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So… Tech founders are now following the Facebook model: non-voting shares, enriching themselves, keeping most of the power Everyone is done pretending to be th

So… Tech founders are now following the Facebook model: non-voting shares, enriching themselves, keeping most of the power Everyone is done pretending to be the “good founder,” that ship seems to have sailed

iamstupidsimple 5y ago
The less power controlled by the investor class, the better.
- JumpCrisscross 5y ago
  > less power controlled by the investor class, the better Define "better." Because it apparently doesn't include reducing carbon emissions [1] or increasing returns [2]. Nor, for that matter, creating and supporting the forum you're on. [1] https://www.msn.com/en-US/news/topstocks/chevron-plans-big-low-carbon-investment-boost-as-engine-no-1-activists-loom/ar-AAOquXV https://www.msn.com/en-US/news/topstocks/chevron-plans-big-l... [2] https://corpgov.law.harvard.edu/2016/12/23/a-successful-case-of-activism-at-the-canadian-pacific-railway-lessons-in-corporate-governance/ https://corpgov.law.harvard.edu/2016/12/23/a-successful-case...
  - zd123 5y ago
    Activist investors are a small subset of all investors. Most investors are just out there to ride the business cycle to the top. Picking and choosing examples that do not generalize to most investors does not refute his point.
    - JumpCrisscross 5y ago
      > Activist investors are a small subset of all investors. Most investors are just out there to ride the business cycle to the top. There is research on dual-class firms. "Excess insider control is associated with decreased overall [corporate social responsibility] ratings," with the "community and employee dimensions...display[ing] the strongest negative association with excess insider control" in firms not in "the top decile or quartile of firms with respect to their cash and cash equivalents, operating cash flow, and free cash flow" [1]. Outside the limited case of technology company founders and family-owned firms, the evidence is strongly in favor of investor-controlled companies over the alternatives in virtually every dimension of "better." [1] https://www.sciencedirect.com/science/article/abs/pii/S0278425421000600 https://www.sciencedirect.com/science/article/abs/pii/S02784...}
      - deleted 5y ago
        [deleted]
  - crmd 5y ago
    Probably better for employees. Canadian Pacific was a well governed, profitable company when Bill Ackerman raided the company and laid off 4500 unionized workers to goose the share price. I would be furious if a sociopathic activist investor did this to my company.
    - missedthecue 5y ago
      I don't think it was "well governed". It was bloated and inefficient. Look at the operating ratio over time between CP and it's direct competitor CN - the lower the better. https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/Capture.png https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C... CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.
      - silexia 5y ago
        So paying employees the minimum amount possible is efficient to you? Maybe it results in better short-term profits, but it destroys the company long-term.
        JumpCrisscross 5y ago
        > paying employees the minimum amount possible is efficient to you? Did pay go down? I don't think that's accurate. Paying a bunch of excess employees, yes, that's not efficient. That's practically textbook inefficient. Are we really on a forum run by a VC debating capitalism?
        crmd 5y ago
        There are plenty of capitalists who believe one of the several purposes of a company is to provide meaningful jobs in the communities in which they operate. When company owners cut the payroll to hoard profits, the remaining employees have to work harder for the same salary. It is the literal definition of the investor class siphoning wealth from the working class.
        5y ago
  - wpietri 5y ago
    It seems a bit rich to look at a climate crisis created by current capitalism's "privatize the gains, socialize the losses" approach, note one recent small change nominally driven by a small subset of investors, and then declare investors actually good. If you count all the times a major oil company made a climate-worsening choice because investors demand profits, and then count the choices like the one you point at, I'd expect it would be 99.9% the former. And I'll note that the link you give does not include actually "reducing carbon emissions". They're promising to invest more in research. How will they pay for that? Selling more oil. So even if they do the research and even if something comes of it, there's no particular reason to think that on net this choice will reduce total atmospheric carbon.
    - JumpCrisscross 5y ago
      > If you count all the times a major oil company made a climate-worsening choice because investors demand profits, and then count the choices like the one you point at, I'd expect it would be 99.9% the former Sorry, do non-market economies have a better track record when it comes to the environment? Eastern Europe says no [1]. Pollution intensity metrics relative to private property rights say no [2]. I cherry picked examples for narrative value. I didn't realize what I took to be an extremist claim--the less influence investors have over private companies the better--had so much purchase. [1] https://documents1.worldbank.org/curated/en/807441493305588896/pdf/Environmental-management-in-centrally-planned-non-market-economies-of-Eastern-Europe.pdf https://documents1.worldbank.org/curated/en/8074414933055888... [2] https://mpra.ub.uni-muenchen.de/48717/1/MPRA_paper_48717.pdf https://mpra.ub.uni-muenchen.de/48717/1/MPRA_paper_48717.pdf
      - wpietri 5y ago
        What you're doing here is creating a false dichotomy. Eastern Europe is (or at least was) worse because the problem -- elites extracting wealth regardless of consequences to others -- was worse there. But it's not like self-interested elites capturing both economic and regulatory problems isn't a problem here. Indeed, in now might be worse here. The two choices available aren't eco-collapse in the 1980s American greed-is-good capitalism style or the 1980s Eastern Europe totalitarian style. There are more things, Horatio. But if you spend all your time cherry-picking citations to soothe your fundamentalist capitalism feelings, you're not going to see them.
  - marvin 5y ago
    Greenhouse gas emissions and climate change has nothing to do with ownership structure. Employee-owned companies make just as selfish decisions as investor-owned companies, and if they didn't, they'd lose to the competition if they tried to do the altruistic thing. These are separate questions; the solution to greenhouse gas emissions is globally-enforced taxes on emissions with the tax used to reverse the emissions.
- lr4444lr 5y ago
  Honestly. Some people are just impossible to please short of every company becoming a completely worker owned cooperative.
  - wpietri 5y ago
    Sounds good to me. I've seen so much dysfunction generated by distorting companies to please executives and investors. I'd love to see what different approaches produce. I'd hope it would be better, but at least we could get some variety in pathology, and society wouldn't just take this generation's dominant paradigm as perfect and eternal. For those interested in the topic, I recommend reading "A Lapsed Anarchist's Approach to Building a Great Business". [1] Years ago a grad student went to the University of Michigan to study their large collection of anarchist literature. As a sideline, he started the now-legendary Zingerman's Deli. Over the years, it spun off a large collection of associated businesses, each run by some of the workers. Lots of interesting ideas, ones backed by real-world success. '1] https://www.zingermans.com/Product/zingermans-guide-to-good-leading-part-1-a-lapsed-anarchists-approach-to-buildi/P-ARI-12 https://www.zingermans.com/Product/zingermans-guide-to-good-...
    - JumpCrisscross 5y ago
      > I'd love to see what different approaches produce Worker-owned companies exist: they're called partnerships. Just add a line requiring all employees be shareholders so the partners can't hire staff. Lots of construction companies are organized like this. (Wholly employee-owned firms were more popular before WWII [1].) I don't see any evidence that they pursued profits less furiously than investor-owned competitors. ESOPs have been more successful [2]. Outside the domain of highly-skilled artisans, it turns out most employees--like most shareholders--don't want to do the work of being an investor. That results in the sort of clubbiness that will be familiar to anyone who has been involved in small-town politics. [1] https://heinonline.org/HOL/LandingPage?handle=hein.journals/month101&div=100&id=&page= https://heinonline.org/HOL/LandingPage?handle=hein.journals/... [2] https://hbr.org/1987/09/how-well-is-employee-ownership-working https://hbr.org/1987/09/how-well-is-employee-ownership-worki...
deleted 5y ago
[deleted]
xwdv 5y ago
Lying about the fact that you are making a startup to become rich is not the definition of a “good founder”.
MomoXenosaga 5y ago
The techno priests are just as bad as the old ones.

iamstupidsimple 5y ago

The less power controlled by the investor class, the better.

JumpCrisscross 5y ago
> less power controlled by the investor class, the better Define "better." Because it apparently doesn't include reducing carbon emissions [1] or increasing returns [2]. Nor, for that matter, creating and supporting the forum you're on. [1] https://www.msn.com/en-US/news/topstocks/chevron-plans-big-low-carbon-investment-boost-as-engine-no-1-activists-loom/ar-AAOquXV https://www.msn.com/en-US/news/topstocks/chevron-plans-big-l... [2] https://corpgov.law.harvard.edu/2016/12/23/a-successful-case-of-activism-at-the-canadian-pacific-railway-lessons-in-corporate-governance/ https://corpgov.law.harvard.edu/2016/12/23/a-successful-case...
- zd123 5y ago
  Activist investors are a small subset of all investors. Most investors are just out there to ride the business cycle to the top. Picking and choosing examples that do not generalize to most investors does not refute his point.
  - JumpCrisscross 5y ago
    > Activist investors are a small subset of all investors. Most investors are just out there to ride the business cycle to the top. There is research on dual-class firms. "Excess insider control is associated with decreased overall [corporate social responsibility] ratings," with the "community and employee dimensions...display[ing] the strongest negative association with excess insider control" in firms not in "the top decile or quartile of firms with respect to their cash and cash equivalents, operating cash flow, and free cash flow" [1]. Outside the limited case of technology company founders and family-owned firms, the evidence is strongly in favor of investor-controlled companies over the alternatives in virtually every dimension of "better." [1] https://www.sciencedirect.com/science/article/abs/pii/S0278425421000600 https://www.sciencedirect.com/science/article/abs/pii/S02784...}
    - deleted 5y ago
      [deleted]
- crmd 5y ago
  Probably better for employees. Canadian Pacific was a well governed, profitable company when Bill Ackerman raided the company and laid off 4500 unionized workers to goose the share price. I would be furious if a sociopathic activist investor did this to my company.
  - missedthecue 5y ago
    I don't think it was "well governed". It was bloated and inefficient. Look at the operating ratio over time between CP and it's direct competitor CN - the lower the better. https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/Capture.png https://corpgov.law.harvard.edu/wp-content/uploads/2016/12/C... CP was languishing until Ackman fired their CEO in 2011 and put Hunter Harrison at the helm.
    - silexia 5y ago
      So paying employees the minimum amount possible is efficient to you? Maybe it results in better short-term profits, but it destroys the company long-term.
      - JumpCrisscross 5y ago
        > paying employees the minimum amount possible is efficient to you? Did pay go down? I don't think that's accurate. Paying a bunch of excess employees, yes, that's not efficient. That's practically textbook inefficient. Are we really on a forum run by a VC debating capitalism?
        crmd 5y ago
        There are plenty of capitalists who believe one of the several purposes of a company is to provide meaningful jobs in the communities in which they operate. When company owners cut the payroll to hoard profits, the remaining employees have to work harder for the same salary. It is the literal definition of the investor class siphoning wealth from the working class.
        5y ago
- wpietri 5y ago
  It seems a bit rich to look at a climate crisis created by current capitalism's "privatize the gains, socialize the losses" approach, note one recent small change nominally driven by a small subset of investors, and then declare investors actually good. If you count all the times a major oil company made a climate-worsening choice because investors demand profits, and then count the choices like the one you point at, I'd expect it would be 99.9% the former. And I'll note that the link you give does not include actually "reducing carbon emissions". They're promising to invest more in research. How will they pay for that? Selling more oil. So even if they do the research and even if something comes of it, there's no particular reason to think that on net this choice will reduce total atmospheric carbon.
  - JumpCrisscross 5y ago
    > If you count all the times a major oil company made a climate-worsening choice because investors demand profits, and then count the choices like the one you point at, I'd expect it would be 99.9% the former Sorry, do non-market economies have a better track record when it comes to the environment? Eastern Europe says no [1]. Pollution intensity metrics relative to private property rights say no [2]. I cherry picked examples for narrative value. I didn't realize what I took to be an extremist claim--the less influence investors have over private companies the better--had so much purchase. [1] https://documents1.worldbank.org/curated/en/807441493305588896/pdf/Environmental-management-in-centrally-planned-non-market-economies-of-Eastern-Europe.pdf https://documents1.worldbank.org/curated/en/8074414933055888... [2] https://mpra.ub.uni-muenchen.de/48717/1/MPRA_paper_48717.pdf https://mpra.ub.uni-muenchen.de/48717/1/MPRA_paper_48717.pdf
    - wpietri 5y ago
      What you're doing here is creating a false dichotomy. Eastern Europe is (or at least was) worse because the problem -- elites extracting wealth regardless of consequences to others -- was worse there. But it's not like self-interested elites capturing both economic and regulatory problems isn't a problem here. Indeed, in now might be worse here. The two choices available aren't eco-collapse in the 1980s American greed-is-good capitalism style or the 1980s Eastern Europe totalitarian style. There are more things, Horatio. But if you spend all your time cherry-picking citations to soothe your fundamentalist capitalism feelings, you're not going to see them.
- marvin 5y ago
  Greenhouse gas emissions and climate change has nothing to do with ownership structure. Employee-owned companies make just as selfish decisions as investor-owned companies, and if they didn't, they'd lose to the competition if they tried to do the altruistic thing. These are separate questions; the solution to greenhouse gas emissions is globally-enforced taxes on emissions with the tax used to reverse the emissions.
lr4444lr 5y ago
Honestly. Some people are just impossible to please short of every company becoming a completely worker owned cooperative.
- wpietri 5y ago
  Sounds good to me. I've seen so much dysfunction generated by distorting companies to please executives and investors. I'd love to see what different approaches produce. I'd hope it would be better, but at least we could get some variety in pathology, and society wouldn't just take this generation's dominant paradigm as perfect and eternal. For those interested in the topic, I recommend reading "A Lapsed Anarchist's Approach to Building a Great Business". [1] Years ago a grad student went to the University of Michigan to study their large collection of anarchist literature. As a sideline, he started the now-legendary Zingerman's Deli. Over the years, it spun off a large collection of associated businesses, each run by some of the workers. Lots of interesting ideas, ones backed by real-world success. '1] https://www.zingermans.com/Product/zingermans-guide-to-good-leading-part-1-a-lapsed-anarchists-approach-to-buildi/P-ARI-12 https://www.zingermans.com/Product/zingermans-guide-to-good-...
  - JumpCrisscross 5y ago
    > I'd love to see what different approaches produce Worker-owned companies exist: they're called partnerships. Just add a line requiring all employees be shareholders so the partners can't hire staff. Lots of construction companies are organized like this. (Wholly employee-owned firms were more popular before WWII [1].) I don't see any evidence that they pursued profits less furiously than investor-owned competitors. ESOPs have been more successful [2]. Outside the domain of highly-skilled artisans, it turns out most employees--like most shareholders--don't want to do the work of being an investor. That results in the sort of clubbiness that will be familiar to anyone who has been involved in small-town politics. [1] https://heinonline.org/HOL/LandingPage?handle=hein.journals/month101&div=100&id=&page= https://heinonline.org/HOL/LandingPage?handle=hein.journals/... [2] https://hbr.org/1987/09/how-well-is-employee-ownership-working https://hbr.org/1987/09/how-well-is-employee-ownership-worki...

deleted 5y ago

[deleted]

xwdv 5y ago

Lying about the fact that you are making a startup to become rich is not the definition of a “good founder”.

MomoXenosaga 5y ago

The techno priests are just as bad as the old ones.