TheSkeptic's comments

"We treat this entire idea purely as a bonus in the unlikely even of a future sale/IPO."

At far too many companies, equity is seen by the employer and employee as a form of cash-equivalent compensation, even though it isn't unless that equity has an income stream attached to it (as would be the case in, say, a grant of restricted stock in a company that pays dividends). So it's somewhat refreshing to see a high-profile tech company eschewing this.

The problem here is that 37signals' "plan" lacks all substance. The company doesn't intend to go public or seek acquisition, and its "bonus pool" is potentially limited to just 5% of any acquisition price.

As such, this "plan" doesn't promote retention the way equity does, and for all intents and purposes, it doesn't promote much of anything as the savvy employee will never expect it to bear any fruit.

Put differently, this "plan" feels sort of like an equity version of a poorly-made Louis V. knock-off. While, to its credit, 37signals' isn't pitching this as a justification for a less-than-market salary, there's a strong argument to be made that offering an equity substitute like this is worse than not offering equity at all.

The better approach for a company like 37signals? Make sure salaries are highly-competitive, offer an attractive benefits package and, if you want employees to feel like they have a direct "stake" in the company's success, implement a profit sharing plan. The benefit of this approach is that you attract the type of employee who wants to work at a company like yours without creating any confusion on trying to pretend that you're offering something that you're not willing to offer.

You should do your research before making statements like "especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades."

Buffett didn't sit idly by while his holdings were threatened. He lobbied for, and supported, bailouts.

Not content with bailouts of companies he owned large stakes in, he made sweetheart deals to invest in Goldman Sachs and GE knowing what was going to happen. Have you ever explored those?

If his GS and GE investments aren't convincing enough, here are a few choice examples of the Oracle of Omaha's hypocrisy:

1. While he promotes higher tax rates for high-earning individuals, he lobbied against a tax that would have sought to recoup TARP losses from bailed-out banks (see http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-...).

2. Buffett once famously warned that derivatives were deadly, but when it came time to put his money where his mouth was, he lobbied against proposed derivatives regulations that would have cost Berkshire billions (see http://www.independent.co.uk/news/business/news/buffett-lobb...).

3. In 2010, Buffett once defended the ratings agencies (see http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-d...), but apparently he's only willing to defend them so long as they agree with him (see http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn...).

Bottom line: whatever one may have once thought about Warren Buffett, his actions over the past several years make it clear he is no investor, he is a corporatist. And quite a successful one at that.

Funny. Buffett certainly didn't mind a little coddling in 2008. He was arguably one of the largest individual beneficiaries of bailouts which shifted ungodly amounts of toxic debt from failed private institutions to taxpayers. See http://blogs.reuters.com/rolfe-winkler/2009/08/04/buffetts-b....

While it's now mighty generous of Buffett to invite the government to increase his taxes, he could spare us another (http://www.cnbc.com/id/40229527/Warren_Buffett_s_Letter_to_U...) nauseating and embarrassing New York Times op-ed and instead put his money where his mouth is. As another poster has noted, the Treasury will gladly cash Buffett's check (http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm).

"BART, which has its own police force, must be held to constitutional standards."

This sounds nice, but do you actually know what those Constitutional standards are?

First, as you seem to recognize, the area in which cell phone service was disrupted is what is considered a "nonpublic forum." The government has significant latitude to restrict speech in nonpublic forums, especially when the restriction is related to the function of that forum. Here, BART shut down cell phone service because it was informed that a group of "protesters", which had caused disruption to BART service in the past, was going to use cell phones to organize another disruption. According to reports, cell phones were to be used to communicate the locations of BART police officers to maximize the mob's ability to disrupt service.

Second, not all speech is due protection under the First Amendment. There is protected speech, and unprotected speech.Speech designed to incite violence or create a breach of the peace is not protected. There is substantial case law on this. Here, based on tweets like "We are going to show BART (@SFBART) how to prevent a riot #OpBART" and the past actions of this particular group of "protesters", it is clear that BART had a compelling reason to temporarily shut down cell phone service in its stations.

Finally, in this case, BART did not prevent this group of "protesters" from expressing ideas. It simply restricted, temporarily, a particular mode of delivery.

What about those who weren't planning to use their cell phones to incite a riot? Again, there is more latitude to restrict speech in nonpublic forums, and any restrictions here were content-neutral, narrowly drawn in terms of time, place and manner, and were for a compelling purpose (protecting public safety).

Bottom line: this is only a Constitutional issue if you have no understanding of the Constitution and First Amendment case law.

YC S11 Company Seeks Uber Python Dev

We're a young company that's so hot, we melt ice in our sleep. Some of our investors even believe we're responsible for global warming. Out hotness is to be expected: our 5 founders hail from top engineering schools, and one even won $5,000 in a single night playing online poker when he was 13 (for reals).

Our users? Cooler than a polar bear's toe nails. Think Tom from MySpace, but even cooler. They're young, they love technology and they all have fat bank accounts. Oh, they're all beautiful people too.

Our trajectory is clear: extreme penetration of a lucrative niche market in Year 1, and world domination in Year 2. We've already grown 500% in our first 2 weeks after launch. See http://yfrog.com/kfu2tcj

We're looking for an awesome Python developer with a big ego and low self-esteem. Someone who knows he's the sheeeeet but doesn't want to prove it at a big company that does lame stuff like QA. Someone who can down a can of Coke and a box of Mentos and then go on to devour a four-course meal of web-scale challenges the likes of which no other startup has ever faced. Seriously.

What do we offer? Put simply, The Life. As an early employee, you'll receive a salary that will enable you to rent a condo in Palo Alto with 3 other startup dude roommates, a huge equity stake that will be massively diluted as we raise new rounds of funding from some of the most respected angels and VCs in the Valley, and the ginormous confidence that comes with knowing you're changing the world one unique visitor at a time.

If you're ready to take your awesomeness to the next level and think you have what it takes to hang, send us an email at [email protected] and tell us why we shouldn't laugh at your Github account.

I think you miss the entire point of my comment. I am not suggesting that companies describe equity stakes in percentage or "you would make $x" terms (they can do neither), or that they provide anti-dilution protection to rank-and-file employees (it isn't going to happen). And while your assumption that nobody can afford to pay the tax on restricted stock grants is simply wrong, that's a different discussion.

Here's the bottom line: at a venture backed company, you will almost never know what your equity represents - in percentage or dollar amounts - until there's a liquidity event. As such, the value of the equity component of a compensation package should not be overestimated if you're a rank and file employee at a venture backed company. It should be treated like a lottery ticket because that's what it is.

1. Were your developers granted actual stock, or were they granted options?

2. Your company is angel-backed. If and when it wants or needs to raise additional funds, is the company obligated to protect said developers from dilution?

Assuming that you're a typical angel-backed company, the answers to these questions are "stock options" and "no." Which would mean that:

1. Your developers don't own anything.

2. Your developers don't have an equity interest (or potential equity interest) that they can trust will actually represent a specific percentage interest in ownership if and when their options are exercised.

I don't mean to pick on you, but your comment highlights two things:

1. Just how loosely the word own[ership] is used when it shouldn't be.

2. How percentages are used to inaccurately describe potential equity stakes when those potential equity stakes cannot be reliably translated into percentage-based (potential) ownership interests.

Dead on.

The problem with equity is that at most venture backed companies, rank and file employees don't know what percentage of the company their equity package represents, or could represent in the future. Naive employees (most of them younger) chasing startup riches often like to think in terms of "If I own 1% of the company and it sells for $500 million I'll be rich!" but if you ask them what ownership interest their 75,000 stock options might represent, they won't be able to tell you.

Employees who think "it's all about equity" would be wise to consider the following:

1. It should go without saying that if you're granted stock options, which is typical unless you're a founder, you don't actually own any portion of the company. A stock option is, obviously, simply an option to purchase stock at a fixed price at a future date.

2. Assuming your employment is at-will, you do not have control over the vesting of your stock options. You could be terminated at any time, including before a large portion (or even all) of your options vest.

3. Dilution is a fact of life at venture backed companies. If you join a company early, your expectation should be that you will be diluted, and significantly. This dilution can also be rapid (i.e. a dilutive new round of funding closes a month after you join the company).

4. There are plenty of ways the value of any equity you own (or may one day own) could be diminished. If your company is acquired, for instance, but the acquisition results in the exercise of a liquidation preference, it's conceivable that your equity will be be worthless, or of such minimal value as to be effectively worthless.

Bottom line: if you're not making six-figures and aren't already independently wealthy, which covers most of the young folks who think equity is an apples-to-apples substitute for salary, accepting a significant pay cut for "equity" is sort of like planning your financial future around the assumption that you'll one day win the lottery.

As they say, "one in the hand is worth two in the bush."

Under premises liability law, a tenant is generally responsible for personal injuries to guests, invitees and others (who are legally on the premises) if the tenant had control of the premises or was responsible for creating the dangerous condition that led to the injuries. IANAL but a quick Google search will provide you with the relevant statutes and case law.

If you sublet your apartment to a third party in violation of your lease and you fail to take reasonable security measures (verifying identities, conducting credit and background checks, signing agreements, etc.), you should expect to be sued for negligence if and when something goes wrong. Might you successfully argue that the injury in question was unforeseeable even under these circumstances? Sure, but you'll still lose because making that argument will be costly.

Finally, even if you somehow believe that there's no risk in subletting your apartment to strangers, you should consider alternative liability scenarios, like your guest suffering an injury while staying in your apartment. This too makes AirBnB a juicy target for cons, as it would be relatively easy to stage an accident with the intention of suing the host.

The net-net:

1. Being sued is an expensive hobby and anyone renting out his apartment to strangers to pocket a few extra bucks is always one guest away from discovering this.

2. There are good reasons most landlords forbid subletting.

AirBnB's guarantee doesn't affect this at all. Here's an example:

You rent an apartment and have a standard lease that forbids subletting. You travel a lot on business and decide to rent out your apartment for $150/night five days a month anyway. That's $750/month, or $9,000/year, in your pocket pre-tax. Not bad, but....

One day, you rent to an individual who happens to be a heavy drug user with a criminal record. You don't know this because you didn't perform any due diligence.

When your guest is confronted by one of your neighbors about a noise issue, he brutally assaults your neighbor. During the assault, your neighbor suffers major head trauma and is rushed to the hospital, where he undergoes emergency surgery in an attempt to save his life. Following the surgery, he is comatose and if he recovers at all, will require months if not years of rehabilitation. In the best case scenario, the doctors believe he will likely have some permanent brain damage that may prevent him from living a full, productive life.

When it comes to light that you were violating the terms of your lease and renting your apartment to complete strangers in exchange for money without doing any real due diligence on your guests, it's very likely you'll be sued by the victim's family. Needless to say, given the amount of damages you may owe if you're not successful in defending yourself, you're going to need a great lawyer. They don't come cheap. AirBnB's $50,000 guarantee? That only applies to damage due to vandalism or theft, but even if it applied to everything, won't even cover the cost of the victim's initial surgery.

Obviously, this is an extreme example, but it's well within the realm of possibility. There are plenty of other scenarios, less extreme, under which an individual could conceivably be personally liable for damages far in excess of what they will ever make using AirBnB, and far in excess of what AirBnB says it will cover.

By the way, AirBnB's guarantee is almost certainly not an insurance policy, even though the company (intentionally or unintentionally) is going to confuse people who don't understand the difference between a guarantee and an insurance policy.

As far as I know, AirBnB is not registered as an insurance company in any state, and I doubt very much that a legitimate insurance company would sell a policy for most AirBnB rentals without, at the very minimum, proof that the host has the authority to sublet and that he or she is not violating any local ordinances that apply to rentals and hotels.

AirBnB's fundamental flaw is that the potential costs (in the form of monetary losses) of renting out a home to a stranger far exceed the economic benefits that can ever be realized, particularly for hosts who are violating local laws and/or are violating the terms of a lease by subletting properties they don't own. These "features" do nothing to address this.

Voice Connect? Professional scammers are usually very persuasive if not downright charming. The ability to speak to a prospective guest will not deter experienced criminals.

Video Connect? These are for hosts only, but even if they were for prospective guests too, a professional con would have little problem putting together a convincing video.

References? These, obviously, are subject to gaming, but notwithstanding that, I doubt very much that a significant number of hosts are going to turn down an otherwise solid-looking guest who is "new" to AirBnB and doesn't have any references.

24/7 Hotline? If your AirBnB experience turns into a nightmare, you're probably better off making sure your first call is to your attorney.

"Offer me a decent salary" should be on the top of this list.

If you have a solid, established relationship with somebody technical, and he or she is interested in a startup endeavor, raising the possibility of going into business together is one thing. But if you have to "recruit" a technical co-founder because your social circle is void of competent technical people, the number of potential co-founders who will be eager to jump on board your boat without monetary compensation is probably fairly small.

Let's face it: the kind of person who would make for a good technical co-founder probably doesn't have any shortage of opportunities in today's market. So what's the appeal of a jumping in bed with a complete stranger if all that's on the table is equity and "salary upon funding"? There typically is none, which is why so many of the people trying to find a technical co-founder experience so much angst.

I think you missed the poster's obvious sarcasm.

As for "China's economy has plenty of growth left in it": the issue is not the amount of growth, but the source and quality of the growth.

In China, "private industry" doesn't truly exist in many industries. To do business, you need to be politically connected to some degree. In other words, campaign contributions are unnecessary; the state and private industry are already married.

Bingo. It's truly amazing that after all the world has seen in the past several years, many fail to recognize a house of cards when they see one.

After pointing out that "The central bankers throughout the world have lost touch with reality" and discussing the messes that have been created in large part by inept bureaucrats, The Smartest Man in Europe dismisses all of the problems brewing in China with a naive "the authorities will figure out solutions to solve them."

Anyone who truly believes that the "authorities" in China are any more capable than the "authorities" outside of China isn't very smart at all.

The author has a point, and it's quite possible his idea wasn't worth pursuing further.

This said, a few points should be made:

1. A picture is worth a thousand words. It shouldn't be assumed that individuals you poll about ideas and abstract product features understand them the way you intend them to. You might simply be describing features in a way that doesn't make sense to them, for instance. This is why wireframes and simple prototypes are so valuable.

2. You need a quality sample to make intelligent guesses about the viability of a new product. You should not immediately assume that if you query 10 people about your idea and all 10 shoot it down you are not on to something. Most businesses that are very profitable aren't convincing nine out of 10 (or even five out of 10) potential customers to buy their products. Keep this in mind.

3. Just because your initial product concept (or implementation for that matter) isn't viable doesn't mean that the problem that led you to develop the idea doesn't exist. Instead of simply asking folks whether or not they like your product concept, you should also seek to validate that you're trying to solve a real problem. If you can confirm that there's a problem, you may only be a few iterations away from a product concept that has a shot at success.

Bottom line: you don't want to give up on an idea too late, but you shouldn't give up on an idea too soon either.

"If you’ve already identified that your goal is not to work for soulless companies, you need to start working for startups."

This is a false choice. It assumes that most established companies have no "soul", but that most startups do. This is simply not true.

"Crucially, the biggest advantage of working lower down the spectrum is that mistakes don’t stick with you. In general, mistakes don’t typically stick with you, but the further up the spectrum you go, the tighter knit the community. Make a mistake at the bottom of the spectrum, and there’s enough people making mistakes that it’s unlikely your mistakes will give you a bad reputation. On the other hand, screw up a company with $41mm in funding, and those mistakes are more likely to follow you."

Obviously, there are good mistakes and bad mistakes, but in general, making career decisions based on where your mistakes will go unnoticed is a path to mediocrity, or worse.

Anyone interested in progressing as a professional should think twice about working at a company where major mistakes are of no consequence. It's hard to improve yourself if you're surrounded by incompetence, and if mistakes made out of ineptitude or negligence have no impact on your reputation, chances are you're not working on anything that matters.

1. You do not need a "CTO"; you need a solid web developer. They are not the same thing.

2. While I think many posters here have focused too much on the the job-posting-as-dating-profile approach, the reality is that something like this will send the wrong message to the type of person you want to avoid, and may hurt your credibility with the type of person you want to attract. I don't need to know that you like long walks and are feisty; I do need to know that you have a solid product and a viable business model.

3. The number of experienced developers who will jump at the opportunity to work long hours with a person they don't know in the hopes that their equity in a startup that hasn't been funded will one day be worth something is fairly limited. If you are going to find a person willing to do this, it will probably be somebody you already know, or somebody you meet locally and build a relationship with.

Everybody should give the people behind Mt. Gox a break. These guys make real banks look good - no small feat!