3,891 karma · joined June 4, 2010
Thank you! I was lucky enough to have an industrial laser in my garage for a few years and was amazed at what it could do, and how miserably hard it was to do it. Hopefully we'll let lots of folks experience the first and none the second.
I was skeptical when I started using the product; I've been hiring for nearly two decades and figured that the company's algorithm wasn't going to be able to improve on my experience. Now I'm pretty sure I was wrong. The suggestions make sense and are, for the most part, clearly improvements. I've had readers look at "before and after" without knowing which is which and they uniformly prefer the "after".
I strongly recommend trying the free trial out, if it's still available, and seeing for yourself. I find it well worth the $99/month.
- Dog already, don't want another
- No dog, don't want one
- Want a(nother) dog
That said, we prefer our Dropcams to our closed circuit TVs and our Fitbits to our pedometers. We realize that some people may not like the tradeoffs we made, but we hope some folks are as excited about it as we are.
Glowforge is now tackling this for lasers. We're still a ways away from shipping, but we're already confident we can get the price under that of a Makerbot.
Exploding offers are unfortunate and a significant negative data point about the behavior of the organization but they are not the only data point. The above answer will defuse the threat and give you the upper hand in the negotiation so you can make the right decision for your team, whether it's 'yes' or 'no'. This is helpful for exploding offers in any circumstance - jobs, M&A, etc.
As a side note, while short-horizon offers are terrible, it is reasonable to have some expiration date. Techstars Seattle, for example, has 10 slots and while they might be able to add an extra one or two, logistics don't allow for the kind of flexibility that YC has[1]. I believe there's a good way for an accelerator to handle this ethically:
1) Tell applicants when the decision date is when they apply (so they can plan accordingly) rather than surprising it on them as a negotiating tactic
2) Provide all relevant information when they apply, so they can consider the possibilities in advance, versus (for example) springing restrictions, valuations, or fees on them when they get the offer
3) Allowing enough time between the acceptance and the notification for the team to make a good decision - a week seems reasonable.
YC's behavior is exemplary here; their model and position in the industry lets them be super-flexible. Other programs may not have the ability to be quite as flexible but that doesn't mean they're unethical if they're thoughtful about their implementation.
[1] My understanding as a mentor for the program - I don't have inside knowledge
If the company has created a prototype that's received $150,000 in crowdfunding support, that's a tremendous accomplishment. The existing founders have conceived of a product, prototyped it, and validated it in the most significant way possible - with customers who are willing to not just pay for it, but pay for it far in advance.
Let me put this in perspective: on Kickstarter, raising $100,000 puts a company in the top 0.2% of successful campaigns [1]. If you include all campaigns, they're rarer than 1-in-a-thousand. Due to selection bias, we hear about these >$100k campaigns preferentially, but the company is breathing rarified air. That indicates there's real value that's already been created by the founders.
That said, 2% and a smidge over minimum wage isn't right either. The compensation hit you're taking is so significant that the equity position should be larger. I would be looking for something in the 5-10% range. The question I would ask them is this: the accelerator put in $50k. You're forgoing much more money than that. The accelerator got 6%. Do they expect you to provide more or less value over the next four years than the accelerator did in 3 months?
Also, while verbal promises are legally binding (in the US and I believe in the UK as well), they're hard to prove. The suggestions to get the "salary after funding" agreement in writing is a good one.
http://lesswrong.com/lw/6z/purchase_fuzzies_and_utilons_sepa...
The money that I gave to potato salad guy came from a very different budget than the money that I gave to, e.g., PATH
If you're trading off dollars between potato salad and charity, you're arguably doing it wrong. But most likely you are not diverting chariable dollars to potato salad, which is why the premise of this article is flawed.
Or as Max Temkin put it: "Crowdfunding/capitalism isn't zero sum. We can feed the hungry and back the potato salad project."
I don't think this is a very accurate assessment of the problems facing startups. Most of the problems you pose can be solved in a few conversations with a good lawyer or experienced operator. If you want protection from patents, you're likely going to be talking to the kind of folks who sell protection, like Intellectual Ventures; they'll be happy to take your money. There are companies that specialize in managing certifications, listings, etc. These are problems you can solve with a few phone calls and a check.
There is, however, a do-or-die problem for most startups: it is extraordinarily hard to create a strong working relationship with a great factory.
First, you have to find a great factory. That requires a lot of experience and a great deal of touring, QA, reference checking, and so on. And while the good ones are great partners, the bad ones are working very hard to deceive you in to thinking they're good. But the worst part is that most of the best factories will have nothing to do with you because you're too small. You don't have the volume to be interesting yet, they are concerned you'll go out of business, your team may not be experienced and so you'll make mistakes that they'll need to correct, etc.
Second, you need to create a great relationship with them. That means at least one person living there full-time. And that person needs to have expertise in manufacturing, QA, and so on. That person needs to feel great about their role over a very long period of time, and not everyone who moves to a new country finds it to their liking.
Third, you need to figure out a logistics supply chain. A good friend, having solved both the previous problems, nearly bankrupted his company when the shipping service used the wrong kind of pen and the address rubbed off all the labels. The return fees alone were more than the total profit on the product.
Companies like Apple rely on experts like PCH to do this for them. I believe most startups benefit from it too.
Also: PCH/Highway1 is willing and well equipped to help with most of the rest of the problems you list as well.
You may or may not find Highway1 to be a good fit for your needs but unless you're very experienced in overseas manufacturing and/or doing something truly trivial, I believe you'll have more challenges with manufacturing than you suspect.
The GPS-guided weapon struck the Americans because the controller on the ground who called in the airstrike changed the battery on his GPS device in the middle of the bombing run. But he didn’t realize that once the unit rebooted, the aim point it began transmitting to the B-52 bomber far above wasn’t the enemy’s location. It was his.
This sounds like the most horrifically awful bug imaginable. Can anyone confirm that this is true, and explain how it might have come to be?
"Does this mean we’re going to get angry at you if you try to help and get it wrong?"
This fear was something that kept me from speaking out for many years. I'm a guy in tech and I want to see change occur but I'm ignorant about these things. I don't truly understand the challenges that women face in our industry. And because I'm relatively ignorant, I worry that I might say something that was intended as supportive but winds up contributing to the problem: white-knighting, disempowering, calling attention to something that the person affected wanted to leave alone.
Personally, I've come to terms that I'm going to try my best and risk screwing up occasionally. It's scary but I think it's better than the alternative of sitting by and doing nothing. But it makes me feel a lot better to hear that I'm not alone in worrying about this.
http://en.wikipedia.org/wiki/Ampere#North_American_domestic_...
- Joel confuses "easy" (50/50) with "fair" (working out the right number)
- It is better to argue yourselves to death early, when nobody else is affected, than later, when people are depending on you
- The expected value of an IOU is negligible because investors usually force you to waive them as a precondition of investing and they go to zero if the company fails
But perhaps I'm wrong. I'm expecting a round of innovation in equity allocation as companies heed sama's advice and try new things. I'm very curious to see how it works out!
Stay tuned. :)
I know YC has seen MFN usage in the "everyone gets $100k" scenario, but I also could see them useful for family and friends rounds where an unsophisticated investor with a conflict of interest wants to put in the first $10k but not set a price. In that case, a default conversion might make sense as an option.
- in the acquisition of a company with an MFN SAFE, it says that the instrument can convert in to common at the fair market value of the stock. Isn't that the FMV the purchase price? So isn't that the same as getting your original money back (no matter how successful the company may become)?
Regarding pro rata rights it says:
Do SAFE holders get pro rata rights? <snip> This pro rata right must be in either the Equity Financing documents or a side letter.
Is this saying investors need to add pro rata rights to your SAFE, or that they only get them if the subsequent preferred financing has them?
Companies should make their policies adapt to their customers, not demand their customers adapt to their policies.