How Instagram Could Have Cut a Better Deal - <AUTHOR> http://dealbook.nytimes.com/2012/08/20/how-instagram-could-have-cut-a-better-deal/

<comment><USER2> This was a well known fact from the get go. TechCrunch on May 17th:

[http://techcrunch.com/2012/05/17/facebooks-38-share-price- ma...](http://techcrunch.com/2012/05/17/facebooks-38-share-price-makes- instagram-deal-worth-nearly-1-2-billion/)

> When Facebook agreed to buy Instagram, it said it would pay with $300 > million in cash and 22,999,412 shares of stock. That stock is now worth > nearly $874 million, creating a $1.17 billion price tag.

<comment><USER3> To save everyone the math, 23 million shares is now worth ~$458.8 million.

</comment></comment><comment><USER4> It is interesting how folks miss the article for the headline. The headline is link baitey, the article tries to explain a financial device called a 'stock collar' which is known in M&A circles but not be common knowledge for startup founders.

I read it as, "Hey, here is this financial tool to consider when selling your company called a stock collar, and here is an example of how using it would have been advantageous." That is a reasonable thing for someone to know.

</comment><comment><USER5> Saying the deal was bad for instagram and attributing it to careless decisions by young founders is like saying you should have known how the FB stock is going to develop.

Duh, you always take risk if part of your deal is in stocks, you dont have to be a professional to know that. Heck, people, including seasoned investors have predicted on average 54 for the stock, so why wouldnt you have taken stock?

Always awesome to see people play Captain Hindsight: <http://www.youtube.com/watch?v=cqkI691dxNg>

<comment><USER6> Agree.

The writer for the story is "A former corporate attorney at Shearman & Sterling, he is a professor at the Michael E. Moritz College of Law at The Ohio State University."

As such he is looking at what structures _could be possible_ instead of what happens actually in negotiation because you have to get agreement on both sides. While of course he could be correct, (we don't know the exact details so we can't rule that out) there is the possibility that those wouldn't have been terms agreed upon even if proposed.

The title of the story was "How Instagram Could Have Cut a Better Deal". Well they also could have cut a better deal by getting twice the amount they got even with the same terms or all in cash, right?

It's ironic as well since to most outside observers Instagram did quite well.

</comment></comment><comment><USER7> The 30/70 split is a nice structure that takes into account the uncertainty of the values involved. Seems like a good deal for Instagram and a sane way for Facebook to do it. Imagine if the stock had shot up to 70, or if it falls to 10. Seems like a great structure to me.

It's hard to imagine that the two sides weren't fully aware of the uncertainties involved during the discussion. These are smart folks. This article seems like it's just an opportunity for the author to show off his knowledge of alternative structures.

<comment><USER8> These types of structures are actually very common in the biotech industry where uncertainty is everywhere.

The deals are typically upfront payments of several hundred million dollars in combination with milestone payments that often comprise of 50-90% of the total deal's value.

It's a smart move on Facebook's part since it shifts a great deal of risk to the Instagram owners. Facebook does well? Instagram does well. Facebook flounders? So does Instagram.

</comment></comment><comment><USER9> This article is ridiculous. Even if the deal were for $300M cash only, it would have been an amazing coup. $300M for a company with 30M users and ZERO revenues? They infrastructure costs were pure spending and eating away at cash, and they had no idea how low their user base would drop to if they tried even a modicum of monetization, like ads or subscriptions.

The fact they got 23M shares of FB is simply delicious gravy on top. This means they get to participate in any upside on FB for free. The only thing that would suck is if they were somehow taxed on the value of FB shares when the deal went down, but I'm not even sure that would occur. I'm sure there's a way to structure the deal so that they wouldn't need to pay taxes until they sell the shares.

</comment><comment><USER10> "$300 million in cash "

Enough said.

<comment><USER11> This.

<comment><USER12> What does "this" mean? I've people use it as a comment, and I also noticed others disliking it.

<comment><USER13> It's another way of "liking" the comment or voting it up. The user is essentially saying "I agree with this".

People sometimes flag such comments because:

1) The upvote mechanism was created for 'this' purpose.

2) These types of comments don't necessarily add much value to the threads and the community at large is very protective and self-governing in terms of maintaining the integrity of the site.

... Personally, I don't care. I'm sure I've 'this'd comments before in one form or another.

<comment><USER12> Thank you.

</comment></comment></comment></comment></comment><comment><USER14> Nothing like a writer playing "Monday morning quarterback." I like the closing sentence...

"It is a lesson for those who strike deals in the heat of the moment — and perhaps too hastily."

</comment><comment><USER15> TL;DR 300m + 700m in Facebook shares in April (much less today) was careless and very very very very veryvery shitty deal, for a service with no revenue, albeit hot. So learn from this.

<comment><USER16> Instagram will go down as being a shitty deal for both sides. An arranged marriage, as it were.

<comment><USER17> Why do you think this will end up being a shitty deal for Instagram?

<comment><USER18> My guess would be the ever-declining value of FB stock.

<comment><USER19> I assume they sold it right away, though I guess there's no way to know.

<comment><USER20> My guess is that they haven't acquired it yet since the deal isn't closed. The deal was also pre-IPO, so I believe they'd be subject to the same freeze.

</comment></comment></comment></comment></comment></comment><comment><USER21> The point of the article is not to argue valuation. Rather, it's about the negotiation that happens between both sides' bankers to make sure their respective clients are getting the best deal structure.

In my opinion the writer is one of the best at detailing corporate deals and making the complexities of investment banking easily understandable for the general public.

</comment><comment> olog-hai From the article: "It may also be that since the parties were both in the same industry, a fixed exchange ratio was thought more appropriate because the market would assign them equally in value, a common assumption underlying this choice."

Would some kind soul please explain what the author meant by "the market would assign them equally in value?" Thanks.

</comment><comment><USER17> Instagram "no longer" a $1 billion sale would perhaps be more accurate. Still quite impressive for a zero-revenue service.

</comment><comment><USER22> I've done this math in my head too much now in the last couple of weeks. Not sure why I care that much.

</comment><comment><USER23> This article was definitely interesting reading for someone that knows nothing about acquisitions, not so much for the particular fate of Instagram but for the details of how stock/cash deals can work and the stock collar possibilities...

<comment><USER24> During the first bubble, one of the companies I worked for used just about all of their IPO money to buy another company.

The buzz was that the owner of the company being bought refused to take any stock and only took cash (smart move), and within a month or two of the purchase, most of the acquired people had already left. The company I had worked for ended up selling the remaining assets for something like 1/40th of what they paid a year later.

Considering my company's stock price tanked on day one of the IPO and continued to go down, the only winner in that deal was the guy who took cash for his company.

</comment></comment><comment><USER25> So at today's FB price, this would put the acquisition price at just over $700 Million.

</comment><comment><USER26> It may eventually be a better deal on the long term if FB shares go UP in the long run :P

</comment><comment><USER27> Why do we care? It's a done deal and was done 3 months ago. Stupid.

</comment><comment><USER28> OMG! The 13 guys at Instagram are not going to end up with approx $100,000,000 each. Instead they might get something around $22,000,000 in cash and more than $50,000,000 in Facebook stocks. I hope they can survive on that meager earnings.</comment>


Should Prison Sentences Be Based on Crimes That Haven't Been Committed Yet? - <AUTHOR> http://fivethirtyeight.com/features/prison-reform-risk-assessment/

<comment><USER2> if they're using age wouldn't that be a form of age discrimination. If not what if they used race or gender?</comment>


Ask HN: What are some recommended tech podcasts? - <AUTHOR>

What are some tech recommended podcasts? I travel quite a bit and spend tons of time driving, sitting in airports etc. Any recommendations? <comment><USER2> Check out TechZing (www.techzinglive.com). It covers the same kind of topics discussed on HN - bootstrapping, NoSQL, HTML5, iPhone dev, machine learning, etc. Plus, I co-host it! ;)</comment>


Engineering vs design - <AUTHOR> http://jasonputorti.com/post/3922568219/engineering-vs-design

<comment><USER2> In a book I read more than two decades ago now, _Computing Across America_ , Steven Roberts wrote: _"Art without engineering is dreaming; engineering without art is calculating."_

Roberts current blog is <http://nomadness.com/blog></comment>


Ask HN: How to evaluate potential non-technical co-founders ? - <AUTHOR>

There seems to have been a spurt of recent posts of non-tech co-founders asking how to find tech co-founders, but I'd like the pose the question from the other side.
As a tech person how do you evaluate a non-tech person as a potential co-founder ?
I recently met someone with a marketing background at a startup weekend style event, and we chatted a bit about cofounding, but I'm at bit of a loss as how to decide if it's a good idea or not.
On one side they're clearly smart and get things done, our skill sets seem to be quite complementary and we get on.
On the other hand from what I've seen on HN people generally seem to have a negative attitude towards non-tech cofounders, is it justified ? - what should I be looking out for and taking into consideration ? <comment><USER2> From my years on the NY scene which is filled with non-technical "entrepreneur"-types

5 points: Has been in executive team at a startup before

5 points: Has been involved in raising capital at a startup before, or is 1-degree from a VC or a few angels (real 1-degree not Twitter/LinkedIn 1-degree)

5 points: Has been in product marketing, biz dev, ad sales at a startup before

5 points: can and will write code

4 points: can get shit done, is well-organized and understands the software development process as opposed to say, selling and shipping widgets

2 points: Has been in product management at a startup before

2 points: Has worked in any biz role at a large tech company and rose to some form of executive post

-5 points: Has an MBA and has only worked at Hedge fund, Consulting company, or iBank

-5 points: Is an idea person and has never shipped a real product.

Your ideal person will score above 10 and close to 20 points on this test.

<comment><USER3> support the -10 for consulting + ibank + hedge fund. they're all smart guys, but watch out for the ones who have never built a product OR don't like getting hands dirty. although there are always exceptions, jeff bezos came from de shaw.

if this sounds strange to west coast people, at startup networking events in the east coast it is pretty likely you'll run into the 'i've done my gig at mcK/harvard mba and the next step of my career is a CEO position so let me find my awesome tech cofounder' type of person.

<comment><AUTHOR> Joshua (of delicious) and Jimbo (of Wikipedia) both have ibanking backgrounds as well I believe.

</comment></comment></comment><comment><USER4> I've been through the process of finding non-technical co-founders, growing companies, and raising money. Along the way, there have been a lot of lessons learned about non-technical co-founders.

First, remember that as a technical co-founder, you will likely be the CTO/lead engineer. Your non-tech founder will probably be the CEO. The CEO has to manage early customers, investors, and partners. Most of their time is spent communicating the vision to these people, and hence they naturally end up directing the vision more.

On the flip side, you will spend a lot more time heads down coding. This relationship often makes it feel like you are "working" for the CEO, and you kind of are. Such is the nature of CEO/CTO dynamics, and I think this is why a lot of technical people resent non-technical co-founders. So ask yourself, are you comfortable working for this person who will probably be your CEO?

As a corollary to the previous question, have they managed or worked with engineers before? Have they ever been in a technical role? If not, you will run into typical Maker vs Manager problems. It's hard to work with non- technical co-founders who don't understand the mindset of technical founders.

As mentioned, watch out for consultant/banking types who have no real experience running companies or in startups.

Also watch out for people who are divorced from the product/passion and don't really get the pain point. This is the guy who has a friend who has a buddy who made money in a startup, and now he wants to do one. All they see is dollar signs. They might as well be pushing another hedge fund, "strategic partnership", or snake oil. They don't really care, and they suck the life out of startup.

My favorite non-technical co-founders are people who were engineers in a previous life, but have since found their strengths in product or customer development. They are well connected from having worked in startups before (which probably means access to talent) and possibly have an MBA (which often produces connections to funding).

</comment><comment><USER5> You want to ask yourself: is this the kind of person I wouldn't mind being stuck in a foxhole with? (metaphorically, of course)

At the end of the day, you need to figure out if they are self-motivated, can take the initiative, and most importantly, can get shit done.

Unfortunately, there aren't really good substitutes for figuring those things out other than experience working together.

A "trial period" where both of you collaborate on a project has worked well for me in the past.

<comment><USER6> Oh, I just noticed the "trial period" suggestion here. Great idea. Wish I had thought of that.

I had worked with a co-founder who I thought was going to be fantastic. And in the beginning, he was. However, after our business started getting rough, he pretty much bailed. I'm glad I hadn't sunk too much time or money into that venture, but it was a great trial run with that guy.

</comment></comment><comment><USER7> One question I would ask myself is that "Does he/she share the same passion as me on what the startup is trying to accomplish?" If he share your passion as well, it is all good. Plus it is important not to have too many technical people on board, having a marketing guy would be useful to help you translate what the startup is trying to do to its potential users.

</comment><comment><USER8> If you get along give it a shot. No one else can really tell you who you will connect and work best with (despite the point rank system comments here).

</comment><comment><USER9> Oh please hash out the splite before hand though. I did a small startup for gaming and at the end my co-designer/graphics partner tried to make me believe he deserved a mysterious extra cut of the profits outside of actual hours- committed.</comment>


Ask HN: What would you do with $700 Billion? - <AUTHOR>

This is basically the title on CNN's site right now, and I thought what a great question to ask you guys.<p>Me? It's got to be a lunar base. Always wanted one. <comment><USER2> Create an alternative, multi-tiered research funding organization and proceed to turn the education system upside down.

In fact, $700b is more than enough to do this several times over, so the surplus will probably go to funding a century of other programs related to exploration, bioengineering, green technology, and other sustainable development projects.

Seriously, what _could_ it be other than this?

<comment><USER3> Agreed. I would establish an organization that will essentially usurp the position of the NSF. It will be non-partisan, be free from political influence, and non-ideologically driven. It will be available to all academics everywhere.

My brother is a researcher in evolutionary biology. I have seen how the Bush administration has been sabotaging funding into this area over the last few years. Science should be a free for all of ideas, not influenced by politics, religion, or anything else except good hard science.

<comment><USER4> _It will be non-partisan, be free from political influence, and non- ideologically driven._

How much of the $700b will be left over after you've developed the sentient robots needed to staff this place? ;)

</comment></comment></comment><comment><USER5> Two chicks at the same time.

Seriously, I have no idea what I'd do with that amount of money. If I was completely selfish maybe I'd buy an island somewhere. I sure as hell wouldn't use it to bail out a bunch of failed businesses whose executives have been giving themselves multi-million dollar bonuses.

<comment><USER6> hehe

I would invest it. I would buy most of wall street and wait for it to bounce back. Turn that 700b to 10 trillion.

<comment><USER7> And then what?

<comment><USER8> A person can do a lot for the world with 10 trillion.

<comment><USER9> Could you give an example? :)

I think it would actually be pretty hard to find ways to spend that much money. 10 trillion is an awful lot.

<comment><USER8> Supposedly eliminate poverty worldwide: <http://news.ycombinator.com/item?id=315521>

<comment><USER9> I'm not convinced that we can solve the worlds big problems like poverty just by spending money.

I don't claim to have the answers.. but I think it will take a lot more than money to solve these problems. That's assuming they can even be solved at all.

<comment><USER8> That's probably true, there are always evil people around.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER10> 700B dollars... Well given the odds of me obtaining that amount of money is just shy of being pure fantasy, I figure the only real answer to this would be in the realm of fantasy too.

So, 700B - here's my shopping list.

      Create Jurassic Park
      Army of Super Oompa Loompas - perhaps with bionic implants
      Moon based Laser "Defense" system
      Universal Optional Breast Enhancement Surgery
      Giant Robot of Doom
      Another Giant Robot (so the first one never feels lonely)
      Build an even bigger supercollider, just to scare the bejeezus out of the irrational people
      Terraform Mars
      Create a religion based around the works of Bruce Campbell

I figure I'd get some change out of that list, so I'd buy a few people a couple beers.

Next stupid question please!

<comment><AUTHOR> Can I administer the breast enhancement program?

</comment></comment><comment><USER11> I'd buy a sovereign country and break it up into city-states, and allow them to compete with each other as an experiment to see which policies and forms of government are the most effective. It would be kind of like Pokemon for social science geeks. You could have libertaritopia, commietopia, fascistopia, etc, and you'd get to see what happens. For motivational purposes, after 50 years I would have barbarian hordes burn and pillage the unsuccessful ones.

If I couldn't find somebody to sell me a country I would build large offshore platforms or rafts that would fulfill the same function.

<comment><USER12> Don't we already have a bunch of states competing with each other as an experiment to see what form is the most effective?

<comment><USER13> I know you're trying to be cute, but our current situation has too many confounding variables: cultural makeup, history, terrain advantages, economic baggage... We'd need a more laboratory like situation where the city-states are more alike, save for the variables we want to test.

</comment></comment></comment><comment><USER14> I think I would buy an uninhabited island and make it a research facility where top scientists can work together and find a way to optimize solar power and batteries.

If I have those I will start a production company that makes those inventions and sells them at the price (or below) it costs to make the goods so everyone can use them. I would also invest in agriculture in dry area's (africa for example). What I would NOT do is waste it on politics, that's why I want the uninhabited island. If you build a facility/production company with that goal there will be government regulations about it and as most of us know, they tend to screw things up and only care for their wallet.

Also a part of that money will go to education and proper sports centers. I'm a bit overweight myself and I want people to know better then always go to McDonalds and have the option to do any sport they like, as it should be.

</comment><comment><USER15> Build a space elevator and start mining the asteroids. This involves a robot army that would need to be built as well. No, I'm not joking

<comment><USER16> $700 b is not nearly enough to make a space elevator with existing technology; you're off by about a factor of 1000.

Of course, if you're willing to wait ten years for the cost to produce carbon nanotubes to drop...

<comment><USER15> Actually my brother and a good friend recently attended a conference on the subject, and I'm not pulling numbers out of the air. Clearly there is room for dispute, but between 10B and 1000B is a most reasonable range. I also disagree in principle that anything could cost $700T dollars. Are you telling me that the whole of the US working for 50 years couldn't build it? Because US GDP is ~$14T.

Also, you don't launch a company and next year make an elevator. There is a lot of tech to develop. You don't just sit on that tech. Materials made cheap enough to build a earth bound tether would have plenty of other applications. As would the automated or teleoperated construction robots.

Also, the first elevator on the moon wouldn't require much innovation in materials at all.

But I do have a very armchair understanding of the topic.

<comment><USER16> In spring of 2005 I did a back of the envelope calculation on the total cost to produce the mass of carbon nanotubes needed for an elevator with cross- section of 1 cm^2 using the methods available then and got a result of about 1.25 quadrillion dollars--a sum truly large enough to be meaningless. It appears there have been several significant advances since then, including the revision of the intended cross-sectional area downward, and improvements in the production costs.

And my estimate on costs was precisely in the vein of "next year make an elevator"--I do not doubt that there will be a space elevator long before the next 50 years pass, I merely doubt that $700b is sufficient that a feasible short term effort could be made.

A lunar elevator, while a nice proof of concept for a terrestrial space elevator, has two major problems: (1) There isn't really a point; the moon's gravity well is too weak for it to be worth it to construct an elevator any time soon. (2) Getting the material there without an existing terrestrial space elevator (and possibly even with one) is a prohibitively expensive exercise.

Research into the construction of a space elevator is a worthwhile pursuit likely to result in many useful technological advances. But $700b is not enough to construct one in the short term from existing technology, and is too much to be usefully applied to further research.

<comment><USER15> I think you're thinking like NASA. I'm thinking like a startup founder.

      construction of a space elevator is a worthwhile pursuit likely to result in many useful technological advance

Exactly! Monetize that shit, and feed it back into the pool. I think we're on the same page that getting it out in a year is ridiculous.

Also, a lunar elevator might not be the best choice. Perhaps a mass driver or sky hook on the moon would be better. I would still start on the moon before constructing the first inch of tether around earth.

</comment></comment></comment></comment></comment><comment><USER17> Remember, 700B pays for around 400 space shuttles.

Just to give a sense of scale.

<comment><USER18> 400 space shuttles would be _awesome_ :)

<comment><USER19> I can see it now, synchronized space shuttles in the space olympics ([http://www.hulu.com/watch/34464/saturday-night-live- digital-...](http://www.hulu.com/watch/34464/saturday-night-live-digital- short-space-olympics))

</comment></comment></comment><comment><USER20> Hookers and RAM.

When I've got a good rate with a few of the girls, and my DIMM banks are filled, I'd probably start building a loyal robot army to help fight the evil ones that come with the inevitable robot apocalypse.

Each of which, incidentally, will require RAM.

</comment><comment><USER21> Hire 70 trillion people to draw me a $700 billion bill.

<comment><USER22> Damn that's some fine resolution. Unfortunately if you want to hire unique people you'll have to wait for the earth's population to increase about 12,000 times its current size.

</comment></comment><comment><USER23> I would bootstrap the asteroid mining economy, invest in micro-terraforming and nano-technology so that each asteroid could become it's own self sufficient republic. Yay Anarchy !

<comment><USER24> >...each asteroid could become it's own self sufficient republic. Yay Anarchy!

That's not anarchy, since each republic would presumably have its own government.

<comment><USER17> A "Federation" if you will.

</comment></comment></comment><comment><USER25> If you'll settle for Zimbabwe dollars, that shouldn't be too hard to arrange.

</comment><comment><USER26> It's fun to read these, but I feel compelled to point out that the 700 Billion is not going to be spent, but rather it's the amount the US is on the hook for.

The last time the US did this they not only got all the money back, they even made a small profit.

To join along: if I had the money I'd spend all of it on as many nuclear reactors, to generate electricity, as I could. I'd standardize the design to keep the costs as low as possible.

</comment><comment><USER27> Hire a mercenary army to conquer some third world sh*t hole, then give it a modern infrastructure, education system, etc., and turn it into a capitalist/libertarian utopia.

With some of the profits, I'd pick another country and iterate.

</comment><comment><USER28> i'd probably take one or two billion and buy myself a giant island to live on and forever take care of my personal needs. and fly into space a few times, too.

after that, i'd take the half of the remaining and invest it in technology and fields that i'd like to see improved (i.e. space travel, science, alternative energy, etc etc)

i'd take the other half and invest/give it to more charitable devices (poverty relief & research, disease research, land preservation funds, etc etc)

basically, try and make the world a better place.

<comment><USER29> Taking an entire giant island for one person would make the world a better place?

<comment><USER28> would you like me to say "i'd give it all up to charity"? i'd be lying if i said that, and so would anyone else.

i've always wanted to live on an island, thanks for shitting on my dreams in a hypothetical thread :*-(

<comment><USER29> I was just sitting on my hypothetical high horse and giving you a hard time.

Friends?

<comment><USER28> sure, no hard feelings :)

</comment></comment></comment></comment></comment><comment><USER30> give $11,000 to each of the 62 million households in the u.s. making under $50,000. watch the ensuing chaos with glee.

<comment><USER3> ... Give $11,000 to each household making under $50,000, and you're in essence paying all of that towards households making over $50,000.

Some people are poor because they're honestly down on their luck, and need a helping hand. The majority on the other hand are simply unemployable, or horrible with their finances. Give them a handout and the money will simply end up in richer people's hands. That's not helping them.

<comment><USER31> Hey, I was working with a college degree for 3 years before I broke 50k. At the time I was investing 8% of my income and I was still eating out all the time etc.

I think the bar for _poor_ needs to be a little lower than 50k/year.

<comment><USER32> How many kids were you trying to support?

<comment><USER16> Family size for $50k to qualify under the federally mandated definition of poverty is 12.

In fact, $50k is approximately the median household income (for 2007), with mean household sizes in that income bracket at about 2.6.

</comment></comment></comment></comment></comment><comment><USER33> I'd get a crew of volunteers together and torch the The World Bank & The International Monetary Fund.. just burn it to the ground. That might cost a couple hundred grand tops. With them out of the way it would be easy to implement a true Meritocracy in all governments. Presidents will get a paycheck on a sliding scale, the more wealth they are responsible for creating for their people, the better off they will do personally. I'd then use crowdsourcing to dictate what investments were made with the remaining 699 1/2 billion. We would then use the interest created by the these investments to fund all of the projects previously mentioned by the HackerNews Community.

 _edit_ I'd make sure all of the employee's were out of the buildings, of course...

</comment><comment><USER34> World's biggest gravity bong; it'd take the place of Ohio.

<comment><USER35> I can't imagine the logistics of such a thing, but it's intriguing enough that I'd visit home to try it!

</comment></comment><comment><USER31> Invest 50 billion and spend each years profit trying to build a real working fusion power plant, (~1 new ITER style plant design per year pick the best one and build it every 5.) when that's working invest the 50billion in power plants and keep growing till all the worlds energy needs are met. I expect 20 - 30 years till first one works and then massive ramp up.

50 billion 3rd world sweat shops to jump start the worlds economy.

100 billion, retro fit a lane on all US highway's with electric grids / contacts so there is no need for battery systems and we can go electric now. I would start by targeting the commercial trucking industry and then move to cars.

1billion fun money for me.

And I don't know about the rest.

</comment><comment><USER36> Try and fix poverty, hunger, clean drinking water in a sustainable way.

<comment><USER37> A few years ago I attended a talk by Prof. Jeffrey Sachs, professor at Columbia University who was commissioned by the UN to develop a program to end worldwide poverty with sustainable, long-term initiatives -- Note this is not the standard aid, but stuff like microcredit and micro-entrepreneurship.

He traveled the world and came back with the price tag: $1 trillion. That is not to relief, but to _END_ poverty worldwide.

<comment><USER8> What kind of guarantee did that have?

<comment><USER38> Probably a better one than anything that Paulson is giving!

</comment></comment></comment></comment><comment><USER39> Nation-wide high-speed wireless. Computers for schools. Spend the rest on paying down our debt.

<comment><USER40> if the 700b came from debt like it is in this situation, you're only delaying the problem

<comment><USER39> Good point. Paying down debt with more debt seems strangely counter productive. In this case, paying down debt means not spending the money period.

</comment></comment></comment><comment><USER7> I wouldn't do anything. You would, because I will own you.

</comment><comment><USER41> Buy microsoft and open source it. Buy google and open source it. Buy apple and open source it. Spend the rest on hookers and beer for all programmers.

</comment><comment><USER42> A monocle, a cape and a vizier. Then I'll do whatever he tells me to do with it.

</comment><comment><USER35> Use it to somehow dismantle all organized religion, probably. Likely the quickest way to save the world.

<comment><USER16> $700b is almost certainly insufficient to do this; the Catholic church has around 4 times this amount by itself (most of it is illiquid, though--a large fraction is in real estate).

<comment><USER34> Whoa - are you serious? Are these documents public? I want to see them. What about the Deferred Liability on their balance sheet for "Child Molestation"?

<comment><USER16> The problem with estimating the net worth of the Catholic church is that an overwhelmingly large fraction of its wealth is in buildings (the many churches it owns throughout the world), real estate (the land those churches are built on, plus the Vatican), and art. That said, this article (<http://www.zenit.org/article-1900?l=english>) gives some indication of the magnitude of their income/expenditures.

Note: Most of the figures in the attached article are in lire, with a conversion rate of 2000 lire to 1$US--the annual in and outflow of the Catholic church is on the order of hundreds of millions of $US; it is only their total assets that are on the order of trillions.

</comment></comment></comment></comment><comment><USER43> I would start my own aircraft company, all my planes would have lisp based auto pilot AI's.

</comment><comment><USER44> Build the world's largest super computer. Then ask it what the meaning of life is.

<comment><USER45> You should ask it:

"Will mankind one day without the net expenditure of energy be able to restore the sun to its full youthfulness even after it had died of old age?"

Long-term, that would be the most useful possible way to spend the money.

(Source: <http://www.multivax.com/last_question.html>)

</comment></comment><comment><USER46> I would create a commercially viable, extremely useful version (versus just plastic doodads) of the self-replicating fabricator ( <http://reprap.org> ), design a decent computer & solar cell that could be easily manufactured by this fabricator and is easy to make into a cluster system (and have semi decent performance). And create some fabrication programs that can manufacture buildings, farming equipment and other such essentials.

Then I would fund a bunch of funding into cures for third world evils like malaria and such.

</comment><comment><USER47> I would hire a team of 87,000 competent developers to develop better documentation for java, C#, javascript, python and ruby. Oh yeah, erlang, OCaml, F#, a few others.

<comment><USER48> Buy a copy of "The mythical man-month" before.

</comment></comment><comment><USER49> It would be pretty easy to knock off all water-borne diseases. Distribute existing technology to clean water where it's needed, or use that newfangled thing that Dean Kamen has.

Bribe all genociding warmongers (e.g. in Sudan) into retirement. Pay for relocation and land redistribution of affected ethnic groups.

Immunize all children in the USA.

Then, with the other 600 billion, I guess you could throw an awesome party.

</comment><comment><USER50> Since it seems like defaulting mortgages are the cause of the situation, why not use the money to pay off those mortgages?. If it took $50,000 on average to save an individual mortgage, then you could rescue 14 million mortgages. Some would say that presents a moral hazard, but it seems like that cat is way out of the bag already.

</comment><comment><USER51> probably something like this: [http://www.boston.com/news/nation/gallery/251007war_costs?pg...](http://www.boston.com/news/nation/gallery/251007war_costs?pg=9)

i mean, no more poverty and educating every child on earth for 7 years seems like a good idea...

</comment><comment><USER52> I would buy massive amounts of gold and start a anonymous, secure digital currency backed by gold :)

</comment><comment><USER53> Build nuclear power plants, and fund fusion research. Permanently end our addiction to oil.

</comment><comment><USER54> build my own university - maybe university on a ship, no a university on a ship with its own navy, wait - a university on a ship with its own navy, its own private islands and a jet plane and a space shuttle. Damn, it got crazy so quickly!

</comment><comment><USER55> Build a huge space station...something that can be seen with bare eyes during daylight.

<comment><USER56> The present one can.

<comment><USER55> I mean something the size of the moon

<comment><USER55> and to beat you to the punch: "thats no moon, thats a battlestation"

</comment></comment></comment></comment><comment><USER57> You know what I would do if I had seven hundred million dollars? I would invest half of it in low risk mutual funds, and then take the other half over to my friend Asadura who works over in Securities...

</comment><comment><USER58> money doesn't solve problems, smart people do. money is just a way of freeing smart people of distractions. and i think 70 billion in todays dollars is a lot more realistic than 700 billion. that said:

10 billion for space elevator research

10 billion for terraforming mars research

10 billion in scholarships available to anyone in the world as well as the money needed to pull strings to get the smartest kids into the best colleges.

10 billion for a clean water research

30 billion in free contraception/medical for every country.

</comment><comment><USER12> Invest in the stock market.

</comment><comment><USER59> Solar electric for, back of the envelope, maybe 1/3rd of the US total electricity supply. I'm not an electric power expert - maybe someone with actual expertise will correct me.

</comment><comment><USER60> Find the 299 most influential people in the world and pay them 10m a year for twenty years to do my bidding. Hold on the last 2 billion for reserves in case they turn on me.

<comment><USER60> I'm surprised no one has mentioned buying Microsoft or Apple and "open source"-ing them. That would be $300b if you buy them at market cap value.

</comment></comment><comment><USER61> Replace the US auto fleet with Better Place cars <http://www.betterplace.com/> .

</comment><comment><USER62> I don't see how this is different than any of the other "Non Hacker News" stories yet this one gets approval. What's up?

<comment><USER63> this is not a story, this is a legitimate question.

<comment><USER64> Legitimate? That's debatable.

<comment><USER7> It would be debatable if they weren't ready to put someone in this exact position.

</comment></comment></comment></comment><comment><USER65> Free renewable energy. Probably geothermal. About 100bn on research to develop the system, the rest to roll it out.

</comment><comment><USER66> Probably keep enough to retire on, and give the rest to my alma mater and have a football stadium named after me :)

</comment><comment><USER67> Energy development (fusion and solar).

Compact self-contained hydroponic gardens (think shipping container).

</comment><comment><USER68> 700 billion is 1400 times the operating budget of Harvard Medical. So I might do that a couple times.

</comment><comment><USER69> Short the dollar into capitulation :)

</comment><comment><USER70> Cure cancer

Cure HIV

Eliminate hunger

Eliminate thirst

Take over Equatorial Guinea

<comment><USER16> The only one of these you could afford for $700b is Equatorial Guinea... :P

<comment><USER70> 1B is enough to take over Equatorial Guinea... the failed 2004 coup attempt was financed with a pathetic 20M. This says that the military budget of EG is 150M/year (<http://www.globalsecurity.org/military/world/spending.htm>) and I suspect that is a very high estimate.

It would be easy to invest in modern pharmaceutical manufacturing plants in African nations with generous IP laws and then start making modern HIV medications available for practically nothing.

Curing cancer is more of a crapshoot, but throwing several hundred billion at the problem would be a good start, if nothing else.

Proper distribution of the money remaining could go a long way towards eliminating extreme poverty.

</comment></comment></comment><comment><USER71> I would sponsor a manned mission to Mars. It's roughly the same amount of money.

</comment><comment><USER72> Death Star.

</comment><comment><USER73> surfing-equipment + house on hawaii ~ 6million$

baller-life-style-money: 10$million.

my own scientific/tech projects, 1billion.

rest i would donate to various scientifc rpoject sand charity.

<comment><USER74> Maybe you should also invest in a spell checker...

</comment></comment><comment><USER74> Create a new space station and possibly try to go to mars.

</comment><comment><USER75> I would use it to pay back the loan from which it came.

</comment><comment><USER76> Longevity. Hook me up with some new organs.

</comment><comment><USER77> Release the hundreds of drugs some people will not approve because that will hurt their financial interest.

</comment><comment><USER78> research in space travel, terraform Mars, build cheaper space shuttles

</comment><comment><USER19> Microsoft just bought back stock with its cash. How about a down-payment on our national debt?

</comment><comment><USER79> Super Crack Party.

</comment><comment><USER80> Shift 3rd/4th world countries to 1st/2nd world.

</comment><comment><USER81> probably start 700 seed fund firms

<comment><USER56> That's ridiculous. You'd never come close to finding enough entrepreneurs to give the money to.

</comment></comment><comment><USER82> Rest

</comment><comment><USER83> Go to war with IRAQ!

</comment><comment><USER84> A very large truck of cigarettes, enough to last my family for the rest of our lives. Then scream "I'm rich biatch!" and honk my truck's horn a couple times.

</comment><comment><USER85> 100 billion goes to speeding up immortality and cryonics research a lot. i don't want to die, and i'd rather you didn't die either. 10 million (or whatever) pays for aubrey de grey, and anyone he recommends, to be my advisors for using the 100 billion effectively.

</comment><comment><USER86> Buy off the government. Mostly dismantle it.

<comment><USER67> What will you do with the rest? If they pass this bill, apparently it costs less than $700B to buy them out...

</comment></comment><comment><USER87> Put it in the bank.

<comment><USER59> A non-failing bank, I hope.

<comment><USER16> With a $700b loan, it wouldn't exactly be failing any more...that's sort of the point of this whole exercise.</comment></comment></comment>


Andrew Ng Resigns from Baidu - <AUTHOR> https://medium.com/@andrewng/opening-a-new-chapter-of-my-work-in-ai-c6a4d1595d7b#.579a7hmkm <comment><USER2> Andrew Ng has always been ahead of the curve in seeing strategic shifts. He envisioned MooCs, founding Coursera to realise that vision. Then he helped found Google Brain. Then he helped Baidu become a leading player in AI (interestingly he pointedly says Americans are good at inventing stuff - Chinese at implementing it quickly. Sounds like the Imagenet cheating culture has't quite been eradicated yet - [http://www.i-programmer.info/news/105-artificial- intelligenc...](http://www.i-programmer.info/news/105-artificial- intelligence/8657-baidu-ai-team-caught-cheating-banned-for-a-year-from- imagenet-competition-.html)).

So, by the sound of things, his next move is less technical and more political. How will AI change society and what vehicle would you use to help shape that change. Will be interesting to see what he does.

</comment><comment><USER3> Does anyone know why is he leaving Baidu ?</comment>


Ask HN: What is the best way to find, Vet and Hire a Freelance Developer? - <AUTHOR>

I have been building an app on the side of a full time job.  I have a customer ready to use the app but I just am not skilled enough to actually develop the app.  I had a friend who is an amazing developer say he would help build it, we settled on a price and then he kind of disappeared.<p>What are your go to ways to find, vet, hire and work with a freelance developer? <comment><USER2> Set a small piece of paid work. Stating that this could lead on to large pieces.

Obviously set some boundaries on this (time, language/ technology) then vet them on there performance.

Here is the thing.

There are many developers out there some good some not so good. What you need to do is find someone who is honest, hard working and is willing to learn.

My general rule is ask them what they have worked on in the past with links and give it a test it. Ask them a couple of easy questions to vet there personality more than code. Then ask them a question to which I hope they dont know the answer. At this point I want them to say to me "I dont know, but I will find out" it shows to me they have the right attitude and know they are willing to say they dont know all the answers.

</comment><comment><USER3> You can check out matchist (I'm a co-founder): [https://matchist.com](https://matchist.com)

We vet developers and match you to the perfect ones for your project and your needs.

<comment><AUTHOR> Cool, checking it out for sure. Thanks :)</comment></comment>


Ask HN: What are the best arguments in favor of a UBI? - <AUTHOR> Hello all!
I am writing an article about the Universal Basic Income. I come from a libertarian background and, therefore, am naturally biased against it. My goal, however, is to represent the argument for it as fairly as possible.
I have done quite a bit of research on the matter already, but I wanted to know what you guys think are its best justifications. I would hate to mischaracterize it or "conveniently" leave out facts that are not in line with my world view.
I greatly appreciate the help! <comment><USER2> UBI has the potential to dramatically reduce economic desperstion. Desperation is what drives many into crime, substance abuse and leads to failing families. Reduce desperation, and we'll all be safer, even liberterians.

If your research has led you to hard data and proper science yielding causal conclusions, many of us on HN are very interested in seeing it, so be sure to include it in your paper. If not, then the discussion will remain hypothetical. Might be best to hold out for the Swiss, Dutch, Finnish or YC Research's own study to yield conclusive results before reaching your own conclusions.

<comment><AUTHOR> > If your research has led you to hard data and proper science yielding causal > conclusions, many of us on HN are very interested in seeing it, so be sure > to include it in your paper. If not, then the discussion will remain > hypothetical.

I certainly am not going to establish a causal relationship between UBI and a given economic outcome! :) This article will be more hypothetical since neither side has a particularly good empirical case (due to lack of studies).

Your appreciation for UBI must come from some sort of theoretical argument, does it not? If so, would you be willing to change your mind if your underlying assumptions were challenged?

P.S. My goal is _not_ to convert you or anyone else to be against UBI.

<comment><USER2> I don't have an argument, really. I believe that people collecting a ubi payment would, more often than not, choose to work and not laze their life away. The archetype for me is a family of four where the parents' only option for employment is minimum wage jobs.

Add a ubi to that and they can then provide a much better environment for raising their kids. I believe this would reduce the number of broken homes and improve the outcome for the kids, reducing drug abuse and crime, and enabling a higher level of education.

It's a theory based on personal belief. I have no conclusive evidence, only hope at this point. These studies should provide some answers.

</comment></comment></comment><comment><USER3> I seriously doubt you will really get the info you need from tossing this question out there on this forum.

The people who are for the UBI tend to see the world differently from the people who are against it. They look at the same data and draw different conclusions.

I have written a few anti UBI pieces. I have had someone tell me "The data for when they have tried it is all positive" or whatever. But, then they link me to trials that I find unconvincing. If you have a UBI trial that involves just one small town and there is intent from the start that it will have a limited duration, you will get different human behavior than if you genuinely try to implement some kind of guaranteed security.

Every historical attempt that I am personally familiar with where they tried to promise universal security has failed. These historical attempts were not called Universal Basic Income. They had names like communism -- the idea being we would all live communally and the community came first and took care of everyone. The result in every real world trial I know of for promising some kind of baseline security to all members of the group is that too many people decide to just be freeloaders and not do fuck all, since they won't starve if they don't do a damn thing.

I have blogged about this from an anti-UBI perspective. It has not been well received. I am not sure I am going to bother to keep blogging about it because I am not convinced it matters. I am skeptical that it will ever actually happen and, if it does, it will likely fail in short order, like all previous attempts.

The only question is whether the failure will cause so much widespread harm that I need to care or not. It might make more sense for me to just keep on keeping on with trying to solve my own substantial personal problems that most people don't give a fuck about, while continuing to light one small candle where I can for helping others currently suffering due to the issues out in the world today.

You might find better answers by either searching Hacker News for previous discussions of the UBI or searching the web. A lot of people are for it. You can easily find their arguments in various places and that might be more helpful than what you are likely to get for answers here.

Best of luck.

<comment><AUTHOR> Trust me, I know exactly what you mean.

I am more concerned with more specific questions pertaining to UBI. For instance, "Does UBI fix _____ compared to means-tested welfare?" or, most likely what my article will be about, "Do we need UBI because robots will take all of our jobs?"

I believe that those who favor UBI can still appreciate that a particular argument is invalid-- although the idea as a whole may not be. Of course in order to do this, the article must fairly represent both sides.

But yeah... I'm not trying to convert people to be against UBI. That would be hopeless.

<comment><USER3> You might want to check my blog for past posts about this.

We faced similar issues during industrialization. The conflict led to unions and the 40 hour work week.

Also, someone really smart has to code those robots, repair them, etc. Automation won't fix all of that.

So, for that and various other reasons, I think the best answer here involves A) increased average education levels and B) further lightening the burden that paid work imposes on workers.

I think gig work done right is a big part of the answer for that. And the good news is that we are moving towards a gig economy, so I don't need to try to convince people to get on board with making that happen. Instead, I try to put out the word concerning specific things that work well, why I think they work well, how to do it, etc.

Anyway, you can check my personal blog and you are welcome to email me if you wish. I hope the world doesn't shoot itself in the foot too much, but I think some of the answers are already emerging. I worry less about this stuff than I used to.

No, robots will not take all our jobs. For every person that exists, they have needs that create the necessity of work. We need to rethink our relationship to work. Humans have successfully done so previously. That rethinking is, itself, work and it is a uniquely human kind of work, something robots cannot take from us.

<comment><AUTHOR> Excellent! I have actually seen your blog on HN before. We will be in touch.

I'm not too worried about the future of the world anymore either. Even if the there is wide adoption of UBI (or even more radical socialist ideas), it is not likely sustainable and, in the long-run, humanity will be fine.</comment></comment></comment></comment>


Startup gets funding for kit to diagnose Zika in 30 minutes - <AUTHOR> https://www.techinasia.com/talk/startup-s500k-develop-kit-diagnose-zika-30-minutes <comment><USER2> Smells like another Theranos, hopefully I'm wrong.</comment>


Exact Maximum Clique for Large or Massive Real Graphs - <AUTHOR> http://kukuruku.co/hub/algorithms/exact-maximum-clique-for-large-or-massive-real-graphs <comment><USER2> This approach works because the 'real' graphs used are very sparse and the maximum clique size is tiny. (in the examples in the original post, the largest clique size over all the graphs is 6)

See also: [http://en.wikipedia.org/wiki/Treewidth](http://en.wikipedia.org/wiki/Treewidth)</comment>


Ask HN: Figuring out logistics for a personalized gift box - <AUTHOR>

I take care of logistic at www.spoil.co at YCW15 company and wanted the input of HN on our biggest hurdle at the moment.
We run a personalize gift box service. This means that all our boxes need at least 3 different items in them that are all personalized to the description we have of the recipient.
Experienced purchasing professional select items we currently hold as inventory and purchase any missing items to make each gift unique if needed.
Now that system is very time consuming but also highly risky since we hold various types of inventory and would constantly need more in curated to an even more specific level if we didn't want to buy at full price.
Would HN have any item on how to grow our network of suppliers without having to hold on to some inventory and manage complexe shipping logistics?
Our skills is in software and  we feel like we aren't investing our time at the right place to be efficient and with high growth in sale the problem gets bigger and bigger each day...
Thanks for your tips, Charles <comment><USER2> > Experienced purchasing professional select items we currently hold as > inventory and purchase any missing items to make each gift unique if needed.

You need to push inventory back to the suppliers but centralize the location where suppliers store their inventory.

You need suppliers who hold their inventory at single location/platform. Which platform has the highest number of suppliers storing their inventory? Amazon.

Another option, make agreement with a warehouse service provider where suppliers can store their inventory for you as well as suppliers' other customers. You can make agreement with warehouse service provider to discount inventory storage fees for your suppliers to encourage suppliers to switch warehouse and shipping service provider. Offer suppliers discount on warehouse storage fees in proportional to the inventory you use from them.

Find a warehouse service provider that also does shipping.

Now what left for you on logistics side to monitor the suppliers' inventory and mix-match products available in their inventory to create gift box before placing order and get warehouse service to ship the box.

You challenge will be to find a warehouse service provider and find incentives for suppliers to use warehouse service provider specified by you.

<comment><AUTHOR> YEs those warehouses are called 3PL's (Third party logistic provider) the issue with those is that local products and niche items aren't using those since they don't have the volume to be in them. The idea of having one warehouse is good but most of the large companies (Does using 3PL's) already have theirs signed. Now I could partner up with them but it won't allow me to gain diversity in my items.

I know I sound negative about it but challenge me on that cause it would be the easiest scenario to go with if I crack that model correctly.

<comment><USER2> If you are using niche product and your suppliers are small, they are too small individually for 3PLs but collectively they can be big enough for 3PLs to accommodate them. Pool together such small niche suppliers yourself to be attractive for 3PLs It is similar to consolidating fractional container load to have one shipping container worth of material.

If your suppliers are large companies, they already have 3PLs. So you need to go to the 3PLs which has most of your large suppliers or setup your operation within local delivery area of these 3PLs. Most 3PL warehouses tend to be located nearby to each other.

I will suggest talking to operation research people at a business school. Those people teach and do this for living. Also look into some of the case studies on consolidator models for ideas (Amazon, Walmart, Costco, Toyota).

You challenge is you are too small of a consolidator and your suppliers are either too small or too large. You need to hack existing models to fit your need. I would most probably start with a hybrid approach of setting up my consolidation and shipping operation near the warehouses of my large suppliers and offer onsite inventory storage and shipping for small niche suppliers. Until you become large enough, you will have to give up some efficiencies of scale.

BTW, you are not in software business, you are in consolidation and shipping business.

</comment></comment></comment><comment><USER3> Is your problem the working capital required to maintain your inventory, or that your inventory is aging out, or that you simply don't want to be in the business of running a warehouse and putting together boxes to ship?

Your suppliers can't necessarily drop ship to your customers, because their items will need to be combined with others - if you have your suppliers drop ship to you, your gift boxes will take too long to come out.

Your core business (at least from the web site) is the ability to customize these boxes.

The good news is that you can keep track of which shipments your recipients have received, and that your buyers have purchased. As long as you vary the contents of the boxes if either one of those is a repeat for the same theme, you can get away with carrying a lot less SKUs in inventory - if I ship a "nerdy" gift to someone, I don't really care if someone else gets the same exact box, as long as I don't find out about it -after all, you're selling customization.

<comment><AUTHOR> "Your suppliers can't necessarily drop ship to your customers, because their items will need to be combined with others - if you have your suppliers drop ship to you, your gift boxes will take too long to come out." \- Jefflinwood

That is exactly the issue simplified! Thank for such a good explanation.

You are absolutely right on the last point but we are looking to build a model were our customization is from the item picking part not the warehousing part. Be a tech play more than a warehousing play. Now we currently ship to us the items, repackaged and send back which is a very non-scalable way to grow not to say non-profitable too.</comment></comment>


What could go wrong?  congress to update 1996 Telecomm Act - <AUTHOR> http://www.nytimes.com/2010/05/25/technology/25broadband.html?ref=internet&pagewanted=print

<comment><USER2> "Congress has little time left on this session's calendar. And it took more than five years to produce the 1996 Telecommunications Act, which itself was the first major overhaul of telecommunications law since the Communications Act of 1934."

I don't understand why it has taken so long for something that has changed so drastically and is vital to our economy to addressed. Hopefully they have some idea of where they are going with this...

I'll also be interested to see if this impacts mobile internet.

</comment><comment><USER3> Hm, maybe the radio stations will stop needing to bleep things out. :)

> Telecommunications firms also argue that a lack of legislation has not > stifled competition among Internet companies.

Yeah, it's the granted monopolies and anti-competitive behavior that did that.

> "The F.C.C.'s legal authority should be decided by the Congress itself, and > not by applying to the Internet a set of onerous rules designed for a > different technology, a different situation, and a different era," he [James > Cicconi, a senior executive vice president at AT&T] said.

Um, I'm pretty sure those rules were designed for there being a (local) monopoly on what we're calling the "last mile" these days, rather than for any specific technology used. They make just as much sense as ever.

</comment><comment><USER4> The editorializing in the title is unnecessary. Please reflect the article's title only next time.</comment>


Ask HN: How do I leverage tech to help solve economic inequality? - <AUTHOR> Greetings HN from a first-time poster!
I'm a highschool junior living in Indonesia, where income inequality is notoriously bad. The tech companies that we do have, most notably those in the e-commerce and transport space like Tokopedia and Go-Jek, do little to benefit low-income earners and small businesses. There are some limited benefits, like employment opportunities for motorcycle drivers and increased sales for mid-to-large sized businesses, but your average shanty resident isn't affected.
I'm of the disposition that tech can be used to do just about anything. With this being said, what would you do with tech/what would you make to benefit the lowest-income earners and to improve social mobility? <comment><USER2> Definitely access to public transportation</comment>