4 ms·

This is certainly true, but innovators are stymied in good old California as well. Try tackling a serious problem, such as finance, and you'll find that your in

This is certainly true, but innovators are stymied in good old California as well. Try tackling a serious problem, such as finance, and you'll find that your innovation breaks a recently passed law. That won't stop someone in Shanghai from copying your work, though. http://www.1jton.com http://www.1jton.com = http://www.facecash.com http://www.facecash.com So who's innovating now?

jessedhillon 15y ago
This is a simplistic view. The law -- which requires payment processors to have some large sum of money, $500k I think, in the bank -- doesn't prevent innovation. There are still plenty of innovators in the payments space. What you don't have is a space frothing with activity and losing the public's money in fly-by-night schemes run by college sophomores. This sort of thing is what the law aims to prevent. It's not anywhere close to the situation in China. Serious problems are being challenged here in CA and in the US at large. I'm sorry you decided to shut down your startup in CA to protest the law. However, it is not the situation that the entire startup scene is defunct, or that we're hurtling headlong into an authoritarian regime a la China.
- briandear 15y ago
  You're completely correct. Just getting a business license in China takes a bribe and months of red stamping. Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.)
  - Volpe 15y ago
    > Just getting a business license in China takes a bribe and months of red stamping. Do you have any evidence of this? From my time in china, I see a massive entrepreneur spirit. In fact everyone I spoke to was starting a business of some kind. What colour stamps do you use in the U.S? Are they somehow superior to red ones? > Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.) Any evidence of that as well? I would 'guess' that it is more related to the fact that there is so much low hanging fruit in the chinese economy right now, that innovation just isn't required to run a successful business.
    - rblackwater 15y ago
      Who were you speaking to? I just recently managed to convince my (Chinese) wife that trying and failing her own online business would be better than working as someone's slave in an industry she doesn't even like. And our friends here are too busy trying to live on the small monthly salaries they get to even consider taking a risk with a startup. ...let alone the fact if you have a successful internet startup, someone with more resources will make a carbon copy of it and there's not much you can do to shut it down.
      - Volpe 15y ago
        ... are you seriously positing it is "too hard" to start a business in China (the fastest growing economy in the world)? > let alone the fact if you have a successful internet startup, someone with more resources will make a carbon copy of it and there's not much you can do to shut it down. Because that never happens in the U.S? I can think of a number of examples just off the top of my head. But I'm worried I'm confusing your point.
- thinkcomp 15y ago
  Not quite. Yours is a simplistic interpretation of a complex problem. The problem is that the large sum of money is not $500K, which is the amount written in the statute, or $500K "in the bank," which is different from $500K in net assets. It's some other much higher number that isn't in writing and is completely up to a single bureaucrat's discretion. (See http://www.americanbanker.com/issues/176_126/think-computer-mobile-payments-california-1039623-1.html http://www.americanbanker.com/issues/176_126/think-computer-.... "A department spokeswoman says the actual amount needed is 'more than $1 million.'" I was told in person that the number is between $1 million and $80 million.) Even the Senior Counsel for the California DFI admitted that this dynamic reminded him of an authoritarian regime--but he's powerless to change it. I didn't "decide" to shut down my startup to protest a law. The law shut down the startup. Corruption in the United States looks different than it does in other countries. In other countries bribes are overt and expected. In the United States bribes are written into the law to serve an upper class that prices legal services out of most people's reach.
  - jessedhillon 15y ago
    I also have researched requirements for becoming a licensed money transmitter, while considering starting a payments solution. From looking over your website and your company's topic in Quora, you are clearly more educated in this than I am. However, from what I know, I believe that you are mischaracterizing the law. Perhaps this is because you feel that you have been victimized by a bureaucratic process. If what you say here and elsewhere is true, I think that it should have been possible to reach a solution that both satisfies the law and allows you to continue doing business. It's very surprising that, in so many places across the web, you have been unable or unwilling to vocalize the possibility that the law has a legitimate intent. Even the language you use to describe your company's lack of presence in CA is misleading: The California Money Transmission Act has forced this merchant to stop accepting FaceCash payments. You can still pay with other payment methods. No. You have decided not to comply with the law because you object to its passing, to the entities you perceive to be backing the law, to its constitutionality, and to its implementation. As evidenced by the fact that other startups do tackle the payments space, and will in the future, we can conclude that the situation has more to do with you than with the Act.
- ramanujan 15y ago
  Logical fallacy. The fact that some payment processors still exist does not overcome the prima facie fact that at least one startup (and probably more than one) was put out of business by this law. Thus, if you agree that startups are engines of innovation, innovation was prevented. If you support a regulation you must be intellectually honest enough to acknowledge its empirical costs in addition to claiming its theoretical benefits.
mikefox 15y ago
And it isn't just IT. Isn't it illegal in California and New York to use services like 23andMe because of state laws mandating that DNA tests can only be performed by "doctor's order"? If I, in New York, want to mail my DNA to 23andMe legally, I must cross the Hudson to New Jersey and mail from a post office there. The law will always be far behind what innovation demands.
hugh3 15y ago
An iron-clad law of the internet: if you complain about how X sucks in country Y, you'll inevitably just wind up with a thread full of comments about how X sucks in the USA.
- Volpe 15y ago
  That so needs to be one of the 'rules of the internet' (if it isn't already) http://knowyourmeme.com/memes/rules-of-the-internet#.TpJshTnpOec http://knowyourmeme.com/memes/rules-of-the-internet#.TpJshTn...

jessedhillon 15y ago

This is a simplistic view. The law -- which requires payment processors to have some large sum of money, $500k I think, in the bank -- doesn't prevent innovation. There are still plenty of innovators in the payments space. What you don't have is a space frothing with activity and losing the public's money in fly-by-night schemes run by college sophomores. This sort of thing is what the law aims to prevent. It's not anywhere close to the situation in China. Serious problems are being challenged here in CA and in the US at large. I'm sorry you decided to shut down your startup in CA to protest the law. However, it is not the situation that the entire startup scene is defunct, or that we're hurtling headlong into an authoritarian regime a la China.

briandear 15y ago
You're completely correct. Just getting a business license in China takes a bribe and months of red stamping. Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.)
- Volpe 15y ago
  > Just getting a business license in China takes a bribe and months of red stamping. Do you have any evidence of this? From my time in china, I see a massive entrepreneur spirit. In fact everyone I spoke to was starting a business of some kind. What colour stamps do you use in the U.S? Are they somehow superior to red ones? > Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.) Any evidence of that as well? I would 'guess' that it is more related to the fact that there is so much low hanging fruit in the chinese economy right now, that innovation just isn't required to run a successful business.
  - rblackwater 15y ago
    Who were you speaking to? I just recently managed to convince my (Chinese) wife that trying and failing her own online business would be better than working as someone's slave in an industry she doesn't even like. And our friends here are too busy trying to live on the small monthly salaries they get to even consider taking a risk with a startup. ...let alone the fact if you have a successful internet startup, someone with more resources will make a carbon copy of it and there's not much you can do to shut it down.
    - Volpe 15y ago
      ... are you seriously positing it is "too hard" to start a business in China (the fastest growing economy in the world)? > let alone the fact if you have a successful internet startup, someone with more resources will make a carbon copy of it and there's not much you can do to shut it down. Because that never happens in the U.S? I can think of a number of examples just off the top of my head. But I'm worried I'm confusing your point.
thinkcomp 15y ago
Not quite. Yours is a simplistic interpretation of a complex problem. The problem is that the large sum of money is not $500K, which is the amount written in the statute, or $500K "in the bank," which is different from $500K in net assets. It's some other much higher number that isn't in writing and is completely up to a single bureaucrat's discretion. (See http://www.americanbanker.com/issues/176_126/think-computer-mobile-payments-california-1039623-1.html http://www.americanbanker.com/issues/176_126/think-computer-.... "A department spokeswoman says the actual amount needed is 'more than $1 million.'" I was told in person that the number is between $1 million and $80 million.) Even the Senior Counsel for the California DFI admitted that this dynamic reminded him of an authoritarian regime--but he's powerless to change it. I didn't "decide" to shut down my startup to protest a law. The law shut down the startup. Corruption in the United States looks different than it does in other countries. In other countries bribes are overt and expected. In the United States bribes are written into the law to serve an upper class that prices legal services out of most people's reach.
- jessedhillon 15y ago
  I also have researched requirements for becoming a licensed money transmitter, while considering starting a payments solution. From looking over your website and your company's topic in Quora, you are clearly more educated in this than I am. However, from what I know, I believe that you are mischaracterizing the law. Perhaps this is because you feel that you have been victimized by a bureaucratic process. If what you say here and elsewhere is true, I think that it should have been possible to reach a solution that both satisfies the law and allows you to continue doing business. It's very surprising that, in so many places across the web, you have been unable or unwilling to vocalize the possibility that the law has a legitimate intent. Even the language you use to describe your company's lack of presence in CA is misleading: The California Money Transmission Act has forced this merchant to stop accepting FaceCash payments. You can still pay with other payment methods. No. You have decided not to comply with the law because you object to its passing, to the entities you perceive to be backing the law, to its constitutionality, and to its implementation. As evidenced by the fact that other startups do tackle the payments space, and will in the future, we can conclude that the situation has more to do with you than with the Act.
ramanujan 15y ago
Logical fallacy. The fact that some payment processors still exist does not overcome the prima facie fact that at least one startup (and probably more than one) was put out of business by this law. Thus, if you agree that startups are engines of innovation, innovation was prevented. If you support a regulation you must be intellectually honest enough to acknowledge its empirical costs in addition to claiming its theoretical benefits.

mikefox 15y ago

And it isn't just IT. Isn't it illegal in California and New York to use services like 23andMe because of state laws mandating that DNA tests can only be performed by "doctor's order"? If I, in New York, want to mail my DNA to 23andMe legally, I must cross the Hudson to New Jersey and mail from a post office there. The law will always be far behind what innovation demands.

hugh3 15y ago

An iron-clad law of the internet: if you complain about how X sucks in country Y, you'll inevitably just wind up with a thread full of comments about how X sucks in the USA.

Volpe 15y ago
That so needs to be one of the 'rules of the internet' (if it isn't already) http://knowyourmeme.com/memes/rules-of-the-internet#.TpJshTnpOec http://knowyourmeme.com/memes/rules-of-the-internet#.TpJshTn...