4 ms·

Wow, truly breathtaking that you managed to squeeze a claim of creating Facebook in there. Have you considered that maybe if you were more willing to break stu

by staunch 15y ago

Wow, truly breathtaking that you managed to squeeze a claim of creating Facebook in there. Have you considered that maybe if you were more willing to break stupid bureaucratic rules you wouldn't run into these roadblocks? It's not even clear the law applies to you and very unlikely anyone is going to care unless you're successful (at which point it would be worth fighting over). PayPal was arguably breaking all kinds of esoteric banking laws when they started. They were getting constant threats from state attorneys. In the end they worked it all out.

thinkcomp 15y ago
I don't assume that politicians know anything about me. Context can be helpful in getting a message across. PayPal started before the USA PATRIOT Act made it a federal crime to violate state money transmission statutes. Max and Peter weren't looking at jailtime in 1999. Entrepreneurs (and investors, and directors) today in this space who break the rules are. Besides which the California law only went into effect this July, twelve years after PayPal started. Also, it's extremely clear that the law does apply to us; that's why we were able to get an exemption order.
- staunch 15y ago
  1. Take the risk anyway. 2. Change your idea. 3. Spend the next year trading letters with bureaucrats. What Would Zuck Do?
  - thinkcomp 15y ago
    Though I generally disagree, you really might want to think twice before using that last line with me.
    - staunch 15y ago
      You can argue and still have a sense of humor :-)
      - thinkcomp 15y ago
        That's a pretty mean-spirited brand of humor then.
        staunch 15y ago
        Sorry then. I mean it sincerely though. Why are you letting yourself get bogged down in bureaucracy when you believe it was your undoing at Harvard? Every day you spend on this is a day lost to making your startup successful.
        thinkcomp 15y ago
        No one "lets" themselves get bogged down in it. Bureaucracy happens, as it did in this case, when you aren't planning on it. (This law only recently went into effect and didn't exist in 2009 when I started on FaceCash.) I keep going because when it does happen, it's a sign that you're onto something important. If anything, I think it's a shame that more startups don't tackle problems like these.
temphn 15y ago
While you might be willing to break stupid bureaucratic rules, your investors won't be. You also assume that these regulators are lax in their enforcement. Make no mistake, the current administration wants to regulate the heck out of everything and everyone...especially in the financial sector. The will to enforce is most certainly there today, and the moment you get a little bit of press (not even necessarily bad press) everyone, including your competitors, will check to see if you have the necessary certificates on file. If not, they will just narc on you to the regulatory authorities...who they are on a first name basis with, as they have known them for years. And if you get bad press, you can't just ride it out. Reporters will strip away all context and ask: "why is an unlicensed payment processor allowed to do business in the State of California"? Especially when prompted by the press or their friends, regulators can spring into action out of nowhere and levy a host of civil and criminal penalties, up to but not limited to pulling your product from the market and freezing your assets so you can't meet payroll. So, in short, you don't want to screw around with regulators under this administration. They treat businesses a LOT more harshly than college students. Indeed, no less an authority than Peter Thiel himself has commented that it might be impossible to clone Paypal today as the bridge seems to have been pulled up behind them: http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-with-peter-thiel-investor-and-philanthropist-q-a/ http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-... CNET: I wrote a retrospective piece for CNET recently about how significant the post-9/11 regulatory shift was, especially when it comes to privacy. Thiel: It's not exactly clear to me whether Paypal could be built as a business today. That may be too strong.... As a startup, these kinds of regulations are much more onerous. Paypal was able to be built at a time that was pre-9/11 on a regulatory basis. Post-9/11 it would be much more difficult to build. It makes the franchise more valuable. I think no competitors will ever be built.
- jeffreymcmanus 15y ago
  There are plenty of investors willing to back businesses that operate in legal grey areas. There are countless examples of this.
  - thinkcomp 15y ago

by staunch 15y ago

thinkcomp 15y ago

I don't assume that politicians know anything about me. Context can be helpful in getting a message across. PayPal started before the USA PATRIOT Act made it a federal crime to violate state money transmission statutes. Max and Peter weren't looking at jailtime in 1999. Entrepreneurs (and investors, and directors) today in this space who break the rules are. Besides which the California law only went into effect this July, twelve years after PayPal started. Also, it's extremely clear that the law does apply to us; that's why we were able to get an exemption order.

staunch 15y ago
1. Take the risk anyway. 2. Change your idea. 3. Spend the next year trading letters with bureaucrats. What Would Zuck Do?
- thinkcomp 15y ago
  Though I generally disagree, you really might want to think twice before using that last line with me.
  - staunch 15y ago
    You can argue and still have a sense of humor :-)
    - thinkcomp 15y ago
      That's a pretty mean-spirited brand of humor then.
      - staunch 15y ago
        Sorry then. I mean it sincerely though. Why are you letting yourself get bogged down in bureaucracy when you believe it was your undoing at Harvard? Every day you spend on this is a day lost to making your startup successful.
        thinkcomp 15y ago
        No one "lets" themselves get bogged down in it. Bureaucracy happens, as it did in this case, when you aren't planning on it. (This law only recently went into effect and didn't exist in 2009 when I started on FaceCash.) I keep going because when it does happen, it's a sign that you're onto something important. If anything, I think it's a shame that more startups don't tackle problems like these.

temphn 15y ago

While you might be willing to break stupid bureaucratic rules, your investors won't be. You also assume that these regulators are lax in their enforcement. Make no mistake, the current administration wants to regulate the heck out of everything and everyone...especially in the financial sector. The will to enforce is most certainly there today, and the moment you get a little bit of press (not even necessarily bad press) everyone, including your competitors, will check to see if you have the necessary certificates on file. If not, they will just narc on you to the regulatory authorities...who they are on a first name basis with, as they have known them for years. And if you get bad press, you can't just ride it out. Reporters will strip away all context and ask: "why is an unlicensed payment processor allowed to do business in the State of California"? Especially when prompted by the press or their friends, regulators can spring into action out of nowhere and levy a host of civil and criminal penalties, up to but not limited to pulling your product from the market and freezing your assets so you can't meet payroll. So, in short, you don't want to screw around with regulators under this administration. They treat businesses a LOT more harshly than college students. Indeed, no less an authority than Peter Thiel himself has commented that it might be impossible to clone Paypal today as the bridge seems to have been pulled up behind them: http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-with-peter-thiel-investor-and-philanthropist-q-a/ http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-... CNET: I wrote a retrospective piece for CNET recently about how significant the post-9/11 regulatory shift was, especially when it comes to privacy. Thiel: It's not exactly clear to me whether Paypal could be built as a business today. That may be too strong.... As a startup, these kinds of regulations are much more onerous. Paypal was able to be built at a time that was pre-9/11 on a regulatory basis. Post-9/11 it would be much more difficult to build. It makes the franchise more valuable. I think no competitors will ever be built.

jeffreymcmanus 15y ago
There are plenty of investors willing to back businesses that operate in legal grey areas. There are countless examples of this.
- thinkcomp 15y ago