Ask HN: Why does P2P encrypted messaging still suck? - <AUTHOR> I chat with my teammates (who are ready to agree on a particular messenger)
So, far we've tried
1. Telegram - The problem here is that E2E encrypted messaging (secret chat) is not available on the desktop.
2. Tox - Works everywhere but qtox crashes randomly on Mac. Antox also doesn't work well on Android either. Utox crashes randomly on Linux. Qtox has no way to disable notification on Linux.
3. Whatsapp - You always need your phone android
4. Signal - Message syncs is very slow if you switch between desktop/phone often.
I've reported these issues to all these projects but it's been a long time and nothing resolved so far.
The situation is still pathetic. What do you recommend? <comment><USER5> I was working on exactly this many years ago at the OFTN OSWG with an open source project called Hum.

I stopped development after Apple got sued for secure p2p video chat with the original version of FaceTime, seeing as Hum was also going to support secure multiparty p2p video chat. Unfortunately VirnetX (and by extension, the US military) owns a patent that would have made deployment of Hum difficult without an expensive legal team.

It's not too hard to imagine that the real reason you don't see many p2p encrypted communication platforms is US military-sponsored patent trolling. This aligns with their mass surveillance interests.

<comment><USER6> Wait a minute here -- You're saying that the US military is patent trolling with secure, multiparty chat patents?

Can you link to said patents?

<comment><USER7> The person is wrong. It's a private company that has the patent, the company works with the government. I don't know why he implies the government is involved in the patent suit, _they are not_.

<comment><USER5> "It's not too hard to imagine…" isn't exactly the same as saying "It's true that…". I don't have hard evidence, but it's not hard to imagine VirnetX being manipulated behind the scenes by the US government. Similar circumstances have happened in the past.

</comment></comment></comment></comment><comment><USER8> Money. It's not profitable to run an encrypted messaging service for free, because you can't extract any data from the chats, and people aren't willing to pay what it costs to maintain a good app.

<comment><USER9> Maybe a company could allow paying customers to invite 10 of their contacts to use the app/service for free. Or is even the potential association of all of those people too insecure?

I otherwise can't imagine how to bootstrap a network.

Maybe users could pay to _receive_ messages.

<comment><USER10> _I otherwise can 't imagine how to bootstrap a network._

Facebook started with a narrow target: students of some uni. Look for another similar group of persons, that want privacy and don't mind spending a few dollars.

Edit: Whatsapp (everybody here in Spain has it) was a paid app at first. They gave one year away... eventually they made it free, around the time that Facebook bought it.

<comment><USER9> One problem with bootstrapping a network of users of an encrypted messaging app/service is that info about the network of users itself arguably needs to be secured too.

But you're still probably right overall. Marketing to businesses or teams within businesses is probably the best bet.

</comment></comment></comment></comment><comment><USER11> Signal works pretty well for me. I mostly use it on my phone, but occasionally on my desktop, but never had sync issues.

Matrix.org + Riot.im are a pretty solid combination. Plus, you can bridge to IRC.

<comment><USER12> Last I checked there was no Signal client for most Linux or BSD distros. IIRC they did something silly like a Debian-only package or something.

But as many others have stated, its inability to work without exchanging phone numbers is a show stopper for many uses cases. Especially now that my country requires SIM registration with valid IDs.

<comment><USER13> There are builds for ubuntu now. They even run an APT repo. [https://support.signal.org/hc/en- us/articles/214507138-How-d...](https://support.signal.org/hc/en- us/articles/214507138-How-do-I-install-Signal-Desktop-)

<comment><USER14> There's been one a couple in the AUR for a long while, too. Signal Desktop is not too bad. The aesthetics are clunky, and it didn't seem to scale well last time I used it, but decent overall.

</comment></comment></comment></comment><comment><USER15> Try Keybase (keybase.io). It provides usable apps for all platforms, encrypted file sharing, git, group chats. Most important thing: it does not require to trust keybase servers as trusted party. Trust for your partner key is inferred from various proofs.

Disclaimer: I do NOT work for keybase, just a big fan of it.

<comment><USER16> I've tried, but it still doesn't support yubikeys/smartcards. So people send me messages on keybase chat, but I can't decrypt them :(

<comment><USER17> Hi, I work at Keybase. There actually is some Yubikey support. But it's not relevant here, because chats use per-device keys, not your PGP key.

<comment><USER16> Right, so how can I decrypt the chats you sende email notifications about if my base pgp key is on a smartcard?

<comment><USER17> It will just work. Your PGP key isn't a "base" key, the device keys are. Your PGP key is only used for PGP operations.

[https://keybase.io/blog/keybase-new-key- model](https://keybase.io/blog/keybase-new-key-model)

</comment></comment></comment></comment></comment><comment><USER18> Did you consider XMPP with OMEMO? I'm running my own server for family and friends, we use [https://conversations.im](https://conversations.im) in mobile and Gajim or [https://dino.im](https://dino.im) on desktop. Everything runs well including encrypted group chats.

<comment><USER19> Is there a server you recommend?

<comment><USER20> Ejabberd and prosody are the most widely used ones. For prosody you should also consider using the community prosody-modules repository that adds many modern features. I'm running prosody 0.10 on a server for my app users, with multiple hundred connected clients simultaneously.

</comment></comment></comment><comment><USER21> 1\. Telegram - Not p2p

2\. Tox - <USER2>

3\. Whatsapp - Not p2p

4\. Signal - Not p2p

Putting the above aside: If Tox doesn't work for you, your best mobile- friendly options are: 1) Signal and 2) as others have mentioned Matrix - <USER3> you want a self hosted and federated solution.

[edited: addendum] i now realize you probably mean p2p-encrypted messaging. Damn semantics of non-formal languages!

<comment><USER22> How do you call P2P that is strictly without any third party?

<comment><USER23> p2p strictly implies no third parties.

If there is a third party involved, you are not p2p.

<comment><USER22> so if other users (not part of the conversation) are used as temporary servers so that messages get delivered even if the sender or receiver are never connected at the same time, what would it be called?

<comment><USER23> AFAIK there isn't a modern word to describe the common architecture that you describe.

About a decade ago, the phrase "hub-and-spokes network" was thrown around to describe an architecture with a central server that acted as the mediator. The term "p2p" became popular in this context. (

Napster, bittorrent, tox are all "p2p" because they don't connect to single server. Skype is not "p2p" because all packets go through the skype servers.

<comment><USER24> Skype used to be p2p, except for the original auth/login. But since then microsoft bought the company and push everything through their servers.

</comment></comment></comment></comment></comment></comment><comment><USER25> I find Wire(wire.com) to be well designed and usable, especially their mac client. Only issue I have with Wire is having no anonymous sign up and having to rely on a central server to add contacts but the former can be worked around by using a temporary email.

I take issue with having to provide a cell phone number for Signal. I just hope Tox clients get more polished and more usable as every client I've used except toxic has been terribly buggy.

<comment><USER26> In addition, their server-side code is open-source and they claimed that federation support is something they are considering to add: [https://github.com/wireapp/wire/issues/160](https://github.com/wireapp/wire/issues/160)

Overall, I'm also not a big fan of Signal's hostility to federated protocols ([https://signal.org/blog/the-ecosystem-is- moving/](https://signal.org/blog/the-ecosystem-is-moving/)), so I'm more optimistic about Wire in the long run.

<comment><USER27> Just want to add onto this that pretty much everything Wire makes is open source. The backend (written in Haskell no less, which continues to amaze me), the desktop app and the mobile apps.

</comment></comment></comment><comment><USER28> At one company where I worked, we ran our own IRC (+SSL) server, and it worked great. Depending on your exact requirements and use cases, that may or may not qualify as "p2p encrypted".

<comment><USER29> Seconding this. You can lock down an irc server pretty thoroughly if it is for company internal use only. First, put it in private IP space that is only accessible from a VPN connection (properly setup openvpn for instance). Have unique vpn public/private keys per device so you can revoke access to a stolen laptop or phone granularly. The ircd server host OS should have no public facing IP. Also configure the ircd to only listen for sessions from a certain range of IP space. Once people are on the vpn, have them ssh into a shell bastion system and run irssi + screen (or tmux) from there, connect to the ircd.

<comment><USER30> This doesn't protect users from snooping by the IRCD admin, which is what e2e encryption/p2p chat is about -- removing the ability of the service provider to see the content of the private messages between users. IMO IRCD in no way qualifies as "encrypted p2p chat".

<comment><USER28> That's why I said it may or may not qualify. What's the threat model? What's the usage environment? (It's "encrypted p2p" between two users if one of the users is also the admin.)

For example, if the _purpose_ of this requirement is to keep a business team's communications out of the hands of other businesses, then local IRC+SSL accomplishes that, even though the local administrator can still snoop on it. Being able to say that company secrets never left the company was a big hit with our investors, and it didn't matter that it was technically possible for our sysadmin to snoop on them because he had physical access to all our workstations anyway.

If you don't have a trusted administrator, all is not lost. Each user can run their own ircd on the same VPN. It's less convenient to set up but any IRC client can handle multiple servers. Again, it depends on your requirements. (Are there 5 users, or 5000?)

Like any other technology, IRC can be used as part of a secure system. It has the advantage that it's free and easy to run yourself. Without knowing more context, though, it may or may not be practical.

</comment></comment></comment></comment><comment><USER31> Well, iMessage is end-to-end encrypted and works smoothly on both mobile and desktop. Caveats apply, of course: supports OS X and iOS only, is not open source and its protocol is not publicly available for audit.

OP's post indicates they need support for Android mobile and Linux desktop, so it won't fit their bill, but it's a viable option for some.

</comment><comment><USER32> > Ask HN: Why does P2P encrypted messaging still suck?

Because no one wants to pay for it.

<comment><USER33> Also, no one's asking to have it paid for.

I've noticed over the past few years that a lot of things go un-made because there's an assumption that no one will pay for something if it's done really well.

The reality is a _lot_ of people will pay for something if it's done really well.

I'd easily pay $10/month for Facebook, if Facebook really had some way to shut off 100% of its marketing-based data things that we're all so worried about.

Thing is that people became allergic to asking outright for money from consumers a while ago. I used to buy software, and I still will if someone actually makes great software!

(I pay for all sorts of services that actually ask; Dropbox, a password manager, Spotify, Netflix, extra space on Gmail, etc. Provide an actually great service, make it a reasonable price and I'll pay!)

<comment><USER34> threema.ch exists if you want a paid encrypted chat client

Things that are free get about 10x more adoption than non-free equivalents, and chat clients are software that have network effects.

<comment><USER35> [https://spideroak.com/semaphor/](https://spideroak.com/semaphor/)

SpiderOak is a good company.

I've had a free storage account with them for years. I didn't log in for 3 years and when I logged in my data was still sitting there, safe and sound. Pretty nice for a free tier.

</comment></comment></comment></comment><comment><USER36> I use Wire, which is a neat p2p encrypted messenger: \- with an open source app / server \- you don't need a mobile phone and you can use a desktop app \- Voice call works perfect (really good alternative to skype) \- no random crashes at all \- (a colleague of mine diskussed some 'minor' issues on twitter - and they fixed in within few days)

</comment><comment><USER37> Did you try Ring? ([https://ring.cx](https://ring.cx)).

Ring is comparable to Tox, but it has much less bugs.

Full disclosure: Ring dev here. I can answer questions.

Keep in mind that some of the platforms you have listed here are not decentralized. When using a fully decentralized system like ring, you must be willing to compromise on some functionality.

<comment><USER38> Never heard of ring, looks very interesting!

Questions:

1\. Who is developing Ring? Is there a company behind the software? Who are the people?

2\. Is it really truly P2P? Does it require servers or known supernodes? If so, what guarantees that those are up? (E.g.: Skype used to be somewhat P2P until MS changed that, and banned old clients from logging in - is that scenario possible?)

3\. What is the UI framework based on? (i.e. is it another Electron app?)

4\. Bittorent Bleep looked promising, until it was suddenly no more. How are you going to keep Ring afloat? What's going to ensure it's there in 5, 10 years? (As much as I don't like Skype, everyone I need to (video)chat with has been there for 15 years)

Thank you!

<comment><USER37> 1\. Ring is a GNU project (see [https://www.gnu.org/manual/blurbs.html#ring](https://www.gnu.org/manual/blurbs.html#ring)).

It is mainly developed by Savoir-faire Linux. A free software consulting company based in Montreal: [https://savoirfairelinux.com](https://savoirfairelinux.com)

2\. It is fully decentralized. OpenDHT is the backbone of the network. Calls are made using the sip protocol and are initialized with ICE ([https://en.wikipedia.org/wiki/Interactive_Connectivity_Estab...](https://en.wikipedia.org/wiki/Interactive_Connectivity_Establishment)).

Some situations require extra nodes: \- If ICE can't open a connection with: ip-to-ip, UPNP, udp hole punching, it will revert to using a TUN/STUN server hosted by Savoir-faire Linux. Note that you can configure your own TURN/STUN server in the Ring settings.

\- The first time that Ring connects to the network, it needs a "bootstrap server". A bootstrap server isn't really a super node, it is just a "know active node". Every DHT-supporting bittorrent client supports this. Note that you can point ring to another bootstrap server in the settings.

\- Ring uses an optional blockchain (ethereum) based service to register usernames. This isn't part of all ring nodes by default. It has to be installed separately and then you must point your ring client to it. You can chose not to use usernames if you want and call people with their full RingID instead.

3\. We have several clients, all of them use native frameworks. \- GNU/Linux: GTK \- Android: native android libraries \- Mac: native mac libraries \- Windows UWP: native UWP libraries \- Windows win32: native win32 libraries \- IOS: native ios libraries

4\. Ring (sflphone) was released in 2004. At first, it was a SIP softphone app. It only became decentralized a few years ago. However, the app still supports SIP.

The development has been generously funded by Savoir-faire Linux since 2004 and there is no plan to stop. Savoir-faire Linux has taken every step to ensure that Ring remains free. Joining the GNU project, (2016) was one of these steps: \- [https://lists.gnu.org/archive/html/info- gnu/2016-11/msg00001...](https://lists.gnu.org/archive/html/info- gnu/2016-11/msg00001.html)

</comment></comment></comment><comment><USER39> Did you consider [https://threema.ch/en](https://threema.ch/en) yet? I have been using it for years and it is great (iOS and Android). The developers keep adding new useful features to stay on par with Whatsapp etc. For instance, their web chat is currently in beta.

</comment><comment><USER40> I've recently moved to wire after looking for a chat app capable of exactly this. It's quite good, sync is fast an effective and even group calling is acceptable.

Only problem is that it currently doesn't allow you to send yourself stuff, making it less useful than telegram was...

</comment><comment><USER41> Signal on Android(app)/Debian(desktop) always syncs for me within a few seconds, and both my connection and DNS suck.

</comment><comment><USER42> Some general notes (I don't have recommendation). Many people see those options as not something to build on, but rather use. I.e. there aren't many p2p encrypted communication frameworks, and they especially don't solve anonymity + discovery well. Also, I think not enough developers care about making it really easy to self-host (i.e. bust NAT and serve from home) with read mirroring. Myself and I'm sure a gazillion others have side projects trying to tackle these things. You just have to wait until one catches on :-)

<comment><USER43> Here's your solution, 181 pages worth of it:

[https://grothoff.org/christian/habil.pdf](https://grothoff.org/christian/habil.pdf)

Bonus: Briar could run on GNUnet, which would speed up interest in secushare development, which currently occurs at a... well, unexciting rate.

Also, I wish Briar would implement double ratcheting WITH metadata encryption. At the moment, it has no double ratcheting, but because the transport layer works differently this seems less concerning as they use good crypto algorithms, but it poses an issue to secure interdevice message sync. I only point the 'WITH metadata encryption' part out because SignalProtocol[!] lacks it.

A point against both Briar and Signal: I can't specify my preferred encryption method and parameters.

</comment></comment><comment><USER44> Maybe I'm missing something but you asked for P2P messengers but listed a bunch of messengers that aren't P2P? The only one you've tried that is P2P is Tox right?

</comment><comment><USER45> The issue becomes very difficult when you need to preserve message history reliably and allow account usage across devices. Because key management becomes tricky and clunky and there's no easy UX ways around it.

For ephemeral messaging like a SnapChat type use case, you can EASILY provide p2p encrypted. For services like Telegram and FacebookMessenger, their feature list requires cross device syncing, historical archiving, and those features don't play well with rotating keys, perfect forward secrecy, and other e2e encrypted messaging techniques.

</comment><comment><USER46> I've occasionally seen delays of ~10 minutes between message sent and received with Signal; even upwards of 30 minutes sometimes.

It's a shame; the app has a very good user experience otherwise.

<comment><USER47> Delays of minutes or hours also occur in WeChat and plain old SMS. They are incredibly annoying, but it's not obvious to me that we can blame Signal here?

</comment></comment><comment><USER48> > The situation is still pathetic. What do you recommend?

XMPP/Jabber + OTR

<comment><USER49> Yea I second that, and have been doing this combination for years. For the client programs:

      Pidgin with OTR - Linux/Windows
      Adium with OTR - <USER4>
      ChatSecure/ZOM - iOS/Android

Used on top of some XMPP service underneath such as Cisco Jabber.

<comment><USER48> On that matter: Can anybody recommend XMPP clients that support GSSAPI/SASL/Kerberos user authentication?

I'd really love to implement thorough self hosted SSO infrastructure that authenticates against a crypto token (Yubikey, Nitrokey, GPG smartcard). Doing this for e-mail and SSH logins is straightforward (BT;DT). And the Prosody documentation is promising with that respect, so the server side should be doable as well. But on the XMPP client side all I can find are some maillist posts where people supposedly got it working with Pidgin, but no howtos or similar to be found.

One thing that I also want to implement is kerberized OAuth and OpenID; however there are only very few services where you can actually log in with something other than Google, Twitter or Facebook – StackExchange used to offer login via custom OpenID, but they removed that a few years ago.

</comment></comment></comment><comment><USER50> XMPP + OMEMO. Cross-platform, multiple client, works fine.

</comment><comment> X-Istence I have been using Keybase.io for a lot of the chatting I do with friends, and it works great across multiple platforms.

<comment><USER51> To clarify: Keybase.io, like Signal, Whatsapp and Telegram above, is encrypted but not P2P - all of them rely on centralized servers.

<comment><USER52> and thats where the vulnerability is, in the centralized servers

<comment><USER53> The only vulnerability introduced by the servers at keybase is denial of service. I believe the protocol and clients are open source and there is no need to trust their servers for the key distribution part either (keys are cryptographically verified from a variety of sources like DNS, Twitter, Reddit, HN for each recipient)

</comment></comment></comment></comment><comment><USER54> I wouldn't call three of those p2p and one of them doesn't even deserve the description "encrypted".

The probably is that the proper p2p encrypted messaging tools have a UI that either absolutely sucks or they have other, similar problems. Problems you have when you can't afford a UI/UX designer.

</comment><comment><USER55> I think part of your question is, why does every p2p app not work on all platforms equally well. This is true of pretty much 90% of apps and software - they don't work on all platforms equally well. This is because of conscious design and business decisions taken by the builders.

</comment><comment><USER56> [https://status.im](https://status.im) is great, it uses ethereum whisper protocol [https://wiki.status.im/Whisper_Messaging](https://wiki.status.im/Whisper_Messaging)

<comment><USER57> Who would want to store their private messages on a public database?

Not to mention needing to buy ETH some how and than paying for every message?

<comment><USER58> You don't need ETH to send messages on whisper. And Whisper doesn't store your messages on the blockchain.

[https://github.com/ethereum/wiki/wiki/Whisper](https://github.com/ethereum/wiki/wiki/Whisper)

<comment><USER57> Interesting protocol, thank you for sharing and correcting my misunderstanding.

      Uncertain-latency Not designed for RTC.

At first glance, this looks like a client broadcasts the Whisper to another server which than places it in a cache and might forward to more clients if enabled. Eventually the cache is cleared and there's no telling if the message will propagate successfully in any given time frame?

<comment><USER59> More or less it's how you described it. The current implementations broadcast messages to all connected peers supporting the protocol every a few hundreds of milliseconds.

It's also true that there is no confirmation that the message reached the recipient (in order to provide dark routing). This can be built on top of Whisper in a separate communication protocol.

</comment></comment></comment></comment></comment><comment><USER60> [https://liberapay.com/matrixdotorg/](https://liberapay.com/matrixdotorg/)

[https://www.patreon.com/matrixdotorg](https://www.patreon.com/matrixdotorg)

</comment><comment><USER61> >3\. Whatsapp - You always need your phone android

Really? I have iOS here, WhatsApp works fine here and the web app version ([https://web.whatsapp.com/](https://web.whatsapp.com/)) also works fine.

<comment><USER62> you can't use whatsapp web when your phone is not on the same network

<comment><USER63> In case anyone is interested, the phone plus web combo was apparently the final solution to the thorny problem of establishing identity with the web client without requiring any more info on the user beyond the phone number.

All bets are off, now that it's FB's beast, but the two device solution was intended as a privacy feature, afaik.

I sat next to Pasha Sadri, the web client lead, for 4 months before the acquisition. He mentiond the problem a few times.

The fact it took another 2 years to get the client out seems to indicate that multiple problems were solved in other ways.

</comment></comment></comment><comment><USER64> Two words: Key Management

And of course nobody wants to pay for it. Also we need to aim higher than just p2p messaging. Shameless plug. [http://firestr.com](http://firestr.com)

</comment><comment><USER65> I use Wire (wire.com). It's good with a few downsides:

\- Cannot send things to yourself.

\- Sometimes buggy with video calls

\- I would love a bit more customization client side, like being able to have a more compact interface on the desktop

</comment><comment><USER20> Briar seems to be an interesting p2p encrypted chat and forum system.

</comment><comment><USER66> It's difficult, even the richest company in the world hasn't figured out proper sync of their encrypted messaging platform and they only support their own operating systems!

</comment><comment><USER67> Lack of efficient fully homomorphic encryption -- as soon as we crack that, we can start injecting ads into encrypted messages and it will be profitable enough to make not suck.

</comment><comment><USER68> I use Signal every day as my primary IM client. I haven't had any real problems except the occasional having to reset my keys.

</comment><comment><USER69> How about running the Telegram or WhatsApp mobile apps on your desktop using an Android virtualization layer (e.g. BlueStacks)?

<comment><USER70> At least in the pass, one couldn't easily (if at all) run whatsapp on multiple devices. Even if one would run it in bluestacks, it be only a desktop solution.

</comment></comment><comment><USER71> Startups like PreVeil are trying to address this with servers that don't have access to your data.

</comment><comment><USER72> Try [https://forsta.io](https://forsta.io)

</comment><comment><USER73> I use JMP.chat which is basically XMPP + OMEMO + a phone number.

</comment><comment><USER74> We are building a p2p decentralized application that uses WebRTC for real time chat, video, etc

You can try it at www.stealthy.im. Would love your feedback!

Also, we have a super secure version called "Snowden Mode" for the privacy enthusiasts!

<comment><USER75> Looks neat - like it checks a lot of boxes I am looking for. Does not seem to tell me of I can host all the code on my own servers or if this is a kind of closed source saas thing you are trying to make happen. It may answer "does it have perfect forward privacy" with some of the terms I am not familiar with, or not, not sure.

<comment><USER74> Thanks Steve, the underlying auth/storage technology is open source: [https://github.com/blockstack](https://github.com/blockstack).

We are planning to open source our code in due time.

One of the cool aspects of our tool is there are no servers involved. Everything runs client side and the lookups are done with de-centralized zonefiles on the blockchain.

</comment></comment></comment><comment><USER76> mainframe is attacking this issue [https://mainframe.com/](https://mainframe.com/)

</comment><comment><USER77> What about RetroShare? I realize the software can feel a bit janky at times, but I've heard many good things about its p2p privacy features.

</comment><comment><USER78> Wire is pretty lit, e2e on all devices.

</comment><comment><USER79> For noobs like the OP Http://crypto.cat is something to look at. (XMMP/OMEMO for idiots.)

</comment><comment><USER80> Because networking is difficult with a lot of unknowns, P2P is a resource hog with many security issues, and encryption in itself is a beast.

A lot of the video game studios would love to use P2P instead of having to invest in infrastructure that cost money. Destiny is a example why they shouldn't. Destiny P2P system shows on average that anything over 5 users causes major lag in data transfer. Users home networks are equip for handling data coming to them, but not for data being pushed out. Same thing for cell phones they are design for small burst of data going out not constant data being uploaded. P2P is to much a resource hog when it becomes a time sensitive data transfer.

The other problem Destiny prove to be a issue with P2P is a small security issue with ddosing. You beating someone in a video game well a instant ddos and bam lag spikes. Lag spike in a P2P system are murder because they are instantly felt by all.

Another unknown issue with networking is routing you never know how or where your packets are being sent. If one user packets are for some reason being routed through Uganda then every user might have to send the same package 3 or 4 times each time till it reaches them. You would be surprise how many packet drops happen between isp and networks. This is even a bigger issue with P2P because a packet drop is multiple by the amount of users.

And finally we get to the fun world of encryption. It is fun because it is simple to say all the terms that make it sound encrypted and secure but it is a iceberg of hell and dog poop. Creating secure channels while creating encrypted message while insuring that the end party are a trusted end users while ensuring all the algorithms used are up to date and solid is horribly boring and tedious. Did you know that if you compress something then encrypted then you just broke your encryption? That is because compression algorithm has a repeating pattern that makes it easier to break encryption. It is little things like that and more why you need a whole security team of red and blue team when you ever use the word encrypted.

Also to the other problem you eluded to cross platform. Making anything cross platform is it's own major heart break issue. When you toss in phones as well (I run in corner screaming and crying thinking about it). You might say something like java can handle it all, but it doesn't. You still need to test everything over and over again. Every computer can be running a different version of the Java virtual machine each having its own different bugs. Then you get to the realm of cell phones on top of creating a desktop app, and I would just walk away. I would charge someone billions to handle that kind of dev work.

The situation isn't pathetic it is a iceberg problem. The amount of complex problems that come with creating a stable P2P cross platform encrypted solution that is easy for end user to use, and doesn't compromise in certain areas would cost millions of dollars upfront to build.

</comment><comment><USER81> Y'all not using Digital Note? (XDN) Been incredible for me.

</comment><comment><USER82> I run Telegram on my desktop? Also i use WhatsApp on my iPhone.

<comment><USER83> Telegram doesn't use end-to-end encryption by default. It's marketed as a secure messenger, but it's comparable to Facebook Messenger or Google Allo.

<comment><AUTHOR> As I've mentioned in the post above, telegram simply does not have "secret chats" available on Desktop.

So, if you use Secret chat on mobile and go to desktop, you'll not see it!

Switching back and forth between secret and not secret is troublesome especially when the other side doesn't know if you are on desktop or mobile to check availability for secret chat.

<comment> michel-slm Which desktop client did you try? The official Mac client, at least, has secret chat just like the mobile clients (I just used it yesterday)

Note that Telegram secret chats are end to end encrypted (default chats are not) but you're still dealing with the Telegram server (not peer to peer)

<comment><AUTHOR> I tried arch linux one.

</comment></comment></comment></comment></comment><comment><USER84> Try Peerio.

</comment><comment><USER85> Isn't there a client by John McAfee?

</comment><comment><USER86> If you're an individual or organization in opposition to a state / stage agency then certainly it makes sense to find an app to protect your communication without a third party being involved.

Short of that, consider if you actually need "P2P encrypted messaging" \- if you're doing business-type things then you should probably use a business-type messaging solution. Slack is pretty good. IRC is fine if you're slightly more paranoid, it just doesn't have UX on par with a commercial solution.

Find any HIPAA-compliant messaging product and you'll get most of what you actually need (vs think you want), but be prepared to pay much more for it than for a regular chat client.</comment>


Ask HN: How should I structure a simple co-founder agreement? - <AUTHOR> I recently brought on a co-founder. I offered a salary and 15% equity with a one year cliff and a four year vest. I have not raised outside funds.
I'm thinking I write a simple document stating 15% equity with a one year cliff and a four year vest and we both sign it and hold a copy.
I'm thinking this will work to cover us both legally until the time of a funding event when we can have lawyers draw up something more official.
Will the simple letter suffice or should I go the lawyer route now? <comment><USER2> Go the lawyer route now. Even if it is not a very expensive lawyer, get a lawyer to draft the agreement. If you do it yourself, you just don't know what things you are missing.

It is not just about funding. What if you start growing without funding and then suddenly you realize you don't have a solid agreement in place. It could be too late by then.

I hate lawyers but they are a necessary evil because when shit hits the fan, you will need one anyway. If shit never hits the fan, good for you and that is the price you pay for hoping shit doesn't hit the fan.

<comment><AUTHOR> Thanks, I will.

</comment></comment><comment><USER3> Absolutely go the lawyer route. The downside risk of doing it yourself is too high.

<comment><AUTHOR> Thank you!</comment></comment>


10-Year Exercise Periods Make Sense - <AUTHOR> https://dangelo.quora.com/10-Year-Exercise-Periods-Make-Sense?share=1 <comment><AUTHOR> I agree with Adam's post and intensely disagree with A16Z's post on this topic.

I don't think companies should take back stock compensation on a technicality. It'd be silly to even discuss taking back cash compensation when someone leaves a company!

I appreciate Adam starting this trend years ago.

<comment><USER3> What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's? Apart from obvious knee-jerk reactions like "stop working there."

Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all. It is just lost money, from their perspective, and probably annoying to have an employee leave (creating a headache in your life) _and_ take a bunch of equity with them. (And it severely limits an employees negotiating power over time, which can be of benefit to the founder...)

What are some strategies an employee can use to make the point that Adam's perspective is a much more employee-friendly one and, thus, better for the company?

Looking for some perspective.

<comment><USER4> "What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's?"

Value the options at zero and take appropriate steps.

It may not be the statistical expected result, but it is the modal outcome anyhow.

"Appropriate steps" isn't just "quit". If you're happy with the cash salary than you don't have a problem, for instance, or the experience, or the lifestyle, or any of the other reasons you may be choosing to work at a startup.

"Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all."

Well, yeah, but that's sort of vacuous; it's not in the employer's best interest for employees to be compensated at all. But that makes hiring pretty challenging.

"What are some strategies an employee can use to make the point that Adam's perspective is a much more employee-friendly one and, thus, better for the company?"

There isn't a general answer to that question, because it depends on your status in the company. In some places, even opening that conversation will put you halfway out the door. In others, they'll fall over themselves to fix the problem if you just mention it, because they'll not have heard of this before. You need to judge the situation you're in, and play out the possible scenarios before you step in to something like this. But I'd suggest you're going to need a _very_ solid position to change something this fundamental about a company.

Generic advice: It's always easier to negotiate from a fallback position of strength; unless you're absolutely confident in your position, consider having a job in hand before starting this talk. (You don't have to tell your employers that you have an offer in hand.)

<comment><USER5> Yours is the most reasonable answer and I wish more engineers understood this. As long as there is a nontrivial fraction of engineers that don't, then startups can take advantage of these ridiculous vesting periods and terms.

</comment></comment></comment></comment><comment><USER6> Founders are committed and in for the long haul, and either make a lot of money or none.

Startup employees make less money on a nice exit, but aren't as committed and can work for a few companies (maybe 2 years each) to improve their odds.

So having 10 years to exercise makes a lot of sense for the second group.

Forcing the employees to stay until liquidation makes zero sense for the second group. So you need to give the people that do commit at that level a package that more closely resembles a founder.

Otherwise it just distorts the market in all kinds of ways. Nobody would want to work for you until it looks like liquidation is around the corner, which means startups would constantly need to be positioning themselves on the auction block rather than focusing on lasting growth.

In addition, it creates the normal kinds of distortions associated with illiquid assets and immobile people.

<comment><USER7> Forcing employees to stay until liquidation isn't in the founders interest either.

You retain employees who might have been great from the zero to 50 stage but not as well suited in the 50 - 5000 stage. But their incentive is to stick around or give up potentially millions in equity that they busted their asses to earn.

Checked out employees aren't doing anyone any favors. You might say you can fire the person or put them on a performance improvement plan but this is easier said than done - especially if it was a key early hire.

I've seen this in many SF-based companies.

<comment><USER8> I completely agree.

Very often the skill set needed for employees changes dramatically over the first several years of a startup's life. It's best for everyone if there is a highly liquid job market and employees can easily leave (or be let go) when they are no longer contributing at their max, but then easily find another place where they contribute more. It's a lot easier to let someone go if both parties know that the employee has been well compensated for the work and risk they took on. It's that much harder to fire someone when a consequence is that they will miss out on any equity.

I'm sure there are edge cases, but I can't see how, in the general case, tying people to companies for long amounts of time is good for anyone involved.

</comment></comment></comment><comment><USER9> For young startups, I always recommend allowing Early Exercise. Put simply, it's the right by employees to exercise their options before they vest. The company retains a right to repurchase those options should the employee depart before they vest.

This enables them to exercise them as soon as they're granted, which greatly reduces the tax burden in two ways:

\- First, the strike price and the value of the option are the same when they're granted, which means that the _spread_ (i.e. the difference between exercise price and value of the options exercised which the IRS considers profit for AMT) is zero. Therefore, no taxes need to be paid. _I 've been stung by a 5-figure AMT tax bill on exercised options that were completely illiquid—all of which would've been avoided had I exercised early._

\- It starts the clock for long-term capital gains. You need to hold the actual stock for over 1 year to be taxed at capital gains rates instead of income tax rates. Federally, this can lower your tax rates from up to ~40% to ~20%. (would've been 15% pre-Obama!) In CA, for state taxes there is no distinction, so you'd still be paying income tax rates of ~10-13%

Keep in mind, if you early exercise, that you _must_ file an 83b election with the IRS within 30 days, or the tax consequences can be severe. (If you don't, you'd be taxed on the spread at the current option value every time some of your options vest.)

Now, I think extended exercise windows are great too, and ideally option agreements would have both. I think generally, early exercise makes more sense for employees who join pre-Series-B, while extended exercise windows make more sense for later stage employees.

</comment><comment><USER10> Wow never disagreed with a16z content so far.

> … at the same time disadvantaging employees who remain loyal to their > employers just kicks the can down the road …

The underlying assumption that people only leave companies because they are not "loyal"

People get fired, people get mobbed out of teams, company cultures change, companies fail in management. employees lives change, people need to move to other countries.

The whole notion about "loyalty" almost appears action-movie-like. "ARE YOU WITH ME? HELL YEA!"

It's already hard enough to convince highly skilled people to join companies vs founding their own. No need to further decrease the upside compared to being a founder.

</comment><comment><USER11> From the A16Z post:

> This solves all of the issues: cash rich vs. poor; competitive offers; and > the bad incentive problem (e.g., encouraging employees to quit to build > their own diversified stock portfolios).

Says the VC whose business depends on a diversified stock portfolio.

A couple paragraphs above he admits that "median time-to-IPO for venture- backed companies is closer to 10 years". That's not a reasonable amount of time to expect employees to stay at a job, and seems like a recipe for burnout and/or "rest and vest".

</comment><comment><USER12> I think there is fundamental difference of opinion here, exposed by Adam's and A16Z's posts.

A fairly typical early stage employee will forgo hundreds of thousands of dollars in salary over a vesting period, in exchange for options.

The philosophical difference is here: At the end of that period, do you think of the shares as the employees, earned in exchange for both the work done in those years, and the hundreds of thousands the company saved on salary? Or do you think of the options as an ongoing incentive to keep the employee with you (perhaps still below market rates), in exchange for the chance of a big payout later?

Technical employees often feel the former, and will point to the fact that they've "given" the company much more in salary reduction than many early round investors paid per share they own outright. Corporations often state the latter point, or some variation, particularly pointing out that later employees don't have the same leverage on the option pool. Option agreements often encode the latter.

<comment><USER13> I'm starting to have the feeling that those very early employees are about equivalent to an angel investor, and they should be getting some sort of angel investor equivalent terms.

Otherwise once people really start realizing the negatives of being an early employee vs. founding your own startup it would be hard to hire otherwise.

<comment><USER12> One way to do this with very early employees is to avoid the whole mess by just giving stock.

<comment><USER14> You'd still have to pay taxes on it as per your (audit-able) 409a valuation.

<comment><USER12> Sure, depending on the country it works different ways. But if there is tax to pay, it is on a low valuation (very early, remember).

<comment><USER15> To be fair, there is another catch-22, which is that a low valuation means the startup is early-stage, which means your options are worth less.

So sure, you can early exercise, but there is a greater chance your early exercising will lose you money (if the options end up worthless).

<comment><USER12> Note I said "give stock", not "give options". Granted, this doesn't solve everything - it was an aside comment about early stage vesting (where liquidation events can be a long way off)

<comment><USER15> My comment is equally valid if you replace "early exercise" with "paying taxes on" (assuming you do an 83b election).

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER16> Isn't any vesting for non-founding employees completely broken?

If the employee loses the stock when he's fired early, then the company has a huge incentive in firing him a day before he vests, and thus he should regard the vesting compensation as nonexistent.

If the employee retains the stock when he's fired early, then he can just get himself fired to ignore the vesting period, making the vesting pointless.

It seems that vesting can only work if the employee is so essential that the company would never fire him because the company would then be highly likely to fail, which should only apply for founders in a functional company.

<comment><USER17> Firings in ways that reduce the options available to the fired employee are actually quite common practice. They just don't reduce it _this much_ , which would have a lot of the obnoxious MBA types who take over middle-aged companies licking their chops.

My spouse worked 13 years at what was a startup-with-traction when she started there. Last year, they were bought out (public-to-private by a hedge fund). A week later, she was sent packing, along with a lot of the "old-timers". That's not even getting out of options (although there was some of that). That's a simple purge. Purges happen.

When you ask employees to commit to ten years to get anything equity-wise, you're exposing them to _tremendous_ risk. You're hampering their careers. You're exposing them to the risk that you'll take a down round three years down the road and their options will get diluted into near-worthlessness. You're exposing them to the risk that your business will be wiped out by a competitor, or put on the road to obsolescence by technical advances and market trends.

For a 50% bump? Screw that.

<comment><USER18> Or that the employees might have changing life circumstances any time in the 10-15 year future. Find a partner that changes your life needs around working life or living location, have a kid, need more or different housing, have medical issues, have family with medical issues, etc and you're sol.

ps -- a16z funded a company that, as an A round, refused to disclose outstanding shares to value my option grant and was already on the brute force 15% of comp is bonus that you don't get if you aren't there in early April every year retention ("bonus") plan. It may be unjustified, but with some other stories I'm not a liberty to disclose, they seem very employee unfriendly.

<comment><USER17> Most option plans are employee unfriendly. And "This incredibly employee- hostile clause will force us to be more honest with employees, which makes it employee-friendly" leaves a bad taste in my mouth. It might work as long as the original founders are in control. They _will_ be in control ten years later, right? Right?

</comment></comment></comment></comment><comment><USER19> I agree with this, but what do you guys think about minimum service periods? Like requiring 2 or 3 years? Companies like Pinterest and Coinbase have added that condition.[1]

Greater portability could in theory lead to higher turnover even among happy employees. They might go on to found their own company sooner. They might see good financial sense in diversifying their options portfolio. Yet young companies need the team to stick together for a certain time. Especially very small startups at the YC stage -- turnover is very harmful.

Note: In Adam's example, nobody leaves the pre-IPO company in under 4 years of service.[2]

[1] [https://github.com/holman/extended-exercise- windows](https://github.com/holman/extended-exercise-windows)

[2] _" imagine a company takes 10 years to IPO. Employee A works at the company from years 0 to 4. Employee B works there from years 4 to 8. Employee C works there from years 8 to 10."_

<comment><USER20> At Quora we decided not to have a higher "minimum service period" aside from the standard 1 year cliff. The rationale is that the vesting cliff is what everyone is expecting as the minimum. If a company wants to have a higher period before someone can leave and retain their stock, they should just increase the cliff to that length of time to make it fully transparent.

<comment><USER19> That's a fair point, but cliffs are more severe than exercise windows. Many employees still get to keep some of their equity in a 90 day exit window scenario. I think Kupor modeled it at about a third of vested shares on average.[1]

More mature startups may be able to simply abolish the long-term incentive that the 90 day window provides, but I suspect younger (<30 employee) startups need added turnover protection. Perhaps backloaded vesting would be a more comparable replacement? Transparent, predictable, fair, and not as harsh as cliffs. You keep what you vest, but 70% of it vests in years 3-4.

[1] (Although there's certainly unfair variability based on personal financial circumstances in that average.)

</comment></comment></comment><comment><USER21> Wow I guess since employees should already value most stock options at near zero it's hard to value them any less.

<comment><USER15> Valuing stock options at zero is one of those HN memes that are repeated endlessly, mostly, I suspect, by people not from Silicon Valley who know few, if any, engineers who got rich from stock options.

Just because stock options should be valued at less than a company's private valuation does not mean they are worth 0. Very few engineers actually value them at zero.

Adding on to this comment:

It's a spectrum, not a black and white _your options are worth zero_ dictum. At one end, (extremely early stage startup, < 5 employees, you're not a founder) your options are probably worthless, sure, although you have a minuscule chance of being worth $10M+. At the other _extreme_ , you join a company that everyone knows is going to go IPO within two years, and essentially earn what you would earn at Google or Facebook, maybe slightly more.

To give you one example, I knew someone that made about a million (vested over 4 years) in options by joining an already-successful startup as engineer ~70, that he believed would IPO within 4 years. On top of his market rate salary.

<comment><USER22> Would you estimate the percentage of Web 2.0 Silicon Valley engineers that have been able to cash out anything significant (let's say > 1 year market salary) at greater than .1%?

<comment><USER23> Yes. I'd say easily 3-5%.

<comment><USER24> Quite honestly that would shock me, but I wouldn't know where to get data about this. I always believed that only a microscopic fraction of tech workers actually made off with more than a year or so of salary from options (but those who did likely made out extraordinarily well). I would not expect a very flat distribution.

<comment><USER15> Every time _any_ tech company goes IPO or gets acquired for a large number (~>$50M), that's on average 1,000+ engineers who probably made some amount of money from options.

<comment><USER25> These numbers don't make sense to me.

You're saying an _average_ tech company that exits has over 1000 engineers alone? Certainly a $50M company can't support 1000 engineers. Or a $100M one.

(And, just for fun, if a co exited at $1B with 1000 engineers... Let's use round numbers to sketch it out. Let's say the engineers alone get 10% of that value (which seems generous). That's $100M. Divided amongst 1000. So $100K. Not that much if you've given up income for years! Even if that amount is split across 100 engineers, $1M's not necessarily a super-duper return on investment if you're taking a bit pay hit.)

<comment><USER15> I'm saying the average number of engineers is pretty high (because it's an average, it's skewed up).

Regardless, quibbling over this doesn't really detract from my broader point which is that every time you see a company go public, that's hundreds, if not thousands, of engineers that made some money off their options. Some got rich. Most probably just ended up with an above-market salary. Others (those who just joined) get a tiny amount. The same applies for acquisitions, though obviously you'll need to scale the number up or down depending on the $$.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER26> Longer exercise window would be very valuable, especially for employees not having big cash pile laying around somewhere. That would raise the value of options a lot. The other suggestion though - longer vesting period - <USER2> have the reverse effect.

4 years vesting options in startup are "extremely risky investment that with much luck and hard work may pay off". 8 years vesting options in a startup means "I guess Las Vegas gambling is too boring and way to little risk for you? How would you like to gamble with 10 years of your life?"

4 years vesting options in an established company is "we'll pay you if you agree to suffer us and drag yourself to work long after it stopped being fun for you". 8 years vesting options in an established company is "for how much would you agree to sell us your immortal soul?"

In short, long period vesting for options may make total sense for company issuing it. It would have very low value for employee, and even long exercise period would not compensate for that.

</comment><comment><USER27> You can't pay rent or save for a mortgage downpayment with illiquid stock options.

It takes something like $200-400K to get on the housing ladder in the Bay Area so the idea of putting it off for 8-10 years with no guarantee of success is already unattractive.

To shackle yourself to a single company for the duration? Nuts. When did you last work anywhere for 8 years?

</comment><comment><USER28> I've written several times in the past that only companies with substantial negotiating leverage against the gatekeepers of capital can afford to buck what is considered standard.

Hence we've only seen the hottest companies achieve 7-10 year exercise terms. [https://github.com/holman/extended-exercise- windows](https://github.com/holman/extended-exercise-windows)

I've argued that as a cohort, YC is the best candidate to make a large push against VCs and make 7-10 years vesting terms an industry standard. Learning that this is now the case is incredibly exciting. [https://news.ycombinator.com/item?id=11198991](https://news.ycombinator.com/item?id=11198991)

 _harj 119 days ago | parent | on: Fixing the Inequity of Startup Equity_

 _We 're excited to make 10 years the new standard option exercise window for startup employees. Each of us have personally experienced someone close to us dealing with the stress of trying to exercise their options within 90 days and it sucks. We'd like to see more companies making this change, we'll be keeping the public list of YC companies who have either implemented or pledged to implement an extended window, updated here: [https://triplebyte.com/ycombinator-startups/extended- options](https://triplebyte.com/ycombinator-startups/extended-options) _

</comment><comment><USER29> > There is no concern for how many shares we granted in the past to other > employees or whether or not they are still holding them; the only concern is > the current market... it would be irrational not to increase the option pool > if that's what was needed to be able to hire someone.

This is the part of this post that I can't believe is true. At the end of the day a company only has so much equity. How can the amount you've given out be of no concern in issuing stock to new employees? Isn't that tantamount to saying equity isn't scarce? When does the amount you've given out become of concern and in what context? If the answer really is that the amount of equity you've already given out never becomes a concern to any aspect of your company then why would you ever limit the amount of equity you give to employees?

<comment><USER30> The employee pool is typically small compared to the entire pot.

</comment></comment><comment><USER31> Everyone has a burn out point, a point when the company and the culture and just your life stages mean you want to move on. Being handcuffed to one is bad for everyone.

I would worry about the value of employees who basically wanted to leave the company four years ago but are only hanging in because their shares are worth a million. Surely it would be better to get those people paid and then out the door rather than keeping your senior influential ranks full of people who stopped caring years ago.

Surely there is a better way?

Stock options are some kind of payment - so why not treat it as a pro rata accrument. You are the first hire - you get 2% of the company if you stay ten years. Leaving after five to get married and move country? Fine here is 1%, just sign here, and we all are happy.

No matter how nice your arresting officer is, everyone resents handcuffs.

</comment><comment><USER32> Thank you for this Adam, as an early-stage startup guy who still hasn't made his FU money, this really nails all the salient points for me. Scott Kupor tries to decorate his article with references to employees' interests and considerations, but it's clear the guy has spent his career on the on the management/finance side where he doesn't _really_ understand what it means to be a ground-level early-stage contributor to a young startup. Consider Kupor's "solution":

> _But, a way to truly compete for the very best and long-term oriented > employees would be to offer even greater amounts of employee options grants. > For example, why not offer stock option grants that are 50% more than the > nearest competitor's — but with the provision that a departing employee > cannot exercise his or her stock options unless there has been a liquidity > event? If you stay, you're a serious owner, but if you don't want to be part > of the company for any reason you won't be an owner. This solves all of the > issues: cash rich vs. poor; competitive offers; and the bad incentive > problem (e.g., encouraging employees to quit to build their own diversified > stock portfolios)._

I don't even know where to begin with this. First of all, unless you are a VC, you don't have visibility into the market for options. Even if you did, startups are not _commodities_ , you can't compare shares of early stage companies directly to each, particularly when you are a single-digit employee, you are going to be shaping the actual future of the company. Not only should the offer you receive reflect the value that your particular skills and expertise will bring the company, but you also have to gauge the potential of the company itself. 1% of a $1B company is worth a lot more than 2% of a $100M company, and of course how much funding will you need to get there?

Obviously these things aren't predictable, but as a prospective employee you have to _try_. After all, unlike investing, you only have one working lifetime to spend as employee. That puts a different perspective on these things from the VC really _is_ building a portfolio and playing the odds. Since the VC is not directly pulling the levers, startups _are_ effectively fungible to them.

But the part that really burns me up about his "solution" and it's purported comprehensiveness, is the idea that early stage employees who leave before a liquidity event don't deserve any equity at all. I'm sorry Scott, but that is absolute horse shit, and frankly it really will make me think twice about taking any investment from A16Z in the future. The early stage employees who take a huge pay cut in order to build something _from scratch_ which will most likely fail completely, are making a huge investment in the company. They will literally pave the way for all the later employees to even have a company to work for.

Can you imagine if VCs made the analogous argument that angel investors should not be entitled to their returns unless they matched the later VC investments? "That would be preposterous! Obviously those angels took a big financial risk and deserve their returns!" Financiers would never be this short-sighted, but somehow Scott thinks that someone putting their blood, sweat and tears into startup for a below-market salary are only as valuable as their latest month of work. I respect the role of capital in startup creation, I really respect it because I don't have it, but even so, money is _nothing_ without execution, and A16Z would be nothing without talented founders and employees who are willing to sacrifice a lot more than them to bring a successful company into this world.

Even if you are a complete sociopath who is interested solely in the short- term benefits to the company, you _still_ wouldn't want to take this tack because (as Adam very aptly pointed out) then you end up with a lot of dead- weight in the company that's just hanging around to cash in their options.

Startups are not fungible, employees are not fungible. Treating employees like humans is not only the right thing to do, it's how you cultivate reputation with "cash-poor" top performers. The danger for VCs like Scott Kupor is there will always be an army of sycophants and yes-men ready to consecrate his every word just to get a piece of that juicy VC fund, but they are in real danger of having their lunch eaten by the expanding reach of angels that actually worked their way up out of the trenches themselves and understand the tech employee mindset.

<comment> lhc- I agree with all of this. a16z and other VC's are pretty clearly on the side of capital, and don't really believe that labor provides any value. Employee's taking lower salaries and investing years of their lives don't provide any lasting value according to a16z. I just cannot believe that he would try to justify taking back fairly given compensation because an employee did not want to continue doubling down and investing more and more money and labor into a startup.

<comment><USER33> When did the labor-capital debate shift from truck drivers to PhD-caliber computer scientists? Serious question, I think I missed the clear split. Has it always been there and I didn't realize it? Is there a clear historical event?

</comment></comment></comment><comment><USER34> This is a well thought out answer, and frankly embarrasses the response from the VC. Of course the VC wants to protect his own interests, he's just obfuscating it by pretending he's talking about "wealth transfer" and "fairness". What a bunch of BS, and I'll never work for a company that he is "advising". Who knows what sort of dirty tricks he'll play against the employees.

</comment><comment><USER35> I felt dirty reading the a16z post. Really dirty. They tried to phrase screwing over the employees for the investors as somehow employee-friendly.

</comment><comment><USER36> >"He suggests paying 50% above market in stock, but including a clause that all employees must remain at the company until a liquidity event or else they cannot keep any stock at all (even if they could come up with the exercise cost)."

Curious to what feelings this invokes for startup employees (nonfounders, investors) on HN.

<comment><USER37> In my case, wild laughter.

</comment></comment><comment><USER38> Why doesn't everyone just exercise as soon as they join a company? At least at earlier stage startups, it seems that the amount of salary offered as compansation is at least an order of magnitude more than the amount of options. Given this ratio, it seems like most employees should have enough in liquid savings after even a few years to avoid taxes on the appreciation between stock grant and vest times.

Of course, there's the possibility that a startup will tank, but even in that case, losing out on having bought stock seems much smaller than the opportunity cost of not having worked at a sure-bet tech giant.

<comment><USER39> Vesting. You can't exercise unvested options - the company needs to have set up an early exercise option as a part of it's stock plan for this to work.

But whether they offer an early exercise program is a very good question to ask any early-stage company you're planning to join.

</comment></comment><comment><USER40> The answer is clear – not easy, but clear; refuse to work with people who act in ways you find unethical.

If Scott Kupor's position is a company's position, and the total package value (including salary, benefits, etc), isn't acceptable to you when valuing options at zero – and given you don't control the company, and they can fire you at any time, you have to – then they're on the list. Refuse to work with them and tell your friends.

If you disapprove of his or A16Z's attitude, just don't accept investment from him. Let the market tell them they're wrong.

</comment><comment><USER41> I understand where the 10 year exercise period came from and I can understand the arguments against it.

A solution I haven't seen put forward is a compromise between the common 90 day window and the 10 year window, which is to have an exercise period equal to the amount of time you were an employee. This discourages people from bouncing around jobs collecting equity but gives a reasonable timeframe in which to exercise if you do want to leave after putting 5 years into growing the company.

<comment><USER42> > This discourages people from bouncing around jobs collecting equity

Vesting periods solve this problem.

<comment><USER41> How does vesting solve that? Which would you rather have (giving a simple example of 1% options vested over 4 years) - 0.25% in 4 different companies or 1% in 1?

This is essentially the argument against 10 year exercise windows - it allows exactly the above scenario.

<comment><USER42> If your vesting cliff is 1 year, then people who job hop after 8 months get nothing. Thus discouraging people from bouncing around to collect equity because there is a minimum tenure needed to collect.

Just set the cliff to match your definition of "bouncing around jobs".

</comment></comment></comment></comment><comment><USER43> Have any companies implemented a sliding scale for the duration of the exercise period? 10 years makes sense for a super early stage startup, and 90 days is reasonable for public companies. I would think that some shorter windows can be implemented for companies at different growth stages -- perhaps by financing schedule, revenue size, expected time until exit, etc.

<comment><USER13> For public companies it doesn't matter because there is immediate liquidity to cover options. Their vesting periods are often even shorter at 6 months and they tend to not even bother with options and just give you stock units directly or have stock purchasing plans at below market rates.

<comment><USER43> Yes, exactly, this is my point. The exercise period length should be correlated to the expected time until potential liquidity.

</comment></comment></comment><comment><USER44> Scott basically argues that there should be a 10-year cliff on vesting. That's what it means to price employees out of their equity comp if terminated early.

</comment><comment><USER45> Scott's post genuinely makes me angry. It uses subtle language to imply that employees are inferior individuals who are _lucky_ that the owners of capital deign to share anything with them.

In Scott's worldview, choosing to leave a company before it has exited is inherently disloyal. Even if they're paying you under market. Even if you could contribute more value elsewhere.

I wonder if he would accept similar terms:

1\. Reduce his salary at a16z to something minimal. (<$100k)

2\. He only gets his carry in a company if he invests in every subsequent round. If they ever decline to follow-on, it's clearly a sign of "disloyalty" and they should forfeit all equity.

I agree with Adam that it's at least nice to see the owners of capital so nakedly betraying their worldview (diversification is all well and good for them, but employees owe infinite loyalty).

I will think long and hard before ever working for a company where Scott is on the board.

This part is particularly troubling:

> One existing solution to the "dead equity" problem has been — and still can > be — to make exceptions where appropriate for certain exiting employees.

It's essentially an argument for cronyism. The people who most need equity extensions are those unlikely to have the connections and political savvy to get them. I strongly suspect such systems would work to further disadvantaged already disadvantaged groups.

<comment><USER28> FYI, you should be wary about any A16Z company then. This sentiment is nearly identical to what Ben Horowitz talks about here: [http://www.bhorowitz.com/one_management_concept_from_how_to_...](http://www.bhorowitz.com/one_management_concept_from_how_to_manage_startups)

And Ben Horowitz has publicly supported Scott Kupor's blog post on Twitter.

Given that he and Marc Andreesen run the show there, we can reasonably extrapolate that this is the firm's preferred stance. In fact, if either of them was _against_ Scott Kupor's position, then the blog post likely would not have seen the light of day in the first place.

<comment><USER40> And I will vote with my feet, as I'm sure a number of other potential employees will.

(Much as I will never knowingly work for a Kleiner company.)

<comment><USER46> What's the Kleiner rub?

<comment><USER28> Might be the whole Ellen Pao harassment suit.

The firm had a big shakeup and departure of staff preceding that as well.

[https://pando.com/2013/12/11/john-doerrs-last-stand-can-a- dr...](https://pando.com/2013/12/11/john-doerrs-last-stand-can-a-dramatic- shakeup-save-kleiner-perkins/)

(I feel like KPCB had another harassment suit before Pao but I can't seem to recall the details.)

</comment></comment></comment></comment></comment><comment><USER47> I followed this link expecting to see a comment about some sort of "encoding" of the human body relating to long-but-not-indefinite period of physical exercise. Instead it's about stock options.

As the article offered no background, I'm lost as to what is being discussed. In the last 20 years I've never had the same employer for 10 years, so can someone ELI5 what is being discussed? Thanks in advance!

<comment><USER48> They're talking about the amount of time you have after leaving a company to exercise the stock options that you were granted, effectively purchasing them at par value. This has huge tax implications, and requires quite a bit of cash on the spot.

Traditionally, the period has been ~90 days, which makes it even harder to weigh your tax options and come up with the $$$$ to exercise the options. Since its expensive, and has a short window of execution, the practice has been viewed by many to be unfair. The Stock Options were a part of your compensation - part of the Risk vs Reward balance you choose when you worked for a startup, and now if you don't have thousands of dollars to spare on a gamble - you forfit those options back to the Company.

By extending the period to 10 years, you have the ability plan accordingly, see if the company will eventually exit, and exercise them when the time is right.

<comment><USER49> Great explanation.

</comment></comment></comment><comment><USER50> Quora was definitely not the first startup to do 10 year exercise period, not by some margin. My Lime Wire stock options from 2000 had a 10 year exercise with a 6 year vesting schedule, no cliff and vesting every 3 months. Here's the proof: [http://imgur.com/6eTUyui](http://imgur.com/6eTUyui)

Adam's on the right track though. I just had to write a 6 figure check today to exercise my vested options at my current employer because of the 90 day clause. It makes me angry because the company's official stance is that the board wants to use stock options as an employee retention tool. I was fortunate enough to have had the cash but a lot of other people are not and there is no secondary market. So if you get fired or have to quit during a bad market you are basically screwed.

</comment><comment><USER51> Man Silicon Valley companies are living in a parallel dimension!

They collectively think they have the LUXURY to hire employees that are in love with their random idea

And they collectively think that the employees have the LUXURY to play russian roulette with the compensation terms

Let's address that, because these factors have are completely disjointed with the success of the company and the employees' INTEGRITY (instead of "aligned incentive") to deliver amazing products and code</comment>


5" Android Tablet $155 - <AUTHOR> http://enso-now.com/n/index.php

<comment><USER2> And this is why Steve Jobs sees Android as a direct attack against Apple: these devices (which Apple would like to sell at a high margin) can be made _really_ cheap in a world of commoditized hardware (thanks, Microsoft!) and free software (thanks, Google!).

Edit-reply: while Apple can try to split off a premium market as it did with PC's, this is going to be a lot harder (and the premium market will be lot smaller) when then OS provider isn't trying to make a profit.

<comment><USER3> From the specs, it's not multitouch (a significant feature). From the video, it was stuttering on just scrolling the application lists.

It may be a competitor to the iPad / iPod Touch, but it's not a serious competitor. Apple still has the "premium" edge on it, their market doesn't seem likely to be overly affected. An Android tablet definitely appeals to me more than an iPad, for software purposes, but I'm not one of the iPad's target consumers. Though I'm not interested if it doesn't have multitouch.

<comment><USER4> More than not multitouch, it's a resistive (rather than capacitive) touch screen, so you can only reliably use it with a stylus (which is included.)

Which is a bit of a downer, cos I was thinking of getting one to mount one in my car. Also, AFAIK, there isn't any good free handwriting recognition on Android yet, so you may be stuck tapping an on-screen keyboard with a stylus.

</comment></comment></comment><comment><USER5> before you start sending them money, read this thread first:

<http://news.ycombinator.com/item?id=1182322>

<comment><USER6> I don't see anything overtly wrong in that thread. If anything I see HN readers behaving badly by taking advantage of someone whose English isn't that great. For the most part the things people were attacking him for are things that almost every manufacturer does in China (copying web sites for example).

I don't see anything that indicates he's dishonest (and even if I did I'm not sure it would detract given the price)

<comment><USER7> The most important thing I learned is that it's not _his_ device. He's just re-branding a device that other people made. It's also clear he doesn't understand the technology he's selling. It also seems to be true that he was taking paid orders before he actually had a device.

<comment><USER8> Anyone find the original device?

This one is close, [http://szboeye.en.alibaba.com/product/255890895-209487612/5_...](http://szboeye.en.alibaba.com/product/255890895-209487612/5_inch_Mobile_Internet_Device.html)

<comment><USER5> [http://www.smit.com.cn/English/proDetail.asp?InfoId=126&...](http://www.smit.com.cn/English/proDetail.asp?InfoId=126&js=)

<comment><USER9> I've been impressed with the Smit and excited someone's selling them, rebranded or no. I'll probably give this guy a shot when my birthday rolls around and report back.

<comment><USER5> That'd be awesome.

<comment><USER10> Its very entertaining that 'enso' hasn't thought to visit your profile to answer his questions about who you are.

<comment><USER5> Agreed, my identity is not exactly a secret. I haven't heard from his lawyers yet though, maybe it's still in the mail somewhere.

It's sad though, I think he may have something there but he's going about it completely wrong.

He wouldn't even have to rebrand the thing, just sell it as it is, save a bunch of $. After all it's not like smit is going to give him an exclusive deal.

And I'm still not sure what the status is on importing that thing with a 3G dongle in to Europe or the US without the required 'seal of approval'. I'm pretty sure that the local variety FCC wants to know that your device has passed inspection, and that operating a device that has not passed inspection is tricky at best and illegal in most places.

<comment><USER10> FCC approval is actually quite easy and affordable (less than 10k), as long as your equipment passes first time.

The best way out is to buy a dongle or module from a 3rd party who has already got approval for it. If the RF module has approval then you don't have an issue. You still need a different kind of approval for your electronic device, but they are just reselling a 3rd party device so no issue there either.

I haven't made a mobile phone - instead I have worked on other RF devices. Perhaps there are issues I am not aware of (a public mobile network probably has a lot of checks and balances that are much more expensive)

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER11> A few weeks ago, this was called the ePad. The link at my post still goes to the same site.

[http://ipadtest.wordpress.com/2010/03/10/apple-ipad-meet- and...](http://ipadtest.wordpress.com/2010/03/10/apple-ipad-meet-android- epad/)

<comment><USER5> Prize quote from there:

> thanks for posting about our product. I have to admit that the image > _mockups_ could be better

What's wrong with simply photographing the device? (If you have them...)

</comment></comment><comment><USER12> Apple products are about experience, that's what they really sell. Hardware and software are perfectly tailored to works seamlessly with each other. And for sure it isn't a free OS that let other companies undercut Apple's price.

</comment><comment><USER13> Android 1.6? Make it bigger and use current version of Android and I'll buy one.

<comment><USER14> From <http://enso-now.com/n/info.php>

> _Upgrades to Android 2.x will be available within 1 month to our customer on > their private section for simple downloading and upgrading. Easy > instructions will be provided._

Funny -- from <http://enso-now.com/n/Images/Slideshow/dimensions.png>

> Designed by Enso in _Hong_ Assembled in China

<comment><USER5> That site is full of gems like that.

</comment></comment></comment><comment><USER15> The _iPhone's_ screen is 3.5" ... where exactly do we draw the line between "phone" and "tablet"?

Sorry, but I'd almost put this in "no man's land" ... too big for a phone in my pocket, too small to be useful as anything else.

</comment><comment><USER16> God I'm sick of all these tablets that don't provide proper reading/writing functionality. MEMS/Mirasol, Pixel Qi or the original OLPC screen. C'mon.

I feel the closest thing at the moment is NotionInk's Adam... throw in a proper Wacom stylus system and I'd buy two...

It really feels like most of the companies don't have a goal, just throwing random stuff at the wall and hoping something will stick... and to be all "me too".

Maybe I should just design my own proper UI for these things and pull a Microsoft :|

</comment><comment><USER17> I like how the large clock on the desktop doesn't correlate with the system time in the upper right corner.

</comment><comment><USER18> Some thoughts: * I'm in the target market for this: some cheap slab that I can carry around and surf the internet. * I know what's on the top of my x-mas list * The barrier to entry for development on a mobile device just went down

</comment><comment><USER19> Call me when this is 8" to 10".

<comment><USER6> I think you're being a little unfair. It's screen is bigger than the iPod Touch and it's cheaper. If you, for example, were a developer who wanted to build an open platform iPod competitor this would be a good starting point.

And let me just say I don't work for/with/or in any way with this company. I just believe in both openness and the portable market and can see how a device like this is a good thing.

</comment></comment><comment><USER20> Nope, still nothing around that even vaguely competes with the iPod touch. 3,427 announcements of amazing freakin' devices sure to be released any day now!

The only market with more vaporware is alternative-fuel vehicles.

</comment><comment><USER21> Does anyone know what type of issues this device will have due to the resistive touchscreen and third party apps? Especially for games or any other apps that are designed more specifically for capacitive touchscreens?

</comment><comment><USER22> Is this company legit? Has anyone here ordered one?

<comment><USER23> A pop up said they aren't currently accepting orders from the site when I clicked the shopping button.

</comment></comment><comment><USER24> name as well as logo is similar to <http://humanized.com/enso/>

<comment><USER25> Probably from: <http://en.wikipedia.org/wiki/Ens%C5%8D>

</comment></comment><comment><USER26> arrg..when will Android support USB Host? We (and many others) are stuck in a WinCE world solely because everyone else is missing this feature.

</comment><comment><USER6> I remember this from a while ago. Here's a good video: <http://dvice.com/archives/2010/03/zenpad-the-155.php>

</comment><comment><USER27> no camera?</comment>


Samsung Jabs iPhone's Retina Display, Says AMOLED Wins - <AUTHOR> http://daringfireball.net/linked/2010/06/10/samsung

<comment><AUTHOR> Video of a Super-AMOLED screen in daylight:

<http://www.youtube.com/watch?v=XMEarDy0QgM>

Older, non-Super, AMOLED screen in daylight for comparison:

<http://www.youtube.com/watch?v=JVYI4ko6_E0>

It's maybe interesting to note that another improvment the "super" version has is the same removal of a layer between the image and top glass that Apple highlights in their Retina Display videos. Oh, and that rumor has it that Apple would have used these displays were it not for the fact that they can't produce enough of them to satisfy current demand, even without Apple's massive iPhone sales numbers adding to that problem.

</comment><comment><USER2> At least below isn't debatable anymore.

[http://whydoeseverythingsuck.com/2010/06/john-gruber- jumps-s...](http://whydoeseverythingsuck.com/2010/06/john-gruber-jumps- shark.html)</comment>


Streaming video from live insects and tiny robots - <AUTHOR> https://spectrum.ieee.org/automaton/robotics/robotics-hardware/uw-micro-camera <comment><USER2> >As if it's not hard enough to make very small robots that can , once you've gotten the power and autonomy all figured out (good luck with that), your robot isn't going to be all that useful unless it can carry some payload.

The very first sentence doesn't make any sense. I think there's a word missing. Also, the writing style throughout the article is choppy and hard to read. Too many commas?

</comment><comment><USER3> Add some mind control and you have great a great spying device.

<comment><USER4> Just tether some wiring to the bugs brain, call it a day.

</comment></comment><comment><USER5> Would miniature spurs and reins work on a beetle?</comment>


Don't Launch A Company, Launch A Fund (Or The Series A Will Die) - <AUTHOR> http://techcrunch.com/2011/11/04/dont-launch-a-company-launch-a-fund-or-the-series-a-will-die/ <comment><USER2> This post is quite off the mark as there are some massive leaps of faith/logic in this post which I'll try to address. For context, my firm (CB Insights) tracks this data so I'm not flying blind here (at least not completely)

Quote: The solution to this structural problem in the startup economy is simple: we need more venture funds. Unfortunately, thousands of funds around the world have been killed off since 2007.

This is really not accurate or realistic. Many venture funds have died for a reason - their returns were terrible. In short, they deserved to die because they didn't perform. The Limited Partners in those funds decided not to invest more in those funds, and as a result those funds are no more. This is a good thing as its the way markets and resource allocation are supposed to work (albeit the market is imperfect but that's a rant for another day). If anyone can name a fund with an above benchmark IRR that was "killed", I will stand corrected.

The one negative of these crappy returning funds is is that some of those LPs may have soured on the VC asset class overall and so might be gunshy to invest in another VC fund. That's perhaps happened but nevertheless, the idea that funds were "killed off" is inaccurate. They were given some rope and hung themselves with poor returns.

Quote: First, you have a large number of high-quality companies that need capital, while the competition to provide capital is decreasing. Second, you have a pool of frustrated limited partners looking for new managers.

Capital will find its way to great opportunities. And that capital may not always come from VCs. We track hedge funds investing in private companies through sidepocket funds, family offices investing their money in these companies, angels, corporates, etc. If there is a good opportunity, someone will invest especially now when it seems everyone wants to invest in the next FB, Twitter, Groupon, Zynga, etc.

The problem is that "high quality" as a descriptor means nothing. Great companies whose metrics are killer, whose growth is up and to the right and who are in the right space (mobile photo sharing app anyone?) will get their Series A. It's the folks who are kinda up and kinda down that have trouble. Are these high quality companies? Who knows? They might be good companies one day but maybe the odds of them generating venture level returns is now not realistic. And so they're orphaned and they'll die. That sounds terrible but there is a VC conversion funnel and has been forever. Not everyone gets follow-on funding. It's the rules.

Just 1 in 100 angel deals may get funded by venture capitalists today, yet there are probably at least 10 strong startups in a 100, if not more.

As commenter staunch says, "Citation Needed". There is no support for this beyond a gut feel.

Finally, here is the reality on Seed VC deals. If done by a large VC, they are "call options". If the company kills it with that money, the VC has the first look at them and can invest in the Series A. If they don't grow like heck, it's just a seed investment so not lots of capital at risk.

Totally unrelated but since this response was longer than expected, I'm gonna sneak this in -- we're hiring so check us out - www.cbinsights.com

</comment><comment><USER3> I assume the author's numbers come from TheFunded or AngelList, which I'd expect to be a highly biased sample. You would expect more seed deals to go through these sites, since they will typically cast a wider net. Later deals will be more private, unpublicized, and with companies that are already connected to institutional funds. It would be much more interesting to see numbers from SEC filings in the tech sector.

</comment><comment><USER4> Seriously? How arbitrary is this article. You cannot post ambiguous numbers to a crowd of data-junkies.

Maybe the system is broken and needs fixing? Maybe the endless series of funding model doesn't work? Or maybe the financial markets in general are broken and crowd sourcing via pension schemes self-selecting may be an option once regulators stop forcing money into the public equity and debt markets, which are nothing more than an elaborate closed shop.

</comment><comment><USER5> Stunning:

"Just 1 in 100 angel deals may get funded by venture capitalists today, yet there are probably at least 10 strong startups in a 100, if not more."

<comment><USER6> [citation needed]</comment></comment>


C-source to deal with OS X Finder aliases  - <AUTHOR> https://github.com/McUsr/isalis I hope those it concerns enjoy it. That is, those that wants their shell tools to work or play along with Finder Aliases.
The source is provided in the form of a shell-tool that lists aliases and broken aliases.
Enjoy! <comment><AUTHOR> Hello.

I just want to make a point of the fact the code doesn't use Carbon, so it should work with the next releases of OS X.</comment>