post seems to make it longer and hence less direct.

Direct is bluntly and baldly stating claims that people find offensive and outrageous. You don't need to throw in extra invective on top of that.

If your aim is to communicate ideas and not simply to offend, then it's a good thing to be willing to accept offending people with the ideas you express (e.g. disagreement, criticism, heresy). However, it's a bad thing for communication to offend people with things that aren't ancillary to those ideas, you fucking retard.

See what I mean?

I wouldn't call this post "blunt" or "direct"

It's got to be 2-3x the length of Jason's original post ... and poorly written

I might point out that while Dave says "fuck", he is responding to a blog post whose title implied forced anal sex: "next gen bends over". That is quite offensive, independent of the backward thinking.

wtf?

Bend over may refer to the action of bending one's body over, as in to pick up something, or, for example, as the hydra does in order to move when hunting, in dancing (like in the various breakdance moves), gymnastics, and sports (like snap football), as well as to be (vaginally or anally) penetrated in sexual activity.

http://en.wikipedia.org/wiki/Bend_over

so even if you took bend over literally there's nothing wrong (or anything implying anal sex) in saying that Mint guys bent over to pick-up Intuit's offer.

and while Jason Fried has actually added value by using such provocative but eloquent metaphor, Dave McClure has totally subtracted any little value that was in his rant by obscuring it with fucks etc.

oh puh-leez... srsly?

i don't need to apologize for swearing... and similarly, you don't have to perform semantic acrobatics to find a different definition for "bending over".

jason certainly meant the headline in a "don't drop the soap" fashion, just like i meant to use the word "fuck" for emphasis.

get over yourself and get off your victorian soapbox. people swear. they've been doing it for hundreds of years.

if you can't get past the use of either as a literary form of emphasis, then you're the one being juvenile.

The important point of Dave's screed is at the bottom (and it's something every single person who has ever worked in VC and made the jump to the light side says this): for your first company, don't hold on too long - it's OK to sell out.

Successfully selling out makes it ridiculously easy to raise money, strike partnerships, and do things your way the second time around. Hell, it probably gets you a third bite at the apple as well.

Hidden in the F-bombs and the wacky colors I think there is a good point here. There are entrepreneurs who love the start of a company (working 7 days a week, adding new functionality, etc...) and there are people who are good at (and sometimes love) maintaining a company once it's established itself (by creating moderate growth, doing a bunch of testing for each new feature, etc...)

What flipping does is to allow the entrepreneurs to pass a company off to the maintainers once it moves beyond that startup phase

Textbook demonstration of why cocaine and <font> tags don't mix.

It looks like a letter from a crazy person.

Good point! Take a look at how similar it is to this: http://www.timecube.com/

That's just Dave's style. Check out some of his slides... http://www.slideshare.net/dmc500hats/

Props to Dave. All the flowery language, pictures, and hyperbole generate great discussion and traffic.

Dave is one of the most savvy investors and marketers around. When we were first pitching Twilio no one seemed to understand "marketing to developers" but he got it while half asleep from an all-nighter.

If you curious about Dave's geek cred, scope his linkedin profile: * Investment Program Director at fbFund Incubator * Investor at Bit.ly * Investor at DailyBurn * Advisor at Life360 * Startup Investor (FF Angel Fund, fbFund Incubator) at Founders Fund * Advisor, Investor at Twilio * Organizer & Founder at Startup2Startup * Advisor at 750 Industries * Advisor, Angel Investor at SlideShare * Advisor, Angel Investor at TradeVibes * Advisor, Angel Investor at EventVue * Advisor, Angel Investor at Oortle * Angel Investor at RichRelevance * Advisor, Angel Investor at KISSmetrics * Advisor, Angel Investor, Boardmember at TeachStreet.com * Advisor, Consultant, Angel Investor at Mint Software * Advisor, Angel Investor at Mashery * Advisor at Kiva.org * Co-Founder, Boardmember at Silicon Valley Microfinance Network * Advisor, Angel Investor at Simply Hired * Angel Investor at Canopy Financial * Startup Advisor / Angel Investor at 500 Hats LLC

And, if you head hasn't exploded from the colors in his blog check out his presentation style... in. your. face. http://www.slideshare.net/dmc500hats/startup-metrics-for-pir...

I thought geek cred was achieved by actually building something technical with your own hands, not by being advisor/angel/marketer, but maybe things have changed nowadays...

The word "fuck" only really works in a shock way the first few times; after that you just sound angry.

Some good points got lost because of that.

Young Entrepreneurs Should Sell Out Early

I did that - not because I was forced but because the deal was good and I have plenty of other ideas to turn into countries. And I agree: it's a good thing.

In fact I sold my second company - the first one crashed and burned. It was a useful experience because the oulay costs were 4 figure amounts and I had no employee's - so no one really lost out.

Now I feel like I have had the right experiences and can make better decisions next time.

Too often I think we see people offered vast sums of money with no idea really what to do with it. The successes we hear about are the multi-millionaires who make the right decisions (either through luck or skill) but Im sure there are plenty of others who failed.

Im glad I got the chance when the worst setback I could face is being back at square one.

when Dave says "sell out early" (and says "firesales don't count), he's talking about sales < $250M as "early", not $xxx,xxx or sub 5M deals.

I know but the same principle stands, it's just a different scale :)

Not sure about that. When I see the word 'sale' and 'exit' together in one sentence only to find out after a lot of digging that we're talking about a < $50K deal its painting a bad situation as a win-win.

It means that a startup has basically failed, that there may be some technology that can be recycled or that the founder has enough street creds that they can convert their failed startup into a signing bonus and call it an acquisition.

He may make a good point, but I wouldn't know. I didn't get past the 8th f-bomb.

Summary: Building a company and then selling it is a remarkable accomplishment regardless, and it is wrong to criticize Mint for not holding out for more.

good summary. Unfortunately, for Dave, noone would have paid any attention if he had written something so short and clear it could be sent through twitter.

I managed to get through the whole thing - and he does make some very good points. Suffice to say though, I would not let this man anywhere near a PR machine anytime soon.

There are ways to express your point and influence people - dropping f-bombs like you just got into middle school is generally not one of them.

I didn't get past the second picture of Gordon Gecko.

ahh, just scroll down trough this shit and watch Gordon Gekko clip from the movie!

I didn't get past the 8th f-bomb.

But at least you know how cool and edgy he is. Saying "fuck" in a blog post is totally sticking it to the man!

Is someone disagreeing with a member of 37siganls really that surprising? 37signals is a pretty opinionated bunch.

At any rate, when Jason states in his post that he "doesn't know the full backstory," that signaled to me that I'm reading a post that's based on a premise that could be completely wrong. And I was okay with that because Jason appropriately couched his post.

Jason Fried may be prone to harsh and honest writing but this isn't even in the same category. Honestly, take another look at 'The next generation bends over'[1]. Here's a quote:

> A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential.

Ok, interesting. What does David have to say about that?

Actually, I wont post any quote from this article here because it's point is diluted by rambling, poor grammer and unnecessary profanity. Now, I'm usually the last person you'll see up in arms about swearing, afterall they're just fucking words. But it turns out words are best used to help get your point across not just for filling space (a lot of space, in this case).

Jason's article was short, succint, made a point and was pretty clear about where he was coming from. You might not agree with it, and I might not agree with it... that's fine. But we can read it and discuss, there's no reason to fly off the handle and swear at the guy.

Seriously, why so offended? Jason didn't say that Mint's sale was forced by the VC's, he was merely using his guess that it was to make a point about the current generation of startups... Namely the trend of aiming directly for the sellout instead of 'greatness'.

His post wasn't even about Mint, the news and his opinion of it just prompted it.

On the other hand this article is just plain vulgar, rude and doesn't add anything useful to the conversation.

    [1] http://37signals.com/svn/posts/1927-the-next-generation-bends-over

Remember when people in software were, in general, pretty thoughtful and self effacing?

Neither of them seem to realize or explain why flipping has actually become so common despite its questionable track record on actual value creation.

actually, the latter 1/3 of my post was about exactly that point. sorry if you missed it.

and while likely more than half of all acquisitions don't actually "work", enough do to make it worth doing.

No, please read my comment again. The point is that your explanation is not complete or correct.

On a side note (and totally off topic), the statues of two peeing guys are really cool. You can find them in Prague in front of the Kafka museum. http://www.davidcerny.cz/EN/piss.html

David Cerny is a very cool artist overall. http://en.wikipedia.org/wiki/David_Cerny

I don't know about you, but "whining like a little bitch" warrants a punch in the face where I come from...

He makes some valid points, but this could have been written in a couple of paragraphs and without constant personal attacks. I'd like to see this guy hold his own in a one-on-one confrontation...

Maybe this could be arranged?

I thought it was tremendously entertaining, if a bit earthy. Kind of a financial Zed Shaw piece.

Boy, that's one pissed off fellow.

Wow, now that is an excellent sample essay. On how to NOT write one.

I like the way he reasons. Maybe the mint founder got scared of him and sold it out.

1) Fucking Wrong, and Irresponsible Conjecture & Hyperbole

2) Completely Fucking Wrong, and in fact Exactly the Opposite trend is going on, and finally

3) Wrong in most cases & crap advice for young entrepreneurs.

did anyone else get the irony of "flipping is good" as the title to an post full of alternative f-words..?

> Fact is, startups operate in a financial system that is inefficient, illiquid, and challenging to manage.

Well, that's certainly true...

> more transactions of any kind or size help improve overall startup ecosystem health.

While more transactions in theory improves market efficiency (throughout this post, I will be using efficiency informally), in practice this fact doesn't matter. In order for the number of transactions to have any meaningful impact on the actual efficiency of the venture capital markets, the number of transactions would have to increase by a lot, not by the occasional Mint.com here and there. Take this as informed speculation, but I don't even think a doubling of transactions would have a meaningful impact on the efficiency on the market, because of the severe restraints regarding information and transparency. To see how this plays out in practice, just imagine that you are marketing your company for a round of financing. You may know the valuations and terms of a handful of other investments (and none that are directly comparable, in all likelihood) essentially from word of mouth or from the experiences of advisors/banks/investors (who also don't have very good information) and use those as a very rough benchmark, but in the end that handful is not at all representative. Even if you double that handful, it still isn't representative, at least, not enough to persuade anyone much more of the correct value.

On the other hand, if companies were forced to make a regulatory filing that included 1. current revenue, 2. details on the round of financing (valuation, preferences, participation features, etc.), the effect would be much greater market efficiency even if number transactions stayed at the same level. The barriers are information-related rather than transaction-volume-related.

> In the long-run, it benefits all system participants for small transactions to occur, because it makes the overall market more knowledgeable -- this in turn, reduces risk and encourages greater investment... which also encourages greater (overall) returns.

Obviously you could argue this point either way (since there are a lot of definitions to play with in the above paragraph), but in truth, a more efficient, more liquid market doesn't benefit all system participants. It would certainly benefit entrepreneurs if there were greater transparency and efficiency, since they are definitely on the wrong side of information barriers.

Greater market transparency tends to DECREASE investment returns in that market, because it removes a source of risk (and risk and returns are inversely related). It would probably encourage greater investment, but that could be increased even more by other means, and given venture capital returns over the last decade, it is not clear that this would be a net benefit for the economy. Additionally, the more dollars invested, the worse returns will be generally speaking (more dollars chasing fewer good ideas). But, he uses the word overall, so maybe he means overall returns including returns to entrepreneurs rather than capital sources, but that gets into even more murky territory.

Just to be concrete, I'll give one example from another financial market. Prior to 2001, stocks traded in the US were traded in fractions of a dollar. The smallest quotation unit was 1/16, which means the smallest spread a market-maker would quote was 6.25 cents. The spread is how these firms make money. In exchange for always having shares available, they charge you (at least) 6.25 cents more for the share than they are willing to buy it from you. For decades, market-making was good business, but after decimal pricing was implemented, these spreads became much smaller, due to competition. Now, market-making activities are basically not a source of profit for financial firms. A regulation that lead to greater liquidity in the market was very much non beneficial to certain market participants, namely, market-makers (many of these were large institutions that you could argue benefited from bigger transaction volumes in other areas, but this is not always the case).

This article would also be a good read without all the f-bombs.

This is a lame attempt to fill the void left by Zed's old persona.

Dave McClure doesn't need to "fill the void left by Zed's old persona", he already has his own place that he's quite comfortable in. See http://500hats.typepad.com/500blogs/about-dave-mcclure.html

Reply on news.ycombinator.com