Failed Startup's Final Income Statements Reveal Grave Error - <AUTHOR> http://www.businessinsider.com/jody-sherman-ecomom-and-a-grave-financial-error-2013-4 <comment><USER2> Two weeks ago I took a look at a company in distress. Three years of figures: 2010, profitable, 2011, still profitable but substantially lower, 2012, huge loss. Every year their turnover grew but their margins decreased (because they had to bid lower (more competitive) on contracts in order to grow their revenues). The CEO had no idea why they were in trouble, he'd attributed it to his co-director making off with money (which in fact he did, but only relatively small sums). They've filed for bankruptcy last week and to this day I'm not sure if I've been able to adequately explain to him that if you lose more money on every subsequent project that you contract that you can grow your revenues only until your cash reserves run out. Even with the figures laid out pretty clearly I think he still does not really get it. Puzzling.

I think they thought that as long as they were winning the contracts from their competitors that they were doing well but if you don't accurately track your purchasing you will never know whether you are making money or losing money on a contract.

<comment><USER3> The more examples I see the more I'm convinced that a big cause of failing businesses is just failure to do math. I've seen so many businesses struggle because they failed to do the simple thing: concentrate on profit margin and focus on maximizing it.

<comment><USER4> I work for a plumbing/heating/HVAC distributor and the absolute biggest number they look at is margin. Real simple shit, especially when you use a system that always shows the GP% on every screen.

</comment></comment></comment><comment><USER5> Among other things, the "revenue" number seems totally bogus.

Reminds me of a tactic used by Skillshare. I sent them some feedback saying the class I'd just taken was terrible. They didn't offer me a refund (I hadn't asked for one), but they _did_ give me a "scholarship" for the course amount - $20 back to PayPal, operationally identical to a refund. This way, they get to book "my" $20 as "revenue," and the "scholarship" as a "marketing expense."

<comment><USER6> Quite interesting! Hadn't ever seen that but it's rather wise from an accounting standpoint.

<comment><USER7> Wise from the perspective of attracting investors? Maybe. Wise from the perspective of running a functional business? No. Fudging metrics to make yourself feel better is crazy. How are you expected to know the actual health of your business without having a clear view of metrics as simple as revenue, marketing, and returns.

</comment></comment></comment><comment><USER8> It boggles the mind that the investors, or even employees, let the margins get that ugly. When you're discounting your products/sales by $750K a month and accepting that loss, how is no one else missing that? Even if you don't see the actual income statement, you'd have to realize that you're selling all of your inventory at a discount. Not just some loss-leaders, but everything. How did no one call that out earlier?

The whole Ecomom story is tragic, and the lost life is the worst part of the whole story. Yet, I can't help but think that if someone else had been more forcefully stood up to Mr. Sherman's business model, the situation could have improved before it turned tragic.

<comment><USER9> I had to LOL at the line from the post mortem:

"No Balance Sheet or Statement of Cash flows had ever been prepared"

I've not been involved in the finance side of a startup, can you really raise millions without any documentation at all? I mean, yeah, we all heard about the dotcom boom but that's all in the past, right? Or is it?

<comment><USER10> These snafus compared to the dot com bubble are orders of magnitude smaller.

I remember when PayPal gave $10 to you just for signing up. (People of course signed up many times and got many bonuses. People howled about how they would never build a business if they had to buy customers.) I remember when Yahoo bought the domain Broadcast.com (and a few assets, but not really) for billions (with a b!) of dollars. I remember when Pets.com spent $10 million on advertising to get $500k in sales (not even net, _sales_ ). I remember when Amazon.com paid workers in a Seattle high rise to call mom-and-pop book stores in search of a $8 out of print book that had been ordered on the website. Etc., etc., etc.

I understand the urge to yell "bubble!" when reading these stories -- but comparisons to the dot com era is to make a mountain out of a molehill.

<comment><USER11> > I remember when Amazon.com paid workers in a Seattle high rise to call mom- > and-pop book stores in search of a $8 out of print book that had been > ordered on the website.

I don't think that one is absurd. Sure, if their business model involves significant selling of cheap out-of-print books, that's not going to fly, but it's my understanding (would be thrilled if any industry insiders reaffirmed or corrected) that overwhelming majority of book sales aren't out-of-print books, and knowing Amazon'll do that kind of thing was good advertising. Like a loss-leader.

<comment><USER12> Yes. This is like saying Toyota is dumb because they were selling the early Priuses below cost.

Smart companies are willing to invest heavily in new products, and base their pricing on long-term costs, not short-term costs.

Giving no thought to margins is one way to kill a startup. But paying too much attention margins is another way.

Amazon has been particularly smart about this. E.g., the Amazon Prime program. From what I've read, it more or less breaks even. They surely lose money on some people over some periods. But now that they've captured 90% of my on-line purchases, they can start squeezing out the costs. E.g., their move to set up local distribution centers and same-day delivery. Cheaper for them than using FexEx, and better for me. And utterly impossible for people too focused on per-sale profits to compete with.

<comment><USER13> Amazon is an interesting case, partly because they really are doing on-line commerce and product distribution infrastructure on a scale that basically no- one else does.

I'm wondering how their next chapters are going to play out when (a) people get fed up with the automatic pricing mechanisms that keep dramatically changing the prices with no logical basis from a customer's point of view, and (b) too many bricks and mortar stores start to go under, and people can't browse there before sneakily shopping on-line afterwards any more.

Here's an obvious example from just this past week. Back at Christmas I bought the first season of a show, and after enjoying the first few episodes, I put season 2 on my Amazon wish list, which I basically use as a convenient bookmarking tool. At the time, both box sets were about the same price, and it was roughly the going rate for such things. A few weeks later, I'd finished the first season and went to order the second, credit card literally in hand, and found that they had basically _doubled_ the price since I bookmarked it. There was no obvious justification, so I assume it was their automated pricing doing something funny. In any case, I immediately removed it from my wish list; I enjoyed the show, but not that much. Last week, I went back to take another look in case the price had come down again, but no, season 2 is still way more than season 1 and other comparable products. The following day, I learned that a TV channel I get is showing both seasons back to back, so if I just wait a few days I can have the whole thing for free. Score: Me 1, Amazon 0.

It's not as if this is the first time I've seen their pricing do silly (from a customer's point of view) things, or the first time they've annoyed me for that reason, but it's the first time it was so silly that I just walked away from a purchase without hesitation, and in this case clearly I'll never go back now. I've heard similar anecdotes from enough friends now to realise that I'm hardly alone, either.

This leads me to wonder whether all of this computerising and optimising that they are doing will backfire at some point, and a lot of the advantages they seemed to have in better pricing compared to bricks and mortar stores were actually temporary or illusory.

</comment></comment></comment></comment></comment></comment><comment><USER14> >> A large problem was Sherman did not understand some basic business principles. "I would bring the financial statements to Jody who would glance at them so cursorily and wave me away with 'no one can understand this without extensive analysis,' Prentiss writes. "Critically, he did not understand margin. At the end of December when things were getting truly desperate, he said to me, 'Phil, just bring me a forecast that shows how much we need to sell to break even.' He did not understand, after three years of negative margin, that increased sales resulted in increased losses. He had built his house by raising money and when times got tough he went with what he knew."

If the above it's true, it's really scary. You should not be in any business, let alone commerce, if you don't get this basic stuff. Building a business is about making money - coaxing it right out of the unit economics - not raising money.

<comment><USER15> I doubt he didn't get it, he just wasn't interested and thought he could make it work just by watching sales. He wanted a target that made sense to him. Obviously a flawed approach in the field he was in, ultimately.

<comment><USER16> In other words, he didn't get it.

You cannot say someone truly gets that something is in their best interest if they think it's best to continue to do the opposite.

<comment><USER17> Exactly. If he really understood what negative margin meant, he would never have asked for "a forecast that shows how much we need to sell to break even."

<comment><USER15> OK, maybe I meant "Could've got it. Chose not to."

</comment></comment></comment></comment></comment><comment><USER18> Holy mackerel, does this ring true!

Long ago, I had an internship at a company that focused primarily on daily revenue. An email would go out in the morning with yesterday's sales figures. It omitted (for reasons I don't know) the gross margins.

Someone high up figured out "Hey, we can goose the numbers by running sales!" and so the sales went up - almost daily - and yes, indeed, the daily revenue $ went up and up.

I'm not sure what happened to the business, but I'm sure if you want to maximize daily revenue you can but if you don't pay attention to margin, well - you're in trouble.

I thought this was an isolated case but clearly anyone can fall into that trap. Very weird, especially when the data is staring you in the face. Reality distortion field? Incompetence? Willful ignorance? Some of each?

<comment><USER19> In medium to large companies, this trap typically emerges in situations where someone responsible for top-line revenue is not responsible for bottom-line revenue (i.e., sometimes in organizations where Sales has little contact with, or accountability to, the other departments).

In startups and small companies, the problem has been exacerbated by a relatively recent obsession with growth _uber alles_. Growth, growth, growth, with little regard to whether growth is sustainable, or to how costs scale with revenue. Groupon is the ultimate lesson in the dangers of putting financial growth on a pedestal at the expense of all other considerations.

The problem is also made worse whenever founders run a company solely expecting to exit with a strategic buyout. If you're not really running the company as a going concern, you have less incentive to work toward long-term sustainable margins. We tend to glorify the big exit, and there's certainly a lot of hard work and skill that goes into achieving one -- but the highest peaks on the mountain of glory belong to whose who develop and run lasting businesses.

A professor in a business class in college used to put it this way, and I'll paraphrase: "If I want to start the world's fastest growing company, I can do that right now. It's not hard. I'll just start a business selling $100 bills for $90."

The metaphor was purposefully simplistic, but it's amazing how people seem to fall into similar business models without even considering that they have.

<comment><USER20> > _In startups and small companies, the problem has been exacerbated by a > relatively recent obsession with growth uber alles. Growth, growth, growth, > with little regard to whether growth is sustainable, or to how costs scale > with revenue._

This is absolutely true. I'm getting downvoted farther down on this thread for a similar observation, and for attributing this obsession to the SV culture, in particular.

This article is attempting to assert that Mr. Sherman was literally incapable of understanding basic math (i.e. the concept of margin). I think it's more likely that he was well-aware of the definition but was focused on growth at all costs.

It's funny, because you look at companies like Twitter and Pinterest which come up to scale with absolutely no revenue model, let alone revenue. That seems to be "normal". Nothing to see here. But, when a company with actual revenue deeply discounts products to scale up, it's somehow shockingly bad.

I'm not arguing that Ecomom had the right strategy here. I actually think they did not (partly for the reasons you mentioned). But, then in the same universe Pinterest could become the darling with millions of users and no revenue _model_?

It's funny how twisted things are without people seeming to notice the contradictions.

<comment><USER21> It is certainly wise to be concerned with having a way to bring income to a profit-seeking entity. But companies like Pinterest and Twitter have very different business realities than companies like Ecomom which market in real goods which they have to pay to buy, pay to ship, pay to hold and even apparently pay to sell and ship again.

When your business is all-online, even at scale, it may be feasible to figure out what you want to do after you make your service big (and indispensable).

<comment><USER20> They are definitely different businesses. No argument there.

But, there are still very real costs involved with the Pinterests/Twitters of the world--especially at scale.

Money lost is money lost. Whether it's because your price point doesn't allow you to recoup inventory carrying costs or because you have costs with no revenue.

But, I think the main point here is that it would seem more feasible to discount products and give up margin as a means to growth than it is to just grow with no idea of how you'll _ever_ monetize.

I guess I don't understand what good it is to have a big, indispensable business without knowing how or if it would ever make money.

That we're having this discussion is kind of homage to how odd things have become.

</comment></comment></comment></comment></comment><comment><USER22> This is all a very sad state of affairs obviously. I think, though, cautionary tales do have some value - and hopefully allow a small silver lining to the accompanying cloud.

In this is, as the post outlines, an important lesson to founders from the sales/marketing side to not oversell yourself, not just to others but to yourself. This is part of the reason many VCs are reluctant to back companies founded by pure sales people, because such folks will oversell their own ideas to themselves and not look as critically. You MUST get to grips with fundamentals. You MUST understand the financial details of your business and not hand that responsibility off to someone else. I would also argue, though many disagree, that you MUST understand on some level of detail the engineering behind your product, even if you are not the level of coder your engineering team members hopefully are.

Pitching ability is necessary but not sufficient qualification for success as a startup founder. It's a very sad situation when someone pitches so far ahead of the curve they feel like they have no way out. Depression and despair is a frighteningly common situation to find yourself in as a founder. Help yourself by owning knowledge of all aspects of your business and THEN let the subject matter experts own the deep dive and the execution on those.

</comment><comment><USER23> Where the fuck was the board?

It looks like he did a "party round" with tiny investments from a lot of sophisticated investors, combined with bigger investments from less sophisticated investors, and none of them were competent and interested enough to exercise any oversight.

<http://www.crunchbase.com/company/ecomom>

<comment><USER24> Was there a board? From what I can tell it looks privately held with one majority shareholder.

<comment><USER23> Per the great state of Nevada:

Jody Sherman ("February Won, Inc") (this is ecomom)

Zem Joaquin ("February Won, Inc")

Alan R. Greene, M.D. FAAP (CareDox, Inc)

Robert Beck BS, MS (EcoMom, Inc.)

John Daniele Hamel (The Cue Ball Group, LLC)

The only one I'd consider credible is Dr. Greene, and in general doctors are exceptionally shitty businesspeople.

Cueball is a small/unknown VC in Boston.

<comment><USER25> How did you get your hands on this?

<comment><USER26> Not to speak for the GP but in addition to the Delaware Division of Corporations[1] in which February Won, Inc -- like many startups -- was registered (and where you have to pay a fee), there are quite a few public sites which attempt to aggregate this information, albeit with varying levels of accuracy. For instance, Bloomberg Businessweek [2].

[1] <https://delecorp.delaware.gov/tin/GINameSearch.jsp>

[2] [http://investing.businessweek.com/research/stocks/private/pe...](http://investing.businessweek.com/research/stocks/private/people.asp?privcapId=98789527)

</comment></comment></comment></comment></comment><comment><USER27> Here's the best part from the full post mortem

"First and foremost,the VP of Sales was compensated according to sales before discounts, not according to margin or profit. Our discount strategy resulted in enormous losses, but for the VP of sales the strategy optimized his bonus. "

It's called incentive based behavior, and it goes to show you that if you reward someone for the amount of shit they can sell without any consideration for margin, they'll give the damn shit away for free!

</comment><comment><USER20> I think it's an oversimplification to say that Mr. Sherman "did not understand margin". The concept is so fundamental that you can explain it to first- graders as soon as they're introduced to a number line.

Sure, he understood it. Did he respect it as the prime directive? It seems not. But, plenty of companies would take the same approach and write down the losses to the cost of customer acquisition--pure marketing--with the idea being to recoup later.

That drive, BTW, is a side effect of high-pressure SV culture. Rather than build more methodically with an emphasis on creating rabidly loyal fans who are willing to pay a higher price for service, customer experience, etc, the goal was to grow revenue and customer base as quickly as possible by any means. In this case, it meant deep discounting.

So, instead of a simple misunderstanding of margin, the problem here seems to be more that this pressure caused him to embark on a strategy ill-suited to his product. Once he'd trained his customers to expect discounts so deep that he couldn't possibly profit, there was no turning back. It seems, instead, that the Zappos model would have been more suited to his offering.

But the relentless pressure for growth combined with the belief that he had access to more capital seems most responsible for his approach. I think it's possible that many rational people would have been lulled into making the same mistake, even with a clear understanding of margin. To say that he didn't understand that you have to sell a product for more than it costs to profit is nearly insulting.

<comment><USER28> No.

You are stating your opinion based on disregarding the facts at hand because they don't align with your worldview, this is exactly how an intelligent person can end up not understanding something basic.

The individual who actually went over the financials in detail, and who actually knew Sherman, and who actually spoke to Sherman about the financial situation at the time is putting his reputation on the statement that Sherman did not understand margin.

He might be right, or he may be wrong, but he has a lot more backing to his opinion than you do.

<comment><USER29> Well said. And don't forget that, for many people, there's a difference between understanding a basic concept (margins) and understanding its effect on you/your baby/your life. We humans do this as a matter of routine (smoking, alcohol, obesity, etc).

<comment><USER20> > _there's a difference between understanding a basic concept (margins) and > understanding its effect on you/your baby/your life._

That's absolutely true, but that's more of an abstract observation of human behavior. On the other hand, the author is stating that Mr. Sherman _literally_ did not understand the basic math of margins (ex: that the more products they sold below cost, the more money they lost).

In my opinion, that's a completely ridiculous notion. Such statements are insulting and fit with the tone of the article, which essentially attacks Mr. Sherman as incompetent and a virtual imbecile. The author appears to have some other motive to be so bluntly disrespectful to someone who has passed. C.Y.A.? Personality conflicts? Something else? Who knows? But, since Mr. Sherman is not here to defend his actions or rationale, it seems a shame to allow these ridiculous memes about him to thrive.

I'm sure there is valid criticism that one can heap on Mr. Sherman's days at the helm of Ecomom and the decisions he made (including the one to discount products and give up his margin). If one wants to critique that, then it's fair game. But, to sit around and suggest that the man literally couldn't understand basic addition and subtraction is ridiculous. It is no credit to the author to insult the man when he's no longer here to defend himself.

<comment><USER30> It is certainly quite possible that "Phil, just bring me a forecast that shows how much we need to sell to break even" is a gross misrepresentation of what he actually said, but if it is at all true then Sherman did in fact _literally_ not understand the concept of margins.

<comment><USER20> Maybe. If.

If he said exactly that. And, if he meant exactly that. And, If there's no other context. And if...

But, Phil seems to be unsynched with himself. On one hand he accuses Mr. Sherman of _literally_ not understanding margins. On the other hand he clearly implies that Mr. Sherman deliberately avoided talk of margins/profits in a company meeting because he was a "master marketer" who "led a management meeting that focused on an awesome feel good marketing plan."

So, by that, he is clearly indicating that he thought Mr. Sherman understood margins well. So well that he was deft enough to avoid speaking of them; instead using his "master marketer" skills to somehow mislead management and divert their attention away from margins.

Completely contradicts the notion that he didn't know what margins were.

And why on earth is Phil speculating about one side of phone conversations that he overheard? That's not his place (as a controller), and it's amateurish at best.

There are some "interesting" statements being thrown around in the article. They seem to be gossipy, reckless and, at best, inconsistent.

</comment></comment></comment></comment></comment></comment><comment><USER31> "Grave error" implies something that a non-fool might blunder into. Fools don't blunder, per se, they simply exist.

One of the first jokes I ever heard at a startup was "We'll give the product away and make it up on volume!" Changing the joke to "We'll pay people to take the product and make it up on volume!" doesn't make it less obviously ridiculous.

I'm amazed they were able to hire employees, let alone find investors. Doesn't make the guy's death any less tragic though.

<comment><USER32> That's an oldie but a goodie.

Saturday Night Live Clip (First CityWide Change Bank 2) <http://www.imdb.com/video/hulu/vi416284697/>

</comment></comment><comment><USER33> "First and foremost,the VP of Sales was compensated according to sales before discounts, not according to margin or profit"

what could possibly go wrong?

<comment><USER34> Oh my god. What clown _couldn't_ get personally rich with that setup?

</comment></comment><comment><USER35> This is tough:

* Revenue $1.0MM

* Variable costs $1.5MM

* Fixed costs & admin $300K

* For a net loss of $800K

How can your variable costs exceed your revenue by so much? You might as well not be in business.

<comment><USER36> This is what e-commerce balance sheets look like, though.

Someone must not have told him that anything related to online (or offline) retail loses money for at least 3 years, making any money at all after 5 years is considered amazing, and Amazon.com lost money for 12 years before it made any. The main personal attribute you need as an e-commerce executive is a strong stomach.

<comment><USER37> This is just plain not true. There are many e-commerce companies who are profitable and healthy immediately.

Start a store with Shopify or Miva Merchant for a low monthly cost, work of of your house and sell your goods for more than they cost you. Ton's of folks do this and are very quickly profitable on a small scale.

If you are trying to be Amazon or Walmart and sell non differentiated products for rock bottom prices, then you are correct. But there are plenty of companies content to run $2 Million - $20 Million dollar businesses without having to go through the pain of losing money for 3 years.

<comment><USER38> Since I can't reply to the comment below me--Now that we understand ecommerce we're profitable from day one with our new brand launches. It usually takes about 2-3 months before we're doing 20k/mo revenue online with 100% margins.

<comment><USER6> 100% margins? _scratches head_

</comment></comment></comment></comment></comment><comment><USER39> It's not just small companies.

I worked briefly for a mid-sized tech company that took a >$70 mm round, but will likely be out-of-business before year end. Like Ecomom, it is helmed by a "visionary" / fanatical leader with a "grow at all cost mentality."

To me, a big red flag is when senior managers make plans without both revenues AND costs being openly discussed.

</comment><comment><USER40> It seems that at the core of their demise was the fact that their discounting strategy was very Groupon-esque, ie. Done using a 3rd party service and ultimately failing to capture loyalty of their customers.

The article states "when they stopped discounting, the sales stopped" but the way that reads to me is that the 3rd party discounting service was actually their only significant source of traffic.

It seems unlikely that if they were offering goods at a reasonable price that people needed with a trustworthy level of support, that their sales would completely evaporate in the absence of discounts otherwise.

</comment><comment><USER41> If all that's true, it's simply breathtaking.

</comment><comment><USER42> | "For example the customer would pay Plum District $20 and receive a $40 coupon to be used on our site. We would ship $40 of retail value and receive nothing from the customer, but eventually receive $20 (less some service charge) from Plum District."

So it's basically Groupon for goods? For businesses with low variable costs (like restaurants and hotels) this might actually work, but for physical consumer goods with cut throat margins? Insane.

</comment><comment><USER43> I recommend reading the full letter from Prentiss as opposed to the summarized version on B-insider. The full-version presents a very clear cautionary tale about business strategy and management. Prentiss articulates himself well and gives you an inside look at what it's like to watch a start up fail.

</comment><comment><USER44> I'm getting tired of seeing the never ending spin from one or another person that given that justice would be considering changes if it wasn't for the fact that jody swote the final chapter.

I don't know phillip, and I'm sure he's a nice guy, but nobody that took an accounting class at community college has a lack of financial knowledge so great that they couldn't see two trains inexorably colliding, a process that began well before 4Q12 and in fact stretched back to prior to the last round of funding closing (late summer).

A mere glance at the numbers showing 90% of the days orders a) via 50% pre- sale b) had significant coupon (often 30%) stacked on top of that that applied to the total not just their share, c) 99% got free shipping that they valued at $6 but likely ran twice that much of the time. When you add it all up you are losing money on every sale even if your product is free, you have no marketing costs, no fullfillment, no chargeback, no backoffice, no ceo's that need to bust it at yet another conference.

It was so bad that you could easily within seconds spot the real transactions - people paying ~70%-~%80 of list and shipping. because you;d only see one once a day if you were lucky.

There's a phrase accountants use when they really wan to to say a certain word but it gets you sued if you do. So here we go. There was an obvious material weakness present in absolutely everyone conducting the business of the board and the c level posts. As much as nerds want to believe that crap about how dumb the population is, people aren't that dumb.

Make no mistake, there was something completely unmistakable for incompetence at the very best at work here. Sure they wasted a bunch buying customers, but thats not how you go from $5+1secured in a few months.

This money walked out the door. Where'd it go? Well it turns out that post crisis the lead investor and secondary spot of the board poured over books day in day out withe the brand new "fall guy" president, elected by the board two days after jodys death. They amounted to the entirety of the forensic accounting done and found that no money was missing though employees never saw the books.

Then, 28 days after his death they transferred all shares and assets without prior announcement to in effect liquidate without the oversight of the court. The key part there is oversight - a court appointed trustee would have the obligation to claw back money, especially from insiders. The Instead in this case the insiders paid a significant amount of their cash on hand (six figures) as they wrapped up to provide sherwood partners a hefty cash guarantee on their liquidation expenses, and likely covered some of their secured debt as well to buy the ascent of the major secured creditor. While that happened in secret they continued to ensure contractors that'd be paid and enough was there. Now that's 0 for the benefit of bankers. For no more than 100-200 gained off of misclassified 1099s.

That substantial fraud occurred goes essentially unquestioned in those circles. That the active member of the board from cue ball was at least guilty of gross negligence seems difficult to argue against.

And yet nobody in the whole process is willing to stand up, investors, employees, the many parties only speaking through lawyers, about it because of the code of silence in vc-istan. Which is absolutely real and will absolutely fuck you.

If you're doing venture backed lottery schemes for a living you should make sure find some of the contrarian stories and listen - when things don't work out the windowns are far from having free snacks.

<comment><USER44> In the end, the idea that Jody lacked a basic understanding of margins after years of being a retailer clearly doesn't make sense. Nobody sells goods for lower than their cost of acquisition without being aware.

It's too bad tech journalism is a farce now, 15 years ago the sj mercury news would have actually put someone on it that had a basic understanding of extracting truth from lies. There are plenty of people who might talk, if they had any belief it'd actually result in a researched and unbiased piece.

</comment></comment><comment><USER45> I hope no one forgets we often value companies (in an overly simplified way) by a multiple of their revenue. Of course other things are taken into consideration but had they kept their discount as a marketing expense they could have gotten away with it in going on to next steps like a potential IPO. What the article highlights is that the wrong variables were taken into account when calculating margin, and this could happen very easily/could be debated both ways.

The thing I'm curious about is their balance sheet. If someone buys from a site like plum district a gift certificate for $40 that they paid $20 for, California residents are entitled to at least $20 of goods for an unlimited time... What a nightmare!

</comment><comment><USER46> I don't get it. The guy was an idiot, and the people who funded Ecomom were blind. A high school student could have pointed out the flaws here.

</comment><comment><USER47> Re: "Our discounts are meant to be one time only, but we can't limit them by customer so every order ends up sold 50% off"

Sounds like a technology problem.

<comment><USER48> No it isn't. It's a business plan problem. Stop blaming the developers for everything :)

<comment><USER47> As a former dev myself, I've seen that problem quite often. :)

</comment></comment></comment><comment><USER49> Reading the Ecomom story it reminds me of Zappos. That company too was losing a lot of money. It only sold to Amazon after their investors refused to put more money in.

The Ecomom story is pretty mind boggling from a sound business perspective, but then so is Zappos. And look how celebrated Tony Hsieh is. And guess who was also an investor in Ecomom?

<comment><USER50> I think Zappos' and Ecomom's stories are way different. Are you referring to the info in the Zappos' book, delivering Happiness?

<comment><USER49> Yes, I am. I am sure there are big differences (especially in the outcome) but both were losing money in the hope of building an audience, and to lower costs later.

As Hsieh wrote:

"Zappos sells shoes and apparel online, but what distinguished us from our competitors was that we'd put our company culture above all else. We'd bet that by being good to our employees -- for instance, by paying for 100 percent of health care premiums, spending heavily on personal development, and giving customer service reps more freedom than at a typical call center -- we would be able to offer better service than our competitors. Better service would translate into lots of repeat customers, which would mean low marketing expenses, long-term profits, and fast growth. Amazingly, it all seemed to be working. By 2005, gross merchandise sales were $370 million, and we made the Inc. 500. We weren't profitable yet, but we were close to breaking even, and our revenue was growing quickly."

<http://www.inc.com/magazine/20100601/why-i-sold-zappos.html>

Seems pretty similar to me. The only difference is that Zappos went after a much larger market.

<comment><USER51> I believe these are very different situations -- Zappos was covering some, nearly all of their SG&A with product margins. Ecomom was, according to the information in the link, needing to pony up cash to cover negative margins on product sales.

</comment></comment></comment></comment><comment><USER35> Seems like he was using a groupon like service to sell $40 coupons for $20, and then only getting part of that $20 back from the marketing company. Built in 66%+ loss on every sale.

Those coupons have hurt many a business. People buy only $39.99 and not a penny more since the coupon anchors the price and the expectation.

</comment><comment><USER27> Can someone please help me understand what I'm missing? When I calculate the Net/Profit Loss on the first income statement I get ($521) and not ($548).

I don't see anything in the article that accounts for the missing $27K. What kind of accounting is that?

</comment><comment><USER52> Investors must invest responsibly and don't give money to clueless entrepreneurs.

These misguided investments pushed that clueless & reckless entrepreneur toward suicide.

Irresponsible investing is similar to irresponsible lending during the housing bubble (pre-2008).

</comment><comment><USER53> The reality is that small online retailers have no chance against amazon unless they sell at a loss. The delusion is to think that the losses are an investment.

</comment><comment><USER54>
        Prentiss also says Sherman drew up a will one week before he died and gave it to his secretary.

And they didn't consider this a massive red flag?

</comment><comment><USER55> How did the "outside accountant" miss this :S.

<comment><USER56> He didn't. That's why he is refusing to talk through lawyers.

</comment></comment><comment><USER57> So the "grave error" is a lack of simple understanding of what a margin is? Seriously?

</comment><comment><USER48> School should teach critical thinking skills and I guess the concept of profit/loss...

</comment><comment><USER58> Multiply by a negative number - and guess what? You get a bigger negative number.

</comment><comment><USER59> I assume "Magneto" is in fact "Magento".

</comment><comment><USER60> Wait, are you telling me I'll _LOSE_ money if I sell things below cost? That's not a "grave financial error", it's an egregious violation of common sense.

He was basically running a Groupon for moms, and no one stopped to say "Hey, Groupon never turned a profit. What makes you think your company will?"</comment>


Anchoring Startups (outside the Valley) - <AUTHOR> http://www.allenpike.com/2012/anchoring-startups/

<comment><USER2> What is Lululeman????

I think you're right that landing an anchor would change things. It's a little simplistic to stop there.

I would say that landing an anchor is like a litmus test of approval for an entire eco system.

What environment does it take to land an "anchor"???? Kind of a chicken or egg thing....you need the schools/environement to land the anchor and you need the anchor to perpetuate the hub??? You need silicon valley to become silicon valley.</comment>


Say hello to the new framework that builds apps in minutes - <AUTHOR> http://stugreen.com/blog/2011/04/say-hello-to-the-framework-that-builds-apps

<comment><USER2> Dude...shouldn't it submit to TechCrunch and HN for you, as part of the setup?

All you should have to do is $myApp = basecamp_style_app();

Then it emails your friends and Michael Arrington, and posts to all the blogs. Anything else is too much work.

<comment><AUTHOR> Yeah that's it, you got it. You can set it up as a cron too, so that it keeps on submitting to TechCrunch and Mashable every day or so.</comment></comment>


Nginx Source code repository switched to Mercurial - <AUTHOR> http://nginx.org/#2013-04-25

<comment><USER2> Looks like the install page[1] needs to be updated to mention that. It still refers to Subversion and svn.nginx.org.

[1]: <http://wiki.nginx.org/Install></comment>


Phylogenomic Reclassification of the World's Most Venemous Spiders - <AUTHOR> https://www.nature.com/articles/s41598-018-19946-2 <comment><USER2> Update wikidata taxonomy!

I'll probably do this when I get around to it, but it would be great if more people did this. This dataset is the only cladistic dataset that is fairly comprehensive that I have found.

</comment><comment><USER3> I hypothesize that the abstract is a close literary relative of Lewis Carroll's work.</comment>


Radioactive Drone Lands on Japanese PM's Roof - <AUTHOR> http://rt.com/news/251937-japan-drone-abe-office/

<comment> tokyou-j It made news to the crash of the drone of the TV station on the same day to a British embassy. The drone restriction committee might have been immediately started.

But I think that it's not a problem of a drone alone. I think that the thing that installs the bomb in the Roomba and delivers it to the destination is possible.</comment>


Go Back with Backspace - <AUTHOR> https://chrome.google.com/webstore/detail/go-back-with-backspace/eekailopagacbcdloonjhbiecobagjci <comment><USER2> One amusing nitpick: this extension restores the backspace-outside-text-input- elements key press functionality, yet does not restore the shift+backspace counterpart (ATM).

Second bitterly amusing fact is that proclaimed drawback of "accidental" backspace causing loss of data entered into form is (FMPoW) in fact quite hard to achieve: you have to make really poor web-app with `history.replace`, broken HTTP redirects or wild JavaScript rendering without proper history API "anchoring" of the view state. For normal use-case (like writing this comment) I am confident that I can go back to previous page in history and return here and I will get this textarea filled with text it contained before exit.

Third fact which contradicts my previous statement and surprised me a lot is how many people here at HN expressed negative experiences with accidental history.backs (paulddraper here and namely discussion under "Ask HN: Please stop overriding standard browser navigation keys with Javascript." [1] I found while digging.

Btw, Firefox goes even further: it is able to re-fill generated elements, keeps filled values after (soft) reload (aka F5 or CTRL+R) and generally prevents loss your precious data so much that I haven't experienced any accident of this kind in years (back in times this was not this reliable there was "Lazarus: Form Recovery" Firefox extension [2]).

[1] [https://news.ycombinator.com/item?id=3092100](https://news.ycombinator.com/item?id=3092100) [2] [https://addons.mozilla.org/en-US/firefox/addon/lazarus- form-...](https://addons.mozilla.org/en-US/firefox/addon/lazarus-form- recovery/)

</comment><comment><USER3> Huh, it's made by the Chrome team.

> Before Chrome 52, the backspace key navigated back...Many people lost their > progress while working online by accidentally pressing backspace and leaving > a page -- so we removed the feature from Chrome, and created this extension > for those who prefer the old behavior.

I've been hurt too deeply by backspace to ever miss it, but but that was...thoughtful of them.

</comment><comment><USER4> I still find myself absently hitting the backspace key to go back once I've finished reading a long page and moved my hands away from the keyboard/mouse. Then I mash the key for a bit to bring up the alt+left notification hoping that maybe it will put a blip on their analytics radar.

I guess it's good that they officially released something to allow this, but it still seems totally absurd to me to need and extension to modify a single hotkey.

</comment><comment><USER5> What a mess, the google chrome team really handled this poorly.</comment>


A Cold War Legacy: The Decline of Stealth - <AUTHOR> http://warontherocks.com/2015/01/a-cold-war-legacy-the-decline-of-stealth/?singlepage=1 <comment><USER2> No one nowadays is going to make a delivery platform without considering (and optimizing) thermal, audio, and radar signatures. Stealth isn't a "technology" we apply; it's an accepted, fundamental part of design. That it isn't perfect, and that other nations are working to compromise it, isn't a reason to give up; it's the reality of any military technology. And there is always a compromise between different desired capabilities.

<comment><USER3> It's always a tradeoff in aerospace, but I think what the article is arguing is that we give up _too much_ for stealth. For example, the incompatibility of stealth and external hardpoints on aircraft causes a significant increase in both the unit cost of aircraft as well as a significant decrease in mission capability. With external hardpoints, launching a missile or bomb is merely just a matter of letting ordnance fall away from the aircraft. Without them, you have to invest in complicated launcher mechanisms (i.e. the F-22's crazy pneumatic system for pushing missiles outside of the plane before firing them). In addition, the fact that all stores have to be carried internally means that each aircraft can carry far less in the way of weapons or fuel. This then leads to knock-on costs, like increased requirements for tankers. And if the value of stealth is constantly being eroded by new radars and other detection technologies, then I think the article is asking a fair question. Is the US best served by stealth aircraft (like the F-22 and the F-35)? Or would we be better served by a supermaneuverable "4.5 gen" fighter along the lines of the Su-35 or Su-37 that is cheaper to build, cheaper to operate, and has greater mission flexibility than our "next-gen" planes?

<comment><USER4> The US air force has two very different missions.

First is to quickly crush a nations standing military. This is where the stealth tradeoffs are less useful. Basically, just blow up anything that uses radar and you win.

The second is to patrol territory. Here stealth can be very useful as you tend to deal with far less capable radar and missile systems. But, they tend to be vary mobile so while there minimal threat at a military level they are a serious 'let's not show up on CNN' issue.

Considering the actual missions flown over the last 50 years I think the Air force's priorities are much more reasonable.

<comment><USER3> >Considering the actual missions flown over the last 50 years I think the Air force's priorities are much more reasonable.

That is a very, very difficult point to defend. The _vast_ majority of USAF missions over the past 50 years have been CAS missions against ground forces, not jet-against-jet duels against other air superiority fighters. Yet, if you look at the design priorities of not just the current state-of-the-art fighters, but even previous-gen fighters like the the F-15, F-16 and the F-18, you'll see that they privilege air-to-air combat capability over air-to- ground.

IMHO, the only plane in the USAF's inventory that's actually suited for the missions the USAF is actually flying is the A-10. And if you look at the A-10's history, you'll see that the USAF leadership fought tooth and nail against the program (it was essentially forced on the USAF by the Army), and at every feasible opportunity they've tried to retire the airframe.

Stealth isn't magic. Stealth doesn't make you invisible. Stealth is, at best, a very sophisticated camouflage that makes your plane harder to see with radar at a distance, and its advantages end the moment your plane starts shooting. Contra your point, stealth is actually _most_ suited for the "blitzkrieg" style missions which are designed to crush enemy air forces in the opening days of an engagement. That's actually what it was designed for. The F-22 (and other stealth aircraft) were designed to wipe out Soviet aircraft and air- defense systems in the opening days of WW3, at which point more conventional fighters (like F-4s, F-15s and A-10s) would do the majority of the "grunt work" of wiping out Soviet ground armor.

Stealth is far less suited for the kinds of "patrol" missions where your planes are going to be flying the same airspace day and day out, supporting ground troops or enforcing a no-fly zone. As the evidence from the F-117 shootdown in Yugoslavia demonstrates, all the camouflage in the world won't help you if your enemy is able to deduce where you will be based on your past activity. Stealth is poorly suited for close-air support missions, where you're flying close to enemy troops, for long periods of time, and shooting at them on a regular basis.

The Air Force's priorities have not been reasonable, by any rational measure, nor have they been reasonable for quite some time now. The Air Force should be investing in developing UAVs and the accompanying swarm tactics that allow for effective use of large numbers (e.g. 100+) aircraft in a combat theater. Instead, they're blowing billions of dollars on a "unified" combat aircraft that can't actually perform any of the roles it's supposed take over.

EDITS: Added points and restructured for clarity.

<comment><USER4> Drones are ideal for day to day ground support.

Cheap, high loiter time the cost is low speed so they have to already be in country. And the Air force has been buying a lot of drones. Manned fighters are currently much better for patrolling large areas of airspace and maintaining air superiority.

As to swarms picture the minimum drone that can hit a target that's traveling at 2.5 times the speed of sound at 65,000 feet. Now how many of those do you need to patrol say the entire US border. Don't get me wrong the swarm concept is useful, the only problem is the minimum useful airframe vs modern fighers is not tiny.

Ps: This is of course highly simplified. Cruise missiles are great at dismantling vary high value targets, but there also vary pricey and can't loiter.

</comment></comment></comment></comment></comment><comment><USER5> The paper proposes a core of stealth weapons and a large number of non-stealth weapons as a way to save money because of the high cost of stealth weapons, unfortunately now you have two R+D programs to pay for instead of one, and lower economies of scale and the labor and logistics costs will be higher to maintain two separate platforms.

My guess is stealth astroturfing from the military industrial complex. Propose something with a higher overall system/platform cost, then sell it to the unknowing public as a cost cutting measure.

An optimized strategy for saving money while still enforcing imperial control over the colonies would be massive automation and economy of scale via drones for the front lines. Rather than making a survivable $500M bomber that will only maybe a hundred combat missions, ship 5000 $100K drones/cruise missiles that will net 5000 combat missions for the same price, even if 90% the drones are shot down you still come out ahead.

<comment><USER6> > unfortunately now you have two R+D programs to pay for instead of one, and > lower economies of scale and the labor and logistics costs will be higher to > maintain two separate platforms.

I'm pretty sure the US government is paying for a bunch of disparate R & D projects already.

</comment></comment><comment><USER7> Stealth is not about not being seen. Once upon a time stealth was meant to evade detection to avoid being shot down. Today, stealth is about not being seen in order to provide deniability.

You only need to hide completely if you expect to be shot at, if you are flying in airspace where unknowns will be immediately engaged. Such airspace is very rare these days. Stealth today is about hiding just well enough that they cannot prove who or what you are (the Osama raid over Pakistan). In non- war airspace, with civilians floating around, they aren't going to shoot at an unknown. You don't need a zero-profile, just enough of a cloak that they cannot readily identify you. Unknown is far easier a profile than unseen.

</comment><comment><USER8> This argument is silly. The next step after stealth is clearly unmanned. To suggest that we need crappy piloted 4.5G fighters to save on costs is nuts. Everyone knows the future is unmanned drones that can takeout SAM sites.

Unmanned also solves the cost problem, as about 70% of the cost is excessive engineering, maintenance, and manufacturing techniques to keep the pilot alive.

</comment><comment><USER9> Stealth is false marketing. Stealth planes are visible on long wave length radar frequencies. Secondly the planes are plain in sight visible on imaging satellites unless they fly below the clouds if there are any. Given you have enough computational power you will create an imaging algorithm to detect them from satellite images. De-cloak.</comment>


Stratis Storage Software Design [pdf] - <AUTHOR> https://stratis-storage.github.io/StratisSoftwareDesign.pdf <comment><USER3> > 10.2.2 Layer 1: Integrity (optional)8 > This layer uses a to-be-developed DM > target that allows the detection of incorrect data as it is read, by using > extra space to record the results of checksum/hash functions on the data > blocks, and then compare the results with what the blockdev actually > returned. This will enable Stratis to detect data corruption when the pool > is non-redundant, and to repair the corruption when the pool is redundant. > Such a DM target could use DIF information if present.

This (and other aspects of Strasis) seem like sensible solutions, especially in Linux-land[1]. Implementing this (and I assume dedupe, which is penned for v3 but on which no information is yet provided) at the DM layer means that other FSs can also benefit from this work.

[1] By this I mean that Linux, both as a dev community and as an OS, seems much more comfortable with individual, composable components that can be tied together in different configurations, than monolithic one-size-fits-many solutions like ZFS (and... systemd).

<comment><USER4> That module is actually already in Linux in the form of dm-integrity: [https://github.com/torvalds/linux/blob/master/Documentation/...](https://github.com/torvalds/linux/blob/master/Documentation/device- mapper/dm-integrity.txt)

I'm using it with mdadm right now and it works pretty okay.

</comment></comment><comment><USER5> I don't get this.

First and foremost, RAID, in many, many cases, is hardware level and it's sorted by mdraid if not. So I never understood why btrfs tried to implement this before having stable other things; it should have been an extra in the end.

LVM... well. LVM works, that is for sure. It's also painful, and the last time I tried the same amount of LVM2 snapshots as I have in ZFS it rendered my machine usesless in speed.

But features like built-in encryption, transparent compression, cow - <USER2> are _useful_. XFS has it's own problems, especially if you manage to fill it up 100% - I had to reboot numerous production servers due to this -, and it lacks all 3.

ZFS should be the answer. I'm aware of the license issues, still, ZFS is decades ahead of the other solutions. I'm also aware that the MD+LVM+XFS+Stratis will fit better in the UNIX philosophy - including the overhead of learning all the non-standardised, completely un-intuitive commands they have on their own.

<comment><USER6> "First and foremost, RAID, in many, many cases, is hardware level and it's sorted by mdraid if not. So I never understood why btrfs tried to implement this before having stable other things; it should have been an extra in the end."

RAID is broken in those layers. The ZFS developers go into the reasons for this in detail.

</comment></comment><comment><USER7> A pity they didn't consider Bcachefs [0]. I understand it's a new project but it's made some good progress and it seems like a relatively cheap investment.

Anyone from RedHat, have you considered talking to Kent, the Bcachefs developer, about this?

[0]: [http://bcachefs.org/](http://bcachefs.org/)

<comment><AUTHOR> bcachefs seems especially exciting because the built-in crypto uses authenticated encryption in the form of ChaCha20Poly1305. Most disk encryption operates in an unauthenticated mode (such as XTS) which means the ciphertext is malleable on disk. This makes it's useful only for the case of your laptop getting stolen out of your car in the parking lot while turned off, but not for many more complicated scenarios (like trusting the data once the police recover your stolen laptop). With authenticated encryption, you're able to guarantee the authenticity and integrity of your files, in addition to encrypting them. Really great. The authentication tag naturally, then, doubles as what ZFS people refer to as their "checksums". I'm watching bcachefs closely to see how it matures.

[http://bcachefs.org/Encryption/](http://bcachefs.org/Encryption/)

<comment><USER8> > Like trusting the data once the police recover your stolen laptop.

If that's your scenario, then you should also expect EFI-level implants or extra chips. Having authentication isn't a bad thing... just don't expect it to be enough.

The only thing you can safely use that machine for post-capture is to read a _still encrypted_ disk image over the network.

</comment></comment></comment><comment><USER9> The article states:

>"ZFS isn't an option RHEL can embrace due to licensing (Ubuntu notwithstanding.)"

Can someone explain that comment to me? I understand that that ZFS is CDDL but why is this acceptable for Canonical and not Red Hat? They both have enterprise customers. Is this just differing opinions form each's legal council or does this comment imply something else?

<comment><USER10> Canonical are rolling the dice and hoping Oracle don't go after them, just as they rolled the dice on the patents around multimedia they bundle but Red Hat and Fedora don't. The wisdom of relying on the generosity is left as an exercise for the reader.

<comment><USER11> I don't know if Oracle (as a right holder of ZFS) can sue them (if they distribute the modules under the CDDL, they're fine as far as Oracle is concerned). It's all the Linux rights holders (including Oracle) who can sue over the GPL violation.

<comment><USER12> Exactly. And it's wise of RH to stay out of that mess.

</comment></comment></comment></comment><comment><USER13> Damn Oracle and their purchase of SUN Micro else we could all have had native ZFS but nooo we are stuck with an incompatible license and RedHat reinventing another ZFS like filesystem.

<comment><USER14> Remember - it was Sun that setup that initial CDDL licensing. Oracle had already started working on a separate replacement at the time (btrfs).

As came out with the Java GPL issues - don't assume that Sun had any choice in the matter - they may have had separate licenses to deal with. They may not have written everything from scratch.

<comment><USER13> Ahh I didn't know that. Still a shame, I love ZFS (probably irrationally) but given it's license some of that goodness has to be reinvented in other projects which just seems unnecessary.

</comment></comment></comment><comment><USER15> Almost everything in Btrfs is in the kernel. And except for some glue that I'm not familiar with, the same is true for ZFS. That means Btrfs volumes are very interoperable across distros and kernel versions, you merely need the kernel module built which most every distro includes. You don't even need user space tools to just mount a Btrfs volume, and get passive scrubbing, and data integrity guarantees.

This is basically an active (daemon) user space file system volume manager, leveraging a bunch of kernel layers. Assembly will require having stratis installed and running, it's not at all a general purpose file system solution. This is trying to fix a specific problem, how to leverage multiple storage technologies invented by different teams over different eras with mutually exclusive terminology goals.

Depending on the likely long list of dependencies, some of which will be version specific, who knows what the portability of such volumes will end up being across distros.

</comment><comment><USER16> Written in Rust and Python, cool.

</comment><comment><USER17> "stores information in a text-based JSON format"

OK, this one is a winner.

</comment><comment><USER18> Let's reinvent the wheel...

They could instead have:

\- made btrfs 'better' so it works for them

\- made ZFS's legal issues go away and use that

\- ask apple if apfs was ok to use

<comment><USER19> > _\- made ZFS 's legal issues go away and use that_

By wishing it intensely?

<comment><USER11> I assume money can help.

Although I don't understand the following if the issue is copyright or patents:

1\. If it's copyright, then presumably a team can black box reversed engineer ZFS, rewriting it under the GPL.

2\. If it's patents, then how would any other CoW filesystem (say btrfs) get around them (curious sub point: when would those patents expire)?

<comment><USER20> It's in part patents. My understanding is that btrfs does not get around them.

This is not a vague patent threat, because there was an actual lawsuit with patent numbers spelled out, namely NetApp v. Sun. You can check expiration date of those patents. More here: [http://en.swpat.org/wiki/NetApp%27s_filesystem_patents](http://en.swpat.org/wiki/NetApp%27s_filesystem_patents)

</comment></comment></comment></comment><comment><USER21> The development is on fire [https://github.com/stratis- storage](https://github.com/stratis-storage)

</comment><comment><USER22> (Ir)Relevant xkcd [https://xkcd.com/927/](https://xkcd.com/927/)

</comment><comment><USER23> [https://news.ycombinator.com/item?id=14915419](https://news.ycombinator.com/item?id=14915419)</comment>


Why Coke Cost a Nickel for 70 Years (2012) - <AUTHOR> http://www.npr.org/sections/money/2012/11/15/165143816/why-coke-cost-a-nickel-for-70-years <comment><USER2> That's a nice story.

The real reason was the US dollar was on a gold standard during that period of time. In the late 50's to 60's the US begin to issue more currency than their gold holdings were increasing, leading the countries like France withdrawing gold from the US (and apparently, inflation, according to this article), and finally the dissolution of the gold standard in 1971.

Since the US dollar was fixed to gold there was little to no inflation, because the ratio of gold price to goods price is much more stable.

In 1950 - A coke was 5c, median household income $4000[1] per year = 80000 cokes per year.

In 2015 - A coke is $2[2], median household income $50500[3] per year = 25000 cokes per year.

In real terms adjusted by the price of coke, the median household income has fallen by 69%. (for giggles).

1\. [http://web.stanford.edu/class/polisci120a/immigration/Median...](http://web.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf)

2\. [http://www.humuch.com/prices/CocaCola- Bottle-20oz500ml/_____...](http://www.humuch.com/prices/CocaCola- Bottle-20oz500ml/______/40#.VZDGuO2qqko)

3\. [http://www.mybudget360.com/how-much-do-americans-earn- what-i...](http://www.mybudget360.com/how-much-do-americans-earn-what-is-the- average-us-income/)

<comment><USER3> You're not accounting for the size of the portion. The nickel bottle of Coca- Cola was 6oz. Today's standard vending machine bottle is 20oz.

<comment><USER4> Which gives us 480,000 ounces of coke in 1950 vs 505,000 ounces of coke in 2015. A 5.2% increase in the amount of coke you can buy for a year's salary. (I'm actually kinda surprised the price is that stable.)

<comment><USER5> It's easier to sell one bigger package than several smaller.

I would not be surprised, if the 505,000 ounces in 20oz packages cost less to produce in 1950 prices, than 480,000 ounces in 6oz packages. (Just one physical package, not three separate).

<comment><USER3> It's a set of tradeoffs. The 6oz bottles were (I think) returnable. Even better than recycling, they only needed to be washed/sterilized to re-use. I'm old enough to remember Coke and other brands in returnable bottles up to 16oz.

They were heavy. The transportation costs savings with the lighter plastic bottles (combined with maybe the raw materials savings, and savings not having to transport, handle, wash, and sterilize the emptys) made plastic more economical than returnable glass.

Manufacturing cost for glass bottles almost certainly higher than plastic. You have to melt either sand or recycled crushed glass which takes a lot of energy.

Some jurisdictions do have returnable plastic bottles. They are much heavier than the disposable ones but still lighter than glass.

Interestingly for some reason beer in plastic bottles has never caught on, it's mostly sold in glass bottles and cans.

<comment><USER6> At Islanders hockey games, beer is sold in plastic bottles with the cap taken off.

<comment><USER7> This has been a growing trend in many arenas and stadiums in Florida too. I've seen them in at least 5 different venues across the state now.

</comment></comment></comment></comment></comment></comment></comment><comment><USER8> When people bemoan how things were cheaper back in an earlier time, they are often forgetting to take into account:

CPI Inflation (when adjusted for inflation, these 'cheap' things are often as expensive as they are today) this is seen with the movie ticket example [http://greyenlightenment.com/debunking-the-gold- standard/](http://greyenlightenment.com/debunking-the-gold-standard/) Maybe some things are a little more expensive, but it pretty much all evens-out.

Improved Utility (you get a better product despite the higher nominal price)

New products (your dollar buys things that didn't even exist even as early as generation ago)

Expenditures such as food & energy constitutes a smaller percentage of income than generations ago.

<comment><USER9> I'd swap my smartphone for affordable education, housing and healthcare any day.

<comment><USER10> Would you? Can't you get better education (though without the diploma) out of your smartphone than you could out of almost all universities in the sixties? Isn't wikipedia more correct than most textbooks from that day? Isn't pubmed better? Isn't it easy to find lots of scanned textbooks from helpful servers in Iran, Turkey, China, etc.? Much easier than finding good textbooks in a university library back in the day?

<comment><USER9> >Can't you get better education (though without the diploma) out of your smartphone than you could out of almost all universities in the sixties?

So you're saying that you'd rather _no_ degree and a few notches on your coursera belt than a degree from a prestigious university from the 1960s?

Are you nuts?

</comment></comment></comment></comment><comment><USER3> Even Pepsi had a jingle based on the nickel price for a 6oz bottle of Coca- Cola:

 _Pepsi-Cola hits the spot, 12 full ounces, that's a lot, Twice as much for a nickel too, Pepsi-Cola is the Drink for you!_

</comment><comment><USER11> Awesome story. I wonder if the same kind of things have happened for other brands. Coke was also pretty clever advertising 5 cents a bottle to lock the price, brilliant plan to neutralize a bad move in the past.

</comment><comment><USER12> > _At one point, the head of Coca-Cola asked President Eisenhower for help. > (They were hunting buddies.)_

That line tells you everything you need to know about how big business gets what it wants from government.

</comment><comment><USER13> I wonder... what would have happened if they fixed the price at 1c, forcing the bottlers out of business, then renegotiated the contract i.e. void the contract and we'll stop advertising it as 1c. The fountain stuff could have kept Coke in business then it is a war of attrition?

<comment><USER14> Coke couldn't fix the puce, Coke advertised it. People were free to sell it as they pleased. I imagine if Coke advertised the product at 1c stores would disregard the advertising and it would be a pointless waste of money from Coke in that they would lose all control as no-one would now expect to pay the advertised price.

<comment><USER15> They are kind of fixing the price now. I see small cans of coke (250 ml) with a large logo stating: "Maximum price $2." [1]

I'm guessing you could legally sell these cans for whatever you want, but consumers would probably not like to pay more for something that has its "maximum" price stated in the design of the can.

[1] [http://ausfoodnews.com.au/2014/08/11/coca-cola-launches- smal...](http://ausfoodnews.com.au/2014/08/11/coca-cola-launches-small-250ml- can-range.html)

<comment><USER16> Arizona Iced Tea (used to?) have a prominent $0.99 price on the label and I occasionally saw it for sale at gas stations for substantially above that price, on a percentage basis, e.g. $1.69.

</comment></comment></comment></comment><comment><USER17> Imagine how expensive coke would be without the US corn subsidy.

<comment><USER18> In that case we'd probably just import _real_ sugar. Agricultural handouts lead to more agricultural handouts.

<comment><USER19> And less dead poor people! But we don't care about those. Your hipster sugar is more important.

<comment><USER18> I support giving poor people any amount of money (or food, I guess?) directly. I don't support messing up the commodities market (and numerous other things as a result) for the alleged purpose of feeding them HFCS.

Did you infer "hipster" from the _italics_?</comment></comment></comment></comment>


HP Releases a HOT Laptop? Yessir Touch screen and flip - <AUTHOR> http://venturebeat.com/2008/11/18/watch-out-apple-hp-has-discovered-multi-touch-technology-for-its-notebook-pcs/ <comment><USER2> I actually own the tx1 version of this laptop. If the battery life is anything like the first version (2 hours tops), we'll see a continuation of what's happening to the iPhone in terms of battery life. Not that that will stop anyone from buying it (which the manufacturers well know).

EDIT: Forgot to mention. If most of the hardware is shared as well, this laptop is not fun to get working with Linux. Doable, but not fun.

</comment><comment><USER3> "Hot" laptop? Seems like a big ol' clunker to me.

But I'm probably spoiled by my new-generation MacBook Air with 128GB SSD--a real joy to use--no moving parts (well, OK, a fan ;-).

<comment><USER4> Next time you're in a meeting and need to draw a quick diagram, I suggest you race the guy below with the TX2. Tablets are seriously useful.

</comment></comment><comment><USER5> Just a rehashed (hopefully) press release. Disgusting.</comment>


A Day's Shopping Delivered by Airplane (1919) - <AUTHOR> http://books.google.com/books?id=ShlbAAAAYAAJ&pg=RA2-PA69#v=onepage&q&f=false Amazon Prime 30 minute. 100 years ago <comment><AUTHOR> amazon prime 30 min. 100 years ago!

*as long as you live near a golf course</comment>


Autodesk to Acquire PlanGrid (YC W12) to Accelerate Construction Productivity - <AUTHOR> https://adsknews.autodesk.com/pressrelease/autodesk-to-acquire-plangrid <comment><USER2> This is a big deal: this is by far the biggest acquisition of a YC startup with a female founder/CEO.

If you want to get an idea of how formidable Tracy Young is, watch her talk at the 2015 Female Founders Conference: [https://www.youtube.com/watch?v=-pKR212H5vQ](https://www.youtube.com/watch?v=-pKR212H5vQ)

<comment><USER3> > This is a big deal: this is by far the biggest acquisition of a YC startup > with a female founder/CEO.

I feel I may be ignorant, but doesn't drawing attention to her gender like this only work to diminish her accomplishments? I feel as though she did an amazing job, and siloing it into "best of..." as opposed to letting it stand on its own seems only to lessen the significance of her work.

Maybe I am naive and do not appreciate the difficulties of being a woman in tech, or perhaps I am too idealistic to think that we should not acknowledge the tribulations of achieving this as a female...but to me it seems to cheapen it rather than strengthen it. It's drawing attention to her gender rather than the accomplishment itself.

I am aware of who I am replying to, and I truly am not trying to sling mud here and I fear I may derail this comment thread when it really should just be a celebration of what Tracy Young has done, but then again if I never ask I'll never learn.

<comment><USER4> It would be awesome if we lived in a world where VCs, investors, and the tech industry in general just invested in people who deserve it. But we're so far from that world right now (just google vc investment in women-founded cos).

I think what JL is bringing up here is important because there is no room for naysayers with this exit. It's a monumental achievement, (for anyone!) but particularly a big F YOU to all the rampant misogny and boys-club culture that persists in tech among investors.

I don't speak for women, but I will say as a mostly-white dude, I have never thought "are there even CEOs or founders that look like me?" whereas I have, through the years, heard that many many times from women and POC.

What Tracy and her team have done is really fantastic. The fact that she's a woman is important only in that it begins the process of shutting up the old boys club, and (hopefully) a sign of things to come for those people who haven't traditionally been given the benefit of the doubt.

<comment><USER5> It's more than just shutting up the boy's club, and you alluded to it. I think it is important to shed light on the fact that she is a female founder because there are lots of young girls out there that need to see that someone like them, at least in one respect, can achieve something like this.

<comment><USER6> Young girls who need encouragement aren't already reading HN's comment section.

</comment></comment></comment></comment></comment><comment><USER7> I had the pleasure of being employee #38. I wrote the visual diff sheet compare feature, among others. I left about two years ago when the company had grown to 200 people.

Tracy, Ralph, and Ryan are authentic people. They really cared for everyone who worked there. (I can remember Ryan pestering me to take more vacation time).

Their success is well-deserved. I've spoken personally to customers who didn't even have a computer or smart phone - the first piece of modern technology they used was an iPad for PlanGrid.

This acquisition is a testament to the moat PlanGrid built in the field. Competitors tried their hardest to sell to the CxOs/head office, only to find out no one in the field wanted to use it. (There are parallels to iPhone in the enterprise space.)

Know your customers and build something they want to buy. Always good advice :)

Anyway congrats to the whole team!

<comment><USER8> How much does employee #38 make from his/her vested equity these days? I understand this is a very nosy question, but nonetheless having one more datapoint on the financial outcome from an early employee in a company that exited at ~$1B would be valuable. It truly couldn't get better than that (assuming the funds were raised at ok-ish terms), so I assume your number must be in the multiple 7 figures at least!

<comment> strtup-lotto Using a throwaway for obv. reasons. I'm employee lower thirties in a company that recently went public with a similar valuation. Unlike gp, I am still with this company, and really like it there.

Ignoring taxes, vested comes in at about 1 mill. I'll pay about half that in taxes. I have a few hundred k in unvested from subsequent awards.

I've hit the start up lotto, but I will not likely pocket 7 figures from equity for a long while, assuming continual equity awards. Well, if the stock does really well, I could pocket 1M, but it needs to go up quite a bit. Honestly, I would likely have made more over these many years in aggregate at a FAANG. But I've enjoyed myself and still look forward to work every day.

I'm blessed and lucky. But the startup lotto is not as good as you might think. Never count equity in a start up. Go for the salary.

<comment><USER9> Why half in taxes? Isn't this a capital gain? So 15-25% fed cap gain plus about 10% California income (if even applicable)

<comment><USER10> Alternative Minimum Tax

There's a good summary here: [https://en.wikipedia.org/wiki/Alternative_minimum_tax#Stock_...](https://en.wikipedia.org/wiki/Alternative_minimum_tax#Stock_options)

Basically, if you are given stock options with a strike price of $small, and then the company has a liquidity event and you exercise your options when the shares are at $large, your AMT taxable income increases by $(large - small), and you'll owe taxes on it for the current year (at AMT rates), regardless of whether you sold (or were able to sell) any shares. This is in addition to the short or long term capital gains that you'll eventually owe after you actually sell shares.

Apparently some people went bankrupt after the first dot-com bust because they owed absurd amounts of money in taxes but weren't able to sell any of their shares (e.g. due to employee lockup) until after their company's stock tanked.

If this happens and you _are_ able to afford the taxes, there's a mechanism to carry your losses forward and get AMT credits in future years, but the rules are hilariously complicated, and you either won't get credit for anywhere near what you paid initially, or you'll end up getting a tiny tiny fraction back for the next hundred years.

It kind of sucks. There's been talk of fixing this for a long time, but I don't think it's ever gotten anywhere.

*I'm not an accountant; do your own taxes.

<comment><USER8> Keep in mind you pay the AMT, so you need to have liquidity, but you will get those extra taxes paid back eventually, via AMT credits.

Source: me, I have gone through it exactly and recouped ~100k of AMT I paid, in about 4 years.

</comment></comment></comment></comment></comment></comment><comment><USER11> From an iPad App that made it easier to read blueprints to $875M. Amazing.

I had the fortune of listening to Tracy Young while at YC and the story of the company and her other founder was inspiring. I wonder if this is the shape of what will happen with other companies like Remix (former TransitMix).

</comment><comment><USER12> Good luck to PlanGrid. Eventually the corporate bureaucracy causes enough frustration to make the best people want to leave after the handcuffs have expired. I hope Autodesk has learned lessons from its prior acquisitions and can integrate them effectively.

I remember an anecdote from the current CEO of Autodesk. A few years ago, while having dinner with his wife at a San Francisco restaurant, he was seated next to a group of PlanGrid employees who proceeded to talk about their strategy. At the time, he said he was unimpressed with PlanGrid. Times have changed!

And be careful where you have your public conversations.

<comment><USER13> > I hope Autodesk has learned lessons from its prior acquisitions and can > integrate them effectively.

They haven't.

</comment></comment><comment><USER14> They've done a great job with PlanGrid.

I wonder what role Carol Bartz played in the deal (she's been on the board for 2.5 years and was Autodesk's CEO for 14 years).

</comment><comment><USER15> Congrats Plangrid. I was your neighbor back in 2014. I remember when you guys needed to expand your office and you were looking to start using some of the space we were subletting all the way back when.

Ironically, 2 years after that I got in to YC and now run our company from Japan. Time flies!

</comment><comment><USER16> Ah crap, I had an offer from them a few years back with good equity comp, guess I should've taken it haha...

They seemed like a really great company with mature management.

<comment><USER13> If it's any consolation I got headhunted by PlanGrid earlier this year. I knew of them in a professional context and was ready to sign on the dotted line after the recruiter's opening salvo. Turns out the hiring manager and recruiter were completely disorganized and seemed more interested in playing games than actually hiring. PlanGrid basically snatched defeat from the jaws of victory.

Reading this news blurb resulted in a bit of mixed emotions for me. Earlier this year, prior to my run-in with PlanGrid, I walked away from a decent chunk of unvested stock options in a rather well known publicly traded company. I suppose they deserve each other.

<comment> coastal-fiesta Curious about the details here. What games were the recruiters playing?

<comment><USER13> The recruiter rescheduled the phone screen the day of, went radio silent for the rest of the week — not even an OOO autoresponse (Burning Man was that weekend, go figure). When I got a response the following week the recruiter was unwilling to go into any significant details including some sort of expected salary range.

At best the impression I was left with is one where Plangrid is a company where communication is wholly unimportant and not valued. It didn't seem worth my time to pursue them.

</comment></comment></comment></comment><comment><USER17> Wow this definitely raise the stakes in the construction software market. Autodesk is going all-in and poised to become the incumbent in construction software. They are seeing what many other companies are failing to see, but there are many other formidable platforms pushing hard too, including Procore, all the Oracle offering which includes the recent acquisitions of Aconex and Textura and many niche players.

<comment><USER7> The difference is if the Superintendent doesn't want to use the software it doesn't matter. Construction businesses live and die by the super, something these other players never seemed to understand.

The people working in the field love PlanGrid. More than one company has been forced to abandon a competitor because the field crew refused to use anything else.

Know your customers. Your _real_ customers. Build something they want to buy. When big players enter your territory be a honey badger :)

</comment></comment><comment><USER18> I used publicly available data on the people behind PlanGrid as a test for my project (data's probably out of date by now). Still, if anyone wants a quick overview of the some of the people behind PlanGrid, here you go:

[https://theymadethat.com/organizations/so3/plangrid](https://theymadethat.com/organizations/so3/plangrid)

</comment><comment><USER19> Big congrats to Tracy, Ralph, and the whole team!

</comment><comment><USER20> Seems like a better fit than Socialcam

</comment><comment><USER21> Good luck to the current customers, I guess the documentation and UI will become a nightmare while the price goes up.

</comment><comment><USER22> Congrats! PlanGrid is a terrific concept.

</comment><comment><USER23> Congrats to them, but personally not surprised. Buying literally everything construction related is Autodesk's schtick.

Some parts will stay great, some parts will stuff in half-baked FBX format support to pretend their independently developed products all interoperate.

</comment><comment><USER24> So it's iOS (Swift or Obj-C), Android (Java) and Windows (Java or C++), but I see python in the eng team. Can you do all three with python alone?

</comment><comment><USER25> Congrats Tracy! PlanGrid is a great company lead by a fantastic and hardworking CEO. Very excited to see their success.

</comment><comment><USER26> Exciting news. Huge fan of Autodesk and YC. Congratulations to PlanGrid!

</comment><comment><USER27> Awesome, congrats - amazing seeing this hard work pay off!

</comment><comment><USER28> were the financial terms of the acquisition disclosed?

<comment><USER29> "Autodesk, Inc. (NASDAQ: ADSK) has signed a definitive agreement to acquire PlanGrid, a leading provider of construction productivity software, for $875 million net of cash." [https://adsknews.autodesk.com/pressrelease/autodesk-to- acqui...](https://adsknews.autodesk.com/pressrelease/autodesk-to-acquire- plangrid)

<comment><USER30> With a per-share price ranging from $0 to $250.

<comment><USER31> What does it mean that some of their shares are valued at $0? Is this typical? I'm not too familiar with the details of acquisition accounting

</comment></comment></comment></comment><comment><USER32> Congrats Tracy!

</comment><comment><USER33> Congrats! A fantastic app, and fantastic team.</comment>