wdewind

Sorry yeah, I reversed the terms, in response to this:

> The term "federation" is borrowed from political science for a reason. Just like in the USA, multiple federated states who share broad-strokes policies maintain interoperability while also maintaining their own sovreignty.

which is not true, under a federation the members do not maintain sovereignty, and this is the important point. The Colonial States gave up their sovereignty when they became federated.

Everything else, besides the terms reversal (my bad), it seems we agree on?

> The EU is arguably a confederation, and it's pretty much the only modern example, because confederations rarely last long.

Exactly!

> That is not the model that the Fediverse wants to uphold

So what are we even arguing about here? We agree decentralization wont last long. If you're using the US as an example of a desirable "light hand" federation I guess that's just where we agree to disagree.

I resent the "not too sharp" comment, and the implication that I hadn't even considered the idea that you're paying with your data coming from all three of you.

I'll respond here to all of you that responded generally with "you pay with your data, it's not free."

Ok fine, but you don't know what you're paying with on Mastodon, because you have no idea what any one node might do with your data, because there is no centralized privacy policy. Not a problem, I'm sure you read the privacy policy of every website you join right?

I'm also not sure why you assume a free, ad-based Mastodon service wouldn't exist as the network scaled.

The network has like 100k active users. It's very much in 'virtue untested' territory.

> I don't entirely understand why you assume that one node will come to dominate such that it will be equivalent to a centralized system?

One, or a small number, and because this is the history of these types of things.

> The term "federation" is borrowed from political science for a reason. Just like in the USA, multiple federated states who share broad-strokes policies maintain interoperability while also maintaining their own sovreignty.

The USA is actually not a federation, and purposefully stopped being one (it turned in a confederation, removing the right to leave, effectively centralizing it under federal control) when the country was founded.

(Edit: I reversed the terms confederation and federation here, but what I mean is that the founding of the US removed sovereignty from the states.)

This is where the rubber meets the road: any decentralized system will need to be able to answer the question "how do we [the govt, usually] forcibly remove content from the network?" The way you answer that question will be the way the network centralizes.

The history of true confederations (Colonial States, Personal Computing, the Internet) is that they are temporary chaotic moments before we revert back to the mean of centralization (United States, SaaS/FB/Gmail/centralized communication and iphones as tracking devices, PRISM).

This is all an instance of https://en.wikipedia.org/wiki/Conway%27s_law. Our culture is not confederated, and so we wont be able to build scalable confederated systems within it.

> I’d say it’s succeeding as much as facebook is.

Maybe I'm defining succeeding too narrowly, and sorry to be rude, but what universe do you live in where this is even close to true? Some quick googling shows the network hadn't even cracked 100k users in Feb: https://mastodon.social/@Gargron/99469840739197657

> FB is essentially a growth engine designed to drive MAU numbers as high as possible

Right, and it does that by providing a better (a matter of taste, perhaps), cheaper product than Mastodon via specialization of labor, and through network effects, both of which depend on centralization.

This question very quickly turns into "who watches the watchmen" if you pull the thread long enough. THAT'S the moderation problem, not scale or cost.

Right email is the exact model I'm basing my thinking on. You don't see people running their own email servers, you see 4-5 companies in the world gobbling up the VAST majority of the network, even with weak network effects.

This is actually my exact point. Why did FB come after phpBB?

And I guess I'd argue: there actually aren't that many phpBB communities, relative to the numbers of people on Twitter and FB.

If Mastodon (or federation in general) was going to "work" we'd see no FB and tons more phpBB type implementations.

> I think you're maybe forgetting that the goal of Mastodon, or any federated (as opposed to distributed) system, is not to have every single user run and administer their own instances, but rather to enable users to freely select from a wide variety of compatible interconnected peers.

This looks like a networking protocol, but this is actually process for electing the main node in the network, which will eventually revert it back to the mean of centralization. Let's see how Mastodon scales.

> I think people mostly want a smaller power to do it for them, or at least a "smaller than The Platform, or The Government".

People want the freedom of small networks while gaining the moderation protection of larger ones. People's beliefs about this are largely incoherent imo. That being said I'm broadly against heavy handed moderation, and so I'm happy to see it being solved by fragmenting the community rather than enforcing undesirable norms across it.

> Have you tried Mastodon?

Yes.

> You still pay someone else to run the server (or not, if you prefer), you can just choose who you pay, and which server. Sending toots does not require that you set up your own infra, re: the email example.

Right, you either pay with your time or your money, as opposed to FB for which you pay nothing at all. Specialization of labor reduces costs, federation increases them.

> This is commonly asserted, but I’ve never seen much evidence for it. Was a direct democracy given a good run in the US at some-point?

It's never been technically feasible, though the main issue has changed from scale to security.

> I agree with you that Mastodon is unlikely to ‘take-over’ Twitter or Facebook anytime soon. But that wouldn’t be my criteria for success.

I can understand why that wouldn't be your criteria for success, but it is mine.

Also access to cheap/free labor, also perhaps underaged labor?

The broad approach to social networking presented by Mastodon and other federated networks is "spend your time/resources on funding the network instead of paying someone else much less to do it." It wont "work" for the same reason everyone doesn't host their own email service. It flies in the face of a broader cultural movement we have: specialization of labor.

For instance, the solution to content moderation and harassment is:

> “Mastodon comes with effective anti-abuse tools to help protect yourself. Thanks to the network’s spread out and independent nature there are more moderators who you can approach for personal help, and servers with strict codes of conduct.”

The solution can't just be "there are more people moderating," which translates to: the network is much more expensive to run. But that abstraction is the solution to everything in a federated system: spread out power so it isn't corruptible.

As a libertarian this is really attractive to me, but in our current system, politically, it's completely infeasible and more than that just a little actively not wanted. People don't want to moderate themselves, they want a larger power to do it for them. It's why we have representative democracy instead of direct democracy: people don't want to be involved. Governing is a pain in the ass.

I can respect that Mastodon is philosophically consistent: if you want to really control your communications, you need to put in the effort. I hope to be wrong about this, but people simply to not want to put this much effort into online communities. If they did we wouldn't have FB, IG and Twitter already.

Please: CMV.

Sure, people don't need to explain RDBMS frequently, but that code you wrote last week? Or that reason you can't do exactly what the PM wants? YMMV but I spend a LOT of time communicating difficult concepts to other engineers (not only mentoring juniors, but also just doing hand-offs and stuff to others), to product managers, sales people etc.

Some engineers really do sit in a quiet room all day writing code, but my experience has been that it is an extremely communication-centric job.

Either way: if you do work in the kind of environment where you need to work with other engs and teams frequently you do need to test communication skills, and simply coding is not always sufficient.

Isn't a lot of the job of software engineering to quickly and concisely communicate complicated concepts? Might this actually be an accurate work sample? How else might you measure something like this?

Also the next few lines kinda address what you are saying:

> It also might be that they know them inside-and-out but aren’t used to answering questions on the fly, or that our question didn’t use the vocabulary they’re familiar with, or that they misheard the question and answered a different one. It made quite a difference just to phrase the feedback in a way which acknowledged all those possibilities.

Since you're the one bringing this this time up I'll throw this out there: fiber is the source of as many problems as solutions. The idea that high fiber diets are appropriate for everyone is not supported by the science, and there are tons of places where reducing fiber is tremendously beneficial. Look into the FODMAP diet, for one obvious example.

A well functioning market contains the incentives to bring correct information to it. If Ackman was right about Herbalife then he stood to make billions. He wasn't, and the process that unfolded over 5 years was a Good Thing, both for The Market and Herbalife (he was actually right about some things, which they fixed).

Herbalife is an excellent example of the market providing the right incentives and those incentives working out in the way we want them to. If Ackman had exited his position after the original corrections were made by Herbalife everyone would've won: he would've made money, long investors would have a stronger company, and Herbalife would be a real business. Instead he doubled down and so he lost, but everyone else still won.

This sounds like a really high functioning market to me. If you think TSLA is bound for 0 there are ways you can make that bet today. The fact is no one thinks that, and so no one is trying to make that bet. Same with Twitter.

> Taking these two strategies together, you can simultaneously have someone short a stock they expect to go down soon and someone else long a stock they expect to go up over 5-10+ years. Both can be right at the same time. You can then derive from this point that short interest is of limited to no concern to a long investor, which was my original point.

Right, but this doesn't mean that the incentive to devalue companies that need devaluing doesn't exist.

So as I said, I'm still not sure what you're arguing. Shorts seem to be doing what we want them to do. The market does not seem broken.

Sorry I don't really understand your point. Some people short sell on a "short" time line, but some people try and make large, long term plays via shorting. Ackman and Herbalife, being a canonical example.

Right, that's why the market is functioning well when it's rewarding you for bring that information to it earlier. That's what short selling does.

> There's no way I can see to get the outcome you want without wrecking the whole system that creates the wealth in the first place.

This really sums up the economic conversation in America these days (and FWIW I agree!).

Why isn't the ability to short sell enough to balance this incentive out? If twitter is severely overvalued there's a ton of money to be made informing the market of that fact.

Sorry but do I really need to explain why on a human level having months/years of work thrown out might be emotionally painful? They're bankers not robots.

And even if they were robots, having a deal like this fall through hurts their career. It's not irreparable damage, but people are going to give way less of shit about the fact that they worked on it now.

> Ok, so what's my point? Well, the mindset of those junior bankers is what permeates America. We're all temporarily embarrassed millionaires, right? It's a kind of shared madness.

I think you're missing the point. It's not really about not getting rich quick...the junior bankers probably spent months/years of 100+ hours weeks working on slide decks to get this done, only to have all their work thrown out. For the guys at the top its just one of many deals that fell threw, but for the junior bankers it's probably the most important if not only deal they've worked on in their short careers, and now it's thrown out. I think you'd be upset if a year+ of your work suddenly counted for nothing, regardless of the amount of money involved.

> People in life are what matters. Money matters too, of course, and it's tempting to dream about having FU riches. But when we live in this culture where we're all trying to gamble, and institutions are trying to gamble, and the losers get quietly swept under the rug and silenced, all that's left is the impression that everyone is winning except you.

FWIW most of the people working in the finance industry are not chasing money thinking of themselves as temporarily embarrassed millionaires, they are simply trying to provide stability and a good life for their families.

> My Bitcoin friend from 2010 wound up a millionaire, but he lost his love along the way, and as far as I know he still hasn't found anyone. Was that rich life worth it?

Isn't this a false dichotomy? Tons of people divorce because of lack of money too.

I think your analogy is 100% spot on. I'm not arguing that the startup industry isn't shady, I'm arguing that it is and, much like the shady used car industry, and much like you said, you can totally find good deals if you know what you're doing. Yes, like any way of making a lot of money, it is hard to know what you're doing and founders promising you millions in 2 years, like all get rich quick schemes, don't work out, it turns out. Let's not throw out the baby with the bath water though.

> They don't tell you anything you need to know. "You'll get X shares, which we estimate to be worth roughly a gazillion dollars when we exit, since we'll be taking over a bajillion dollar market."

I have literally only once been told what shares would be worth on an exit and it was the first, worst company I ever worked for. Every other time I have been told total # shares and current FMV. You're correct this is a sign for dogshit founders though.

> That really is all you'll typically hear in the pitch talks. Seems like the vast majority of engineers never ask. So now when I ask for more information, I'm the odd one out. I got weird stares just for asking about the total size of the equity pool (!).

My experience with this has only been positive. I have always found that founders respect you for asking these kinds of questions, even if they don't want to give you the information. If a founder reacts poorly, again, that's your free sign to leave.

But look: yes, most people aren't good at starting startups and so most equity is worthless. Some of them are trying to screw you, but most of them just don't understand themselves. Don't buy most used cars. Don't join most startups. Don't live your life through simplistic stereotypes like sleazy used car salesman and misleading startup founder.

Anyway all I can really do is offer my assistance in helping others figure this stuff out, as I did in a previous post. This can be a frustrating industry but it can be rewarding as well.

> The context for this argument is that joining a profitable business carries less risk of being deceived / manipulated and waking up after 4+ years to a reality that is totally different than what you were repeatedly lectured to expect.

> Your response doesn't really refute or address that argument. You are claiming that in the theoretical case that you are given 100% valid information and 0% hype, you should be able to to get a more accurate profit expectation. That's, of course, true.

You need to put yourself in a position where being deceived is fraud. If they show you fake revenue numbers that's fraud. If you don't understand that the real revenue numbers they are giving you aren't good enough, that's not fraud. If they don't tell you every single thing about the business that's not fraud. If they tell you they expect the business to do really well and it doesn't, that's not fraud. Ask the questions you need to get a feel for if the risk is worth it to you and take an educated risk. If they don't give you enough information run.

How much the employer hypes the position doesn't even come into the equation. I don't really understand why you think it's an important thing. Hype is not part of the deal. The numbers and the structure of the agreement are. Of course the CEO is excited about his company why else would he be risking so much to start it? Stop paying attention to emotions and start paying attention to the documents you are signing and the deals you are making.

> What Skype (technically, SLP) did was obviously legal, but extremely shady, and a good example of a savvy business tricking naive engineers. This wasn't innocent: these options that could (and eventually did) amount to millions of dollars were dangled in front of the employees noses since they were mere candidates. And all this time, they were actually worthless.

Again, why are you letting these engineers off the hook for not reading or understanding documents they signed that said in really big letters SIGN HERE IF YOU UNDERSTAND THIS. I can't imagine anything less misleading than spelling out your exact intent in legalese and then following through with it. Engineers chose to pay attention to the cheer leaders instead of the lawyers to their detriment. Why would employees expect Skype lawyers and managers to be on their team?

> Now I'm curious: which are these employers, in your opinion?

Cap table access is rare though I've gotten it a few times, and high level numbers about the cap table are not (# shares, %owned be investors etc.), revenue numbers are widely available, projections are widely available, I dunno man these aren't huge things for early stage employees to ask for, I think most people just usually don't.

> Compare that to options, which worth is hypothetical and up for debate. None of your fellow employees know more than what the founders told them. It's some glowing future promise that will only be broken a few years down the road... When they typically won't need you anymore...

Hmmm...I think the part that is maybe missing from your model is that the value is not hypothetical and made up, you need to price the certainty into the value itself when negotiating the offer. If you are given very little information, the value is low. But it's not "high value low certainty" it's simply low value.

Skype equity that allows you to be fired and have it bought back at strike price is not "high value low certainty" it's simply low value. Engineers overvalued their equity going into it. They were not misled, and this was something that could've been reasoned about going in easily. They should've read what they were signing.

Some employers will give you enough information to make an informed decision (cap table, current revenue, projections, etc.). Most will not. Most are not worth working for, or at least their options are not worth valuing above $0. Some are, though.

> The question was about how startups are in general, so we must acknowledge that wildly optimistic equity value expectations are the norm.

Isn't this true about life in general? Even when you go interview at bigco they are lying to you about your position and how great the work/life balance is etc. It's weird to me that HN expects employers to be their personal lawyers, explaining incentives to them when it comes to options.

The idea that there are tons of employers out there violating legal agreements over options is nonsense and its what is implied in a lot of these threads. People need to learn about options, like people need to learn about everything in their career to get good at their jobs. It's not a mystical art, people are just greedy and read the FB story and expect to show up and make a billion dollars their first go around so they don't bother to read or understand the agreements. I certainly was like that, got burned, and then wised up.

FWIW I'd actually still considering joining Skype today I'd just read the agreement before I did so. I would expect them to stick to their agreements, as they have a track record of doing in the past. As I said, it's bizarre to me that the expectation is that people signing these agreements aren't responsible for understanding them.

> Have you interviewed in many startups? "Sober view" is not what you'd get from a founder hard-selling you on any role. Try "wildly optimistic, unrealistically so".

Don't join those companies. I've spent over a decade in the startup industry, I've interviewed at a ton of startups. Most startups are not worth working at.

> Eh. Unless it's a late-stage startups (which is not the typical scenario), it's very hard to know what will happen. You can model some events, but the key question remains unanswered: how successful is this going to be?

Right, that's exactly what I said...in the case that it's not successful it's not like anyone is getting rich, so in that case it's not like employees have been "screwed out" of options.

In reference to Skype: they did absolutely poison the talent pool look at you remembering and posting this article. Are you or anyone reading this thread ever going to consider working for Skype? Why else would TechCrunch cover it?

Not only that, the agreement that Skype offered did not change, so a bunch of people signed a shitty agreement and are then upset that it didn't work out well. This is not the rug being pulled out from underneath engineers, this is engineers not understanding what they are signing.

You're right that most startup options are worthless, but not all are, and that doesn't mean you can't reason about which are worthless and which are not.

> 1. The valuation you will get from the founders before being hired ("your equity will be worth $X millions when we IPO") is unrealistically optimistic. Even on the remote chance your startup becomes a huge success, you'll see a small fraction of that at best.

If a founder is selling you on anything but a very sober view of the stock that's a great signal to not join the company. Even so, it is not too difficult to model a few reasonable dilution, acquisition etc. scenarios and get a feel for how you'd do in each.

> 2. Unless you have a lot of influence on the board and majority shareholders (you won't), you can't really protect yourself from losing all the value of your stock.

Sort of. The reason this doesn't really happen much in practice is that it destroys the company's talent pool and ability to hire in the future. Most companies that are succeeding don't tend to screw employees, it's only when they've entered the "squeezing blood from a stone" phase that these things start happening, and at that point the stock's not worth much anyway.

Sorry I don't have a source, but what I really meant by that was: when you hear the stories of engineers getting "screwed out of options" it always boils down to things like liquidation preferences and taxes and things like that that are built into the stock agreement. You also very rarely hear these stories in places that are doing super well, it's places that are failing and the company is being chopped up for scraps that things like liquidation preferences really even become a serious problem for employees anyway. The real problem is usually just that the business doesn't do well.

I'm sure there are exceptions and places where people disagree about the terms of the actual agreement but by and large these stories are "a thing that felt really low chance happened and the stock agreement had a clause for that and that sucks for me." Truly shitty situations, but ones that you can factor into your risk model when deciding whether or not to accept the offer. Part of the deal of having ownership in the business is taking the responsibility of that risk on. Not everyone wants that which is why a higher salary at a more stable big company makes more sense for some people.

Also, I think the perverse incentives thing is real, but again I want to reiterate: the cool thing about stock options is that they allow you to have a small (but often significant) amount of ownership in the means of production. But that also means increased responsibility, which includes the responsibility to understand the value of the options agreements you sign. If you need to hire a lawyer to explain the agreement, or you need more information on the business, cap table etc., in order to fairly value the options in the offer those are all fair questions to ask. Additionally the way companies respond to your request for such information will tell you everything you need to know about how they truly feel about employee ownership.

Sorry yes that's exactly what I meant.

Right, you definitely have to understand what you're getting into. Being a successful startup engineer is probably a specialty in itself, that requires a mix of business knowledge and software knowledge.

Many startups are beginning to offer the ability to convert your ISOs (which the SEC requires you to exercise within 90 days regardless of company preference) into RSUs (which allows the company to set the terms, I believe Stripe and some other big ones offer 7 years). You do lose some tax benefits of ISO treatment when you convert to RSUs, but this is just something you need to understand going into the deal and consider part of the offer.

Another thing being offered frequently is early exercise. If you join a company early enough you can often afford to exercise all your options outright. If you couple that with an 83B filing you can eliminate your tax liability until you sell your shares. Frankly I probably would not consider joining a company without early exercise at this point because of the exact issues you pointed out.

It's not as straight forward as cash, but you can definitely create a mental model for thinking about the risk.