haploid

Assuming the average startup founder is under 30, this is effectively a non-issue. When I was 24, I got a high-deductible PPO that covered almost everything for $40/mo. That's beer money.

My point is moot if you're starting at 40, of course.

In a free market, there is no such thing as "too much" of a given class of workers. A free market corrects for a glut of N by making the expected failure rate of N too high, or the capital available for N too low, or both.

Bubbles can affect this dynamic temporarily, but eventually they always pop, usually leading to a temporary condition of too little investment in N. Believe me, it was not "cool" to be a dot com founder in 2001.

But in the long run, this cycle averages out such that free markets don't have long term misallocations of resources.

Whether the system we currently have can be described as a free market, though, is a question for another day.

I can't speak to Braintree because we don't use them. I do believe that they will set up a merchant account for you as a proxy or agent, IIRC.

But I can speak to the economics of all this "complexity" of which you speak.

We currently use CyberSource for our gateway and associated banks for our Merchant Accounts, and we maintain several accounts. Each account takes less than a day to set up, with our representatives at each company.

Integrating with the CyberSource API takes roughly 20 developer-hours.

An increase in transaction costs to 5%+0.30, would cost us roughly the salary+benefits+taxes+overhead of two fulltime developers, per year. That's a cost that's simply unacceptable.

There is also the issue of "killing the need for a merchant account", being problematic from a number of legal/accounting angles( tracing this transaction from A to M, entity separation and identifcation ), as well as customer service angles( what is this PAYCSTRIPE_TCMERCH charge on my card?? ).

5% is horrendously expensive. Just the other week I was ragging on Braintree for being very slighty above wholesale merchant rates.

Stripe is quite literally double Braintree's rates, with no value-add.

And on top of that, they hold the float for up to thirty days?

Good luck, guys. You're going to need it.

Am I the only one who thinks the local and federal food regulatory bodies are going to have a field day with this?

I hope you have a solid legal team in place to deal with the inevitable FDA, USDA, state heath boards, and local restaurant licensing regulators that are very likely to take notice if you grow.

Well, I'm torn on this. My initial, non-thinking reaction was one of rabid agreement. This is very correct if you're a 9to5er. If you are at the office to put in your 40 hours and then leave, I would agree that there is no room to inject a social life into this. There's also the issue of breaking flow, which you alluded to.

I think the typical startup lifestyle changes this a bit, though. We who run startups( generally )don't work 40 hour weeks, and if you're even a bit extroverted, chances are you're going to need to "get energy" from social interaction with your coworkers, since time to do this outside the office is fairly limited.

With the standard introvert archetype, this is likely a non-issue. My money is on samtp being an extrovert, and you( and I )not capable of empathizing with the odd need they have for such interaction.

This is an interesting use case, but I don't understand it.

Why fund the development of new software to a third party who will then resell it to your competitors, versus hiring a software shop to develop it and deliver it to you for internal use?

Equity split? lower maintenance costs? I can't really grok such a decision.

This is a good post, but I would take issue with the following:

"You are likely to gain weight."

It is fairly trivial to stock your cabinets and refrigerator at home with healthy food options. Contrast this with an office environment. Between the morning donuts, the snack bins, the beer kegs, the pizza delivered for meetings, and the endless birthday cakes - sweet lord, the birthday cakes! - it's far more likely that you'll gain weight there than at home.

"Non tech cofounders that have 10 people committed to paying up to 1000/mo and signed letters of intent from the 5 of them (120k/year, 60k guaranteed) before building a product are few and far between."

What? I would suggest that the abovereferenced set of cofounders is equal to the null set.

I can't imagine anyone dumb enough to commit to a $12k annual contract for vaporware from a company whose very existence is contingent on finding 9 other suckers just as dumb as you are. The closest model I can think of is games software publishing, but that exists in an area with a known customer base. Nobody in the real world, running a real enterprise, with real money on the line, would gamble like that - at least none of the people I work with.

I wouldn't categorize whitespace-as-syntax to be merely "frustrating". I'd categorize it to be "wrong".

Wait, zero need for marketing spend?

The publicity that this move bought them only extends to the insular tech news/blogger community.

Do you really think JoeSixPack or Kerligirl13 reads TechCrunch? And even if they did, do you think they'd try out the app based on the amount raised?

I'm sometimes guilty of this type of thinking myself, but really, stop thinking like a geek when it comes to marketing.

Minor correction: diapers.com loses shitloads of money. By the time Amazon acquired them, the founders had diluted themselves down to about 2% and had taken on large amounts of debt as well.

What you can say, however, is that diapers.com sold for shitloads of money.

This. I don't understand why everyone thinks the price for color.com was too high. We paid quite a bit more than that for our domain names, so I do have a point of reference here.

I personally believe this was a horrible investment in a horrible product with a horrible idea, but to rip on the domain name purchase really seems like the least of all possible concerns.

Looking forward to the HN pseudo-feminists coming out of the woodwork on this one.

Queue the white knights in 3, 2, 1, Go.

Zynga contributed to the economy's growth? Really? Farmville increased average worker productivity?

Yes, and phpfog has the added bonus of being very secure. Those guys eat, sleep, and drink security. Your code/data/site is safe with them.

Yup. Ecommerce, or anything else that provided a real service or real product in a sustainable manner.

The funny thing about Amazon is that they took on so much debt that everyone was certain they would be the first "big one" to fall when the bubble burst.

My comment is very tribalist in nature( e.g. my region is superior to your region ), and I fully expected the downvotes.

Regardless, it does reflect much of what I see in the insular SF startup culture, even if it's based entirely on my anecdotal evidence.

I suspect it's because we in SoCal prefer actually getting work done instead of being trendy and being seen hanging out with other trendy people doing trendy things.

Although I do exclude certain portions of LA and Hollywood from this description.

There is nothing stopping anyone from doing a startup on the side. Needing to pay rent and working on your own project are not mutually exclusive.

"And, I think Google ranks sites higher if the domain name has the keyword in it."

There is some effect, but it's not that significant. Bing, on the other hand, seems to weight domain names very highly.

"it just doesn't seem that people navigate to sites that way"

It may not "seem" that way, but our data suggests strongly otherwise.

We got our domain names by approaching the registrant and making an offer.

There are plenty of domain names that are not listed on the ripoff domain name sales sites.

Find something you like and make an offer.

Let's say you're a founder. You know that it only takes $X to develop and market a given app. So you go out shopping, asking for $(1.3X)MM( the estimate plus a small buffer )at a Y% dilution.

You pitch your idea to Trust Fund Baby Ventures, LLC, and they shit their pants and offer you $(5X)MM, but at the exact same dilution, Y%.

You've just been offered far more money than you think your business is worth. What do you say? No?

In the same way that inkjet printing affected the book publishing industry.

Try printing a full-length book on your desktop printer, and let me know how much the total cost of your time, the paper, and the ink is.

Compare it to the cost of a normal paperback and then note that the quality of the typesetting on your printed version sucks, and there's no cover.

I think you vastly underestimate the driving compulsion of millions of attention whores to get random men to tell them how hot they are by virtue of myspace angles and flattering lighting.

Same experience, here; never received a response.

Reminds me of the pre-IPO dog and pony shows I experienced in 1999 when series 1 and 2 investors would tell mezzanine investors that "This is bigger than electricity, bigger than the railroads" with a straight face.

Sequoia is just talking their book to the greater fool. Nothing out of the ordinary here.

As someone with a company that has purchased 6 and 7 figure domain names, I wonder why you make this assumption. All our deals were for cash, and I have no reason to believe these listed deals were otherwise.

Do you have any citations?

Because overinvestment in a specific sector of the economy necessarily results in underinvestment in other sectors of the economy.

In the case where investment capital flows to ultimately unproductive enterprises like photo sharing, and away from productive enterprises like efficient batteries, cancer drugs, etc, humanity suffers in the long term.

Now it's possible that the proliferation of photo sharing services is increasing the efficiency of photo sharing that people were doing previously, thus freeing up time to engage in other productive pursuits, so it's not necessarily a bad thing to sink investment capital into ventures that appear unproductive in and of themselves.

But I would highly suspect that this is not the case for the current bubble. It's quite likely that photo sharing apps are actually generating demand for photo sharing activity, thus being a net drain on actual economically productive activity.