SIPC Says It Has Serious Concerns About Robinhood's New Product - <AUTHOR> https://www.bloomberg.com/news/articles/2018-12-14/sipc-says-it-has-serious-concerns-about-robinhood-s-new-product <comment><USER2> Through all of this I can't help but be reminded of the 2008 financial crisis and think "this is not going to end well." One part of that crisis was Icelandic Banks making a huge push for savings all over the UK and other parts of Europe ("IceSave") with the promise of better interest rates. When it all went belly up those savers realized these Icelandic banks were not quite the same thing as UK banks and Iceland refused to make depositors whole.

If Robinhood had offered this as a normal bank with FDIC insurance I would have been impressed. For now it just seems they're just moving a little bit higher up the risk/reward curve and trying to pretend the risk is the same.

<comment><USER3> Short term investment grade debt has a default rate of near-zero and pays more than 3%. See for yourself:

[https://investor.vanguard.com/etf/profile/VCSH](https://investor.vanguard.com/etf/profile/VCSH)

It is entirely possible for them to safely promise a 3% account under these conditions. This is not at all like the financial crisis. It's just wrapping an investment grade bond fund in a bank account interface.

<comment><USER4> I clicked 'performance' on that page and it says 1.5% over the last five years. Am I reading it wrong?

<comment><USER3> Look at the "SEC yield." That's what it pays going forward. Returns were lower over the past five years because the Fed had lowered rates to stimulate the economy.

<comment><USER5> The yield is only part of the return, one has to consider also the change in price. If interest rates go up prices will go down and the actual return will be lower than the yield.

Over the last 12 months, the price of the VCSH fund is down more than 2%. This offsets the dividends paid with the coupons received and results in flat performance.

</comment></comment></comment></comment></comment><comment><USER5> Matt Levine comments on this today: [https://www.bloomberg.com/opinion/articles/2018-12-14/nyse-n...](https://www.bloomberg.com/opinion/articles/2018-12-14/nyse- needed-some-pretend-traders)

"There is a lot of confusion about what Robinhood's thing is. Delightfully, it is called "Robinhood Checking & Savings," apparently because calling it a "checking account" or a "savings account" would come too close to implying that it is a real bank account insured by the Federal Deposit Insurance Corp., while "checking & savings" is not a thing and so does not carry that implication. A magic ampersand!"

<comment><USER6> That's great. It's like the "chicken wyngz" you can buy at the grocery store that are probably chicken but can't legally be called wings.

<comment><USER7> I prefer the chikken wings, which are probably wings but cant be legally called chicken.

<comment><USER8> You should try the Frozen Dairy Dessert.

<comment><USER9> Or processed cheese food [1]

[1] [https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFR...](https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?fr=133.173)

<comment><USER10> Try "potted meat food product" on for size.

Ingredients: Mechanically Separated Chicken, Beef Tripe, Partially Defatted Cooked Beef Fatty Tissue, Beef Hearts, Water, Partially Defatted Cooked Pork Fatty Tissue, Salt. Less than 2 percent: Mustard, Natural Flavorings, Dried Garlic, Dextrose, Sodium Erythorbate, Sodium Nitrite

<comment><USER11> Seems like a good way to value-add the parts of animals that would otherwise get turned into dog food or exported.

</comment></comment></comment></comment></comment></comment></comment><comment><USER12> > "I disagree with the statement that these funds are protected by SIPC," > Stephen Harbeck, president and chief executive officer of SIPC

How the hell did this product get launched?

<comment><USER13> Probably because someone took "ask for forgiveness, not permission" a bit too far.

<comment><USER14> Or the president of SIPC is not speaking authoritatively for the organization and doesn't realize the RH lawyers have already been talking with SIPC about this.

Of course, maybe that didn't happen, but between the idea that RH would build and announce a new product without running past the proper regulatory authorities, and the idea that the president of SIPC might just be wrong ... well, the latter seems more plausible to me.

<comment><USER15> You really think the president and CEO of the SIPC is a... freaking clown?? Sorry if that tone is harsh, but that statement appears completely ludicrous on its face to me. Can you provide a little context on why you would trust startup lawyers over the chief executive of a major government organization?

<comment><USER16> Nobody said a "freaking clown" or anywhere near that. The higher up you are at a company or organization, the less visibility you have into the day to day operations. What OP is saying is simply that the CEO of SIPC may not be informed in the discussions that already happened with Robinhood.

Simply put, Robinhood has _far_ more at risk than the SIPC by launching without SIPC insurance. The banking industry is heavily regulated and Robinhood has been in the brokerage game for enough now to know that a major product launch like this in a tightly regulated area requires massive amounts of paperwork and approval. A mistake like this could collapse not only this new product but also their brokerage. It's _far_ more likely that they have done their due diligence before announcing and launching a product that has that big of a risk.

<comment><USER15> It's more likely than the CEO of this organization making an uninformed public statement. Doing so is indeed the behavior of a clown. But I guess we'll see.

Edit: We don't even have to wait! SMH...

[https://www.google.com/amp/s/techcrunch.com/2018/12/14/robin...](https://www.google.com/amp/s/techcrunch.com/2018/12/14/robinhood- insurance-sipc/amp/)

</comment></comment></comment></comment></comment></comment><comment><USER17> I don't understand the infatuation silicon valley has of Robinhood. Take almost every possible bad idea about personal finance and put them in an app, you get Robinhood. The business model is also suspect, I think there's a little more that hasn't been disclosed and I suspect the chase for cash started when the crypto currency fad started deflating in a hurry. I wonder if Robinhood is hiding something bigger under the covers.

<comment><USER18> > bad idea about personal finance

Such as?

<comment><USER19> The vast majority of people should just be maxing out their 401k and investing in index funds.

They shouldn't be using Robinhood to buy individual stocks, buy cryptocurrency, or do options trading.

<comment><USER20> > They shouldn't be using Robinhood to buy individual stocks, buy > cryptocurrency, or do options trading.

What if they do it for fun?

Personally, I would have fun having a few thousands there (but I'm Canadian), it's not worse than having a few thousands over a gaming computer, or gambling at the casino.

If you consider Robinhood as the way to finance your retirement, well you are doing something pretty bad, but that was always true for any stock trading.

<comment><USER21> If you understand what you're signing up for and still want to dabble in stock trading for fun then sure. Go wild. Everyone needs a hobby. But the homepage of robinhood.com has the following call to action above the fold:

> Investing, Checking & Savings. All for Free.

> Robinhood gives you the tools you need to grow your savings, invest in your > future, and do more with your money.

Does that sound like "this is not an appropriate way to finance your retirement" to you?

<comment><USER22> What should their ad copy say instead? "Robinhood gives you the tools to lose all of your money making impulsive decisions" ?

All brokerage accounts advertise themselves as investments, even if the reality is that idiots open them and lose all of their money trading options.

I mean, if you really have this expectation of marketing copy, I don't blame you, that's a totally legitimate position to hold. It's just not one I would expect many people to share.

<comment><USER21> The grandparent talked about treating it like fantasy sports, and if they advertised themselves like, say, Draft Kings does then it would be one thing. As it is, though, the more thoroughly you trust their representation of how their product should be used the worse off you will be. I usually take that particular trait as a big red flag that a the universe would be better off without the company in question.

And yes, this criticism does apply to most brokerage accounts. Most brokerage accounts don't have half of Silicon Valley fawning over them, though.

</comment></comment></comment></comment></comment></comment></comment><comment><USER23> Robinhood's offering is indistinguishable from a cash management account at a brokerage. Short-term deposits, check writing, debit card, interest bearing, etc.

Fidelity Investments pioneered this product, and now it's available from others like Schwab.

But at Fidelity, the cash management account is distinct from the brokerage account. While the brokerage account is insured by the SIPC, cash management funds are swept into FDIC-insured balances at actual banks.

Looks like Robinhood is gonna lose on this one.

Source: [https://www.fidelity.com/cash-management/faqs-cash- managemen...](https://www.fidelity.com/cash-management/faqs-cash-management- account)

<comment><USER24> It seems like RH is taking this to the next step (at least with respect to Fidelity) by building typical checking account features around it, with parameters that are best-in-class.

<comment><USER25> Fidelity already has best-in-class checking account features?

The CMA account has mobile image deposit, free online bill pay, check writing (with free checks), free ACH transfers, free wire transfers, ATM/debit card (with ATM fee reimbursement at any ATM worldwide, no less), etc.

The only "best-in-class" factor that Robinhood has presented is setting the interest at 3%.

<comment><USER24> Good to know, I was reading briefly from their site and didn't see any of those things expressed upfront.

</comment></comment></comment></comment><comment><USER26> The whole "this can't end well" seems to come at every Robin Hood product announcement.

The somewhat recent addition of crypto is just depressing. They've integrated it with chat and live announcements of transactions, so you see people's names as they buy $1500 or $2500 worth of crypto as the whole market makes an inverted hockey stick nosedive to zero.

But the most absurd thing was seeing the HN comments yesterday as people were saying they were living up to their name of taking from the rich and giving to the poor. They're doing something worse--tricking non-rich people into thinking they'll get rich, while making a ton of money in the process.

<comment><USER27> If they make a ton of money but give users an easy 3% account I wont complain. Why is everyone so mad at them for being successful when they are offering cheaper services then the rest of the market!? Do they need to hire a homeless CEO to actually qualify as doing something good for society overall?

<comment><USER28> They are exposing a vulnerable and naive class of investors to a higher-risk asset class in an arguably deceitful way. If their 3% account was SPIC protected (and therefore low-to-no risk), this would be a totally different conversation.

<comment><USER29> I have a money market account at Capital One that earns 2% and is FDIC. Staying there.

</comment></comment></comment></comment><comment><USER30> It's a bit jaw dropping that they've launched this without talking to the SIPC to check that they agree with the statement that they provide FDIC-like protection on these accounts. I wonder what happened here…

<comment><USER31> AFAIK they haven't yet launched, it's not going to be until "early 2019". Not a defense of Robinhood, but their lack of (apparent) SIPC protections today do not necessarily imply they will be missing when they formally launch with actual customer deposits.

<comment><USER32> Yet it's being marketed as SIPC insured _today_.

<comment><USER31> You're right. I thought I had read it as "will be insured" but now that I go back and look at the content on [https://checking.robinhood.com](https://checking.robinhood.com) I see it reads "Every Robinhood account is SIPC insured up to $250,000 in cash and protected by modern encryption so you can rest easy and save confidently."

No bueno.

</comment></comment></comment></comment><comment><USER33> Robinhood strikes me as a complete financial amateur-ish company, trying to attract millennials that don't know better by branding themselves as a cool tech company.

I have been using Ameritrade for a while and was curious about their no fee platform so gave it a quick go. The graphs have no legends associated in the app. The spreads seems not up-to-date with official quotes, etc. I went back to Ameritrade as fast as possible.

They are the "go fast and break things" of finance. There is a good chance that this will not end well.

<comment><USER34> I have been using Robinhood for years, but I don't disagree at all with this statement. I have always been a little bit suspicious of their approaches.

For me the strangest thing about their business is their zero-fee approach. Yes you can make money by getting interest from uninvested funds + premium subscriptions + trade arbitrage, but if it's such a good business why aren't the incumbents taking similar approaches?

Contrarians would say that incumbents are just to engrained in their past approaches to actually adopt modern strategies, but I had that extremely hard to believe, especially when one of the incumbents, E-Trade, was the pioneer of online trading.

Also, unlike other industries, financial firms are savage. They're not scared to make risky bets and spin-off new businesses and strategies. Their industry is naturally risky, so they have the experience and tenure to make risky bets, without souring stakeholders.

I always give Robinhood the benefit of the doubt, because in my day to day I personally can say that it works great. They definitely nailed the Customer Experience. However that doesn't mean that they have an actual viable long- term business, so I prefer to stay reasonably cautious... Time will tell.

<comment><USER35> > For me the strangest thing about their business is their zero-fee approach. > Yes you can make money by getting interest from uninvested funds + premium > subscriptions + trade arbitrage, but if it's such a good business why aren't > the incumbents taking similar approaches?

They do, they just charge you extra commissions _on top_ of what they make selling order flow, etc, etc. Commissions make up a miniscule portion of income for brokerages. I think that fees a) keep out the "riffraff" and b) brokerages know that it's a zero-sum game to compete on them.

Asking this question is like asking why Ally and Goldman Sachs can offer 2% APY savings accounts, but Bank of America and Chase can only offer 0.01% APY.

There are similarly low-cost brokerages which offer dangerous products, like $500 intraday futures margin (about 250x leverage), 400:1 leverage on Forex products, or more traditional low-cost stock trades. The difference between $5/trade, $1/trade, and $0/trade isn't that significant in reality.

<comment><USER36> > I think that fees a) keep out the "riffraff" and b) brokerages know that > it's a zero-sum game to compete on them.

There are also costs per position per investor. Some services that brokerages have are based on position counts. An investor with 10 shares in 1 stock is cheaper to maintain than an investor with 1 share in 10 stocks.

(One example is prospectuses. If you buy a fund, you're entitled to the prospectus to be delivered within a certain amount of time post trade. If you just by 1, 2, 3, then 4 shares of the same fund, you only get one file/document delivered to you.)

</comment></comment></comment></comment><comment><USER37> Which leads to one of two scenarios:

1) They knew SIPC wouldn't cover it, but decided to lie about it anyway

2) They weren't competent enough to assess the risk that SIPC wouldn't cover it, but decided to launch anyway without contacting the SIPC

Regardless of which is the truth, I wouldn't trust my money with someone who does either. Might as well jump into a tried-and-true pyramid scheme like bitcoin!

<comment><USER38> Apparently they purposely called it a "checking & savings" account because they were well aware that technically it is neither a "checking" nor a "savings" account and that a "checking & savings" account does not really exist to protect themselves from accusations of false claims...

<comment><USER39> They are still claiming it is SIPC insured- which is false, regardless of what you call it.

<comment><USER40> It's not necessarily false - that's up for various attorneys to decide.

<comment><USER37> Technically true, but irrelevant. Everything might be up for attorneys and judges to decide.

</comment></comment></comment></comment></comment><comment><USER41> Another example of startup hubris. Much like Uber and AirBnB got started (and in many cases, continue to operate) by flouting regulations, Robinhood thinks they're being innovative, when they'll really just hoping they can get big enough that they can buy or bully their way past the rules. At least long enough to get acquired.

It might work, but in this case, the people most likely to get screwed are the customers.

<comment><USER42> AirBnB and Uber are both examples of companies that were huge wins for customers/consumers. Just because they flout regulations which are often times outdated and unnecessary (re: protecting inefficient incumbents) doesn't mean they aren't doing what's good for the consumer.

I agree though that Robinhood is a different story with potentially harmful consequences for unsophisticated investors looking for a safe/easy investment.

<comment><USER43> The people sexually assaulted, discriminated against because of their skin color or sexuality, and those recorded in their beds without their consent would all presumably disagree that Uber and AirBnB flouting regulations made for huge wins for customers/consumers.

EDIT: The fact that these crimes "have happened at hotels/in taxis as well" ignores the fact that they are far more likely in an environment where regulations meant to prevent or reduce them are wholesale ignored.

<comment><USER42> It sounds like you're conflating common law with industry regulations.

If I'm a fisherman in Florida, and I need to follow regulations for the fishing industry there, they don't have a stipulation that you can't discriminate against certain persons based on age, raced, gender, etc. when you take customers out on expeditions.

Why? Because that's covered by United States law.

Yes these things happened, and yes they are atrocious but they have nothing to do with the regulatory gray areas that these companies operated in.

</comment></comment></comment></comment><comment><USER44> "I disagree with the statement that these funds are protected by SIPC," Stephen Harbeck, president and chief executive officer of SIPC.

Not sure that leaves a lot of room for speculation - don't sign up to use Robinhood as a savings account unless you are comfortable doing so without an FDIC level of guaranteed protection.

<comment><USER45> Without deposit insurance Robinhood would be _extremely_ vulnerable to a bank run. In the event of even a slight market downturn I can't see why depositors wouldn't immediately withdraw their funds to an insured account (at the cost of only a slight reduction in interest) just to hedge their risk.

</comment></comment><comment><USER46> ""The statute that we administer says that we protect money with a brokerage firm that is used for the purchase of securities," he added. "On Robinhood's help page, it says that you don't need to invest to use Robinhood checking and savings, that statement is wrong. If you deposit money for any other purpose, it is not protected."" \-- If they are using the deposit to then behind the scenes purchase a security directly, why wouldn't that be protected??

<comment><USER47> The SIPC insures and protects _consumers_ , not the brokerage/investment bank itself. So if the funds are deposited by the customer in order to buy securities on behalf of the customer, then it's protected. If the funds are deposited by the customer in order to pay out interest, and the only one with the intention of investing that money into securities is the brokerage itself, then it's not protected.

<comment><USER48> Isn't Robinhood's Checking & Savings service about the same as non-invested cash in an E*Trade account? That would mean there are a lot of consumers assuming the same risk if they invest with the many brokerages covered by SIPC, since its impossible to not have cash floating around after you fund your account or take profits.

<comment><USER49> The problem with this is that Robinhood claims you can have a Robinhood "Checking and Savings" account and not buy stocks with it - and the SIPC is saying no, you actually do need to intent to buy and sell stocks with it and to use this account as a source of funding in order for it to be insured.

</comment></comment></comment></comment><comment><USER50> Normally brokerage accounts fall under the SIPC and bank accounts under the FDIC.

Robinhood thinks their checking account should fall under the SIPC...so is their bank account not a bank account? What am I missing?

<comment><USER51> It's a brokerage account where you buy US Treasuries but also made liquid via a deal with Mastercard and branded as a chequing account

It's kinda smart - but i'm curious how they settle some of the backend with daily transactions moving in and out - if they're actually making bond purchases/sales with each transaction, for each customer each day, or for all customers each day etc.

edit: fwiw I think the entire premise of these new products and 3% paid (way over what treasury bonds pay) is as a loss leader to the gambling that is a lot of the "investing" done by Robinhood users. Must be temping to buy some Tesla options once you have a chequing account in the same app.

edit 2: their fine print:

> Robinhood Checking and Savings is an added feature to existing Robinhood > accounts and is not a separate account or a bank account.

so they're saying they might market it as a bank account, but it isn't

<comment><USER52> I'm not sure what you mean by "way over" but 6-month t-bills are paying 2.5% right now. It's probably a loss leader but since they'll make money from merchant fees on debit cards, it might not be that much of a loss.

<comment><USER51> I doubt they'd be able to 100% buy tbills at that maturity length (hence curiosity on what they're doing on the backend here), but even assuming 2.30~ average plus whatever Mastercard kickback is negative 50-70bp is still a hell of a margin to make on selling consumers tbills and not raising funds for your own investment activity

edit: a better way to explain it - we'll give you tbills at 3% p.a and let you pull out/in whenever you want and handle the rest is a hell of a business model without the rest of the story

<comment><USER53> My guess is: they're investing in 6-month T-Bills, they're expecting rates to rise over the next 6 months to 1 year, they're covering the remainder out of pocket, and by doing this they're capturing the lion's share of their target market before their competitors do.

In addition, I'm guessing their AUM are low relative to their popularity. Lots of millennials may be very vocal about Robinhood, but may not have the quietly massive asset balance that boomers have, tucked away in Schwab, Fidelity, or Vanguard. This could be a land grab for AUM to support future VC rounds, an acquisition, or an IPO.

</comment></comment></comment></comment></comment><comment><USER54> When I saw the original announcement I thought to myself, that's a high interest rate, but it sounds to good to be true; I probably ought to stay away as I'd rather play things safe with my money.

</comment><comment><USER55> "Had they called us..."

ffs - they didn't even do the most basic due diligence on this?

This is not just an indicator that this particular product might be in trouble, this is another order of magnitude kind of incompetence that makes me wonder why anyone would trust this company at all.

Wouldn't you have to feel like the probability they end up with a major security issue, funding issue, executive behavior issue, etc., are all magnified by this knowledge?

I mean really, this is a _staggering_ thing to read. I don't think there could be hyperbole in this, it's just incredible hubris-based incompetence.

</comment><comment><USER56> Not to mention this: [https://old.reddit.com/r/wallstreetbets/comments/a5iwgh/robi...](https://old.reddit.com/r/wallstreetbets/comments/a5iwgh/robinhood_options_fat_finger_glitchbug_thread/)

</comment><comment><USER57> I had a bit of interest on this when I first read about it, but was a bit skeptical then... I wouldn't touch this at all now with no guarantee that the deposits are insured.

</comment><comment><USER58> Here's their very brief unaudited financial statement.[1] This makes no sense for a financial institution. How can their liabilities be so low? Anything on deposit with them is a liability for them. This seems to say "all your assets are belong to us."

[1] [https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal...](https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHS%20Statement%20of%20Financial%20Condition.pdf)

</comment><comment><USER59> "You see, Mr. Griffin, what makes us different from other banks is that we're not a bank."

</comment><comment><USER60> Assuming patio11's comment[1] from yesterday is correct that this is a loss leader intended to target millennials with low value accounts rather than whales, maybe this is Robinhood's intended outcome to make it less attractive to the customers they don't want?

[1] [https://news.ycombinator.com/item?id=18673426](https://news.ycombinator.com/item?id=18673426)

<comment><USER61> It may be true, but it's not relevant for the current article. The questions is if these accounts will be insured by the FDIC or the SIPC or neither?

</comment></comment><comment><USER62> "The statute that we administer says that we protect money with a brokerage firm that is used for the purchase of securities," he added. "On Robinhood's help page, it says that you don't need to invest to use Robinhood checking and savings, that statement is wrong. If you deposit money for any other purpose, it is not protected."

So it is insured, unless they can prove it's not for investing?

<comment><USER63> The burden of proof is not on the insurer, but the insured.

Think through this like a court case, where the insured is suing the insurer.

The insured doesn't simply go in front of a jury and state, " _SIPC owes me $N. I rest my case._ "

<comment><USER62> What if I'm buying stocks with just some of the money? So I buy a couple shares of some penny stock but keep the rest of my 25k uninvested, am I only insured for the amount I have invested or is my entire account insured?

</comment></comment></comment><comment><USER64> Is this how it works??

consumer securities purchases protected by sipc

robinhood bank checking format:

deposit: money -> account -> robinhood backend securities purchased

withdrawal: robinhood backend securities sold -> account -> money

Is this the argument made by robinhood? Perhaps if that is laid out clearly in contract, i.e. robinhood is granted agent status to purchase and sale securities on behalf of consumer

<comment><USER65> Receiving agent status to purchase and sell securities on behalf of the consumer would mean the consumer is consenting to possible losses from the performance of those securities.

<comment><USER66> As is the case with any money market account...

<comment><USER65> Yes, point being that's not really the bank account Robinhood is trying to offer.

</comment></comment></comment></comment><comment><USER67> They've posted a response, for what it is worth: [https://blog.robinhood.com/news/2018/12/14/a-letter-from- our...](https://blog.robinhood.com/news/2018/12/14/a-letter-from-our-founders)

Not exactly confidence-inspiring, but we will see.

</comment><comment><USER68> Makes this top comment from yesterday seem even more flippant and re-inforces the "trust us, we're smarter than you" mentality of certain regions of the country:

[https://news.ycombinator.com/item?id=18673426](https://news.ycombinator.com/item?id=18673426)

</comment><comment><USER69> Irrespective of if it is protected or not, surely there is some other catch? Normally impossibly high interest rates are time-limited or balance-limited. I think somebody mentioned this is a variable rate so presumably this is a marketing ploy and they'll put it down to 1.5% in 6 months.

<comment><USER47> Is there a "catch" when Uber rides cost less than the equivalent taxi ride, and in fact cost less money than the ride itself actually costs to provide?

It's just VC money being burnt to acquire more market share. The intent isn't to be profitable on the actual services provided, but to grow revenue and profit on an eventual IPO.

<comment><USER70> It's not at clear to me that Uber costs less than the ride takes to provide due to the differences between marginal and total cost accounting.

As an example, if I'm going to own my car anyway, I'm going to pay the time- based depreciation whether or not I drive Uber. My marginal cost to drive a mile is around 10 cents for power, 2 cents for tires/brakes, and 2-3 cents for miles-based diminution of value. The fact that GSA/IRS allows $0.545/mile doesn't mean that's my actual marginal cost, just that that's a permissible financial rate for profit-seeking business usage. (As one example, the IRS only allows $0.14/mile for charitable deduction driving, which squares pretty well with my marginal cost estimate above.)

Near as I can tell from a few minutes of Googling, Uber pays $1.35/mile and $0.21/minute in Boston, or roughly 10x the marginal cost of driving a mile. That leaves a lot of margin for driving to/from fares, positioning yourself to an in-demand area, disputed rides, Pool differences, etc.

</comment></comment></comment><comment><USER71> "Move fast and break things" does not work in the heavily regulated worlds of healthcare (e.g. Theranos) and finance (now Robinhood). FB and GOOG have massive lobbying operations for this very reason, as they don't want advertising to become like finance and healthcare.

</comment><comment><USER72> Let's talk about conventional alternatives to this. I've heard good things about Ally bank's 2% saving account. Does anyone here use anything comparable? How about credit unions?

<comment><USER73> Radius Bank offers 2.05% interest on a savings account as long as you have $25,000 balance, or 1.5% for balances over $2,500. It seems to be the best option I've found. (see note for fine print).

They also offer a checking account that pays 1.2% with zero fees and even waives ATM fees worldwide. These are all FDIC insured. I've been banking with them for about 6 months now and they're pretty awesome, outside of having a rather janky web and mobile app.

[https://radiusbank.com/personal/high-yield- savings/](https://radiusbank.com/personal/high-yield-savings/)

Radius High-Yield Savings is a free savings account with no monthly maintenance fee, no minimum balance requirement after $100.00 to open the account, and is FDIC-insured up to the maximum allowed. Annual Percentage Yield (APY) accurate as of 12/14/2018\. Minimum amount to open account is $100.00. Rate tiers are as follows, 0.00% APY applies to balances of $0.01—$9.99, 0.05% APY applies to the entire balance on balances of $10.00—$2,499.99, 1.50% APY applies to the entire balance on balances of $2,500-$24,999.99, and 2.05% APY applies to the entire balance on balances of $25,000 or more. Rates may change after account is opened. Fees may reduce earnings.

<comment><USER74> Marcus by Goldman Sachs has 2.05% interest with.. effectively no minimum? ([https://www.marcus.com/us/en/savings/high-yield- savings](https://www.marcus.com/us/en/savings/high-yield-savings))

</comment></comment></comment><comment><USER75> Their page [0] on the new product still mentions both SIPC and FDIC in numerous places. If I wasn't following this news, the clear implication I'd get is that my account was both FDIC and SIPC insured. This is really irresponsible of Robinhood.

[0] [https://blog.robinhood.com/news/2018/12/13/introducing- robin...](https://blog.robinhood.com/news/2018/12/13/introducing-robinhood- checking-amp-savings)

</comment><comment><USER76> They'll give you 3% on savings by investing it in treasuries and pocketing the difference. The 20 year is now 3.03%

and interest rates are rising

Its the Theranos of finance!

<comment><USER49> Theranos's product didn't work. This product may be a bad deal or a good deal, but it's going to deliver what they promise. T-bills are illiquid if you want the gains. They're promising liquidity in exchange for a cut of the gains. Sounds reasonable, at least in theory.

<comment><USER76> You see, if Treasury interest rates rise, the value of existing treasuries from a lower interest rate fall. If you have to wait 20 years to get whole on the deal then it's effectively illiquid. But if you have to liquidate, then you must lose prinicple. Its a problem ongoing right now in the bond market.

</comment></comment></comment><comment><USER77> For those of you looking for a great place to park your money, try this one: www.mysavingsdirect.com

it's now up to 2.4% for a online savings account, that is FDIC insured. i've been using them for 2 years now, and it's been awesome. As far as i know, 2.4% is the highest there is for online accounts. i'm surprised they don't top the list on nerdwallet.com

<comment><USER78> As general word of caution: is that extra fraction of interest worth the hassle/risk of dealing with a less known bank?

What I mean is, banks like Ally offer both near-highest interest rates, are well established, and provide a nice experience. Your savings account is bread and butter in your financial life. Using some "janky" bank just to squeeze few dollars probably isn't a good use of your time.

I'm not saying mysavingsdirect.com is "janky"; I really have no idea about them. But I've seen a number of higher interest bank accounts and turned them down because they were from unknown vendors.

As an example, I was pissed at Ally and needed a new vendor. I decided to try Discover Bank, figuring they'd be good with a well established reputation like Discover, and with the same interest rates as Ally. But the experience has been decidedly worse. Slower deposits and transfers, for example.

Also worth noting that usually you shouldn't be carrying a lot in savings anyway. Excess cash should be sitting in investments and doing work. So savings accounts will only be carrying emergency funds et al. If you've got, say, $12k in your account, an extra 0.4% is only going to give you a few extra bucks a year.

Is a few extra bucks worth working with a lesser bank?

Or, to the focus of the original article, is a few extra bucks worth working with an uninsured bank?

I advise extreme caution when it comes to savings accounts, which are explicitly for "safe" money in a health financial portfolio.

<comment><USER77> Well, if you're saving very aggressively to buy a house in the near future, it makes a lot of sense, especially in places where housing is extremely expensive.

Slow deposits and transfers are not a problem at all. You only need to transfer in or out maybe a few times per year at the very most.

i'm not sure what you mean with "janky"

</comment></comment></comment><comment><USER79> This is extremely concerning:

>> "I disagree with the statement that these funds are protected by SIPC," Stephen Harbeck, president and chief executive officer of SIPC

As a result, I will not be signing up for Robinhood, that's for sure. I get the sense, It's not the place to park your money, if you're just trying to save up without investing.

</comment><comment><USER80> I guess it depends on how you read the statue.

we protect (money with a brokerage firm) that is used for the purchase of securities

or

we protect money with a (brokerage firm that is used for the purchase of securities)

Unfortunately, due to the nature of law, there's no way to get an answer on this until it goes to the courts which will only happen if/when there's a problem.

</comment><comment><USER81> I bet the idea is to use the deposits to fund margin lending to offer 3% interest rate. I remember the rate was like $10/m for $2000 margin which is 6% per year. If it's funding margin lending would it count as empty brokerage account to get insured?

</comment><comment><USER82> Behind the scenes, it is getting invested in a money market, tbills, or some other investment. So why wouldn't it be covered? Robinhood is only putting a checking account facade around this investment.

</comment><comment><USER83> Initially the 3% can be paid by RobinHood investor money (they'll make it up on volume, like Pets.com did shipping 50lbs bags). But tomorrow? Maybe offer a x year guarantee

</comment><comment><USER84> Is the main issue that the product is marketing as a checking account? If robinhood marketed this as an investment bank account would they comply?

</comment><comment><USER85> I have had such an account at Fidelity for years. However they only pay lower money market rates which are based on bonds less than 30 days.

<comment><USER53> Fidelity CMA balances are swept into FDIC-insured bank accounts. One trick with this account is that you can purchase Fidelity Money Market funds, which are treated as cash, and which Fidelity will auto-liquidate as-needed to cover debits, without intervention on your part. You can select any Fidelity Money Market fund for this. SPRXX, for instance, currently pays 2.09%. Plus you get a debit card that refunds any ATM fee in the world, free wire transfers, bill pay, paper checks (if needed), and competent customer service that's available 24 hours per day.

</comment></comment><comment><USER86> HN's value has really declined with the appearance of all the paywalls the last couple of years where there's no simple workaround. I've stopped clicking on WSJ, NYT, Bloomberg articles. Would be nice to just be able to filter them out of the view.

<comment><USER87> I've been using Outline.com when possible to get around this, but I agree. Posts behind paywalls should be removed, or tagged and filterable.

</comment></comment><comment><USER88> It's Bloomberg reporting so they probably got it completely backwards, or made it up, or misunderstood what was told to them. Not saying they're right or wrong, i'm saying Bloomberg is a very unreliable news source, especially in tech.

<comment><USER89> Just because the company financial news is about has an app doesn't make it "tech". And here they're reporting direct, attributed statements, so it should be easy for you to explain what they "didn't understand".

<comment><USER90> One of my pet peeves is that certain internet based companies are reported as "tech" and others aren't.

What's "tech" about Uber or AirBnb?

<comment><USER87> I think it is more appropriate to call them a software company. They both make software that facilitates real-world interactions.

I consider software companies to be "tech" companies, but alas.</comment></comment></comment></comment>


Choosing between democracy and party, Americans will chose party over democracy - <AUTHOR> https://www.cambridge.org/core/journals/american-political-science-review/article/democracy-in-america-partisanship-polarization-and-the-robustness-of-support-for-democracy-in-the-united-states/C7C72745B1AD1FF9E363BBFBA9E18867# <comment><USER2> Editorializing titles like this is against the site guidelines. We take submission privileges away from accounts that do it repeatedly, so please don't.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

</comment><comment><USER3> [https://static.cambridge.org/binary/version/id/urn:cambridge...](https://static.cambridge.org/binary/version/id/urn:cambridge.org:id:binary:20200423073226266-0814:S0003055420000052:S0003055420000052_tab1.gif?pub- status=live)

So they have a list of "undemocratic" behaviors, such as biased redistricting. But it doesn't include using courts to secure laws that one side would be unable to get through the ordinary legislative process. That's one of the most profoundly undemocratic things about the US. (Not bad, which is debatable, but by definition undemocratic.) So many major policies, from abortion to the role of religion in the public sphere are decided in America by unelected judges, whereas Europe for the most part manages to pass legislation on the same issues through democratic consensus. But social scientists steeped in American liberal ideology don't even perceive this as anti-Democratic (again, different from good or bad).

This popped into my head reading the first paragraph, so I scrolled down to see what they thought were "undemocratic" things. Sure enough.

<comment><USER4> first, the US is a representative democracy, not a direct democracy. we don't vote on every little legal precedent. second, judges and the judicial system are a check on executive and legislative power, not a _lawmaking_ body.

please keep partisanship out of such analyses. if your ideas are good, they can stand on their own merits without trying to rally the party faithful (ironic, given the thread title).

<comment><USER5> Is there any direct democracy in the world? Maybe Swiss cantons? The default is a constitutional representative democracy. It's sort of a non-clarification because that's exactly what everyone is talking about when they say democracy.

He's absolutely correct that American courts are, in actuality, through the precedent system and novel interpretation of law around cases, a defacto legislative body. They're sort of like a House of Lords. Examples are Schenk v US and Roe v Wade.

Overall, I think this has been effective in practice in the US, but it isn't quite in the spirit of the judiciary as you describe it.

<comment><USER4> direct democracies weren't practical at the scale of a nation until relatively recently, but yes, many smaller governmental bodies can and have been direct.

but no, the judiciary is not a legislative body (nor is the executive). it curbs legislative power through interpretation (as does the executive), as is their charge, and therefore has influence and power at the margins, not in the wholesale creation of laws. it's more influential in the negative--striking down unconstitutional laws wholesale. that's not the same as a legislative body.

besides, representative democracy centers around the legislature, not the judiciary. talking about an undemocratic judiciary was just a contrivance for partisanship.

<comment><USER5> The judiciary is not a legislative body. I don't think anyone is claiming it is. But it acts, in practice, often as a legislative body. Certainly any application of judicial activism is indistinguishable from legislation due to the use of judicial precedence, i.e. it is parallel law-making.

For what it's worth, the nature of the judiciary appointed by representatives chosen by voters is just slow representative democracy. It is no surprise that, given the ability to make a law-like, appointed in a manner that is representative-like, they act lawmaker-like.

They are, in their activism, isomorphic to lawmakers. That's what judicial activism is. In a POSIWID sense, the judiciary are lawmakers, no matter what you call them, like North Korea is a dictatorship despite being called a Democratic People's Republic.

<comment><USER4> no, you're trying to stretch concepts past the breaking point to fit a desired narrative.

the judiciary isn't a parallel lawmaking body. the legislation has corrective oversight of judiciary interpretation (outside of consitutional issues). that the legislature only exercises their oversight selectively inconsistent to your wishes is not a judicial issue.

also, "judicial activism" is a loaded term. the judiciary is doing exactly and only what it's tasked to do--interpret law against the backdrop of the constitition; it's not a bug if you disagree with its decisions.

<comment><USER5> I don't. I _love_ it's decisions, I'm glad they made them, and I said as much, but that doesn't change that they're making law.

</comment></comment></comment></comment></comment></comment></comment><comment><USER6> "There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution."

       -- John Adams, 2nd President of the United States

Here in Australia there's a weird combination of moves towards this hugely damaging two-party approach to politics (moves orchestrated I suspect by pop media), and a very real trend away from that. At the last federal election, f.e., we had >25% of people _not_ voting for either of the two major parties - that ratio has been growing steadily, and is hugely reassuring.

What's not reassuring is that most people still think in terms of A or B, exhibiting a poverty of expectations, or perhaps just seeking a simple answer to the complexity of administration.

<comment><USER7> It should be said that John Adams signed the Alien and Sedition Acts, the Patriot Act of their day except far worse, which were used to imprison a majority of the opposition newspaper editors using those acts' definition of sedition. Not who I would quote as a defender of democracy.

<comment><USER8> I'd consider the merits of the idea separately from who said it. An idea should be judged by its merits alone.

<comment><USER9> It should be judged by its merits and looked at askance according to its author, because that often helps you spot sneaky-sneaky demerits being slipped in by the back door.

</comment></comment></comment></comment><comment><USER10> Populism has always, from day one, all the way back in Ancient Greece, been a threat to democracy. People don't really want lofty philosophical ideas. They want the rules most favorable to them. Been true for thousands of years and it's not going to stop anytime soon.

The surprising thing isn't that rule of law is being threatened. It's always being threatened. The surprising thing is that it ever evolved at all. And despite the constant threats, it still manages to evolve, one tyrant at a time.

CGPGrey has a great pair of videos on pirate social dynamics that everyone should watch. Economic factors, not shared idealism, created the flat hierarchy.

Nobody will choose idealism that's not beneficial to them.

<comment><USER11> > Populism has always, from day one, all the way back in Ancient Greece, been > a threat to democracy.

In Plato's republic democracy is a result of populism and is seen as one of the lowest forms of government.

<comment><USER12> Direct democracy can be pretty damn horrible and unprincipled.

Any modern system has check and balances and the process itself is important. Forcing negotiation, coalitions and making it difficult to change constitution etc. Plato had no idea how democracy can develop.

<comment><USER13> Aristotle describes this as "Polity":

See [this]([https://fs.blog/2017/02/aristotles- politics/](https://fs.blog/2017/02/aristotles-politics/)) article, and the [Politics, book 4, section XI]([http://classics.mit.edu/Aristotle/politics.4.four.html#553](http://classics.mit.edu/Aristotle/politics.4.four.html#553))

</comment></comment></comment></comment><comment><USER14> I wonder to what extent there is also a prisoner's dilemma problem here, insofar as defecting makes more sense if you have strong prior knowledge or belief that your opponent will defect. ( [https://ncase.me/trust/](https://ncase.me/trust/) provides a great interactive and intuitive understanding of the prisoner's dilemma.)

For example, using one of the hypotheticals from the paper, I could imagine multiple reasons for a partisan to "support a redistricting plan that gives them more seats despite a decline in polling":

1) Choosing to intentionally commit anti-democratic behavior, such as to "win at all costs". Someone couldn't justify this (to themselves or others) directly through democratic values, though they could attempt to argue that winning averts some worse outcome.

2) Perceiving unfairness in existing polling (e.g. disenfranchisement, gerrymandering, etc), and choosing an action they perceive as "balancing" similar anti-democratic behavior by the other side, with the justification that the outcome may be closer to democratic. Someone _could_ justify this (to themselves or others) directly through democratic values alone, particularly if they argued that they would prefer the outcome in which neither side commits such anti-democratic behavior.

Possibility (2) allows people to self-justify defection from democratic principles more easily, and feel more morally correct in doing so. It's difficult to get back from that situation to one in which everyone follows democratic norms and principles, if cooperating (following those norms and principles) is or is perceived as a losing strategy.

<comment><USER15> You have to also take into account Long Term and Short Term thinking.

Not only are we playing a Prisoners' Dilemma but most of the population is thinking about a value function that pays off in the Short Term (it's definitely true about events outside the population's expected lifespan, but also is true within a single lifespan).

In the Long Term all of our needs are relatively aligned.

There are pivotal points in history like the signing of the Magna Carta at knife point, rather than yet another relatively-shallow regime change, that are thinking about the value function in the Long Term.

There will one day be an iteration on democracy that solves the Byzantine Generals Problem. Where the "failures of communication" are caused by Short Term thinking.

</comment></comment><comment><USER16> Sure, I'm fairly confident that "Democracy" for many Americans means "my political beliefs" and does not designate an ideal political structure in which the system of government is determined by the populous.

In the American context it's become one of those meaningless, overloaded sham words, wrought with personal interpretation and emotion. For the American, anyone who is defending his own political prescriptions is a defender of sacred democracy.

I mean, jeez, we do such a poor job at political education in this country that I'm sure a large swath of the population couldn't even articulate ideal principles of a well-structured democracy.

<comment><USER17> It's why we're perpetually bewildered when one of the Bush family goes into a foreign country to "liberate" it and find that democracy is not the same thing as fealty to America.

</comment></comment><comment><USER18> From briefly looking through the results and the survey design, I have some practical concerns with the design of the candidate choice survey part of the study as they relate to the "party over democracy" conclusion, specifically, the fact that there were no "pro-democratic" candidate positions, only "undemocratic" and "generic". This lets the voter faced with a choice between an undemocratic candidate and a candidate who has nothing to say on the "democracy" issues project the undemocratic positions onto the "generic" candidate. This seems especially problematic because anti-electoral fairness positions and rule by executive order, widely used in America by both parties, make up half of the undemocratic positions used. For many Americans these seem to be intractable issues because (1) these abuses are already widespread, and (2) almost no political candidates, aside from more fringe single-issue ones, run on ending them or can be expected to do anything to oppose or end them if perpetrated by their own party. So to me it seems perfectly reasonable to vote for a candidate of who explicitly supports gerrymandering and rule by executive order over a candidate less aligned with you on other policy issues who has nothing to say about them. Chances are, the other guy supports those things too. Am I missing some part of the study that accounts for this?

</comment><comment><USER19> Of course, very few people actually like democracy in practice, they just tend to prefer whatever system/government that agrees with them.

Imagine you let people from one party (doesn't matter Democrat or Republicans) to _anonymously_ vote on a constitutional amendment that outlaws the opposing party members from participating in the next presidential election, my gut feeling is that amendment would pass the vote overwhelmingly.

Either way, democracy is a nice ideology that won't scale in the 21st century anyway, but that's a different discussion for another day...

</comment><comment><USER20> But it's well-established that this has _always_ been the case, from almost the beginning. And it's also common in _any_ party-based system.

</comment><comment><USER21> It's the game theory optimal choice. No surprise there.

</comment><comment><USER22> Not much different from many countries e.g. India

<comment><USER23> Many Muslim countries are also skewed to elect conservative Muslim government. It's not they hate democracy. They just don't trust normal people to make the right decisions.

<comment><USER24> I am not sure if I understand your comment. Are you saying conservative Muslims are not normal people?

<comment><USER25> I think the favorable interpretation of his comment is that by normal he means secular.

<comment><USER5> These are always funny statements because they sort of betray what the person thinks are normal. There's a famous one with world renowned football coach Pep Guardiola:

> _My kids go to school with Indian people, black people, normal people, > people from everywhere_

[https://streamable.com/ga3fg](https://streamable.com/ga3fg)

It's pretty easy to forgive that but it's still funny.

</comment></comment></comment></comment></comment><comment><USER26> This is actually what I think is most dangerous in US politics right now. Nixon resigned to avoid an inevitable impeachment. Today? He's stay in office, have impeachment defeated on a straight party-line vote and then declare victory against "fake news".

The Senate obstruction of Obama was unprecedented. The subversion of the Justice Department is unprecedented. The White House going _months_ without a press briefing is unprecedented (in modern times). The erosion of public institutions doesn't seem to matter. Nor does the public trust in those institutions. Winning matters. Getting your agenda through no matter what matters. And that's so dangerous.

This, by the way, is why mandatory voting (as we have in Australia) is so important and so much better. In the US, the election process itself is politicized. What you have is highly organized efforts aimed at voter suppression because people are allowed not to vote so much so that the GOP had to enter into a 35 year consent decree to prevent voter suppression [1].

What a lot of liberals don't understand (for the record, I include myself in that camp) is how angry the idea of activist judges makes conservatives.

In US constitutional law you really have two major schools of thought: the "living document" school and the "literalists". The second group think the constitution says what it says. If you want to change that, there's a process for that (ie a constitutional amendment). The "living document" school thinks the constitution should be viewed through the lens of the times and it asks questions like "what would the Founders have written or meant today?" Broadly speaking, literalists are the conservatives and "living document" types are liberals.

Judicial conservatives think there was no _constitutional_ basis for the SCOTUS decision to legalize gay marriage. They feel like "dignity" was another invented right, just like "privacy" was an invented right that legalized abortion in Roe v. Wade. And whether or not you agree with those things in principle, you shouldn't dismiss how strongly many voters feel that legislatures not judges should enact those things.

I strongly believe the combination of the SCOTUS gay marriage decision and having a black president while the candidate was HIlary Clinton was the perfect storm that was the only thing that could get Trump elected.

But here's this relates to party over democracy: by any measure, Trump is a reprehensible human being. The level of hypocrisy required for religious conservatives to stand behind him is truly astounding. But they do it because we're now in a situation where the ends justifies the means and one of those key ends is packing the courts with young Conservative judges, something that'll have a legacy for decades to come.

[1]: [https://en.wikipedia.org/wiki/Ballot_Security_Task_Force](https://en.wikipedia.org/wiki/Ballot_Security_Task_Force)

</comment><comment><USER27> Did they ask about democracy vs. a constitutional republic?

</comment><comment><USER28> If I wanted to read about politics, I'd go to the dumpster fire that is reddit. I come here to read about interesting things.</comment>


Argentine government favors farmers in dispute with Monsanto - <AUTHOR> http://en.mercopress.com/2016/04/15/argentine-government-favors-farmers-in-dispute-with-monsanto <comment><USER2> FYI, this is the same company that sues farmers for re-planting seeds that blew onto their land: [https://en.wikipedia.org/wiki/Monsanto_Canada_Inc_v_Schmeise...](https://en.wikipedia.org/wiki/Monsanto_Canada_Inc_v_Schmeiser)

I don't use the phrase "evil" often to describe corporations but Monsanto makes the cut.

<comment><USER3> Your allegations miss a crucial detail, Monsanto sued farmers who planted seeds and then sprayed them with herbicide[1]. Ie the farmer knew what he was doing and used the patented trait. Why shouldn't Monsanto sue over that? Like many things in GMO land the myth that they sue accidental contamination is wrong.

Monsanto has the worst PR team in history, which has made my company's work much harder, but 'Monsanto is Evil' is a marketing slogan developed by Greenpeace, Friends of the Earth etc. These environmental groups are actually the true evil in the industry. Their campaigning has held back progress in the industry by many years. Smarter folks than me argue that their actions on Golden Rice meet all the criteria to be considered a crime against humanity[2]

[1] [http://www.monsanto.com/newsviews/pages/gm-seed- accidentally...](http://www.monsanto.com/newsviews/pages/gm-seed-accidentally- in-farmers-fields.aspx) [2] [http://www.allowgoldenricenow.org/the-crime- against-humanity](http://www.allowgoldenricenow.org/the-crime-against- humanity)

<comment><USER2> > Your allegations miss a crucial detail, Monsanto sued farmers who planted > seeds and then sprayed them with herbicide[1]. Ie the farmer knew what he > was doing and used the patented trait. Why shouldn't Monsanto sue over that? > Like many things in GMO land the myth that they sue accidental contamination > is wrong.

I disagree that anything is wrong with doing that. The way I see it, he identified that a number of plants were resistant to RoundUp and efficiently figured out which they were.

It's not his fault that Monsanto's business model fails to meet up with the reality that plants have plantable seeds.

> Monsanto has the worst PR team in history, which has made my company's work > much harder, but 'Monsanto is Evil' is a marketing slogan developed by > Greenpeace, Friends of the Earth etc. These environmental groups are > actually the true evil in the industry. Their campaigning has held back > progress in the industry by many years. Smarter folks than me argue that > their actions on Golden Rice meet all the criteria to be considered a crime > against humanity[2]

Friend of the earth ( _lower case without a ™ symbol_ ) sure, but I'm no tree hugger. I'm not against GMOs and think Golden Rice is amazing. I just don't like the idea of imposing licensing restrictions on farmers. It's a dark road that we don't need to go down.

<comment><USER4> > fails to meet up with the reality that plants have plantable seeds.

This is a terrible argument.

Is Microsoft to blame for Windows piracy because CDs are easy to copy?

These cases aren't accidental - the farmer was very clearly copying the technology and using it to their benefit without contributing to the IP costs.

<comment><USER5> > Is Microsoft to blame for Windows piracy

That isn't a comparable claim. Microsoft _is_ responsible for their choice of business model.

> because CDs are easy to copy?

You shouldn't expect profit when your business model relies on scarcity that doesn't exist in nature. Attempting to impose _artificial scarcity_ doesn't work, for the same reason you cannot make a law that changes gravity. Trying to change laws of nature by fiat only makes you look foolish.

Note that Microsoft can still run a profitable business even when their CDs are easy to copy. They did this for decades. For most of that time, they didn't spend much effort trying to stop piracy; unpaid copies helped maintain their desktop monopoly. If they were successful in stopping piracy, people might have learned about an alternative OS.

<comment><USER6> It is my understanding that copyright and patents exist exactly to create artificial scarcity so that the owners can extract money. I'm not sure whether it's a good idea, but it seems to work reasonably well for what it was designed to do.

<comment><USER5> > work reasonably well for what it was designed to do

An argument can be made that copyright and patent worked _before_ the digital era.

The trick that Claude Shannon introduced may have been intended to remove noise, but that's not all it did. Digital encoding allowed data to be repeated _indefinitely_. Put another way, data was _scarce_ when it gains noise (lower s/n) each time it is re-amplified; Shannon's encoding schemes allowed perfect copies, and thus data was no longer _scarce_.

> copyright and patents exist exactly to create artificial scarcity

Copyright and patent cannot _create_ scarcity, nor were they intended to. They rebalanced existing scarcity.

<comment><USER4> Just because the cost to copy IP today is near nothing doesn't mean that there are not fixed costs into the generation of IP.

Also you're right, patents and copyrights are not there to create scarcity - an IP owner can use a license that allows absolutely everyone to use it. They exist to give the owner a timeframe with which to recooperate costs of IP generation (and yes, the copyright timeframe is too long but patents are reasonable).

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER7> If you don't like Monsanto's work, don't pirate it. If you like it, pay the royalties.

It's really very simple; if you don't uphold their ability to defend their intellectual property you destroy the business model, and you'll lose the research.

The US Government needs to step in here -- exactly the same as they would if Chinese companies were selling computers with pirated copies of Windows into US stores.

<comment><USER8> The article is about a dispute over when royalties have to be paid. Monsanto expects to be paid every time, farmers are saying only the first generation can have the royalty requirement by law.

<comment><USER9> Disputes like this are why companies like Monsanto engineer in terminator genes to make the business model viable.

<comment><USER10> No, that's why those companies have PROPOSED terminator genes. There is no commercially available product that actually contains them.

<comment><USER9> I sit corrected. Instead, the current typical approach is to use cross- breeding to produce seeds that grow well the first generation and don't produce reliable seeds themselves.

<comment><USER11> That is misleading, as the goal of that cross-breeding is not to produce unreliable seeds, but in order to produce better results. Look up "hybrid vigor" for details on this. Nothing about the cross-breeding is done in order to hinder re-use of the seeds, it's just that naturally non-hybrid seeds are less effective.

<comment><USER9> As I understand it, the idea is to have two parent lines that when produce the desired traits in heterozygous offspring but not in second-generation offspring. Sort of a Mendelian DRM.

<comment><USER11> This is incorrect. As I already stated: the cross-breeding is to take advantage of hybrid vigor[1], it is not an effort to intentionally hamper successive generations. This same practice occurs in non-GMO, non-patented plant breeding, and has been done for over a hundred years[2]

1: [https://en.wikipedia.org/wiki/Heterosis](https://en.wikipedia.org/wiki/Heterosis) 2: [https://en.wikipedia.org/wiki/History_of_plant_breeding#Gree...](https://en.wikipedia.org/wiki/History_of_plant_breeding#Green_revolution)

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER12> > Argentine farmers had benefited substantially from its Intacta technology > and called for "all producers to pay ... if they decide to use it."

This sounds a lot like the music industry and their constant call for "royalties".

</comment><comment><USER13> The indian government has cut Monsantos Royalty fees. Monsanto threatened to leave and Govt of India said f* off. [1][http://indianexpress.com/article/business/economy/monsanto-t...](http://indianexpress.com/article/business/economy/monsanto- threatens-to-exit-india-over-govts-show-cause-notice/) [2] [http://timesofindia.indiatimes.com/business/india- business/G...](http://timesofindia.indiatimes.com/business/india-business/GM- cotton-row-Government-says-India-not-scared-if-Monsanto- leaves/articleshow/51429611.cms)

<comment><USER14> For those wondering like me about the word 'lakh' in the articles, it means 100,000.

</comment></comment><comment><USER15> Very proud to see the new gov't doing something right for a change. But it's probably a little too late sadly.

</comment><comment><USER16> Argentina is a sovereign nation and should tell Monsanto to fuck off.

<comment><USER17> If they had told Monsanto to fuck off before agreeing to treaties that included patent protections that would have been just fine. But first they agreed, and now they are reneging. That's not fine.

<comment><USER16> Seems like they're just taking a play out of the US's playbook then.</comment></comment></comment>


Is Pop Music Evolving, or Is It Just Getting Louder? (2012) - <AUTHOR> https://blogs.scientificamerican.com/observations/is-pop-music-evolving-or-is-it-just-getting-louder/ <comment><USER2> The original article in Scientific American is much better [https://blogs.scientificamerican.com/observations/is-pop- mus...](https://blogs.scientificamerican.com/observations/is-pop-music- evolving-or-is-it-just-getting-louder/)

The author of the article highlights a potential bias with this study which is worth pointing out:

 _But I did wonder if there was a selection bias in play here. The Million Song Dataset, huge as it is, may not provide a representative slice of pop music, especially for old songs. Its contents are heavily weighted to modern music: the database contains only 2,650 songs released between 1955 and 1959, but nearly two orders of magnitude more—177,808 songs—released between 2005 and 2009. That's because it draws on what's popular now, as well as what has been digitized and made available for download. And the songs of yesteryear that people enjoy today (as oldies) may not be the same ones that people enjoyed when those songs first came out._

<comment><USER3> Yeah - this could potentially be a huge bias. Songs that are top 40 hits for a month or so and songs that have staying power to be memorable 40 years from now are probably not quite the same category.

It also echoes my (baseless) assumption that the main reason that we have this idea that music a few decades ago or more was somehow "better" is that anything that wasn't at least above average is completely forgotten by now i.e. survivorship bias.

<comment><USER4> That's true. Terrible songs (like Sylk-E Fyne's "Romeo and Juliet") are completely forgotten very soon while the really good songs are never gonna give you up, never gonna let you down, never gonna run around and desert you.

<comment><USER5> People are really still doing this? I can't stand the fact that back in 1998, The Undertaker threw Mankind off Hell In A Cell, and plummeted sixteen feet through an announcer's table.

<comment><USER4> It was done to make a point in a clever way. I think you should appreciate the level of skill it takes to RickRoll Hacker News and not get voted off immediately.

<comment><USER6> If you have to point out how clever something is, it was not, in fact, clever.

<comment><USER4> No. You're thinking of jokes.

</comment></comment></comment></comment></comment></comment></comment><comment><USER7> What I have personally noticed over the last 15 years or so is the move away from melody and towards chord progressions and layering. This has the effect of producing more complex music (many times courtesy of modern digital technology) but nevertheless music that generally is forgettable. When I have my family in the car on the weekends and I'm forced to listen to the radio, I'm amazed at the lack of melody in most songs as well as the same progression, structure, and timbre between songs. They are so similar it's extremely difficult to recall which song is which if you take away the vocals. I think modern pop has attempted to replace instrumental melody with a sort of vocal melody that stands out for easy identification. This, I presume, is because of the nature of modern pop. Many "artists" are solo performers who have a brand to sell so the people writing songs for them make it such that the song is built to bolster the brand/image rather than attempting to structure the song in the best way musically.

The switch away from melody is also extremely present in soundtracks. Think about John Williams who, in my opinion, is the "master of melody". Every time he creates a soundtrack there are instantly recognizable melodies and motifs. Just reading the following words - Harry Potter, Jaws, Star Wars, Superman, Indiana Jones, Jurassic Park, The Godfather - and you could probably hum any of those melodies on command. Or at least you could instantly identify it if you heard it. Contrast that with someone like Hans Zimmer (who is excellent, BTW). But he's a more "modern" composer, right? And if you look at his stuff you'll see that he's basically a "master of timbre", which is why someone like Hans Zimmer stands out in the modern era where, as the article states, timbral variety has gone down. In fact, I would argue that some of Zimmer's best work are the ones where he actually combines his timbral mastery with melody. Things like Gladiator and Pirates of the Caribbean.

</comment><comment><USER8> I see it as more of the same corporate 'streamlining' that's gone into other media. Much like movies and video games, pop music is being produced for a mass international audience. I've got friends in Indonesia and the Philippines that know more about modern American pop music, movies and video games than I do. Other than what comes on the radio at work I have no idea what's really popular these days.

That being said. I've heard lots of great modern music being produced you just have to look for it. Kinda like the way some of the best video games I've seen being made these days aren't giant AAA games with huge a Dev staff and budget, but small indie games with one or a few developers seem to be the real leaders in game innovation these days, a lot of the 'good' music being made isn't the stuff that comes on the radio or hits the top song lists of Spotify or whatever the kids use these days.

Loudness is kind of ridiculous these days though. But, I've noticed a big difference in songs I listen to that are intended to be released on vinyl(this still happens) vs songs that are intended for digital or CD release. The vinyl tracks are far less compressed, have moredynamic range, and are 'quieter', even for dance type tunes, than the digital ones, which have peaked red lots without any kind of amplification and their waveforms are basically just one big blob from start to finish. Compression and normalization have kinda wrecked the quality of a lot of music. One of Metallica's newer albums suffered from that badly, the song's weren't terrible but the mastering made them sound like shit. Then there's autotune...but that's a whole other pile of bullshit right there.

<comment><USER9> Death Magnetic, released a decade ago.

Famous for being so bad, Guitar Hero's development team asked for the original unmastered files, was granted their request, and then properly mastered them just so they could be included in the game without destroying the experience.

Guitar Hero's version of Death Magnetic was apparently pirated more times than rips of the authentic release. It was heavily praised for being a more clear, detailed mix, that didn't shove highs under the bus for muddy lows and generally ruined vocals.

[https://www.youtube.com/watch?v=6Nfqpr3ygSg](https://www.youtube.com/watch?v=6Nfqpr3ygSg) for a comparison on the least ruined song on the album, that the author volume matched for the video. The original release had to be decreased 14dB to match the level of the GH3 release for this comparison.

</comment></comment><comment><USER10> Quickly read the article for evidence that popular music peaked with Motley Crue's Theater Of Pain (1985) album but it appears that this article had also failed me.

</comment><comment><USER11> Not to say that I think modern pop is anything special, but how do these three categories of measurements correlate? How do you compare something like Dr. Dre's 2001 to Led Zeppelin 3 with only these measurements? I would imagine that 2001 would rank lower on these metrics, but I don't think anyone would describe it as "worse".

<comment><USER12> I suspect you need a different measure for the vocals, as opposed "music" itself.

The sounds other than vocal part of Dr Dre's album probably wouldn't really stand on their own and much is quite repetitive (as noted in the study).

Led Zeppelin Immigrant Song can definitely be enjoyed without the vocals, though the vocals really make it recognizable.

Similarly, there are quite a few rock songs that have been made into pretty interesting orchestra pieces.

Would be interesting to see if there any hip hop masterpieces that have been arranged for classical music.

<comment><USER13> The TV series Westworld had a scene where they had Shogun era musicians playing a Wu Tang Clan song on traditional Japanese instruments. [https://www.youtube.com/watch?v=__DEAK3AinM](https://www.youtube.com/watch?v=__DEAK3AinM)

</comment></comment></comment><comment><USER14> it's almost as if this is, on a highly sped up time frame, a process similar to that which yields stable traditions in different regionall forms of artistic representation, but without the kind of natural propagation boundaries that would normally contain the spread of a tradition to within a narrow geographical and cultural region.

We, by which I mean the Western world as influenced by pop music in the era of widespread mass communication, are settling on a common collective cultural music motif, and this cannot help but be a bit of a race to the complexity floor in order for it to be sufficiently widespread and stabilized.

<comment><USER15> Needs more autotune and wobble bass bro.

<comment><USER16> Not to mention the cowbell.

</comment></comment></comment><comment><USER17> Sure, if your "proof" is measured in some arbitrary metric.

A few of questions to consider:

\- Are timbre, pitch, and volume the only good metrics to measure song quality in? What about lyrics? What about themes? What about instruments? etc.

\- Are variations in these three metrics necessary or sufficient for there to be quality in music?

<comment><USER18> Well lyrics and instruments certainly haven't gotten better. Drum machines and electronic effects have taken over for instruments and lyrics are about as shallow as they can be right now.

<comment><USER19> Lyrics for popular music were always shallow. It's no worse today.

<comment><USER20> Well today's lyrics are worse in at least one objective way: number of unique words.

In the "good old days" you could at least count on a verse, chorus, different verse, chorus, etc. structure. Then at some point they were doing "chorus, chorus, chorus, bridge, chorus...". Soon we'll be lucky to get more than a repeated sentence fragment.

Case in point: [https://www.google.ca/search?q=turn+down+for+what+lyrics](https://www.google.ca/search?q=turn+down+for+what+lyrics)

Or this gem: [https://www.google.ca/search?q=watch+me+whip+lyrics](https://www.google.ca/search?q=watch+me+whip+lyrics)

<comment><USER21> >Well today's lyrics are worse in at least one objective way: number of unique words.

That's not a good metric.

<comment><USER22> Right. I occasionally hear local word-rich rap and it is low quality lyrics overall. In particular, it's like they explain every line with ten more lines, as if their listener was an idiot who cannot read between these.

If I looked for a good metric, I would probably take min(word per meaning and touch), but that would raise a question on what 'meaning and touch' is. Nonetheless, good lyrics always seem to be un/under-spoken or sharp cut.

<comment><USER21> Yes! In poetry, William Carlos Williams is a great example. In music, Lou Reed and Randy Newman are good examples.

</comment></comment></comment></comment></comment></comment></comment><comment><USER23> Maybe I'm wrong about this, but I have a feeling it's because the primary demographic of music listener is getting younger and younger. With streaming platforms like Spotify and Youtube, I imagine that teenagers and even young children have a huge sway over what the music industry produces and represent an increasing fraction of their revenue. Not to mention businesses are likely using music more than ever (it plays over the speakers on planes when boarding and de-planing, in stores, restaurants, gyms, etc.) and they all try really really hard to avoid something that is offensive, which usually means lowest common denominator, plain vanilla garbage. That being said, I really wonder about their database. They are certainly including more than just pop using that many pieces of music.

I pretty much disagree with any premise that music is getting worse, in general. Pop music, maybe, but the sheer quantity and variety of amazing work out there can't be understated. I've found so many life changing works of music that have been produced after 2000 and continue finding them all the time. Anyone saying music is getting worse either isn't looking in the right place, or is stuck in their ways.

<comment><USER24> You're not wrong. Adults have an ability to discern crap from talent. Children don't know the difference, and will buy what's pushed at them. This is very different from the 1940s, 1950s, where a record (and phonograph, speakers, amplifier) was expensive and music was primarily purchased by adults. The demographic shift is rather profound -- where the average age used to be in the high 30s/low 40s, to today, where it is teenagers.

I don't agree that pop music is becoming more vanilla and less offensive. In fact I think it's demonstrably quite the opposite -- much more vulgar and crude. Just a few moments spent with modern "music videos" should dispel any notion of bland, inoffensive art.

</comment></comment><comment><USER25> "Everyone knows rock attained perfection in 1974. It's a scientific fact!" \-- Homer Simpson, "Homerpalooza"

<comment><USER26> Yes, but then it turned out Phil actually sang that music better than Peter so there can be some disagreement over the exact year.

<comment><USER27> > Yes, but then it turned out Phil actually sang that music better than Peter

It did? Apparently there can't be only disagreement over the year.

</comment></comment></comment><comment><USER28> A well set equaliser (for your specific speakers/headphones) goes a long way towards reversing this problem. Or at least it feels like it to me.

I've started using eqMac2 [1] on my Macbook for equalising my headphones. The difference between non-eq sound and my profile is night and day. Without the equaliser it sounds like I'm listening to music through a swimming pool.

I have to say though, nothing beats music with proper dynamic range being pumped through a >$10,000 speaker system in a room that's been properly fitted for the acoustics. There's a new nightclub that's opened in my city, where the owner has spent a lot of time and money getting the sound system set up properly. He has an absolute banging Funktion One system [2], with properly designed room with all the correct dampening and stuff. The difference between that and a generic setup with no design is absolutely night and day. You can stand in the middle of the dance floor with the music absolutely cranking and still hold a conversation. As much as I do love techno, I really want to see them put some Led Zeppelin or Pink Floyd through the system.

With proper sound systems like a Funktion One and high quality music, you don't just hear the music, you can feel the music. It's absolutely phenomenal.

[1] [https://github.com/nodeful/eqMac2](https://github.com/nodeful/eqMac2)

[2] [https://www.funktion-one.com/](https://www.funktion-one.com/)

<comment><USER29> As much as I love a room with a properly fitted and tuned Funktion One system playing techno at a level where I can feel the bass in every part of my body, that pretty much is the sweet spot for F1 rigs, so you might be disappointed with how they sound playing other types of music.

[http://www.jumble.blue/en/what-nobody-tells-you-and- admits-a...](http://www.jumble.blue/en/what-nobody-tells-you-and-admits-about- funktion-one/)

<comment><USER28> Great read, thanks.

I haven't listened to enough psy-trance on F1 systems to really make a comment, but it's something I'll definitely think about next time I'm at a psy-trance thing with F1 speakers.

<comment><USER29> In my experience with smaller outdoor psy-trance parties they've tended to go with Opus rigs, but when I've been to the Ozora Festival in Hungary where they might have ten thousand people dancing in a valley, it's the sort of long- throw J-rigs the article talks about.

</comment></comment></comment></comment><comment><USER30> This conclusion may have held in 2012, but the loudness wars are ending with loudness normalization being enabled by default on most streaming platforms, which is what most music is mastered for these days.

</comment><comment><USER31> Louder is not really worse when it comes to music. In fact, try turning up whatever you're listening to right now--it'll actually sound better!

The loudness wars (mass application of massive compression that reduces dynamic range) are the music equivalent of adding salt to savory foods. People like it better even though it's technically "worse".

<comment><USER32> Wow. Can't disagree more. Compressed audio only sounds better on crappy speakers. Maybe they are common with phones.

<comment><USER33> The effect of loudness on perception is well-documented in several studies and used to much advantage by audiophile snake-oil peddlers.

<comment><USER3> Loudness yes, but increased loudness that necessitates compression, where the compression is the negative is what is being talked about here.

</comment></comment></comment></comment><comment><USER34> Alternate title: pop music responds to consumer preferences for louder music with less jarring timbre and pitch transitions

</comment><comment><USER35> Pop music isn't nearly as important now. As music is cheaper to make and produce, and more and more artists and fans live in niches and subcultures, the only people who listen to pop are the people who don't care enough to discern their more specific tastes. Why would it be any surprise then that pop trends towards a boring inoffensive middle?

</comment><comment><USER36> I'd be interested to see a follow up on this. Spotify and Apple both encourage a form of mastering that doesn't reward loudness. Apple has that soundcheck thing, Spotify as well (not sure what they call it). I'm sure this has had a not so insignificant effect on the loudness war.

<comment><USER37> I don't think Spotify has a specific word for it, just "Normalize volume", with an option to set it to quiet, normal or loud.

There's a clear difference between well-produced songs and over-compressed songs. The over-compressed ones tend to be much quieter, because the normalizer goes by average volume instead of peaks. So well-produced songs get to go "over" for some amount of the song, to give room for dynamics.

</comment></comment><comment><USER21> It's always interesting to see certain types try to discuss art. Since James Brown, music has been trending toward an emphasis on rhythm, with melody and harmony playing a more pragmatic role - rather than the inverse. This article doesn't even mention rhythm.

Ringo Starr was a mediocre drummer, yet many claim the Beatles are the best band ever (a stupid claim to make about any band, but here we are).

Most pop music will be bad, because art is hard. There are different ways to make art work. There are different ways to make music work. The more dogmatic you are about what makes art and music good, the more you'll miss out on great stuff, the more you'll limit yourself.

The combination of Future and Metro Boomin is just as exciting (to me) as the combination of Jagger and Richards or Lennon and McCartney.

</comment><comment><USER38> That headline makes about as much sense one that says "art proves science" or "objective facts prove subjective points".

</comment><comment><USER39> Science only disproves.

</comment><comment><USER40> premise is fuckin stupid. you cant pick metrics willy nilly and use them to justify. impressions has two chords, still a brilliant song. lack of textural variety means a solo piano piece sucks i guess? no. you are just an opinion in search of evidence. sorry, try again.

<comment><USER41> Uhh... that completely misses the point.

Sure Impressions only has two chords... but Giant Steps, another Coltrane tune essentially has 5 chords every three bars and modulates in that time as well. They're very different charts by the same artist. And even with Impressions they really didn't play it safe nor did they play it straight dorian in the solos either (much less so than Miles did with the same two chords). Depending on which recording of Impressions you're referring to, I wouldn't call Eric Dolphy's bass clarinet on "India" a common timbral choice either and on the same album as Impressions.

The point was over a large body of work there is much more homogeneity today than there use to be. While we can bicker about their data and study approach, the gist of their conclusion is not necessary invalid or stupid. Maybe their methods are...

[edit for clarity] Before anyone thinking about it jumps on my case... yes I know Giant Steps is 16 bars with four bar phrases or "stanzas" if you prefer... but to my ears the fourth bar in each group, while structurally important overall, functions more as embellishment and transition harmonically, melodically, and (a bit less so) rhythmically setting up the next phrase... the first three bars in each group are really the focus and point. (sorry had to get that off my chest).

<comment><USER40> no you miss the point, which is that you cant arbitrarily choose metrics of quality and decide "more is better". i played giant steps in 7 and added a bar of f# aug... guess im better than coltrane!</comment></comment></comment>


How to win as a first time founder - a Drew Houston Manifesto - <AUTHOR> http://firstround.com/article/How-to-Win-as-a-First-Time-Founder-a-Drew-Houston-Manifesto <comment><USER2> While I think it is much more useful to learn from others' success than others' failure (lessons from _your own_ failures are invaluable), let's not forget selection bias. A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.

Many, if not most, founders aren't even aware of these factors, don't appreciate them fully, or won't acknowledge them out of ego. In many cases the advice should be "work hard, be smart, and buy the winning lottery ticket."

My advice is to attempt startups in the center of a confluence of macrotrends; that will tilt the odds more in your favor.

<comment><USER3> "My advice is to attempt startups in the center of a confluence of macrotrends"

My advice is to solve a problem you yourself have.

<comment><USER2> If 1,000 CS grads found startups attempting to solve a problem they each have, are they guaranteed success? Or will there be five outliers which exit for billions and then tell everyone all they need to do is to solve their own problems?

Telling others to solve a problem they have seems more like an algorithm to generate at least _some_ successes by guaranteeing diversity. This million monkeys approach is a strength of capitalism, but I wonder if it's the method which maximizes expected value for a would be founder. It seems more of a method to guarantee a minimum return for a VC.

<comment><USER3> Certainly not. Only a fraction of them will have the determination and intelligence required to turn a problem into a startup. And some of those will be unlucky. But more of the 1000 will succeed starting from that rule than any other.

This is not one of those cases where founders and investors' interests are opposed.

</comment></comment></comment></comment><comment><USER4> DropBox is one of the most useful products to come out in the last decade.

I still remember seeing the original 5 minute demo (1).

My jaw was on the floor, I instantly needed it.

And it's still the best, even at a premium price (marked in cost of GB of storage).

The article has several interesting points, but the takeaway for me remains "[Solve] a worthy problem."

(1) [https://www.youtube.com/watch?v=7QmCUDHpNzE](https://www.youtube.com/watch?v=7QmCUDHpNzE)

<comment><USER5> If only they'd give users the option for 1-click encryption _before_ uploading/syncing. It could work especially well with Dropbox since it has only native apps anyway. We already know they are "next" on NSA's list for companies to target (at least in an official manner, they've probably targeted them for a long time unofficially).

<comment><USER6> I belive that might not have been initially viable since part of their service is the mirroring of files that are already uploaded. If you and I both have the same mp3 in our dropboxes, only one of us have to upload it initially, then the second person to add it would only have it 'synced' in their dropbox since the file checksum matches. If we both locally encrypted it with our own keys then the resulting file on the server would be different. It'd require more storage space and more bandwidth — more operating $. Maybe not though :-)

<comment><USER7> I think the key reason is it would be significantly slower for the end user rather than the incremental increase in storage cost. Bandwidth remains the same since Amazon doesn't charge for incoming and de-duping doesn't affect outgoing.

</comment></comment></comment></comment><comment><USER8> All luck aside, i wonder how much being an MIT graduate played a role in successfully getting DropBox off the ground. I always get the thought that walking out of a reputable school opens a lot of opportunities like this, which is why i read articles like this with a grain of salt.

<comment><USER3> There is an advantage, but perhaps not the one you think. The advantage is not the brand, but that you know lots of smart people you can recruit to join you. Which Drew did, starting with Arash.

<comment><USER9> The brand is only an advantage in public perception (which usually means nothing in terms of company success at the startup stage), and maybe some level of increased respect from investors (which, as you have pointed out, really doesn't mean much, since they act as sheep. A great company is the way to get investors).

Completely agree that the major value of great schools is better schools attract smarter people, who often make better founders.

<comment><USER10> Agree with this. Brand is a big advantage in public perception and it's easier for top-school grads to get coveted meetings/intros since they are part of the "family." But at the end of the day, all that matters is the quality of the work. And there are tons of people who never attended MIT/Stanford/Harvard/etc. that are extremely successful at what they do and have built.

Like you said, great schools attract smarter people (not all of them!) and that makes for a more competitive environment, which in turn churns out more driven/analytical kids.

I know a TON of idiots who went to Stanford and Berkeley. And I know a dozen or so extremely successful entrepreneurs who never went to college.

<comment><USER9> You know a ton of idiots who went to Stanford and Cal (and aren't including Cal athletes, had to, UCLA grad)?

</comment></comment></comment></comment></comment><comment><USER11> To be fair, Houston had already dropped out of school from a year to start an SAT prep company, so he's not entirely a first time founder. [0]

[0] [https://www.linkedin.com/in/drewhouston](https://www.linkedin.com/in/drewhouston)

<comment><USER12> I was going to mention the same thing, Drew wasn't quite a first time founder when he started Dropbox, just as Mark Zuckerberg was not a first time founder when he started Facebook

</comment></comment><comment><USER10> Kudos to Drew.

Dropbox is simply a great product and that's why it's such a great success.

I've tried so many different cloud-based storage services throughout the years and nothing really comes close in terms of ease-of-use, accessibility, sharing, speed, etc. Sure, DB has a few flaws here and there but nothing is perfect.

I remember being bombarded with marketing emails from the AeroFS team two weeks ago when I tried their products and while they were great in asking how they "could help" me, their software was broken. It wasn't working properly, crashing on colleagues' systems, etc. Worst part: emailing support four times never got me a reply. And to me, that's just an awful product (aside from it being super buggy). But I digress.

Great little read from Drew, someone who has created a simple product that we all need and use daily.

</comment><comment><USER13> Good article - there's a lot to take away from this.

However, if I ever read that Gladwell 10,000 hours quote again I think I'm going to go postal!

</comment><comment><USER14> Incredibly informative article.. But the second I closed this, I saw the article about how BitTorrent is growing at a faster rate than Dropbox did. [1]

It made me wonder how Drew/Dropbox is going to respond to such a competitor

[1] - [http://thenextweb.com/insider/2013/12/05/bittorrent- doubles-...](http://thenextweb.com/insider/2013/12/05/bittorrent-doubles-sync- userbase-2-million-month-says-dropbox-competitor-growing-twice-fast/)

<comment><USER15> I bet quite a lot of that growth is down to the NSA news. I switched to Dropbox sync because of it. The NSA is really hurting US based SaaS businesses.

</comment></comment><comment><USER16> That 5 minutes long presentation movie from 2007 really explains why Dropbox is such a success. He just simply tell us about what his product does, what problem it solves, and how he has a good solution to "the file syncing problem". The presentation is so good that even my dad understands it.

</comment><comment><USER17> This is much more about "how to win" than it is about "how to win _as a first time founder_ ".

The only real "as a first time founder" material is his story about how he scrambled to find a cofounder for YC.

</comment><comment><USER18> great and inspiring read! find ourselves in the same spot as when drew started - when he walked in to YC unprepared. Well we blew our YC 2014 application, it was so poorly written. So with a common starting point looking forward to cracking the code to success by - solving a problem that we have ourselves, and improving on things that are already around!

</comment><comment><USER19> There is also a hidden factor: white male in his early 20s attending ivy league schools like Stanford and MIT

<comment><USER20> Stanford and MIT are both not Ivy League schools... But your point is noted.</comment></comment>


IPhone Case to Spray Perfumes - <AUTHOR> http://www.nextbigwhat.com/iphone-5s-case-atomyzer-297/ <comment><USER2> It's a very nice idea and i congratulate for the same but as far as i am concerned i will not be interested to carry such bulky cover for my iPhone. Anyways all the best:)</comment>


MS Security Advisory 4022344: RCE in Windows Defender - <AUTHOR> https://technet.microsoft.com/en-us/library/security/4022344 <comment><USER2> It sounds a bit counterintuitive, but for me this just confirms that you should only be running Microsoft's AV software and avoiding all that third- party crap like the plague. This bug was more subtle than the ones Tavis has found in the third-party products, and Microsoft responded immediately with a fix instead of giving them the runaround.

</comment><comment><USER3> "To be clear, this is an unsandboxed and highly privileged JavaScript interpreter that is used to evaluate untrusted code, by default on all modern Windows systems. This is as surprising as it sounds."

[https://bugs.chromium.org/p/project- zero/issues/detail?id=12...](https://bugs.chromium.org/p/project- zero/issues/detail?id=1252)

<comment><USER4> Why on earth?? I don't get why the engine would be executing JavaScript, even if it were sandboxed, in the first place? That doesn't sound sensible.

</comment></comment><comment><AUTHOR> This was the vulnerability found by Tavis and Natashenka from P0: [https://twitter.com/taviso/status/860679110728622080](https://twitter.com/taviso/status/860679110728622080)

Impressive that Microsoft patched within 3 days.

<comment><USER5> It always depends on the vulnerability, but most major organizations are able to patch critical issues in less than 24 hours. That's the result of improving continuous integration and release engineering pipelines to the extreme.

The real issue is getting 100% of users to download and apply the patches. We haven't solved that one yet.</comment></comment>