7 ms·

This is something that always strikes me about the amount of money swilling around in tech. $90M is an absurdly huge amount of money. By absolutely any outside

by untog 8y ago

This is something that always strikes me about the amount of money swilling around in tech. $90M is an absurdly huge amount of money. By absolutely any outside objective measure of work put in to payoff it is off the scale. To look at this as the founders having lost out is almost comical.

randomacct3847 8y ago
Well apparently you can play baseball and make $330m. Yes, it’s a lot, but to build a $30b company and make 90m pre-tax (maybe 50m post in CA) is something... The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber.
- jonknee 8y ago
  On the other hand, the baseball player will create much more than that in value while Lyft has lost billions of dollars. If someone here is underpaid it's not the Lyft founders.
  - kolbe 8y ago
    Lyft has enriched its investors far more than any baseball player could even dream of. You're just looking at accounting losses. But when this IPOs, early stage investors will have all made billions.
    - Certhas 8y ago
      But that's not creating value. Unless the lottery creates value for people who buy the right tickets.
      - kolbe 8y ago
        The current price is the market's expectation of value throughout the existence of the company. The market believes that these past cash flows are not indicative of the company's future ability to create accounting value. And you may choose to value a growth company by its historical cash flows, but the market doesn't.
      - conanbatt 8y ago
        The value was created on the company itself, thanks to the early funds of the investors. Value was definitely created..
  - stepanhruda 8y ago
    What value is exactly a baseball player creating? Lyft has provided WAY more value to society over its lifetime.
    - lmm 8y ago
      The baseball player brought joy to other humans, which is the whole bottom-line point of the entire economic system. Lyft has burned piles of investor cash to give people artificially cheap taxi rides; the wealth-transfer is zero-sum and it's actually worse than that because their dumping distorts the real transport market (and exacerbates the negative externalities of cars). You could argue they've done some genuine value creation by being a more efficient taxi dispatcher, but if there was any substance to that then they'd have a profitable business.
    - codegoblins 8y ago
      Drawing viewers' eyes to lucrative television timeslots for advertisers, selling tickets to local stadiums, and selling merchandise such as jerseys and figures.
      - ericd 8y ago
        Those are all wealth transfers, though, not really value creation. The only value creation by the baseball players is the entertainment provided (which is definitely not nothing).
        jpeg_hero 8y ago
        How about getting a massage? “Wealth transfer”? Or “value creation”?
        ericd 8y ago
        Value creation, they're fixing/entertaining the customer.
- untog 8y ago
  > The obvious comparison is Travis Kalanick That's why I said outside objective measure. By any objective standard 90M is an insane amount of money for one person to have. One billion is so far off the scale it is impossible to describe.
  - randomacct3847 8y ago
    I’m making the point that you have two cos whose main US product is virtually indistinguishable from one another. The founder from one became a multi billionaire and the others are 1/20th of the way of becoming one.
    - ceejayoz 8y ago
      Lyft and Uber's revenue numbers are quite distinguishable from each other.
    - untog 8y ago
      I'm making the point that when you look at both objectively rather than in comparison they are both absurd amounts of money.
      - kolbe 8y ago
        If you had a billion dollars, would you immediately give away $900mm, since you appear to be arguing the difference is meaningless? Just because they're both a lot of money doesn't mean it's not important to the people who have said money.
      - throwawaymath 8y ago
        But you're injecting that point into a discussion about a different point as though it provides more insight. It's not particularly interesting; we get it, they're fabulously wealthy. But no one contested that, which is why several people are trying to explain that it's not what they were talking about. An S-1 filing encourages relative financial comparisons by design and intention. It's not surprising that Lyft's founders are extremely well off now. What could be surprising is the degree of dilution they experienced. Those kinds of financial technicalities require us to engage in discussion that treats objectively fantastic returns in terms of relativities.
- bsder 8y ago
  > The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber. That's because Kalanick got screwed by VC's previously and made sure that wasn't going to happen again.
pastor_elm 8y ago
> $90M is an absurdly huge amount of money. is it? A 10 million dollar house isn't all that special in a lot of parts of the country. A family worth 90 million can still have a lot of financial anxiety.
- jonknee 8y ago
  > A family worth 90 million will still have a lot of financial anxiety My god, get out of the valley for even 2 minutes. $90,000,000 is an obscene amount of money literally anywhere in the world.
  - wirelessest 8y ago
    Not to mention even by that standard, owning your house outright and having 10x its value in wealth is not "financial anxiety"
- deleted 8y ago
  [deleted]
- dmode 8y ago
  Is this a quote from the HBO show "Silicon Valley" ?
- jjeaff 8y ago
  You must be joking. $90m, even in the valley is massive, generational wealth. It is the top 1% of the 1% if not higher. You could buy some of the largest mansions in America. It puts you around the wealthiest 30,000 people in America.
teej 8y ago
The founders (theoretically) created $20B in value and you think $90M is sufficient compensation? $90M is definitely enough to be more than comfortable the rest of your life. But a $5B payout would have meant they could start a VC firm, invest in the next several generations of startups, partially self-fund something ambitious like a Space-X, start funded non-profits, etc.
- untog 8y ago
  > The founders (theoretically) created $20B in value and you think $90M is sufficient compensation? ...yes? I don't really see what's so absurd about that idea. It also seems more than a little disingenuous to suggest that the founders were the only ones that created that $20B in value. They didn't single handedly create the apps, the marketing platform, drive the cars, etc. etc.
- ceejayoz 8y ago
  > But a $5B payout would have meant they could start a VC firm... https://en.wikipedia.org/wiki/Y_Combinator https://en.wikipedia.org/wiki/Y_Combinator > In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator which would allow the company to invest in approximately 60 companies a year as opposed to their previous 40 companies a year. The following year, Sequoia led a $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund. I think they'll be OK if this is their goal.
- jjeaff 8y ago
  You can do all of those things and more - easily - with $90m.
  - ericd 8y ago
    Elon invested more than $100M in SpaceX and they came very close to death before they finally succeeded with their last rocket. So it's not clear that you can do all of those and more, easily, with $90M.
- rajacombinator 8y ago
throwawaymath 8y ago
But they did lose out. You're confusing a comment about relativities for a comment about absolutes. No one is saying they're not going to be well off, or that it wasn't a worthwhile use of their time to build the company. They're just saying the return is smaller than it could have been. Your "objective outside measure" isn't enlightening in that sense, because the point is specifically about relative measures. Responding to a discussion about funding dilution by saying, "well they're well off anyway!" is kind of odd, because that's not really relevant. Dilution also materially impacts non-founding employees, and small changes in dilution could have outsized impacts on their returns. It's also comparable to negotiating with a company who tells you that you're still getting a lot of money "by any objective measure" even if they won't meet your ask, because their offer is higher than the median wage for your locale. Yeah, sure, but that's a pretty empty observation isn't it?
fosk 8y ago
There is always a greater goal to achieve that requires more money: 90M to retire? Sure, it’s plenty of money. 90M to do greater and better things? Not so much. Hell, even Bill Gates would gladly take more money that what he already has in order to achieve his foundation goals. Your point of view is not objective, but subjective to how much money you need to have in order to do the things you are planning to do.

by untog 8y ago

randomacct3847 8y ago

Well apparently you can play baseball and make $330m. Yes, it’s a lot, but to build a $30b company and make 90m pre-tax (maybe 50m post in CA) is something... The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber.

jonknee 8y ago
On the other hand, the baseball player will create much more than that in value while Lyft has lost billions of dollars. If someone here is underpaid it's not the Lyft founders.
- kolbe 8y ago
  Lyft has enriched its investors far more than any baseball player could even dream of. You're just looking at accounting losses. But when this IPOs, early stage investors will have all made billions.
  - Certhas 8y ago
    But that's not creating value. Unless the lottery creates value for people who buy the right tickets.
    - kolbe 8y ago
      The current price is the market's expectation of value throughout the existence of the company. The market believes that these past cash flows are not indicative of the company's future ability to create accounting value. And you may choose to value a growth company by its historical cash flows, but the market doesn't.
    - conanbatt 8y ago
      The value was created on the company itself, thanks to the early funds of the investors. Value was definitely created..
- stepanhruda 8y ago
  What value is exactly a baseball player creating? Lyft has provided WAY more value to society over its lifetime.
  - lmm 8y ago
    The baseball player brought joy to other humans, which is the whole bottom-line point of the entire economic system. Lyft has burned piles of investor cash to give people artificially cheap taxi rides; the wealth-transfer is zero-sum and it's actually worse than that because their dumping distorts the real transport market (and exacerbates the negative externalities of cars). You could argue they've done some genuine value creation by being a more efficient taxi dispatcher, but if there was any substance to that then they'd have a profitable business.
  - codegoblins 8y ago
    Drawing viewers' eyes to lucrative television timeslots for advertisers, selling tickets to local stadiums, and selling merchandise such as jerseys and figures.
    - ericd 8y ago
      Those are all wealth transfers, though, not really value creation. The only value creation by the baseball players is the entertainment provided (which is definitely not nothing).
      - jpeg_hero 8y ago
        How about getting a massage? “Wealth transfer”? Or “value creation”?
        ericd 8y ago
        Value creation, they're fixing/entertaining the customer.
untog 8y ago
> The obvious comparison is Travis Kalanick That's why I said outside objective measure. By any objective standard 90M is an insane amount of money for one person to have. One billion is so far off the scale it is impossible to describe.
- randomacct3847 8y ago
  I’m making the point that you have two cos whose main US product is virtually indistinguishable from one another. The founder from one became a multi billionaire and the others are 1/20th of the way of becoming one.
  - ceejayoz 8y ago
    Lyft and Uber's revenue numbers are quite distinguishable from each other.
  - untog 8y ago
    I'm making the point that when you look at both objectively rather than in comparison they are both absurd amounts of money.
    - kolbe 8y ago
      If you had a billion dollars, would you immediately give away $900mm, since you appear to be arguing the difference is meaningless? Just because they're both a lot of money doesn't mean it's not important to the people who have said money.
    - throwawaymath 8y ago
      But you're injecting that point into a discussion about a different point as though it provides more insight. It's not particularly interesting; we get it, they're fabulously wealthy. But no one contested that, which is why several people are trying to explain that it's not what they were talking about. An S-1 filing encourages relative financial comparisons by design and intention. It's not surprising that Lyft's founders are extremely well off now. What could be surprising is the degree of dilution they experienced. Those kinds of financial technicalities require us to engage in discussion that treats objectively fantastic returns in terms of relativities.
bsder 8y ago
> The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber. That's because Kalanick got screwed by VC's previously and made sure that wasn't going to happen again.

pastor_elm 8y ago

> $90M is an absurdly huge amount of money. is it? A 10 million dollar house isn't all that special in a lot of parts of the country. A family worth 90 million can still have a lot of financial anxiety.

jonknee 8y ago
> A family worth 90 million will still have a lot of financial anxiety My god, get out of the valley for even 2 minutes. $90,000,000 is an obscene amount of money literally anywhere in the world.
- wirelessest 8y ago
  Not to mention even by that standard, owning your house outright and having 10x its value in wealth is not "financial anxiety"
deleted 8y ago
[deleted]
dmode 8y ago
Is this a quote from the HBO show "Silicon Valley" ?
jjeaff 8y ago
You must be joking. $90m, even in the valley is massive, generational wealth. It is the top 1% of the 1% if not higher. You could buy some of the largest mansions in America. It puts you around the wealthiest 30,000 people in America.

teej 8y ago

The founders (theoretically) created $20B in value and you think $90M is sufficient compensation? $90M is definitely enough to be more than comfortable the rest of your life. But a $5B payout would have meant they could start a VC firm, invest in the next several generations of startups, partially self-fund something ambitious like a Space-X, start funded non-profits, etc.

untog 8y ago
> The founders (theoretically) created $20B in value and you think $90M is sufficient compensation? ...yes? I don't really see what's so absurd about that idea. It also seems more than a little disingenuous to suggest that the founders were the only ones that created that $20B in value. They didn't single handedly create the apps, the marketing platform, drive the cars, etc. etc.
ceejayoz 8y ago
> But a $5B payout would have meant they could start a VC firm... https://en.wikipedia.org/wiki/Y_Combinator https://en.wikipedia.org/wiki/Y_Combinator > In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator which would allow the company to invest in approximately 60 companies a year as opposed to their previous 40 companies a year. The following year, Sequoia led a $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund. I think they'll be OK if this is their goal.
jjeaff 8y ago
You can do all of those things and more - easily - with $90m.
- ericd 8y ago
  Elon invested more than $100M in SpaceX and they came very close to death before they finally succeeded with their last rocket. So it's not clear that you can do all of those and more, easily, with $90M.
rajacombinator 8y ago

throwawaymath 8y ago

But they did lose out. You're confusing a comment about relativities for a comment about absolutes. No one is saying they're not going to be well off, or that it wasn't a worthwhile use of their time to build the company. They're just saying the return is smaller than it could have been. Your "objective outside measure" isn't enlightening in that sense, because the point is specifically about relative measures. Responding to a discussion about funding dilution by saying, "well they're well off anyway!" is kind of odd, because that's not really relevant. Dilution also materially impacts non-founding employees, and small changes in dilution could have outsized impacts on their returns. It's also comparable to negotiating with a company who tells you that you're still getting a lot of money "by any objective measure" even if they won't meet your ask, because their offer is higher than the median wage for your locale. Yeah, sure, but that's a pretty empty observation isn't it?

fosk 8y ago

There is always a greater goal to achieve that requires more money: 90M to retire? Sure, it’s plenty of money. 90M to do greater and better things? Not so much. Hell, even Bill Gates would gladly take more money that what he already has in order to achieve his foundation goals. Your point of view is not objective, but subjective to how much money you need to have in order to do the things you are planning to do.