Nothing in particular. But as we grow, I think it's important we're clear about our expectations. Because the amounts are small and we fund so many companies, we don't do much diligence before investing. So occasionally we'll fund someone bad.
We've had problems in the past, but only twice that I know of. We have now funded more than 700 companies, so that seems remarkably low.
I would like to see "keeping investors informed" as part of the honesty thing. I've had a few YC founders dissapear without so much as a "we're shutting down."
I don't think anyone absconded with anything. The company legitimately gave up the ghost. An email explaining it and then shutting down the company so I can take my losses would be nice, though.
That is surprisingly low given the number of YC founders there are now.
Paraphrasing something I heard from a (somewhat retired) CEO is that beyond a certain size, you're going to end up with problem employees in some proportion to the world at large. i.e the one with a possible alcohol problem, the one who is abusive, the one with odd compulsive behaviours and all manner of other predilections you were unprepared for. The first time you have to deal with this is a bit of a shock but you eventually realise that it's just reflection of humanity at large.
As a former Green Dot VP, you're no doubt familiar with the money transmission legal problem (http://www.regulations.gov/contentStreamer?objectId=09000064...). Do you think it is ethical for Y Combinator, its portfolio companies, or its founders to violate state and federal laws simply because they're poorly enforced? Is it ethical for those companies to quietly hire, as contractors or employees, former regulators to "guide" them through the regulatory process? What about overseas tax havens? Does Y Combinator have a policy on the ethics of that issue?
Also, there were more than two Y Combinator portfolio companies named as defendants in the federal lawsuit over money transmission (http://www.plainsite.org/dockets/t6maunfo/california-norther...), so how are you defining "problems?" Are federal lawsuits alleging unlawful and immoral wrongdoing not "problematic?"
What about shell corporations? Does Y Combinator have any connection to Payments Sub, Inc., the company that Airbnb's CFO formed after being sued to obtain a money transmission license in California?
Regardless, wouldn't the most ethical thing to do in the face of a confusing legal situation involve public lobbying for reform of the laws at issue, rather than exploitation of the chaos? Why has Y Combinator consistently opted for the latter, rather than the former?
What's the ethical problem here exactly? I linked to the lawsuit docket, it's clear that my company filed it, and it doesn't matter either way in the context of my argument.
Furthermore, had I written "my" as you suggest, it would make it sound like there is a potential ethical problem because I say so. But my point isn't that there is a potential ethical problem because I say so. My point is that there is a potential ethical problem when lawsuits in general start getting filed.
Anyone can file a lawsuit naming anyone they like. You are using the existence of a lawsuit you filed as evidence in your argument. I would call that "circular logic".
True, the lawsuit exists, and anyone can be named. But this particular lawsuit is backed up with a few hundred pages of evidence. Feel free to read it--that's why I linked to the docket, so that anyone can. No circular logic involved.
Again, my point is that lawsuits are signaling mechanisms for ethical problems.
I also disagree. And I have no dog in this fight -- no affiliation with YC nor Aaron/thinkcomp.
It is false and tendentious to claim that "lawsuits are signaling mechanisms for ethical problems" -- the law nowadays is sadly well-divorced from ethics. Just look at some of Hollywood's inane copyright lawsuits with Silicon Valley companies as defendants. Or the rise in software "patent" suits. Or Harvey Silverglate's book Three Felonies a Day. Etc.
It would probably be true to say that lawsuits are signaling mechanisms for business success. I once interviewed Cypress Semiconductor CEO TJ Rodgers who pointed to the list of complaint cover pages on his office wall. There were dozens. He said something to the effect of: Whenever we get sued, that means that our competitors are unable to win in the marketplace. Bring it on!
If I'm not mistaken Aaron/thinkcomp is suing just about everyone who could possibly be a defendant including Andreessen Horowitz, Coinbase, DST Global, Dwolla, Kleiner Perkins, Slide co-founder Max Levchin, Reddit CEO Yishan Wong, Sequoia Capital, Square, and Y Combinator. (If YC principals don't reply in this thread, it's probably because of litigation.)
A uninvolved attorney, commenting on this case, wrote: "Unfortunately for Aaron Greenspan, he has sued enough people to seem litigious at best—his own word choice—and a little crazy at worst (that last word choice is mine)." http://blog.upcounsel.com/aaron-greenspan-versus-silicon-val... While I'm expressing no opinion about the merits of this suit, I do wish Aaron/thinkcomp would do less lawyering and more, actual, you know, engineering.
(Since 2011, I've built PlainSite from scratch, building on Aaron Swartz's PACER data. But I'd rather be working on payments.)
Also, I'd expect a reporter as experienced as yourself to read the complaint and evaluate the evidence on its own merits. There was a long list of defendants in the recent litigation involving Google and Apple and Intuit and eBay, because--guess what--they all broke the law.
I stand by my point that lawsuits are signaling mechanisms for potential ethical problems. Not all of them are legit. Sometimes they're just crazy. But by and large, they point to problems that need resolution.
Also, if you want to selectively quote things from articles, here's what Felix Salmon at Reuters has to say about T.J. Rodgers: "Chrystia Freeland has found a classic example of Silicon Valley hubris in TJ Rodgers."
Regarding my legal battle with California, the Upcounsel article also said, "He may be right, and it seems obvious that California’s MTA is much tougher than comparable laws in other states," as well as "his complaint raises some valid points."
Civil suits should definitely not be considered signals of ethical problems. This case is a perfect example where the law is vague, primarily exists to protect some large incumbents and has been used to generate a lawsuit by a legally active gadfly with tenuous standing.
If there were standing issues in the case against California it would been tossed out years ago.
In the unfair competition case, after trying and failing to get rid of the case via bogus sanctions, Y Combinator and the other defendants manufactured standing issues to get it thrown out by arguing that one cannot be the victim of "unfair competition" if one is not legally permitted to compete (even when the other parties are "competing" by breaking a law). This leads to the perverse conclusion that § 17200 encourages illegal activity.
Most legal gadflies are not cited by opposing counsel in formal filings before state agencies, invited to submit testimony to Congress, consulted by the GAO on what to tell Congress, cited by academics, or offered fellowships at Stanford Law School. But, you know, whatever.
I disagree. Lawsuits could also be rightfully characterized as signalling mechanisms for predatory (but still ethical) commercial opportunities, social ills and/or exploitation of same, poorly constructed laws or regulations, reasonable disagreements, and probably half a dozen other situations. Not to mention that the ethical problems that could be signaled by a lawsuit might be those of the plaintiff, the defendant, or either of their legal teams. Or all of them together.
Hmmm, I suppose that could have been plainer. I disagree with your assertion that - as a general rule - the existence of a lawsuit necessarily signals ethical concerns relating to the defendant.
As for "it", if "it" was not in the text of one of the comments leading up to my post, I probably did not read "it". In any event, I doubt that further knowledge of "it" would have substantially modified the nature of that assertion you made.
The actual subject matter of the lawsuit you've been referencing is only of marginal interest to me (and is irrelevant to my comment), and I didn't feel like looking through the claimed hundreds of pages of materials, or addressing the merits of a case that is already in the hands of professionals.
It might be more on track to say that criminal lawsuits indicate criminal activity, since DAs are only supposed to commence with prosecution when they believe that the law has been broken and when they can prove it. It's a safe bet that the majority of people criminally accused actually did what happened. But it violates the spirit of innocent until proven guilty, where even after an investigation the state must still convince a jury of the defendant's peers beyond a reasonable doubt.
So that's just to contrast with civil lawsuits. There is essentially no bar at all for those.
Your employer just filed a $5 billion lawsuit against Visa about this dead horse (interchange fees). It's not the first time. What happens in this market matters.
When I see you comment, you are usually using whatever topic to talk about your pet issues, which is usually money transmission.
Combining your boorish focus with your unpleasant discourse makes me think, "oh god, he's here to beat his dead horse again."
For what it's worth, digging into someone's profile to figure out how some background detail is relevant to your dead horse is is somewhere between "unpleasant discourse" and "creepy."
I also suspect that pointing these things out to you is unlikely to yield fruit so I already know that this is my own private dead horse.
I understand that you don't like what I have to say. And I understand that you, and apparently others, don't like talking or even reading, for whatever reason, about money transmission.
Here's what I don't understand: you're now criticizing me for referencing something you posted on a public profile. Why did you put it there if you don't want it to be seen or considered?
You're also criticizing me for raising a substantive issue especially relevant to startup founders and investors, on a forum for startup founders and investors, when you yourself are a startup founder and (it would appear from this page) investor.
If you want to plug your ears and pretend that I am just some crazy person obsessed with a pet issue that has no bearing on reality, by all means go ahead. But this is exactly the ethical debate I believe needs to be had. Because I am not just a crazy person obsessed with a pet issue. I, like you, am a rather rational person looking to turn a profit from my involvement in the technology sector. And the California legislature has now put forth not one, but two bills, to amend the law that I am most concerned with because it had a material impact on my company and many others, including some of the largest in the country (ADP, PayPal, MoneyGram, etc.). Moreover, this law affects you and potentially your investments. It certainly affects Y Combinator. And there are serious ethical issues tied up in all of this, which I will continue to haul before a judge as long as I need to.
So really, what are you getting at? You don't like me? No problem, you don't have to. But don't pretend that I'm doing something "creepy" when all that I'm doing is pointing out that laws actually matter.
I guess my point is: you sound like a crazy person. You use tangential issues to raise things you think are important (YC ethics, my background) that nobody else seems to agree on.
The creepy refers to your mode of communication, not the message specifically. I never really get to the meat of what you are saying because I find I dislike your manner of presentation.
Again, what you consider a "tangential issue" is directly linked to a $5 billion dollar lawsuit over interchange fees (actually, several, that's just the latest one). Where I come from, that amount of money is not "tangential." It's core.
I think ethics are important. I don't really know much about your background. But it's disingenuous of you to claim that it's irrelevant when you're an investor with links to Walmart.
The only reason I sound like a crazy person to you is because, as you admit, you "never really get to the meat of what [I'm] saying." That's easily remedied by actually reading what's written, as opposed to just scoffing and writing me off as crazy.
As for format, I've tried just about everything there is, but I'm open to suggestions. In any event, my approach seems to be working, whether you want to admit it or not:
You don't sound crazy to me, but definitely angry, which makes it painful for me to read you.
The technicalities are way over my head, but even if you're right, you're unlikely to get any reply from YC since a law suit is pending...
Unsolicited advice:
From what others say in this thread, it sounds like you're obsessed with this issue. If I understand correctly, you've been wronged and filed a law suit because of it. Let your lawyers do their thing, and move on.
Your rants cause you more pain than they cause to the people you accuse.
Thanks for the update, I was relying on your original complaint's text that "…Plaintiff's Board of Directors wishes Plaintiff’s CEO, Aaron Greenspan, to represent Think Computer Corporation in this matter before the Court", but my parenthetical qualification allowed for the chance you might have acquired lawyers later.
I guess my point is that it just seems like you are using any relevant point to talk about your own issues. Conversation is a give and take, not an infinite loop.
I never claimed that ethics weren't important. I am saying that your mode of presentation is tiresome and makes your point impenetrable.
And it seems like you are flippantly excusing Y Combinator's ethical double standard because you're not interested in hearing about how pervasive unethical behavior is in the industry from a person you've never met but you're pretty sure you don't like, no matter how much evidence is a click away.
Perhaps that's because according to AngelList you're an investor in Square, which has signed two consent decrees for violating money transmission laws. That would make you a federal felon per 18 U.S.C. § 1960. And it sure would suck if my "presentation" caused you some legal trouble.
Because I'd expect someone as smart as you, with a clear financial stake in the money transmission regulatory situation, to realize that you can make more money by helping to promote reform than you can by hiding your connections to the mess and trying to shut me up.
If you haven't noticed, that strategy isn't working.
I'm not trying to shut you up. I'm trying to get you to phrase your message so that other humans will want to consume it.
How am I hiding my connections?
Accusing people of felons is probably also not a good way to rally them to your cause.
Even here you are bent on turning the discussion to your cause. I'm talking about the phrasing, not the message.
It does seem creepy that you see enemies and opposition everywhere. Good luck with your cause - you need it.
FWIW my investment in Square was small and because Jack was a friend. I'm not really injured either way, though would generally like to see laws make sense in the interest of parsimony.
Also FWIW, I think plainsite is pretty good.
Wow, news.yc makes this thread really narrow. Probably punishment for belaboring the point.
I don't see enemies and opposition everywhere. I'm not paranoid. You just happen to be an investor in at least one money transmitter and company I'm in litigation with (not to mention your Walmart involvement), and you didn't care to mention it. That would seem material and capable of altering your viewpoint. Instead you said you weren't employed.
The fact that I am supposedly "bent on turning the discussion to [my] cause" would actually suggest that I see potential partners everywhere, if anything.
As for phrasing, if the private and very polite conversations I've had with people had gone better, we never would have reached this point.
I am not involved with Walmart. I sold a company to them and did some contracting work that wasn't extended. I am no longer advising them, though I haven't bothered to update every profile everywhere. I'll go edit some more things if that makes you happy.
I retract "dead horse" and wish to replace "pet cause" - the first implies more about your cause than I really mean to.
Whenever I see your username, I instantly assume you're posting something about money transmitter laws. And usually talking about something that happened to you years ago that your feel was unfair to you.
Fair or unfair, that's the impression I have of your account.
Yeah, not your strongest argument ever. Aaron Swartz and Google AdSense have absolutely nothing to do with money transmission. Nice try though.
The general sentiment I get from the community is that if you're an expert on a particular issue, and you happen to have an unpopular viewpoint, you shouldn't participate. The community is entitled to that sentiment, and I am entitled to strongly disagree with it, which I will continue to do so long as it persists.
> The general sentiment I get from the community is that
> if you're an expert on a particular issue, and you
> happen to have an unpopular viewpoint, you shouldn't
> participate.
For all the talk of deference to logic, facts and expertise here, the reality is that this community is just as emotional, superstitious and irrational as any other group of humans you'll find.
Forget about "facts" and "evidence": If you want to win people's support you'll have to court them like a politician courts voters. Study the techniques of some politicians who had to gain support for unpopular or controversial legislation.
Not only are people sick and tired of your dead horse, some of the folks here are on the other side of your lawsuit (or close). So don't be surprised when you don't get the red carpet.
Word to the wise: don't pollute HN like this or you risk alienating those that were seeing things your way (or at least, had a bit more balance than just black/white).
I'm not trying to win a popularity contest. I'm trying to make a point about ethics that no one wants to hear. Still not one person has addressed any of my initial concerns.
No, that much is clear. What is clear is that you have an axe to grind and have lost perspective as to what is and is not a proper venue for making your point (you're suing, what else do you want to do?), and that your concerns are now a matter of court review so whatever someone here has to say about it (including Sam Altman) has no importance at all.
Ethics have relatively little to do with your complaint, you contend that it should be illegal, that does not mean that it is ethical or not to engage in said practice.
Lots of things that are legal are not ethical and vice versa, but by involving the courts you have made your battleground the legal aspect, not the ethical one.
The one that does not want to hear it seems in this case is you.
So you're saying that because I filed a lawsuit, which for the time being is no longer pending, I should relinquish the right to speak in public about the ethical implications raised by that lawsuit, and that any such speech is "pollution."
All I can say is that I disagree wholeheartedly.
Also, ethics have everything to do with my complaint.
If you're trying to argue that all payments startups, AirBnB and Uber are unethical because they are operating in reasonable but gray legal areas, then you're wrong.
ps you might have more luck pretending that you're trying to win a popularity contest. No one likes lamers.
I'm using orthogonal in the sense of "can vary independently". IOW, something can be illegal but yet still be ethical, while something could be legal but still be unethical.
Of course, this is all somewhat subjective, and I acknowledge some people may dispute the idea that something can be illegal and still be ethical. But if a law is bad, I believe breaking that law can be ethical behavior. YMMV.
while they can vary independently because they are dis-similar, as a general rule it seems they are complementary more often than not. So, I would say they are likely co-vary together (even if inversely) at times.
At an intutive level, "ethical fabric" is often/practically seen substitute for legal/regulatory infrastructure. The latter is more complex/arduous/expensive, so one advantage of developing ethical norms is increased productivy (from more focus on business, less on due dilligence/monitoring of contracts and general micro-management issues).
More likely it was an aggregation of events that prompted it.
It's amazing the extent to which (what should be) self-evident principles such as this whole "fairness and respect" thing, "honoring handshake deals", and "generally behaving in an upstanding way (even though it may be convenient or profitable for you not to)" seem to be beyond the cognitive grasp of certain "founders" I know.
I've heard about a few instances of the past year of startup founders treating their employees really badly... from lying about work hour expectations, to the details of the day to day job in order to get someone to sign on the dotted line. Even firing people, without cause, within days of them starting.
What do you mean, "without cause"? There are plenty of good reasons for firing people just after you've hired them:
"We really appreciate your strong backend skills (especially being as we're still trying to figure out like, namespaces and stuff). But we just found this frontend guy who's really hawt! And we can't afford him unless we fire you."
Being fired for "not being a culture fit" within days of being hired sounds reasonable to you? Especially after what was most likely a rather involved interview process?
