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This is brilliant. Instead of saving on labor costs by pretending your employees are contractors like Uber and friends, they go in the opposite direction. You'

This is brilliant. Instead of saving on labor costs by pretending your employees are contractors like Uber and friends, they go in the opposite direction. You're not a contractor, or even an employee, but an owner. Just imagine how big your milkshake will be once you all own 80% of the business! Admittedly, a business where this company has slurped out most of the value and saddled you with various software license fees or whatever in perpetuity. But a business nonetheless. And now when the business goes belly up and these owners are destitute, the HN logic applies-- hey man, most businesses fail. So why not just learn some python and code up some nice fintech that extracts value from other rubes?

robertlagrant 3y ago
> the HN logic applies-- hey man, most businesses fail. So why not just learn some python and code up some nice fintech that extracts value from other rubes? I haven't really seen this here. Is there any need to perpetuate such silly stereotypes?
- googlryas 3y ago
  Right, I would more ascribe that viewpoint to some journos on Twitter. I think if that viewpoint is referenced on HN, it is done so derisively.
  - robertlagrant 3y ago
    It was a big thing ten years ago - why not learn to code if your job has gone overseas? At the point Mayor Bloomberg tweeted something about learning to code, it seems Jeff Atwood felt it was time to weigh in[0]. [0] https://blog.codinghorror.com/please-dont-learn-to-code https://blog.codinghorror.com/please-dont-learn-to-code
    - borski 3y ago
      I think the point is that it wasn’t big on HN.
      - robertlagrant 3y ago
        I was saying it wasn't just some "journos on Twitter".
        borski 3y ago
        Fair.
        googlryas 3y ago
        Saying "learn to code" is different from "oh, you got laid off of your trucking job? Learn to code"
        robertlagrant 3y ago
        It is, but it was the latter that was being said, IIRC.
        googlryas 3y ago
        But not by Bloomberg. He was saying a version of "Everyone should know how to code!"
deleted 3y ago
[deleted]
grensley 3y ago
It feels like marketing sleight-of-hand. Like "you own the house, but you have to rent the walls from us".
- dylan604 3y ago
  Or the real world situation that happens to people, you own the domicile, but we own the land it is on
- jimt1234 3y ago
  That's my feeling, too. It reminds me of a scene in "The Founder", the movie about McDonalds: "You're not in the burger business. You're in the real estate business."
jancsika 3y ago
Replying to my own comment because I just can't get over how ingenious this is. On HN we're used to FOSS devs acting quickly when, say, a proposed or implemented license change turns project X into project X'. Upon reading the diff, they'll fork from X and continue on with a new org, and X' dies on the vine. We've seen it recently on HN. Employees of a mom and pops have specialized skills either in the frontend or backend of the business but typically only a basic idea of the fundamental business model. If they were to become owners in X it would take them at least a year and probably longer to learn the ins and out. E.g., how a change to even a few vendors can have a large effect on the bottom line. If they think they are getting X but instead get X', they won't know for awhile. In fact, if were talking about succession then the owner may be gone and they'll never know. Perhaps I'm being cynical and fintech really is here to help the little guy. But something tells me that's unlikely.
- 3np 3y ago
  Them setting terms for insurance and likely de-facto cotrolling all the firms' financial capabilities through their mandated fintech services surely helps hedging the risk, too.
- busterarm 3y ago
  Being an owner in a business is a typical way to route around labor laws completely. If you're a restaurant or retailer that needs your staff to work 14 hour days 7 days a week, giving ownership is a fairly common scheme to CYA against future lawsuits. The ownership shares are usually miserly and forced-transferrable upon leaving. Not saying that's what's happening here, but it could be.
  - lotsofpulp 3y ago
    Labor laws are for employer-employee relationships. You cannot simply “give” some of your employees shares and then disregard labor laws. If someone wants to work 14 hour days 7 days a week so that their shares are worth more, that is their choice.
    - 3y ago
AlbertCory 3y ago
Unfortunately, most mom-and-pop businesses are around because they've built a clientele, hired good employees, and mastered the basic economics in their local economy, which is all they need. Sophisticated fintech for them is just a frippery, as is big-time professional management.
- edmundsauto 3y ago
  I would bet the weaknesses of most mom and pops, and where professional management excels, is in the efficiency and vendor relationships. Lots of small mom and pop places pay exorbitant amounts for things like credit card processing, cash management and banking, tech, inventory management, etc. If team shares can be a good partner to complement the strengths of the small business owners, they can increase the profitability significantly. By leaving the community element in place, theoretically it could be the best of both worlds.
  - AlbertCory 3y ago
    "theoretically" doing a lot of work there. Also: "Lots of small mom and pop places pay exorbitant amounts for things like credit card processing, cash management and banking, tech, inventory management, etc." is totally unsubstantiated. Like they're too stupid to know what they're doing? We'll have no trouble at all finding stories of old businesses that changed ownership to a soulless group of MBA's, the customers heard about it, complained that it wasn't the same anymore, and quit coming. I doubt you can find many stories going the other direction.
    - edmundsauto 3y ago
      Edit, never mind, prefer not to engage here.
MatthiasPortzel 3y ago
It’s a whole 6th viral growth method. Buy companies and force them to use your product before spinning them off. (Emmet Shear’s 5 viral growth methods: https://twitter.com/eshear/status/1402449655208632321 https://twitter.com/eshear/status/1402449655208632321)
- MatthiasPortzel 3y ago
  Past the window where I can edit the comment, but Emmett (like Matthias) has two T’s.
99_00 3y ago
What's the difference between this and a franchise?
adrianmonk 3y ago
> saddled you with various software license fees or whatever in perpetuity Are they necessarily forced into it for perpetuity? Once they transition to 80% employee ownership (or 51%), don't the employee-owners decide whether to continue? Unless there's some kind of non-voting ownership stake or contract that never expires or something. Plus, 20 years is the timeline to transition to employee ownership. So for the first 10 years, if the acquired business pays software license fees, the parent company is mostly paying itself, which isn't revenue. More importantly, that means whatever tech stuff they supply to the acquired companies needs to actually pull its weight. It seems more likely they just want to keep proven businesses going so they can tap into that established revenue year after year. Giving ownership to the employees probably helps with retention and continuity so that the company doesn't fail after being sold. The corner pizza shop's customers still see familiar faces, the plumbing company's customers still recommend them to neighbors, etc. People don't say, "It used to be good, but it's not the same since it was bought." The point of handing over 80% is keeping the goose healthy to keep laying golden eggs. Yes, being a supplier to these companies you own 20% of is some nice gravy. But you also want the revenue (and expansion), so you really can't bleed them dry.
bryanrasmussen 3y ago
>Admittedly, a business where this company has slurped out most of the value and saddled you with various software license fees or whatever in perpetuity. But a business nonetheless. didn't I see an episode of The Sopranos where this was the plot, albeit in mafia dress.
deleted 3y ago
[deleted]

robertlagrant 3y ago

> the HN logic applies-- hey man, most businesses fail. So why not just learn some python and code up some nice fintech that extracts value from other rubes? I haven't really seen this here. Is there any need to perpetuate such silly stereotypes?

googlryas 3y ago
Right, I would more ascribe that viewpoint to some journos on Twitter. I think if that viewpoint is referenced on HN, it is done so derisively.
- robertlagrant 3y ago
  It was a big thing ten years ago - why not learn to code if your job has gone overseas? At the point Mayor Bloomberg tweeted something about learning to code, it seems Jeff Atwood felt it was time to weigh in[0]. [0] https://blog.codinghorror.com/please-dont-learn-to-code https://blog.codinghorror.com/please-dont-learn-to-code
  - borski 3y ago
    I think the point is that it wasn’t big on HN.
    - robertlagrant 3y ago
      I was saying it wasn't just some "journos on Twitter".
      - borski 3y ago
        Fair.
      - googlryas 3y ago
        Saying "learn to code" is different from "oh, you got laid off of your trucking job? Learn to code"
        robertlagrant 3y ago
        It is, but it was the latter that was being said, IIRC.
        googlryas 3y ago
        But not by Bloomberg. He was saying a version of "Everyone should know how to code!"

deleted 3y ago

[deleted]

grensley 3y ago

It feels like marketing sleight-of-hand. Like "you own the house, but you have to rent the walls from us".

dylan604 3y ago
Or the real world situation that happens to people, you own the domicile, but we own the land it is on
jimt1234 3y ago
That's my feeling, too. It reminds me of a scene in "The Founder", the movie about McDonalds: "You're not in the burger business. You're in the real estate business."

jancsika 3y ago

Replying to my own comment because I just can't get over how ingenious this is. On HN we're used to FOSS devs acting quickly when, say, a proposed or implemented license change turns project X into project X'. Upon reading the diff, they'll fork from X and continue on with a new org, and X' dies on the vine. We've seen it recently on HN. Employees of a mom and pops have specialized skills either in the frontend or backend of the business but typically only a basic idea of the fundamental business model. If they were to become owners in X it would take them at least a year and probably longer to learn the ins and out. E.g., how a change to even a few vendors can have a large effect on the bottom line. If they think they are getting X but instead get X', they won't know for awhile. In fact, if were talking about succession then the owner may be gone and they'll never know. Perhaps I'm being cynical and fintech really is here to help the little guy. But something tells me that's unlikely.

3np 3y ago
Them setting terms for insurance and likely de-facto cotrolling all the firms' financial capabilities through their mandated fintech services surely helps hedging the risk, too.
busterarm 3y ago
Being an owner in a business is a typical way to route around labor laws completely. If you're a restaurant or retailer that needs your staff to work 14 hour days 7 days a week, giving ownership is a fairly common scheme to CYA against future lawsuits. The ownership shares are usually miserly and forced-transferrable upon leaving. Not saying that's what's happening here, but it could be.
- lotsofpulp 3y ago
  Labor laws are for employer-employee relationships. You cannot simply “give” some of your employees shares and then disregard labor laws. If someone wants to work 14 hour days 7 days a week so that their shares are worth more, that is their choice.
  - 3y ago

AlbertCory 3y ago

Unfortunately, most mom-and-pop businesses are around because they've built a clientele, hired good employees, and mastered the basic economics in their local economy, which is all they need. Sophisticated fintech for them is just a frippery, as is big-time professional management.

edmundsauto 3y ago
I would bet the weaknesses of most mom and pops, and where professional management excels, is in the efficiency and vendor relationships. Lots of small mom and pop places pay exorbitant amounts for things like credit card processing, cash management and banking, tech, inventory management, etc. If team shares can be a good partner to complement the strengths of the small business owners, they can increase the profitability significantly. By leaving the community element in place, theoretically it could be the best of both worlds.
- AlbertCory 3y ago
  "theoretically" doing a lot of work there. Also: "Lots of small mom and pop places pay exorbitant amounts for things like credit card processing, cash management and banking, tech, inventory management, etc." is totally unsubstantiated. Like they're too stupid to know what they're doing? We'll have no trouble at all finding stories of old businesses that changed ownership to a soulless group of MBA's, the customers heard about it, complained that it wasn't the same anymore, and quit coming. I doubt you can find many stories going the other direction.
  - edmundsauto 3y ago
    Edit, never mind, prefer not to engage here.

MatthiasPortzel 3y ago

It’s a whole 6th viral growth method. Buy companies and force them to use your product before spinning them off. (Emmet Shear’s 5 viral growth methods: https://twitter.com/eshear/status/1402449655208632321 https://twitter.com/eshear/status/1402449655208632321)

MatthiasPortzel 3y ago
Past the window where I can edit the comment, but Emmett (like Matthias) has two T’s.

99_00 3y ago

What's the difference between this and a franchise?

adrianmonk 3y ago

> saddled you with various software license fees or whatever in perpetuity Are they necessarily forced into it for perpetuity? Once they transition to 80% employee ownership (or 51%), don't the employee-owners decide whether to continue? Unless there's some kind of non-voting ownership stake or contract that never expires or something. Plus, 20 years is the timeline to transition to employee ownership. So for the first 10 years, if the acquired business pays software license fees, the parent company is mostly paying itself, which isn't revenue. More importantly, that means whatever tech stuff they supply to the acquired companies needs to actually pull its weight. It seems more likely they just want to keep proven businesses going so they can tap into that established revenue year after year. Giving ownership to the employees probably helps with retention and continuity so that the company doesn't fail after being sold. The corner pizza shop's customers still see familiar faces, the plumbing company's customers still recommend them to neighbors, etc. People don't say, "It used to be good, but it's not the same since it was bought." The point of handing over 80% is keeping the goose healthy to keep laying golden eggs. Yes, being a supplier to these companies you own 20% of is some nice gravy. But you also want the revenue (and expansion), so you really can't bleed them dry.

bryanrasmussen 3y ago

>Admittedly, a business where this company has slurped out most of the value and saddled you with various software license fees or whatever in perpetuity. But a business nonetheless. didn't I see an episode of The Sopranos where this was the plot, albeit in mafia dress.

deleted 3y ago

[deleted]