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Flipping is Good. (aka Memo to Jason Fried: Sorry, You're Fucking Wrong.)
- johnnybgoode 17y agoNeither of them seem to realize or explain why flipping has actually become so common despite its questionable track record on actual value creation.
- davemc500hats 17y agoactually, the latter 1/3 of my post was about exactly that point. sorry if you missed it. and while likely more than half of all acquisitions don't actually "work", enough do to make it worth doing.
- johnnybgoode 17y agoNo, please read my comment again. The point is that your explanation is not complete or correct.
- apexauk 17y agodid anyone else get the irony of "flipping is good" as the title to an post full of alternative f-words..?
- ikitat 17y agoHe may make a good point, but I wouldn't know. I didn't get past the 8th f-bomb.
- gaius 17y agoSummary: Building a company and then selling it is a remarkable accomplishment regardless, and it is wrong to criticize Mint for not holding out for more.
- jhancock 17y agogood summary. Unfortunately, for Dave, noone would have paid any attention if he had written something so short and clear it could be sent through twitter.
- bingaman_ 17y agoI didn't get past the second picture of Gordon Gecko.
- borism 17y agoahh, just scroll down trough this shit and watch Gordon Gekko clip from the movie!
- jrockway 17y agoI didn't get past the 8th f-bomb. But at least you know how cool and edgy he is. Saying "fuck" in a blog post is totally sticking it to the man!
- potatolicious 17y agoI managed to get through the whole thing - and he does make some very good points. Suffice to say though, I would not let this man anywhere near a PR machine anytime soon. There are ways to express your point and influence people - dropping f-bombs like you just got into middle school is generally not one of them.
- idlewords 17y agoTextbook demonstration of why cocaine and <font> tags don't mix.
- sayrer 17y agoIt looks like a letter from a crazy person.
- jrockway 17y agoGood point! Take a look at how similar it is to this: http://www.timecube.com/ http://www.timecube.com/
- tlrobinson 17y agoThat's just Dave's style. Check out some of his slides... http://www.slideshare.net/dmc500hats/ http://www.slideshare.net/dmc500hats/
- chaosprophet 17y agoBoy, that's one pissed off fellow.
- CapitalistCartr 17y agoWow, now that is an excellent sample essay. On how to NOT write one.
- pavs 17y agoI like the way he reasons. Maybe the mint founder got scared of him and sold it out. 1) Fucking Wrong, and Irresponsible Conjecture & Hyperbole 2) Completely Fucking Wrong, and in fact Exactly the Opposite trend is going on, and finally 3) Wrong in most cases & crap advice for young entrepreneurs.
- edw519 17y agoThis was hilarious. The only thing missing was "You have until 1:36 p.m. on October 4, 2009, to BUY NOW!" (But that would have required a little js.) This is a great example of how not to blog: - Challenge a blog post of a successful member of the community. - Wait 2 weeks before responding to that blog post. - Insult him as often as possible, in as many ways as you can. - Swear like a sailor. - Brag about swearing like a sailor. - Co-opt images that have nothing to do with your point. - Have no point. - Make sure some of those images are vulgar. - Use red letters. - Use green letters. - USE ALL CAPS. - Swear some more. - Argue with your only commenter. (That oughta generate more feedback :-) - When all else fails, show your resume.
- chaosprophet 17y agoI find nothing wrong with challenging a successful member of the blogging community. Just because the guy started blogging a few years ago and has a successful startup does not mean that everything he says is always right. The other points are spot on though.
- tptacek 17y agoSometimes, taking on someone like Jason or Graham or Spolsky just comes across like coattail-riding. It's not that it's wrong to challenge them; it's that the mere fact that you're standing up to them shouldn't be the value proposition of your post.
- swombat 17y agoI don't think Dave needs to "stand up to Jason or Graham or Spolsky" to give more value to his opinion. He's got enough star power by himself, though oddly the people posting on here at the moment seem to be blind to it. See http://500hats.typepad.com/500blogs/about-dave-mcclure.html http://500hats.typepad.com/500blogs/about-dave-mcclure.html
- tptacek 17y agoMeh, you're probably right. I'm just saying, edw's point doesn't require us to believe that we should back down to "authorities".
- minsight 17y agoI thought it was tremendously entertaining, if a bit earthy. Kind of a financial Zed Shaw piece.
- yan 17y agoThis is a lame attempt to fill the void left by Zed's old persona.
- swombat 17y agoDave McClure doesn't need to "fill the void left by Zed's old persona", he already has his own place that he's quite comfortable in. See http://500hats.typepad.com/500blogs/about-dave-mcclure.html http://500hats.typepad.com/500blogs/about-dave-mcclure.html
- sachinag 17y agoThe important point of Dave's screed is at the bottom (and it's something every single person who has ever worked in VC and made the jump to the light side says this): for your first company, don't hold on too long - it's OK to sell out. Successfully selling out makes it ridiculously easy to raise money, strike partnerships, and do things your way the second time around. Hell, it probably gets you a third bite at the apple as well.
- JCThoughtscream 17y agoIs there anybody in this thread actually reading this essay seriously and weighing its merits, instead of dismissing it on superficial stylistic reasons? The man brings up interesting points regarding the Mint.com merger and how 37signals handled the news, f-bombs be damned. Especially in regards to the differing metrics of incentives for startups, VCs and preexisting competitors.
- dannyr 17y agoAgree. Dave can be very blunt sometimes. I saw him on a panel earlier this year and he's just very direct. It's refreshing to get very honest answers. Some people just play too nice just not to offend anybody.
- sofal 17y agoHere we go again with the fallacious nice == indirect argument. I've heard this over and over again and it never makes sense. Why do you think that it is necessary to go on an offensive rampage in order to be honest? Guess what? Some people actually don't hate everyone who disagrees with them and these people can be very blunt and honest without petty insults.
- callmeed 17y agoI wouldn't call this post "blunt" or "direct" It's got to be 2-3x the length of Jason's original post ... and poorly written
- philwelch 17y agoSomehow, adding various conjugations of the word "fuck" and the like into a blog post seems to make it longer and hence less direct. Direct is bluntly and baldly stating claims that people find offensive and outrageous. You don't need to throw in extra invective on top of that.
- GHFigs 17y agoIf your aim is to communicate ideas and not simply to offend, then it's a good thing to be willing to accept offending people with the ideas you express (e.g. disagreement, criticism, heresy). However, it's a bad thing for communication to offend people with things that aren't ancillary to those ideas, you fucking retard. See what I mean?
- TomOfTTB 17y agoHidden in the F-bombs and the wacky colors I think there is a good point here. There are entrepreneurs who love the start of a company (working 7 days a week, adding new functionality, etc...) and there are people who are good at (and sometimes love) maintaining a company once it's established itself (by creating moderate growth, doing a bunch of testing for each new feature, etc...) What flipping does is to allow the entrepreneurs to pass a company off to the maintainers once it moves beyond that startup phase
- ErrantX 17y agoThe word "fuck" only really works in a shock way the first few times; after that you just sound angry. Some good points got lost because of that. Young Entrepreneurs Should Sell Out Early I did that - not because I was forced but because the deal was good and I have plenty of other ideas to turn into countries. And I agree: it's a good thing. In fact I sold my second company - the first one crashed and burned. It was a useful experience because the oulay costs were 4 figure amounts and I had no employee's - so no one really lost out. Now I feel like I have had the right experiences and can make better decisions next time. Too often I think we see people offered vast sums of money with no idea really what to do with it. The successes we hear about are the multi-millionaires who make the right decisions (either through luck or skill) but Im sure there are plenty of others who failed. Im glad I got the chance when the worst setback I could face is being back at square one.
- drusenko 17y agowhen Dave says "sell out early" (and says "firesales don't count), he's talking about sales < $250M as "early", not $xxx,xxx or sub 5M deals.
- ErrantX 17y agoI know but the same principle stands, it's just a different scale :)
- jacquesm 17y agoNot sure about that. When I see the word 'sale' and 'exit' together in one sentence only to find out after a lot of digging that we're talking about a < $50K deal its painting a bad situation as a win-win. It means that a startup has basically failed, that there may be some technology that can be recycled or that the founder has enough street creds that they can convert their failed startup into a signing bonus and call it an acquisition.
- cridal 17y agoI don't know about you, but "whining like a little bitch" warrants a punch in the face where I come from... He makes some valid points, but this could have been written in a couple of paragraphs and without constant personal attacks. I'd like to see this guy hold his own in a one-on-one confrontation... Maybe this could be arranged?
- emcooke 17y agoProps to Dave. All the flowery language, pictures, and hyperbole generate great discussion and traffic. Dave is one of the most savvy investors and marketers around. When we were first pitching Twilio no one seemed to understand "marketing to developers" but he got it while half asleep from an all-nighter. If you curious about Dave's geek cred, scope his linkedin profile: * Investment Program Director at fbFund Incubator * Investor at Bit.ly * Investor at DailyBurn * Advisor at Life360 * Startup Investor (FF Angel Fund, fbFund Incubator) at Founders Fund * Advisor, Investor at Twilio * Organizer & Founder at Startup2Startup * Advisor at 750 Industries * Advisor, Angel Investor at SlideShare * Advisor, Angel Investor at TradeVibes * Advisor, Angel Investor at EventVue * Advisor, Angel Investor at Oortle * Angel Investor at RichRelevance * Advisor, Angel Investor at KISSmetrics * Advisor, Angel Investor, Boardmember at TeachStreet.com * Advisor, Consultant, Angel Investor at Mint Software * Advisor, Angel Investor at Mashery * Advisor at Kiva.org * Co-Founder, Boardmember at Silicon Valley Microfinance Network * Advisor, Angel Investor at Simply Hired * Angel Investor at Canopy Financial * Startup Advisor / Angel Investor at 500 Hats LLC And, if you head hasn't exploded from the colors in his blog check out his presentation style... in. your. face. http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version http://www.slideshare.net/dmc500hats/startup-metrics-for-pir...
- borism 17y agoI thought geek cred was achieved by actually building something technical with your own hands, not by being advisor/angel/marketer, but maybe things have changed nowadays...
- deleted 17y ago[deleted]
- NewWorldOrder 17y agoIs someone disagreeing with a member of 37siganls really that surprising? 37signals is a pretty opinionated bunch. At any rate, when Jason states in his post that he "doesn't know the full backstory," that signaled to me that I'm reading a post that's based on a premise that could be completely wrong. And I was okay with that because Jason appropriately couched his post.
- deleted 17y ago[deleted]
- st3fan 17y agoThis article would also be a good read without all the f-bombs.
- LeChuck 17y agoOn a side note (and totally off topic), the statues of two peeing guys are really cool. You can find them in Prague in front of the Kafka museum. http://www.davidcerny.cz/EN/piss.html http://www.davidcerny.cz/EN/piss.html David Cerny is a very cool artist overall. http://en.wikipedia.org/wiki/David_Cerny http://en.wikipedia.org/wiki/David_Cerny
- xanados 17y ago> Fact is, startups operate in a financial system that is inefficient, illiquid, and challenging to manage. Well, that's certainly true... > more transactions of any kind or size help improve overall startup ecosystem health. While more transactions in theory improves market efficiency (throughout this post, I will be using efficiency informally), in practice this fact doesn't matter. In order for the number of transactions to have any meaningful impact on the actual efficiency of the venture capital markets, the number of transactions would have to increase by a lot, not by the occasional Mint.com here and there. Take this as informed speculation, but I don't even think a doubling of transactions would have a meaningful impact on the efficiency on the market, because of the severe restraints regarding information and transparency. To see how this plays out in practice, just imagine that you are marketing your company for a round of financing. You may know the valuations and terms of a handful of other investments (and none that are directly comparable, in all likelihood) essentially from word of mouth or from the experiences of advisors/banks/investors (who also don't have very good information) and use those as a very rough benchmark, but in the end that handful is not at all representative. Even if you double that handful, it still isn't representative, at least, not enough to persuade anyone much more of the correct value. On the other hand, if companies were forced to make a regulatory filing that included 1. current revenue, 2. details on the round of financing (valuation, preferences, participation features, etc.), the effect would be much greater market efficiency even if number transactions stayed at the same level. The barriers are information-related rather than transaction-volume-related. > In the long-run, it benefits all system participants for small transactions to occur, because it makes the overall market more knowledgeable -- this in turn, reduces risk and encourages greater investment... which also encourages greater (overall) returns. Obviously you could argue this point either way (since there are a lot of definitions to play with in the above paragraph), but in truth, a more efficient, more liquid market doesn't benefit all system participants. It would certainly benefit entrepreneurs if there were greater transparency and efficiency, since they are definitely on the wrong side of information barriers. Greater market transparency tends to DECREASE investment returns in that market, because it removes a source of risk (and risk and returns are inversely related). It would probably encourage greater investment, but that could be increased even more by other means, and given venture capital returns over the last decade, it is not clear that this would be a net benefit for the economy. Additionally, the more dollars invested, the worse returns will be generally speaking (more dollars chasing fewer good ideas). But, he uses the word overall, so maybe he means overall returns including returns to entrepreneurs rather than capital sources, but that gets into even more murky territory. Just to be concrete, I'll give one example from another financial market. Prior to 2001, stocks traded in the US were traded in fractions of a dollar. The smallest quotation unit was 1/16, which means the smallest spread a market-maker would quote was 6.25 cents. The spread is how these firms make money. In exchange for always having shares available, they charge you (at least) 6.25 cents more for the share than they are willing to buy it from you. For decades, market-making was good business, but after decimal pricing was implemented, these spreads became much smaller, due to competition. Now, market-making activities are basically not a source of profit for financial firms. A regulation that lead to greater liquidity in the market was very much non beneficial to certain market participants, namely, market-makers (many of these were large institutions that you could argue benefited from bigger transaction volumes in other areas, but this is not always the case).
- nir 17y agoRemember when people in software were, in general, pretty thoughtful and self effacing?
- thenduks 17y agoJason Fried may be prone to harsh and honest writing but this isn't even in the same category. Honestly, take another look at 'The next generation bends over'[1]. Here's a quote: > A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential. Ok, interesting. What does David have to say about that? Actually, I wont post any quote from this article here because it's point is diluted by rambling, poor grammer and unnecessary profanity. Now, I'm usually the last person you'll see up in arms about swearing, afterall they're just fucking words. But it turns out words are best used to help get your point across not just for filling space (a lot of space, in this case). Jason's article was short, succint, made a point and was pretty clear about where he was coming from. You might not agree with it, and I might not agree with it... that's fine. But we can read it and discuss, there's no reason to fly off the handle and swear at the guy. Seriously, why so offended? Jason didn't say that Mint's sale was forced by the VC's, he was merely using his guess that it was to make a point about the current generation of startups... Namely the trend of aiming directly for the sellout instead of 'greatness'. His post wasn't even about Mint, the news and his opinion of it just prompted it. On the other hand this article is just plain vulgar, rude and doesn't add anything useful to the conversation. [1] http://37signals.com/svn/posts/1927-the-next-generation-bends-over