$170 million is "fuck you" money. Aaron and I'm guessing many of the top founders/executives made enough money to never ever have to work again. Fake revolutions are cute and all, but think of how awesome it would be to never ever have to work for the man again. They can do anything they want...for profit, not for profit, TBD (Y Combinator). This wasn't some BS talent acquisition; this was an absolute shitload of money to make in a very short period of time (3 years!).

Techcrunch and many others constantly harp on how people should be working on stuff that can help save the world. But the reality is, most of us have bills to pay and a table to put food on. With FU money you can do whatever you please without worrying about your family.

I also think something must have been going terribly wrong. The exit was tiny considering the huge amount of money that was invested.

I agree with your second statement: to the uninformed observer (me and everyone else in this thread) something does seem off. Bank and credit card leads pay from $50-$200 per pop let alone the riches that mortgage leads bring in.

I was in fits of laughter during the initial Mint acquisition HN thread (http://news.ycombinator.com/item?id=821615) when people accused Mint of being unable to make money. To some, advertising and subscription payments are the only way to monetize.

Perhaps between the crappy economy and whatever Yodlee is charging for their data, Mint may not be anywhere near profitable. They may have acquired a lot of users, but they have to pay Yodlee for all those users' data, and cover the costs by the fraction of those users who go for the bank/credit card stuff suggested.

During the time I used Mint, none of the financial offers presented were better than my current ones, so I never bit.

http://spyfu.com/Domain.aspx?d=-3624320565025573542

http://www.onecubicle.com/page/jobs/job/4581

"We didn’t have money for writers, so most of our original blog content then was guest posts from other personal finance blogs, plus a couple of columns on people’s worst financial disasters. To build demand, we started asking for email addresses for our alpha 9 months in advance of launch. Then when we had too many people sign up, we asked people to put a little badge that said “I want Mint” on their blogs to get priority access. We got free advertising and 600 link backs which raised our SEO juice."

Instead, we relied on press. It’s where I spent 20% of my time. I’m spending it right now while writing this."

http://www.techcrunch.com/2009/09/14/the-value-of-techcrunch...

Having an awesome product certainly helped but it was in conjunction with their other efforts.

Doesn't always work that way (NeXT, Apple).

Also, it is likely that nothing was going terribly wrong. The exit was only small for the later-round investors, who also made a killing on their investment, though not as extreme as the earliest investors.

A company should always have a sell price. Intuit met Mint's.

Honorable, but basically flawed.

Your relationship with your friends will change because of something like that, it is very very nice of you to want to share the wealth, but someone that has a sense of honour themselves will either have to refuse your offer or they will accept and it will hurt their sense about themselves.

Should you ever find such wealth be very careful how you approach your friends with such plans. If someone in my circle of friends would make me an offer like that I'd see that as an intrusion, even if it was meant well. Just that you got into some money does not mean that you have the right to 'fix' others lives, they may get a lot more satisfaction out of fixing it themselves.

Giving money away is a very tricky thing to do if you do not wish to change your relationship with people.

But kudos for looking after others, I really appreciate that that would be one of the first things you'd think of.

After a few mistakes, here's the tack I've learned to take.

Treat everything you give as a gift. Don't expect _anything_ in return, and say so very clearly. This keeps you from giving more than you would like to, and prevents the recipient from asking for more.

Any kind of loan leaves the door open to additional requests; after all, they're going to pay it all back, so what's a little more? Which leads to resentment if you decline.

Considering it as gift prevents you from going overboard - if a gift is inappropriate (paying off a friend's debts falls here), then don't do it.

In my experience, the best way to give money to your friends isn't for the necessities, but for the luxuries. When I go to a party, I bring plenty of really good booze and/or beer. If we go out to eat, we go to nice places, and I pick up the tab. On trips, I pay the difference between the Motel 6 and the Sheraton (or whatever).

Part of it is couching it all in the right terms. You aren't doing this for them, you're doing it for yourself. I don't like cheap vodka, I like the good stuff. I don't like Motel 6. Then don't bring it up again.

The tone you want to set is that you don't want to share your money, you want to share your experiences. After all, that's how we all became friends to begin with.

ADDENDUM: it is also important to leave openings for your friends to help you, in whatever way they can. Right now, I'm prepping my house for sale, and I've had a stream of friends come over to help me clean and fix things. I could just pay someone, but this way is much more fun.

That may be, but it depends on the people. There are people that could resent this and see it as you rubbing your money in their face.

It's just easier to say, "it works for me." By saying 'it works, at least for me,' you're claiming that it will always work everywhere 100% of the time... then saying "but I could be wrong." This is just anecdotal evidence. It's possible that none of your friends are the kind of people that would react that way, or that you have a personality that causes people to quickly forgive you for such things.

It's just easier to say, "it works for me." By saying 'it works, at least for me,' you're claiming that it will always work everywhere 100% of the time... then saying "but I could be wrong." This is just anecdotal evidence. It's possible that none of your friends are the kind of people that would react that way, or that you have a personality that causes people to quickly forgive you for such things.

I also can't imagine taking a heartfelt offer from a close friend as an "intrusion," but then I'm sure it depends on the relationship and the personalities involved.

I'd like to think that this wouldn't change our relationship, but you never know.

It would be okay to loan money to your parents or your children- there's a clear power relationship in both of these, of obligation both ways. It would be less okay to loan money to a sibling, where equal footing is a necessity for a healthy relationship.

That depends very much on the way you bring it. Indeed, if you offer to pay off their debts, of course it will hurt their ego.

But if you bring it like "here's 50 grand, i don't need it, i care about you, do with it what you want", well, most people will have a hard time rejecting it. Since they don't associate it with their debt, but rather as part of sharing in your success.

By giving that money you are denying someone the chance of achieving that on their own and keeping parity with you. Especially if you say 'here's 50 grand, I don't need it', as though 50 grand should be peanuts to them too.

The asymmetry of the situation is what causes these problems.

The reverse also happens, plenty of people may assume that because you go back a long time they have an automatic right to whatever is yours. This is also not a healthy point of view.

There is nothing more poisonous to a friendship than to have one party suddenly come in to a lot of money. It takes a lot of tact (on both sides!) to get through that without getting peoples feelings hurt.

The best way to avoid this problem is to earn the money together with your friends.

> By giving that money you are denying someone the chance of achieving that on their own and keeping parity with you.

I don't refute the fact that it's a tricky situation, but I think you and the OP might be talking about different situations.

There is a big difference between a fairly well payed programmer that needs to pay $20k of student loans and might take a while to do so but still live comfortably, and someone who is unemployed, the bank just repossessed his car and his family is about to be thrown out of their house due to unpaid mortgage.

There were a few years when I was growing up when my parents' business was going under (and bleeding money like nobody's business) and things looked very bad.

They managed to get out of that by their own eventually (at a significant cost, not just financially), but a lot of people don't.

That's the best kind of thing a friend could do.

Honor is preserved on both sides and when it is all done the friendship has only strengthened, not become lopsided.

I think it would be a better idea to loan them money to pay off their debts. Of course, your loan should be interest free, shouldn't have any strings attached, should give your friends very long time to repay - otherwise there wouldn't be any difference between your loan and the 'other' loans in the first place.

The borrower is slave to the lender; why would you want that dynamic in your friendship?

It becomes a business when

1) you charge interest

2) you have some terms and conditions or attach some "strings"

3) you require collateral

4) you make your friend sign papers, and you leave "legal" options open

When I loan a friend, all I say is "dude, this is just to help you, I know you are going through tough times. No way this is to insult or patronize you. you can return the money when you can, even if it takes you 5-10 years"

That is trust and friendship, one friend helping the other, nothing more nothing less and definitely not a business.

You are putting a dollar amount on the friendship

Nope, I am not. All I am saying is, if I am in a better position than my friend, and he needs help, I am willing to help. He has to borrow money from someone anyway, why not from me, interest free and trouble free? He can sleep peacefully at night, knowing that I wont foreclose his house or something, if he is going to be late in repaying, or even if he is not able to repay at all.

If they don't pay you back, will you still be friends?

Yes. We are talking of FU money here, and also assuming that I am in a situation like Mint founders. I am in a position to loan money, without affecting my own lifestyle. Obviously, if I am myself living paycheck to paycheck, this won't apply.

why not just give them the money?

because, I don't want to patronize them, and don't want to insult them.

Frankly, I don't understand why you call this bullshit. Loaning money to friends happens all the time. I've done it many times, and have always been repaid.

It's often a bad idea to mix friends and business/money. That doesn't mean it is always a bad idea.

Flipping a company is just one way to say FU to the man.

I've said FU to the man lots of times, even when all I had was some cash I had saved up from working really hard and long hours at a salaried job.

There's a sense out there that you need lots of cash to break free, but lots of homeless people break free all the time and many of them are way happier than those receiving big exits for startups. That is not hyperbole.

Breaking out of the machine is about mind not money. If you believe it is about money, you'll never break free even if you have lots of money.

Even with lots of money in the bank, you get bored. You end up wanting to go back into the system, to be part of a team, to do something productive. FU money is not all it's cracked up to be and it's mostly those who have never had it who think the world of it.

I'm sure you can find several homeless people who are happier than several people who made FU money in a short amount of time, but I'd be willing to bet that on average, people who started up a company and sold it for dump trucks full of cash are happier than homeless people.

Of course, this could be psychological due to them not having done anything to earn the money.

I'd love to read up on any actual data gathered on the topic if you know of any.

"Here's two different futures that I invite you to contemplate, and you can try to simulate them and tell me which one you think you might prefer. One of them is winning the lottery. This is about 314 million dollars. And the other is becoming paraplegic. So, just give it a moment of thought. You probably don't feel like you need a moment of thought.

Interestingly, there are data on these two groups of people, data on how happy they are. And this is exactly what you expected, isn't it? But these aren't the data. I made these up!

These are the data. You failed the pop quiz, and you're hardly five minutes into the lecture Because the fact is that a year after losing the use of their legs, and a year after winning the lotto, lottery winners and paraplegics are equally happy with their lives."

http://www.thisamericanlife.org/Radio_Episode.aspx?sched=123...

Act two (This is a very fascinating story)

"This American Life producer Alex Blumberg talks with Ed Ugel, who had a very unusual dream job: he bought jackpots from lottery winners. When you win the lottery, your prize is often paid out in yearly installments. And Ed would offer winners a lump sum in exchange for their yearly checks. He's talked with thousands of lottery winners, and the vast majority, he says, wish they'd never won. Ed is writing a book about his years in the "lump sum industry" called Money for Nothing: One Man's Journey through the Dark Side of Lottery Millions. It comes out in September 2007."

Here are some more examples: http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney...

http://www.dailymail.co.uk/news/article-1208498/Teenage-lott...

It's kind of surprising how many people are absolute idiots at managing their money. My girlfriend's parents are broke again after blowing over $100,000 in a year on leather couches. Their manufactured home is still not paid off.

None of those are guaranteed - especially compared to a lump sum.

>I've said FU to the man lots of times

They're saying it to him permanently. Almost all of your examples are temporary.

>Even with lots of money in the bank, you get bored. You end up wanting to go back into the system, to be part of a team, to do something productive.

No one said they would do nothing. The whole point is they can do whatever they want without worrying about it being monetizable.

Do you personally know some? Tell us about them. They must be remarkable people.

I'm not saying you're wrong, but your claim sure sounds like hyperbole. I know a few startup-exit-receivers who seem pretty happy. Of course it's hard to tell these things (http://robinson.bokardo.com/poem/richardcory and all that).

The only modern case that comes to my mind is the homeless guy who recently left $4 million to NPR. I seem to recall hearing information about him that made me think he might have been happy.

Fuck you money (for a lot of people) isn't "go buy a Caribbean island" money. It's "I can finally build the company I WANTED to build" money.

(anticipating response of "Why not just build the company you're passionate about to begin with?") Some companies cannot practically be built without vast piles of money/power/connections/etc. As a previous commenter pointed out, you can't bootstrap the SpaceX prize. :-)

Also-- people change! A guy I know's wife just got diagnosed with breast cancer. If he sold his startup tomorrow to chase a different dream, could you blame him?

Diamandis used a small initial grant from the Ansari family and leveraged it via insurance.

And obviously FU money here has a very different meaning than to punt a nasty boss-- given that they people who made the decision to sell here WERE the boss.

But I think it's stuck because, for a lot of people, it is buying a Caribbean island money; it is their chance to say "fuck you" to everyone who still has to work for a living. Their ambition is to display their wealth conspicuously, and otherwise sit on their asses while other people envy them.

I can't imagine someone working because they want to saying "fuck you" to someone who works because they have to, and especially not to the degree that the perpetual vacationer would. In fact, I can imagine the Caribbean island owner being condescending to the willing, but rich, worker because they aren't projecting the image of a rich person. Rich people don't work; but this one does, so he's a misfit.

I think for the crowd that gathers here, "fuck you" money should really be called "next level" money. They likely have that ambition you refer to, where getting rich is just a means to even greater ends. It's hard to quell intrinsic ambition, even if one of the hopes of that ambition has been fulfilled. And it's hard to develop ambition, even when one has the means to become so, but didn't rely on ambition to get there (e.g., lottery winners, etc). This is why most people call it "fuck you" money; it's where they can stop faking ambition and show how little they actually had before getting lucky.

I think the post will end up being contrarian just to be contrarian. This site and YCombinator were created as a result of "fuck you" money.

If your mind is already made up then you don't need to read it.

What's kind of funny is the vast majority of the 37signals philosophy I agree with. Hell, we turned down VC funding in part because we really liked what you guys were able to do without it, and the fact that investor interests and founder interests often conflict. But to lambast someone for taking the payday of a lifetime without knowing all the circumstances surrounding not only their company, but their life, doesn't seem right.

I'm shocked at how arrogant your comment comes across. Different strokes for different folks.

And for what it's worth, I think YC is way cooler than ViaWeb.

Seriously though - you can never have too much money, but this doesn't change the fact that it is way better to have, say $10M in net worth vs. $100,000. Of course if you have $10M you're still going to want to be a billionaire, but now you can choose to either work hard to become a billionaire or do something entirely different. You're still going to have to find your place in the world---everyone deals with this---but now you have a huge amount of freedom you didn't have before.

This was a famous exchange between Ernest Hemingway and F. Scott Fitzgerald. Fitzgerald said, "You know Ernest, the rich are different from you and me." Hemingway replied, "Yes, they have more money."

The phrase was lifted for the title of a book of anecdotes about rich people that I once saw a stack of on a coffee table at Restoration Hardware. I picked one up and it turned out to be freaking hilarious. I heartily recommend it: http://www.amazon.com/Rich-Are-Different-Priceless-Quotation...

For example, there was the English aristocrat who, when told he could no longer afford to keep three pastry chefs (French, Danish, and one other), said "What? Can't a man have a biscuit when he wants it?"

Then there was Christina Onassis' habit of sending her private jet out to get a twelve-pack of Diet Coke every time she ran out. The pilot was asked why he didn't just bring back a full load. His answer: "Because Madame does not want old Diet Coke."

I could quote another dozen stories from memory and this book has been sitting in storage for like 10 years. A seriously hilarious book.

Money is a tool, not an end in and of itself. So, yes, you can have too much money.

FU money is the worst reason to do startups. Most startups which are driven by FU money as the goal, dont really get anywhere. They destroy lives and drain the best years of some of the brightest young people. The ones we hear about going big are really a very very small fraction - you are better of buying lottery tickets if you really want FU money.

Do a startup by all means, but do it for the right reasons. There is no better life waiting for you after you get FU money. Do a startup only if running one is the best use you can think of your life.

What's valuable is the ability to create money, not the money itself. Investing is hard. You could probably ask pg about how hard it is. These guys had a really good investment, and these guys, bright as they are, may have very well killed their golden goose.

I'm not sure this has very much to do with whether the Mint guys would have done better to keep going independently rather than taking the $170M, though.

That's not to say Mint did any of us a favor by accepting Intuit's offer, but their decision may not have come as easily as you think.

Being able to stop working as an obligation and start working as an authentic contribution, passion and creation is an important and very, very satisfying lifestyle change.

You seem to assume that being a hugely profitable company is the right thing to be, and that anyone who isn't is bitter and requires a outlet to vent about how their failure isn't their own fault.

What I've seen 37Signals blog posts advocating is building a business such that it is enjoyable enough to run that it doesn't matter if it has a potential multi-million dollar exit. There is nothing wrong with them advocating such a philosophy, and nothing wrong with running a company that holds to such a policy provided no one involved was bullshitted about the terms.

The terms that Mint was running on are different, though, partly because there are investors and founders involved who entered into the deal expecting a profitable exit. Nailing them to a cross makes no sense, because their goals weren't the same, nor do I think they were ethically compelled to be.

But please, let's not make this conversation about flinging one line barbs at Jason and 37Signals so they can send one line barbs flying back. All that does is raise the heat level in the room.

No, I'm not some sort of Kool-aid drinking acolyte. But ultimately, I'm trying to do the same thing - to have fun and do what I find fulfilling, at the expense of considerably faster and more lucrative routes to making more money - so I can appreciate their general angle.

I'm not sure what's not to like about that. The real question is about what those 3 years were like. If they kind of enjoyed them, that's just gravy.

(Of course, I'm aware of Survivor's Bias here. Not everyone gets bought for $170m.)

No, they didn't. A substantial chunk of that money is undoubtedly going to their investors.

This notion that working on a fulfilling business can meet all of a person's needs is false.

Working on something fulfilling, for money is good. Having the option of doing something fulfilling that doesn't need to make money is better.

So, back to the OP's point: FU money is better than a happy income (depending on what you have to do to get to the FU stage).

Really, your question could be raised in response to virtually any person or entity with a clearly identifiable ideological stance of which they are frequent exponents. Just about anyone with a philosophical disposition and/or a discursive character - a tendency toward narration - is a candidate for, "Why do you keep saying what you think all the time?"

I guess it's because that's what intelligent people or groups of them who conceptualise themselves to have some sort of intellectually coherent purpose do.

Only nerds -- and people with no persuasive skills (or influence) -- think that saying something "the right way," once, is productive.

If you're not thinking about these things all the time when you're reading things, you're not getting maximum usefulness out of them.

It's not just what people say, or what people read, but WHY.

And you don't need FU money to have more than one option available that prevents your family from starving. Others may disagree, but I thought this was a bit hyperbolic and cliche. There are millions of shades of gray between $170 million and poverty, and I can't imagine the Mint guys, and their families, were going to go hungry if they didn't accept this deal.

But I get what you mean, and I'm inclined to agree with your larger point. The founders of Mint aren't beholden to anyone but themselves and their shareholders, and I wouldn't expect them to put their lives on hold for my comfort, convenience, and need to have faith in the goodness of mankind. In the same position, I'd have done the same.

The solution to this, if Intuit completely drops the ball in managing Mint well, is for someone else to launch another competitor to take Intuit on. That gets the best of both worlds, people getting rewarded for creating something great, and people always have another option outside of Intuit.

Ha I never said their families would starve. My point was most people are beholden to many debts, people and obligations that prevent them from doing X.

But, depending on the investor, I can't imagine they're quite like working for The Man, who conjures up really unhappy images of cube farms and dress codes. I guess I can't really gauge the investors of Mint; maybe they were that bad.

And when people say they have their family to worry about, and I ask them to elaborate, starvation is brought up in many cases. Maybe it is just hyperbole in an attempt to preempt my probing.

But this opens up another probably off-topic discussion on the bounds of beholdenness, and how much of that is self-fulfilling.

Unless you're into substantial overhead costs ($10 MM per year), red tape, excessive meetings and chief diversity officers.

I'm not sure if an IPO is the subtext; I couldn't imagine 37signals ever going public. Then again, at one point in time I could never imagine them taking venture funding. [1]

[1] http://37signals.com/svn/archives2/bezos_expeditions_invests...

And Mark, I know your situation, you're more fortunate than others :).

It seems possible that he'd get acceleration and be retained through other means (retention bonuses/etc.).

Also, for a company in Mint's position an earn-out is somewhat common (although it would be hard to argue that this would be the case when Aaron is taking over all of Quicken Online).

They already weren't working for the man. They had a startup, and one with huge potential and growth.

And now, depending on how long they have to stay there, they're working for "the man" more so than before.

That said, one does have to keep in mind how relative the concept of "fuck you money" really is. I, for example, am broke, bootstrapping a company entirely out of cash, having to do huge amounts of consulting in order to pay two part-time employees and support my comparatively large living expenses inherited from my well-off salaried days. Yes, I do mean "to pay the bills" - as in, just to break even operationally. Finding the time to work on the projects I'm passionate about building into products, which are in the same vertical as the consulting customers but with which there exists no meaningful overlap is very hard (that is, it's not really feasible to get the customers to shoulder or subsidise the development costs - the aims are just too unrelated to short-term projects, especially since I don't have the cash cushion to float anything especially long term).

If I could sell my company for say, $5m, that would be "fuck you" money to me. It wouldn't mean that I'd never have to work forever, but it'd definitely afford me, oh, say, a good decade of being able to sit around and code whatever I please, after winding down all my customers and telling anyone who has any debts to collect: here's your principal pay-off, now blow me.

OK, if I wanted to hire some team of nontrivial size to help me along the way, fine, $10m - the extra $5m would fund, what, about 30-35 $100k employees for a year, or 7 of them for 5 years?

I'm not even interested in imagining what 9-figure exits look like. I don't care. For someone who has no real assets to speak of and no real cash nor credit, even a large six-figure exit would be a ginormous game-changer.

The point here isn't to put forth my sob story--not at all. My point is that a reasonable threshold of, "Hey, who could blame them for taking the money?" could be much, much lower than $170m, or considerably higher, depending on the position you're coming from and the relative interests bound up in that. Obviously, if I had a net worth of a few million, cashing out of a valuable, disruptive company for $5m, once its relative merits and goodwill and brand and reputation and future marketability potential and all that are considered, would seem rather absurd. But to someone with $0, $5m is very much "fuck you money." Just imagine what $170m is.

I think PG alludes to this dimension of things pointedly in "The Venture Capital Squeeze" (http://www.paulgraham.com/vcsqueeze.html), where he encourages VCs to allow founders to partially cash-out prior to any "liquidity events":

"As things currently work, their attitudes toward risk tend to be diametrically opposed: the founders, who have nothing, would prefer a 100% chance of $1 million to a 20% chance of $10 million, while the VCs can afford to be "rational" and prefer the latter.

Whatever they say, the reason founders are selling their companies early instead of doing Series A rounds is that they get paid up front. That first million is just worth so much more than the subsequent ones. If founders could sell a little stock early, they'd be happy to take VC money and bet the rest on a bigger outcome."

They deserve a higher than minimal and/or even average salary, too.

Selfish, short-sighted and immature...more words that describe the next generation.

It's funny you're nitpicking a quote when the original article is pretentious and what were your words "short sighted and immature" enough to call their own company a revolution.

http://en.wikipedia.org/wiki/Revolution

Regardless I don't see how your quote is "out of context"; I don't see anything in your original post that would indicate the sale benefits anyone other than the owners/executives of the company.

Your reply reflects precisely the attitude that the author of the article is calling out; that many founders set out to create a company for the sole purpose of selling out. The reason this is harmful is that in most cases the sale is to a company who is uninterested in the new, innovative ideas that the original founders incorporated in the product (the same qualities which drew in early adopters and other customers).

This has a negative effect on the overall progress of the industry involved as it prevents "big changes" (I'll try to avoid loaded terms) from happening and allows stagnation to continue.

It's out of context because I wasn't saying to be "selfish" and do nothing. I was saying they could work on whatever they wanted regardless of whether or not it's monetizable. There's no way to know that without context.

>Many founders set out to create a company for the sole purpose of selling out (which in the author's context included Aaron).

You don't know that. Aaron could have set off to build a long-term profitable company, which they appeared [1] on their way to doing. But 170 million dollars is 170 million dollars. Almost everyone has their number especially if they have shareholders and vested employees (which 37s does). Their responsibility isn't just to their customers, but to their shareholders, employees, vendors and other people in their life. Who's to say their customers will be treated worse because of the acquisition (granted, Intuit has a poor track record, but this thread has enough assuming in it already).

You run in to the same problem as the OP does: a lot of assumptions without any real knowledge of Aaron or the company's dealings. Instead you're relying on blind assertions and tunnel vision to judge others.

[1] Based on lead gen affiliate fees and the amount of users they had. Unfortunately I don't know this for sure.

In my case I was referring to startups/founders in general which I thought I made clear by the terms I chose in my response, however if this was ambiguous to you I apologize.

They rail against people who take VC money. At the same time they take money from an investment firm. They they say that their taking money was okay because they wanted the advice of the investor: http://37signals.com/svn/archives2/bezos_expeditions_invests... Other people taking money to get access to investor advice is bad and a disease.

They rant against startups that pursue the eyeballs business. But then they publish blogs that are frequently contentious and create drama in the startup community. Really, RoR aside, if DHH didn't swear at conferences, or if 37 Sigs didn't throw rocks at other people's business models, would have heard abou them as a company? They like being the "bad boys" of the startup world. Bad boys get eyeballs and 37 Signals upsells those eyeballs.

The only problem that I have with 37 Signals is that they constantly say that they aren't doing the things that they are actually doing.

Re: Eyeballs... Our problem with action for eyeballs is when you have nothing to sell the brains behind the eyeballs. Just building an audience with nothing to sell (beyond ads) is what we rail against. But building an audience that could also be your customers is something we encourage.

You sell a few online webapps, and get a full cut. People showing ads, sell them tech, finance, cars, whatever. Anything that's relevant, and get a smaller cut.

A smaller cut of a massive pie is often better than a full cut of a very small pie.

The website selling directly has a finite (small) number of things they can sell the user. 37signals can sell me a basecamp subscription, a campfire subscription...

The website advertising to the user has a massive inventory they can get the user to buy. Each time the user comes back, there's another chance to sell something new to them.

I'm guessing either you tried advertising at some point and couldn't get it to work for you, or you just hold some sort of weird grudge against advertising and see it as evil.

It's actually the opposite IMHO. If you're selling directly to people, you have one chance to get it right. You need to be 100% sure they will buy what you're selling, at the price you're proposing. Also for several types of service, charging the user may not make sense - who would pay for access to a search engine?

With advertising, you're effectively acting as a middle-man, providing the users with the opportunity to buy millions of different things related to your own service. The risk is ridiculously low. That's why advertising as a model works so well on the web.

Both are completely valid, good business models. It's just funny how 37singles take every opportunity to make out that a business making money from advertising isn't a 'real' business.

The thing that hurts the model is silly people who slap up adsense, don't do their research or learn about how to make advertising work, and then moan about how they only make a few cents a day.

The position doesn't seem too principled. Your condescending tone with "sell the brains behind the eyeballs" doesn't aid the argument.

I personally like selling stuff and services too. But I'm not railing* against other business models.

* pun intended

How can you build an audience with "nothing to sell" anyways? What kind of audience is that, spam bots?

Also, I really really really do not understand all the crap you guys give ad based websites/business models. Advert business has well and long been an established industry, dripping with cash. There are tons of websites out there generating millions of dollars for their owners. From POF to sleazy SEO blogs, these people generate enough money to live comfortably, and they're happy with that. And when I see DHH rail against ad based sites at conferences in his snarky ways, it's very disingenuous, as if he's completely blind to the world of those who are making bank from ads.

Tesla makes physical products. They manufacture. They have inventory. They have a factory. Money is required because they have significant initial capital expenses.

I take issue with "Facebook had to". Facebook chose to, they didn't have to. Software companies don't have to. They choose to.

There are plenty of times where the companies (and consumers, and founders) best interests are served by taking early money and focusing on growth rather than profitability, especially if their VCs are open to helping those founders take money off the table as they hit milestones).

my .02

Facebook was started in some kid's dorm room, and I'm still not entirely clear on what they're selling.

I've never seen an ad on Facebook that highly targeted me. I think that beyond a few niches (like engagement rings) Facebook's targeting works out to be a wash. That's why despite having 300 million users and billions of page views they are only barely profitable.

I think the real mistake is that so many people don't ever stop to really think through their business model and "selling ads" is just the default thing they fall back on.

*I might be biased since I run advertising networks, but then again my business model isn't really ads either.

Also, if you had a chance at a $170M exit, what would Jeff Bezos say?

Sorry, Jason, I think you're being disingenuous again.

Did you come up with the idea of writing Getting Real and then try to market it and sell it to web developers? Or did you gather the content of your book from your blog posts, bundle it into Getting Real and up sell it to your readers?

Did you start out with the idea of having a job board on a popular blog? Or, did you have a popular web developers blog, and then decide to monetize those eyeballs by selling to people looking for developers on your job board?

What's the difference?

From what I can see, 37signals came up with the idea of writing a book called Getting Real and marketing it to web developers. But they came up with the idea very slowly and incrementally by starting out with one post on a blog, observing the response, and working up from there.

It's positional chess. Yes, the checkmate on move 37 is caused directly by the pawn move at move 1. But that doesn't mean that the chessmaster planned move 37 all along. The chessmaster started out with a plan to make money ("win this game") and then made strong moves that led in winning directions, refining as the game proceeded.

37signals has had a mechanism for translating developer attention into cash from day one: Selling developer project-management tools. What's disingenuous about that?

It's a rare founder who has no offer he'd take. In fact, if you have shareholders or employees with options, and someone makes you an offer that's significantly above the expected value of your company, fiduciary responsibility requires you to take it.

You can bend this requirement to some extent by overestimating your expected value, but there is always some number you'd have to take.

They were growing rapidly and figured out the revenue game.

We have no idea how close Mint was to making good revenue, especially if lead-gen was their only source. Maybe they figured lead-gen wasn't lucrative enough and decided to take the early payout over losing time and money in the longer run?

There are many successful business that truly don't have a number they'd HAVE to take. It's a choice, and that choice doesn't appear to be actively made by this generation's poster-child business leaders.

I do disagree with Jason, I think that there are a lot of unspoken young businsses, not in the spotlight, that do have the passion to take the baton from the previous generation; it's just that they don't seek out the attention, nor does the attention seek them out.

Never underestimate the risk of losing it all because of a failure to diversify.

If you have major shareholders or they vote to take it against your wishes then perhaps. But, if you are the major 'holder or have a casting vote then you can do as you wish. Sure greed may motivate you more the bigger the numbers get but you don't have to take the money.

I think this point is important. Mint was adding value to an existing set of services rather than creating from scratch. This made its offering relatively easier to replicate. IMHO this point is not given adequate importance when considering why Mint chose to sell.

Your comment reminds me of the remark ( either here or on reddit, I can't remember) that StackOverflow is easy and can be cloned in a week, because the underlying technology is not hard to replicate. What you forget is market often pays a premium for the database, not the technology. Getting the technology to setup is easy, getting the subscribers, is not.

EDIT: rephrased for clarity.

My guess is that Intuit will be able to dump Yodlee now and use their own systems.

Wonder how much those access rates are going up :-)

The most common argument (by far!) that I've heard against VC funding is that VCs only care about home runs, so their interests aren't aligned with the founders', they don't care if 9/10 of their portfolio companies die, and so on. But here the criticism is just the opposite: the "VC-induced cancer that’s infecting our industry and killing off the next generation" is that VCs don't want home runs, they want early exits. Both criticisms can't be right. So, are there two distinct and incompatible schools of thought about why VCs suck? Or are there just a lot of people who are against VCs no matter what, for whatever reason is handy? My spidey sense is that there's a little of the latter at work. (FWIW, I don't have an opinion for or against VC funding in general.)

as a Mint investor, friend of Aaron's, and someone familiar with most of the other Mint investors, i can only summarize my feelings on this by saying that Jason Fried is 100% wrong and pretty much completely full of shit on this topic.

if he'd bothered to even lift a finger to check a few sources on this issue, he would quickly have realized how WILDLY INACCURATE his conspiracy theory was.

in my opinion, blogging at length about a subject which he fully admits he knows little about -- and had not attempted to research -- is incredibly ignorant & irresponsible.

please forgive my anger, but when someone attacks my friends with stupid lies, i tend to get a little pissed off.

If you want change, make your own change. It's no one else's responsibility. Even if it were, the founders are now better positioned to execute on any idea they have in the future with few limitations. How shortsighted.

You're using the word freedom in very different way than Jefferson ever meant it. In Jefferson's world, the Mint founders are no more or less free now than before selling to Intuit.

Otherwise, I agree that it isn't for us to judge. The founders were certainly free to sell their company.

But from the point of view of a consumer of financial software, this is terrible. Intuit's products have been terrible and getting worse. I do better with a spreadsheet than their money management software, and it isn't even money management software any more, it's just an advertising platform that also keeps track of your money. The only good thing I can say about them is that their chief competitor (Microsoft Money) is as bad or worse.

Mint.com was different. It was great. Maybe it will continue to be different and great. Maybe not. But if I were to guess, I would guess that it will change for the worse.

My only REAL hope now is that someone else decides to come along and build something great. And then maybe THEY will sell it for another $170 million. Intuit, Microsoft, the phone company oligopoly: they all seem to be a new form of monopoly where competitors cannot break in to the market because the incumbent is too rich.

There's nothing wrong with a decent exit. The old guard doesn't have to die, and right now we're relying on the old guard since they're almost the only way startups can get liquidity.

The Silicon Valley venture game isn't about making lifestyle businesses. It's about making good returns on investment. $170m was a respectable return for everyone involved.

Wait, didn't I read that somewhere?

Oh, right: http://37signals.com/svn/archives2/define_your_own_success.p...

This just feeds big companies and will likely cause innovation to happen slowly through common user perspectives and reduce competitive businesses.

That said, Mint seems like the exception out here. Facebook and Twitter seem to be doing a great job keeping the champagne at bay.

Okay, I'm not in the Valley, but businesses are in business to do business - to make money for their shareholders. Arguing against that as a reasonable motivation is disingenuous. You can disagree with the business decision; that essentially amounts to "I think their expected value is >$170m and I'd take their risk profile". Fair enough. But if you're arguing it on any other basis than that, then you're substituting your morals for economics, and what's more, your morals for those of all the individual shareholders. Not cool.

Isn't it easiest to just assume that Facebook and Twitter haven't been bought because their equity holders think they make more money doing it their way? They've got a case too; as Twitter's paper valuation climbs past $1bn, the crew there get proved more and more correct.

Banker math surely proves Aaron would have to show real hubris to ignore Intuit's offer, but founders rightly run startups, not bankers. Intuit is a $9B twenty five year old company. Mint could have given them a run for their money. They took the payday instead.

Looks like a business opportunity then ...

Fair enough, judgement call. But what justifies it? 'Banker math'.

Even for a company like Mint (of which I am a long time user), at some point their business model has a maximum angle of growth, and unless they went to a freemium-based model to generate recurring revenue, the short of it is they're running out of room to make money on their userbase.

That being said, as a user I'm very distrusting of Intuit taking Mint and running with it in any direction but into the ground.

And there's nothing wrong with that --- I mean, I have kids to put through college, and my first loyalty is to them, etc --- but employees should know what they're getting in to.

I have never seen Mint and haven't used Quicken in ages. But isn't Mint the same thing only hosted? Where exactly did they innovate, I haven't heard of any exciting features. Anything here besides just "onlineness"?

  prettier user interface and waaaay better marketing

If I make a magic box, then patent it, and then sell the patent, whomever I sell the patent will dominate the box making industry, since they are the only ones with a magic box. This is what the author thinks is happening, but it is not analogous.

If I open a factory for making boxes, and I sit in the front office and monitor my factory, and hire great staff and motivate them to make boxes, and figure out methods and practices that help workers stay alert, motivated and uninjured, and I keep costs way below industry norms, I will have a very profitable box factory. Now, BigBoxMaker wants to buy my factory, since it is so much more efficient than theirs. They pay me $$$$$. I move to ${sunny_place}. They run the factory, but they aren't me, and they shit the place up. All they did was drive me out of the market, and in a few years another industrious soul will come in and they will have to buy their factory too, otherwise, eventually, they will be out of business.

Now, the key is eventually. They can afford to pay me what I would profit from running my awesome factory for 15 years, except it only took me 3 years. They require me to stay at BigBoxCompany for 2 years, but I just have to meet benchmarks, which is super easy since I already have the factory working at the level the benchmarks specify. So 2 years of dicking around at BigBoxCompany, doing whatever I feel like, plus a check for the amount I would make if I worked my heart out for the next 10 years, or 10 years sitting in a factory, looking at factory people, dealing with factory problems. Plus, my factory might not be successful in the long run, there is inherent risk of lawsuits, natural disaster, political shinanigans (BigBoxCompany gets your factory rezoned as an old folks home by bribing the governor, or you get EPA inspections every 10 minutes, or they bribe an employee to sabotage your equipment).

Finally, you don't have to sit around after you take the check. Perhaps you should open a bag factory (you probably agreed not to compete in Boxes), and you turn that around even faster, since you will of course take all your talented workers with you in 2 years once you are free of BigBoxCompany.

If the check is larger than (expected profit without selling out) * (risk factor) - (estimated value of your time doing other things) you MUST take it unless you don't care about maximizing profits, in which case why are you running such a great factory?

Obviously the loser is the consumer, but this is always the case. On their way up, companies are models of efficiency (that is why they are moving up, so this is a tautology). At some point they are able to use market position and branding to get customers, and so they can let efficiency slip a little, so of course it does slip. If you were guessing what an executive would do when presented with 2 options, and one option requires 60 hours a week of hard work for 6 months, and one requires a phone call and dicking around and playing golf, and both have the same outcome, which would you expect the executive to make? So of course established companies just advertise and give out free schwag and sponsor events instead of buckling down and making a better product and more cheaply, the executive only cares about profit for the period which effects his compensation, and both methods are identical if that is your only metric.

I have a long history of being a bleeding heart. I also come from an environment where "throwing money at the problem" is kind of the default mental model. So I've spent lots of time fantasizing about how I would improve the world/help people around me should I suddenly have money. Over the years, I have concluded that financial problems grow out of real problems, so in most cases just throwing money at the problem actually hurts a person's ability to solve the underlying real problem. If someone is convinced that "The Problem" is how much money they owe and you pay off their debts, it lets them off the hook for wondering if there is something about their lives they should change. (And in many cases, those debts will quickly pile up again because the cause of the debts was not resolved. My recollection is that about 2/3s of people who win the lottery are bankrupt 5 years later.)

For intractable personal problems, the odds are very good that the person with this intractable problem is very resistant to change and/or the problem itself is inherently difficult to overcome. In both cases, an easy way out of a portion of the consequences tends to undermine any hope they will buckle down and do the hard task of making the necessary changes. Also, paying off someone's debts inherently contains a judgement about how the money should be used. I have concluded that it would be better to just give someone money, no strings attached, no questions ask, no expectations, as a gift. And then not roll one's eyes and such when it isn't used the way one thought it ought to be. I have also concluded that if I want to help people address some serious personal problem, throwing money at the problem is not the way to do it. Some day, I might figure out how making money available could grease the wheels of progress towards a solution without causing all kinds of unintended negative side effects. Should I ever work that out in my mind, I might well found a charity. In the mean, I will share info and try to mind my own business.

In general, though, I would point to something that ought to strike anyone with an outside angle on the culture and worldview pervading the tech startup community and much of small business: there is a rather Messianic complex of exceptionalism, particularly with innovation.

While it is certainly true that large companies necessarily homogenize business processes and impart well-known characteristics of "mediocrity," that's exactly what they do best: optimise for profitability. Large organisations are very good at extracting value from existing things. They are also the only ones with the capital to bring many innovations from an incipient level to mass-market; that's a large-scale, and very capital-intensive endeavour.

I think startups often like to imagine themselves leaders in innovation due to hypothetically negligible distribution and replication cost structure introduced by the Internet, but that's a silly thing to extrapolate to a universal. It really depends on what the product is, and certainly on the nature of the innovation. There are a lot of modern conveniences, well-known products, appliances, brands, etc. that would have never seen the light of day - in a household name sort of sense - if they had been left in the stewardship of the original creators. It takes a lot of money - and, indeed, a lot of thankless, cheerless, rather bland and unremarkable process development and management - to get the escape velocity.

My point is that without knowing more about Intuit, I am not convinced, ipso facto, that Mint is going to die a mediocre, bromidic megacorporate death simply because it was acquired by a much, much larger company. That doesn't necessarily follow. That it will undergo considerable change and adaptation to the business imperatives of the acquirer is almost certain, but whether that will turn out to be utterly horrible or something quite pleasant depends on the quality of the acquirer, not the mere fact of the acquisition.

I don't hear anyone criticize pg for selling Viaweb, and that sale was obviously what opened the door to the Y-Combinator experiment (which is much more interesting than running an established company).

There's a reason founders leave when the company "makes it", and its not the money.

If this was an acquisition fueled completely by a VC or investor, I doubt the founder would be interested or willing to then commit to the Big Evil Company that his revolution is being sold to.

Therefore I think the main premise of Jason's blog post is wrong.

See Scott Cook's (Intuit's founder) blog post: http://www.mint.com/blog/updates/intuit-not-out-to-change-mi...

>>Scott Cook from Intuit here. OK, I’m about to date myself. Long ago (27 years ago in fact), I watched my wife complain about paying the bills. That gave me an idea. And that idea became Quicken. Check with your parents – they might use it. Maybe even your grandparents.

>>But probably not you. For many of you, Quicken is a 20th century product in a 21st century world. It’s like the car your parents had growing up. So you turned to Mint.com. Because it wasn’t Quicken.

He seems to deliberately and at every opportunity play up what an out-of-touch old fart he is. You can almost hear the fake twang as he sits on his rocking chair...

Will the lead people at Mint have real power in Inituit? Will one of them be the next CTO? Are terms like those ever specified in a buyout?

Very unlikely. And even if someone from Mint were to become CTO, he would find it very difficult to change direction or focus. Intuit has multiple levels of management fiefdoms(within fiefdoms) and is infested with layers of clueless middle management and with a few honorable exceptions(mostly old timers from the old days, and some sharp kids just out of school, who don't stay very long) the tech people aren't very hot either (which is why, with all their resources and customer base and domain knowledge, they couldn't compete with a thin layer around Yodlee's backend).

1. Mint founder isn't Steve Jobs.

2. Mint founder didn't also found Quicken.

3. Mint made a pretty little web app, based on someone else's platform, nothing that Quicken themselves couldn't do, if they could be assed to hire a decent consulting firm...

4. NeXT, on the other hand, created bleeding edge hardware and an amazing new operating system that was worthy of being the core for the next decade or two of development.

Apple didn't "buy" NeXT. Apple paid $400 million as a way of groveling -- begging for Jobs to come back. And Jobs brought NeXT tech with him, of course, but let's not fool ourselves and pretend it was due to the tech. The tech was a bonus.

Jobs' return was the return of the prodigal son and messiah and troublemaker all rolled into one, and it was the last desperate gasp of a company that absolutely could not function without him.

But I guess most of you guys were too young to take in those subtleties at the time.

The bottom line is, Mint isn't even that good. Getting bought by their Big Daddy competitor is the expected outcome.

Did you ever really think they were going to spin it into a lifetime of riches and plucky entrepreneurial do-gooding?

They are buddy-buddy with credit card companies; they have a rather draconian ToS; their UI has only the gloss of friendliness, with glitz and shine and no true usability work baked in; they basically have screamed "BUY US!" the entire time they existed.

At $170 million, Mint is a mere toy to Intuit. The Mint founders are not going to revolutionize things at Quicken -- Quicken's key customer base does not overlap with Mint.com's customer base (if we can even call them "customers" since the service is free).

Mint must have been a mere annoyance, a PR problem, an insect buzzing around the room, crying "NEENER NEENER" in Intuit's ear, until Intuit decided it had to swat - or buy.

Buying is less work than swatting.

Get in, get out - that's a O.G.'s classic

Everyone on this thread is just screaming their own point of view so they can feel validated.

Quit arguing on HN, and go DO something.