That is, from all I've heard, Mailchimp is a great company to work at, and the founders definitely had the "scrappyness" that let them become so successful without VC funding, and their customers really like them too.
Intuit, on the other hand, is basically the poster child for "regulatory capture" company. Also, since employees don't have equity (though I'm assuming they'll get fat bonuses for this), it's bound to cause some level of strife in the company.
> Intuit offers a free online service called TurboTax Free File as well as a similarly named service called TurboTax Free Edition which is not free for most users
> Intuit, the maker of TurboTax, has lobbied extensively against the Internal Revenue Service (IRS) creating its own online system of tax filing
> [I]nvestigations by ProPublica found that Intuit deliberately steered taxpayers from the free TurboTax Free File to the paid TurboTax Free Edition using tactics including search engine delisting and a deceptive discount targeted to members of the military.
Soon we will be getting the automatic calculation, for a fee, and taken from source. It's already starting to happen, medium and other digital economies are doing that. Forced to collect from source , and they pass on the cost of the system to tax payers.
If we don't attack the idea of tax, I think it will never end.
When you try to defect from paying tax, you may have in your mind the people not killed with your money, but others in society will (correctly) recognize the people not saved with your money and wish to punish you. This is basic tit-for-tat group behavior. Tit-for-tat makes it possible to solve the prisoner's dilemma cooperatively.
I don't think the downvotes should necessarily be interpreted as punishment, though, it could also be because people think the above rationale is so obvious that your post has negative value (little information, noisy).
I'm sorry if the questioning of taxes is noisy information, and I glad you took the time to answer with arguments.
I agree there is a group behavior at play there. You mention education, my own education was nearly in full paid by tax payers. I only had to sustain myself during all these education years, and I spent the rest of my life re educating myself, which came at lower cost but greater effort than getting educated by non government funded bodies.
Fire and health are different issues, which I'm sure would also be handled better than with public funds taken by force.
Informational maybe, but the taxing system we have today wasn't what founded America and made the great country it had become. We can look at specific issues such as turbofax and questionable lobbies, but these are plugged onto a taxing dogma that would need to be discussed more than the intricacies of its implementation.
I appreciate your explained view, I can only agree with what you've taken the time to point out.
But don't make the mistake of thinking the American experience is the universal one - one of the reasons these anti-tax arguments fall on deaf ears internationally is that a lot of countries actually do use tax to look after their citizens to some degree. One of the reasons Libertarianism never caught on globally is because there's little appetite for dismantling government institutions that are, for the most part, working.
The problem isn't tax, it's the behaviour and culture of the government.
France: over 20% vat, about 50% on income for median pay.
Uk: 20% vat, over 40% of median pay.
Malaysia: 10% gst
Vietnam : 10% gst, over 33% income
Those aren't the only taxes, just the most obvious ones. Western and Asian countries, from very developed, to somewhat developed, and under developed. Please show me where those taxes have benefited the people.
Any tax critic in here is always downvoted. I only ever saw 2 comments as a response. Why is it most dont see that taxes are just a way to fund barely checked agencies causing either havoc, or failing at their task?
In the more socialist capitalist countries, taxation is an effective way to mitigate the effects of the parasitic merchant class.
Things usually only get difficult when you are self-employed or have difficult deductions.
Plus you always need extra forms for savings etc.
No, TurboTax seems like a clear case of lobbying where millions are inconvenience just so that a handful of executive keep an underserved revenue.
Once you have your W2s (basically an annual pay stub) you can click through any of the free tax services in under an hour. If you have mortgage interest or student loan interest add however long it takes you to get those forms (they usually mail you a form telling you what you need to know for your taxes that year) or dig up the PDF version on your online account with the creditor. I just magnet the forms to the fridge as they show up at the beginning of the year and file once I have them all.
Or are you referring to some other provisions?
The above case would cover 99% of people.
Instead you have to do a whole bunch of song and dance using some third party and hopefully the numbers match.
Basically if you are paid money and put that money in the bank, you pay yearly income taxes on the income the money earns.
If you are instead given a bunch of stock shares, you don't pay taxes on the stock when the price goes up, only when it's sold, which leads to all sorts of possible ways to side step paying taxes, or put them off and then paying them in a lump sum, or paying interest on loans secured with the stock, where the loan isn't considered income for tax purposes, etc.
I had to laugh a little at this, its like saying, "CPUs, isn't that just a bunch of switches?" Yes, you are correct. But it's been nearly a century of wealthy people hiring lawmakers to create hundreds of thousands of esoteric deductions that are only accessible to people who own business that they can fiddle with, aka rich folks.
I surmised that complexities introduced by that group are irrelevant in calculating standard tax return costs, as no one requires a low income earner to deal with vagaries of obscure deductions. It’s mainly Intuit who should be blamed for beefing up those costs.
You seem to agree with that statement in your subsequent comment, so I’m no longer sure about the insight you are trying to drive through.
Is it just a trivial “taxes are complex, man” thesis?
I did nothing of the sort. You inferred your own narrative and are now blaming me. Know what that is called?
"Design" implies intent requiring coordination and effort on the part of a group of people strategically situated to deliver a result. "To benefit the wealthy" identifies a clear and well-defined objective as the focus of such activities.
Who came up with the original idea to "design" a tax code "to benefit the wealthy"?
Was it more than one person? Names please.
What were the design principles? No hand-wavy stuff, looking for specific objectives, etc.
Over what period of time?
Can you provide a year-by-year (or close enough) summary of the progression of this design and how it met your stated purpose?
How? By this I mean: How was such a coordinated effort organized and run over, presumably, decades and through various generations of politicians participating in the process.
And, for all of the above, documentation please.
I remain puzzled about whether people just stay stuff like this or actually believe it. You don't have to make too much of an effort in digging into these ideas to fully identify them as nonsensical. Yet people believe this stuff without having one shred of proof, evidence, history or documentation. Not very different from folks who believe the COVID vaccine injects you with tiny little robots the government can use to control you (one of the things people say and I don't really know how to react other than to shrug and wish them well).
I'll add my own observation to this: No, the US tax code is not designed to benefit the wealthy. It is based on incentivizing behavior through tax breaks/credits.
For individuals the simplest example is the ability to deduct your mortgage interest from your income. Another example is the 30% solar system tax credit (I think it's down to 26% now).
At the business level you get such things as Section 179 tax credits, which allow you to reduce your tax burden by as much as 100% of the purchase value of qualifying business property. For example, when we purchased our last Haas CNC vertical machining center and all the tooling and software required to design, program and run it, we got a Section 179 tax credit of nearly $250K.
The theory behind these incentives is to promote behaviors. We bought equipment. The tax code treats this as a desirable behavior because it creates jobs. The options were: Send the IRS a check for $250K or send them $0 and use that money to buy additional machining capabilities. This is what is called a "no brainer". Everyone wins.
This is why businesses can seem to pay zero taxes. Well, if they invest enough money into things the tax code wants them to put money into, they get to pay less taxes. Yet, in certain circles, this is treated with blinding ignorance; the headlines often reading company "x paid zero taxes". Nobody bothers to understand any of it.
For the record, I don't like the idea of using the tax code to control behavior. I think this is (was) a terrible idea. It gives politicians tools they should not be able to access. Taxation should be as simple as possible, to a limit. The problems start once you try to simplify it. For example, "You must pay 10% of your income". OK, someone sets up an LLC and pay themselves very little. They pay very little in taxes. This is a very simplistic example to say that one of the reasons for which the tax code quickly gets convoluted is because, in software developer terms, it has to be a massive chain of "if-else if" statements in order to address all permutations and limit cheating to the extent possible. Once you start down that path you end-up with never-ending complexity because we don't have a way to control it.
Perhaps a simpler approach would have no income tax at all for anyone (state of federal). All the money needed to run governments at various levels comes from taxing transactions. There are hundreds, if not thousands, of options here. For example, tax every electronic funds transfer; tax every single imported good; national VAT, etc. Not a simple idea. There are no simple options. Maybe that's my point. It wasn't designed to benefit the rich, it turned into a monster that requires more and more "if else-if" statements to be added every year because we find more and more conditions that require evaluation. It's crazy. Not sure what they right answer might be. Not sure there is a right answer at all. And, no, what they do in (country) "m" has no bearing whatsoever on what is done or should be done in any other country. Tax codes evolve almost like natural selection, they respond to evolutionary pressure and each makes sense (to the extent possible) within the nation it evolved from.
> It is based on incentivizing behavior through tax breaks/credits.
Who do you think has time and money to spend lobbying for new tax breaks to their benefit? Hint: it's not the poor
Churches and charities don't lobby politically for poor people, they take them on as a righteous burden to bear. Some churches and charities are even used as tax breaks for rich people.
Unions used to, to some degree. They've mostly been neutered and have very limited political capital.
I belong to a church, and the minister frequently represents vulnerable people in the local community to politicians. He’s also sponsored by the church to attend events campaigning on behalf of low-paid people in the UK. And we contribute to a fund which publishes articles and runs events to raise awareness about homelessness.
If that doesn’t count as lobbying for people then I don’t know what does. I do wish it were more effective.
Lots of churches say nice things while extracting maximum revenue from their congregation. Can you point to any actual political changes that have occurred as a result, or is it just some nice words?
Here it goes:
The poor do not elevate the poor out of poverty.
If you want to chip away at poverty you have to create incentives for entrepreneurs, investors, business people and, yes, the rich, to engage in favorable economic activity. One of the simplest ways to do this is through the tax code. As much as I hate using taxation to promote behavior, that’s the best way we know so far.
We have lifted more people out of poverty through these methods than any other way.
Be careful what you wish for, because government has never, in the history of humanity, elevated the poor. Quite to the contrary.
The disconnect in what you are implying here is astounding.
China elevated massive numbers of people out of poverty precisely because they turned violently capitalistic and entrepreneurial when it comes to business, far more so than likely any other society on the planet. The main decision their government made was to get the heck out of the way.
I can understand that people who might not do business directly with Chinese companies likely lack an understanding of what things look like. Well, I do, have been for decades. I am sad to say doing business with Chinese companies can be massively easier than with US companies. The entrepreneurial spirit and drive in China is incredibly strong and refreshing to watch. You actually want to do business with them because they want to get things done.
If you think government has the power to raise 800 million people out of poverty in complete isolation of a massive step change in business activity you don't have even the most fundamental understanding of economics.
This is one of the most perplexing things I continue to experience on HN. This is a Y-combinator related forum. You'd think people voicing opinions here would have a modicum of business and economics chops. You'd think that, at the very least, they would devote a bit of time to doing simple math before forming opinions. And yet, what you see here time and time again are comments such as yours, which reveal a deep disconnect between even the most basic understanding of how the world operates and the importance of business.
That said, government intervention is not sufficient. It must come with structural improvements, and not just be free handouts. And too much help can also be counter-productive by crowding out the very thing it’s trying to nurture.
Not quite. As is usually the case with such programs, people tend to form opinions based on what is easily and externally visible. Reality isn't every that simple. The truth of the matter is that the not-easily-visible aspects of this plan harmed the poor and middle class for decades. Yes, lots of people were busy, but, no, it didn't elevate millions out of poverty and into the middle class.
This article touches the surface of some of the issues:
Reality is not described by a single variable, it is a complex multivariate problem. A program that promises more jobs is never without consequences. The details are always in the unseen variables that don't make it into political speeches or headlines. Nobody talks about them, and yet, that's where reality lies.
I suspect most libertarians and those who lean to the right would say "no, you saved one person but weakened the system as a whole, and thus you have created more hungry people". Whereas socialists and those who lean to the left would say "yes, because saving a human life when you can is always a good thing".
As I see it, the biggest problem in modern society is that we've stopped respecting the right for everybody to have their own view on issues like that, and instead come to believe that "the other" is so wrong that they must be corrected at all costs. I believe the Cato Institute is just as guilty of that as AOC's horde of Twitter followers.
What a bizarre, paternalistic take. This is the same sort of narcissistic logic that led to Reagan's golden showers^W^W trickle-down economics.
I mean, I agree about entrepeneurs. Historically, the thing that has lifted communities out of poverty has been entrepeneurs in that community that contribute back to it. In other words, the poor very much elevate the poor out of poverty.
The rest of your comment (e.g. "and, yes, the rich") is just weird apologetics for people that don't need it, and can pay for it anyways, so why are you wasting your time doing it for free?
Really? I can understand if the truth might be offensive to you...yet that doesn't mean it isn't true or that the statement is mean-spirited or paternalistic.
Try to start a company without money and see how well it goes. I mean, you are reading this an a forum run by Y Combinator. Easy questions: In the history of humanity, how many sizeable companies were financed and launched by the poor? I think the number is pretty close to zero. In the context of the history of business, less than a rounding error.
> Historically, the thing that has lifted communities out of poverty has been entrepeneurs in that community that contribute back to it.
This is a fantasy. The best you are going to get in this scenario are a smattering of small businesses that will produce low and mid skill jobs and low wages. While it does happen, the percentage of these businesses that make it big is but a rounding error. There are examples, like the pizza joint of fast food restaurant that went national. Think places like Dominos and McDonalds. Rare, very rare, and we might even argue about who they actually elevated and where. Most local businesses remain small mom-and-pop entities incapable of elevating communities, as you put it, out of poverty. There are entire towns we can use as examples of how what you say simply does not work.
> In other words, the poor very much elevate the poor out of poverty.
No. Save very rare corner cases, the only way you elevate large numbers of people out of poverty is through massive external investments. This means people or companies with money come into a town and make very large investments that results in large numbers of jobs as well as opportunities to ascend through the ranks.
Please post a link to a business school study that explains how a 100% poor community without external investment elevated itself into the middle class. Since you say that this is "historically" the case, there ought to be thousands of such studies for you to pull from, hundreds, certainly. All I want is one.
I got a tax benefit semi-recently by buying an electric car, about $7500. It was the largest I've ever gotten. Compare that to one small crumb of Trump's tax deductions that was covered by the New York Times. A $70k tax deduction for hair styling.
It's just not the same. Wealth gives you an outsized influence on politics, which lets you accumulate more wealth, at a faster rate than those poorer than you.
Every celebrity hires armies of people to look after them. They sell their image and likeness. Everything about their public appearance is part of their business. In this context, paying $70K for a hair stylist is not different from paying $70K for a personal trainer, beautician, tanning service, nail service, massage, etc. Their business has expenses and parameters not found in other businesses.
I pay a service to come clean our office, CNC and electronics manufacturing shop. This becomes a deduction. Trump, Bill Maher or Dua Lipa don't have that deduction. They have stuff like hair and clothing.
I have a friend who is a real estate agent. Part of his tax deduction profile includes such things as washing and detailing his car as well as some allocation for clothing. My wife is a doctor, she gets to deduct work clothing, safety equipment, seminars and other business expenses.
Yes, the tax code is a rotten mess. I agree with this 100%. I would much rather have a nominal flat tax and no deductions of any kind for anyone. Our current tax code wasn't the result of a conspiracy to benefit the rich. It's the result of decades of pushing and pulling by a bunch of different groups, each with a different objective.
Where the little guy gets screwed is that the individual has very few deductions, while businesses have tons. That's the bottom line. This has nothing to do with the rich. You can go form an LLC today --HIGHLY RECOMMENDED!-- and access deductions you could not as an individual. None of these deductions have "rich person" written on them. All you need is an LLC, which isn't that expensive or difficult to create. And all you need to be a business is to sell a few items per year on eBay (or whatever).
Simple example: I can deduct business mileage use of a vehicle when going to see clients. An individual can't deduct miles driven to and from work. I think this is wrong. Yet, again, it has nothing to do with benefiting the rich, you don't have to be rich to have access to these deductions, you just have to be on the side of the tax code that enables access to them. If you are puzzled by the possibilities, talk to a tax accountant and ask them if you would benefit from forming an LLC and, if you did, how you should use it.
It doesn't require any conspiracy, only self interest. Even then, the wealthy do have yearly economic summits where tax policy is discussed. Why would you assume it's about how to raise their own taxes instead of the opposite?
> Can you provide a year-by-year (or close enough) summary of the progression of this design and how it met your stated purpose?
There's a fairly good summary at Brookings.
> I'll add my own observation to this: No, the US tax code is not designed to benefit the wealthy. It is based on incentivizing behavior through tax breaks/credits.
Yes it is. Even narrowing the focus to their personal income tax after it's loopholed through corporate tax shelters, the extremely wealthy pay have a lower tax rate than workers earning $45k. Workers who make $140k pay as much into social security as the richest people on earth who also have US citizenship. What's the benefit to society having less money for shared infrastructure, and what's the benefit of rewarding people who find a way to avoid paying into that?
> And, no, what they do in (country) "m" has no bearing whatsoever on what is done or should be done in any other country
Eliminating the chance to learn from other nation's policy mistakes and successes is a terrible idea.
Are you the only one identifying some of the sarcasm in my post? Good.
The idea of the tax code being "designed to benefit the rich" is beyond ridiculous. This is as ridiculous as me asking a simplistic question about the origins of any part of of the rotten stinking mess this tax code has become.
I'd much rather have a flat tax system with no deductions at all for anyone.
I would also propose that taxing businesses is wrong. Why? Because you tax the employees of the business already. Taxing the business stinks of double taxation and removes capital that could be used for growth and to create more jobs over time.
Think of it this way. Let's say ten people as a group product furniture and sell it. They make money and pay themselves salaries. They also pay taxes. However, let's pretend they can do this without forming a legal entity we call a business. The just do the work, pool the money, pay themselves salaries, pay expenses, pay taxes and life goes on.
Now we come along and say: Wait a minute! You are working together to make tables. Because of that, we are going to take another 30% in taxes out of all of you. It isn't enough that each of you pay 30% in taxes, we want 30% from what remains.
Sounds silly, doesn't it? Well, it is. At least I think so. Could be wrong.
Me: How much do I owe?
Gov’t: You have to figure that out.
Me: I just pay what I want?
Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too.
Me: What if I get it wrong?
Gov’t: You go to prison"
Apart from that, IRS workers are just like workers at any other job where throughput is a primary metric: They just want to close cases quickly with a resolution. That may mean penalties and interest rate if you screwed up or were actually trying to avoid what you owe. They're not taking you to court and prosecuting for $100k if you're working with them to fix things though. In the end, they don't much care if the settlement takes 10 years to pay off $200/month at a time as long as they can close the case as resolved.
Source: 1) I have a friend who was an IRS lawyer and then a tax attorney. 2) I know someone who went bankrupt and came to long term multi-year agreement to pay $50/month.
The "solution" they deem as legal is to create a whole new bussiness dedicated to do X, or refuse to do it. And to my eyes X and Y are related (like doing a security audit to a web and building a web), but IRS don't think so.
It sounds complicated, but paying about $100 for the TurboTax edition that handles small businesses will make it fairly easy. Yep, they've got strong regulatory capture in this space, but business income isn't always straight forward so I would consider ~$100 well worth it. Though I'm sure that some dead-simple home businesses really wouldn't need it.
Then I just sign a form and return it instead of slogging through the bullshit that Intuit et al has lobbied for.
Edit: I'm being downvoted for THIS particular comment? lol is intuit monitoring this thread or something?
Compare to, for example, Twitter and Facebook. All they did was amp up grievances that already existed, some centuries old. No one can agree on how much fault they deserve for the consequences even if it's clear they played a huge role in the current state of things.
In the next decade there will be market capture for one or two companies of the entire sub 50 employee retail business market segment. Everything from food trucks to floral shops will have one monthly subscription that covers pos system, employee scheduling/payroll, invoicing, tax, and much more in a platform of tools that resembles AWS or Azure. This is clearly Quickbooks expanding into fulfilling marketing needs for their clients.
Keep in mind it’s competitive in two ways. If businesses running Square have a competitive advantage because of tooling compared to businesses running Quickbooks than Quickbooks will suffer more churn and lose in the long run to Square.
> Internal presentations lay out company tactics for fighting “encroachment,” Intuit’s catchall term for any government initiative to make filing taxes easier — such as creating a free government filing system or pre-filling people’s returns with payroll or other data the IRS already has. “For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. The company’s 2014-15 plan included manufacturing “3rd-party grass roots” support. “Buy ads for op-eds/editorials/stories in African American and Latino media,” one internal PowerPoint slide states [ https://www.documentcloud.org/documents/6483061-Intuit-Turbo... ]... Based on publicly available data and statements by Intuit executives, ProPublica estimates that roughly 15 million paying TurboTax customers could have filed for free if they found Free File. That represents more than $1.5 billion in estimated revenue, or more than half the total that TurboTax generates. Those affected include retirees, students, people on disability and minimum-wage workers.
Note as well that Intuit recently acquired Credit Karma for $8.1 billion - a company whose business model relies on granularly predicting what financial products will be most profitable when offered to consumers.
At the end of the day, it's often impossible to avoid using Intuit's B2B solutions like QuickBooks - as others have noted, they're an industry standard. But in the packed market of email service providers, is this the company who will set the most robust ethical boundaries on how to use a treasure trove of highly-actionable PII and purchasing data? Do we want to contribute to feeding our customers' data to such a company? That's a choice that those of us choosing ESP solutions should make with eyes wide open.
It is literally impossible to start up your own email server now and have it accepted by major email hosts like microsoft and gmail now without your emails ending up in spam or even worse, completely dropped.
People should be asking why email is so broken that companies like mailchimp exist and is being bought for billions.
I am 100% ignorant on the subject. If you have a moment can you provide the 30k foot view of what has changed to make this the case?
Only real way around this is to instead host your email server with them, aka Office365 or gWorkspace. This basically breaks the federated aspect of email and turns it into a siloed SaaS offering from two of the big cloud providers. AWS can also be used to send newsletters but doesn't really do consumer email hosting (they don't have a good client), and you're still tied to a SaaS cloud provider.
Does HN live in a bubble because of ycombinator where they think it's unusual for companies to be able to self start?
The 'unusual' part is more that a company this old and profitable has a traditional 'exit' vs. being run as a cashflow generator for the duration of the founders' lives.
Is there any more detail on that? I'm not sure why they wouldn't.
The only gripes I heard were not really gripes just an expression of the challenge of grappling with the legacy of TurboTax. The team seemed intent on finding new ways to manage the complexity and they seemed very open to new tech.
Everyone seemed happy to be working there. The few managers i interacted with seemed to really care about their teams. The most surprising thing I experienced was how grateful some were that they weren’t working at Hooli across the street in Mountain View. I didn’t understand this sentiment till I wandered over to Hooli’s campus. Everyone there seemed as depressed as the folks on a particular insurance campus in Lansing Michigan I visited. Not scientific, just sharing my lived exp.
Mailchimp has ~13MM users and 800k paying customers. In 2019 they had revenues of $700MM. In 2020 they had EBITDA of ~$300MM.
They are fully bootstrapped and have taken on zero outside funding.
This is not some great injustice or a company acting in any kind of morally questionable way. In fact, it would be more accurate to say that in the grand scheme of things (not just the tech bubble), offering equity to employees is the exception, not the norm.
If they would've been more generous with equity (even at the expense of base salaries), I think we would've been high-fiving each other when the sales team closed a huge deal instead of cursing them under our breath and plotting our escape.
Maybe they could have gotten some great employees by giving out more equity. Or maybe they tried and couldn't find them so they sold.
>Founded in 2001 and based in Atlanta with offices in Brooklyn, Oakland, Vancouver, London, and Santa Monica, Mailchimp has 1,200+ employees
Sending email must be much harder than I thought.
Add in all the usual ops, customer support, business to business client management for bigger accounts, marketing, and so on and its not hard to see how it can need quite a lot of people.
Selling to Intuit is not fine by me - and i consider it morally questionable in both senses of the term.
If they had gone public instead, Intuit could just as easily have bought up all the shares and reached the same end goal.
I'm not too sure what on earth "late stage capitalism" means but I do know that my little firm trundles on quite happily and works slightly better for the extra incentive that directly contributing equals directly earning. We have never insisted that shareholders need work extra hours or whatever. I kick people out of the office if they work too late. Work life balance is important.
Is offering or not offering equity something that can be considered within the realms of "morally questionable"?
A business is a business and a contract is a contract. When you take up employment within a business, you engage with a contract. If the contract offered is not one you like, you are not obliged to accept it. The last two sentences are rather polarised and I accept that the real world is rather more nuanced when you consider individual cases.
Can you really call a mutually agreed equity arrangement as "morally questionable"? You might as well describe working for a salary as morally questionable too. Anyway, whose morals are we considering and what standards do they espouse? Morals don't live in a vacuum nor do morals stay attached to a single concept. Your "morals" may well not be the same as mine!
We (my little company) are quite boring, rather small and won't ever feature in a how to take over the world, unless 10^-3 unicorn suddenly becomes exciting.
I wasn't criticizing people like you (although this thread does seem to have hit a nerve). I was critizing the assumption that you are morally culpable (or indeed praise worthy) for how you run your company.
You are able to be a good boss and that's great. In fact it's probably good business to be. But you could just as easily have been born the inheritor of a sweatshop garment factory in Bangladesh and unable to make a profit unless you employed children under appalling conditions.
The economic conditions dictate the possible relationships with employees. As profits decline (late stage capitalism) in different economic sectors the options narrow.
In the future your economic sector may become the target of a wave of consolidation. If a competitor starts buying up all the competition and adopting a more aggressive business model with lower prices you will be forced to adapt.
It's called Microsoft 8) Oh well, this MD rocks Arch Linux on his laptop and workstation. I put up with Exchange thanks to Evolution (and recently: Kmail.) I login via winbind-nss and leave a trail of Kerberos tickets wherever I go.
"I was critizing the assumption that you are morally culpable (or indeed praise worthy) for how you run your company."
Sorry, I read your comment differently.
If giving an employee 1% of equity improves acquisition valuation by 2%, then it was probably a good move, as the remaining shareholders got 1% more than they would have otherwise.
It gets less intuitive with multiple people: what to do if one founder owning a valuable small business adds a salesperson and a UI guru, each of whom adds 10x the valuation to the company?
The main problem with equity is that it is extremely difficult to value how much a person will increase a future valuation by (ignoring complications with voting rights etcetera).
An aside as an engineer founder, I have always thought of accepting stock instead of wages is more like gambling.
1. You are concentrating your risk instead of diversifying.
2. As a minority shareholder in a private company you have virtually zero choice over any critical decisions, and the other shareholders have financial incentives to screw you.
3. You may influence technical outcomes, but even there you often realistically have limited financial incentive to improve profits. Unless you are an early employee, the amount of work you need to do to increase valuation by 10% is probably actually not worth the extra effort you put in for the $ you might get out.
4. Most people grossly misprice equity - ordinary shares are worth much less than the preferential shares an investor gets. Even though you are investing the equivalent of cash, you don’t get preferential shares. This is misrepresented everywhere, and certainly a startup has no financial interest in telling you the truth.
5. It is a high risk investment. That is fine for a VC which can spread their risk over many investments to get the industry average. It is a bad bet individually because even if you could invest your time in 10 startups, your variation in profit is still high. (Assuming one in ten startups is successful, which I highly doubt). Even VC funds are OK with ‘high’ variance because LPs are usually looking for diversification (especially non-correlated diversification with the rest of their portfolio), and the VC partners still get their tidy 2% even if the fund tanks.
6. Engineers usually seem to believe that they can pick a winner to join. VCs with decades of experience fail all the time, so the majority of engineers are just fooling themselves (or more truthfully, being fooled).
Of course, if the startup ever goes public, you'll make out like a bandit on that amount of stock! But more likely, as you say, you'll be left with only the cash component.
If the two options were rationally considered equal that would mean the missing $50,000 NPV of the employee’s salary would be paid by future investors once they bought the shares. Either in an IPO or in this case by the acquiring company.
Options are also a method to retain and incentivize talent, but they’re certainly a form of funding.
* they do allow employees to buy options with a portion of their salary and included a 5% stock option a few years ago.
I hate this selective criticism; for goodness' sake, she was the CEO of reddit -- a company with ethical controversies every other week, but she attacks MailChimp? Give me a break.
At a point in time before Mailchimp was clearly a success (and thus equity would actually be worth something), most engineers would jump at a salary-over-equity compensation scheme because it's common knowledge (at least around here) that equity is a lottery ticket that usually doesn't pay off.
There is no substance to the objection. They aren't entitled to anything, they didn't negotiate anything, and they shouldn't get anything. Her argument is akin to saying that the Uber driver that dropped me off at the gas station is entitled to part of my lottery winnings because the ticket I bought happened to have the jackpot numbers.
The position is both logically inconsistent and severely asymmetrical—we are only talking about this because MailChimp did have a successful exit, not because they failed miserably (as literally hundreds of startups do on a yearly basis). Even as a staunch capitalist, I'll be the first to say there are plenty of problems with corporate tax law, offshore tax havens, money laundering, etc.
But this ain't one.
Anything else and you're a chump. Since there are a whole lot of employee #50, and #35, and #110s out there apparently many people really don't know what they are getting into.
From a strict compensation perspective, you are probably right, but even then, it is probably less stark than it was ten years ago, what with seed rounds and series A sizes being so massive that salaries are a bit more reasonable at this stage too.
As another commenter pointed out, there was obviously a fair agreement here: work for Mailchimp at X salary and no equity, or don't. Nobody was forced into anything, and if no equity was offered, then I'm sure the salaries had to be competitive in the market. Nobody would be stupid enough to work for them otherwise.
From reading the room I’d say Ellen Pao is typically seen as a minor villain around here. Definitely not a hero.
They have no reason to be unhappy and MailChimp doesn’t owe them anything other than the salary and profit sharing that was promised. Regardless of who the new owners of MailChimp are.
There are multiple other possible motivations for Ellen’s post other than criticism.
Ellen Pao sucks. Didn't she fire a Reddit employee who had cancer?
That is the thing, we are seeing an extreme negative view of basic capitalism, people tend to believe founders and capital have no value believing in a socialist utopia where by all the workers get an equal share of the "means of production"
and this is why i'm against unions in tech - the people like she will be the bosses.
If Ben and Dan split it 50/50, that's $6b each and they would each be looking at $1.2b in capital gains tax.
It's unusual seeing a company that sells goods and services for money be valued highly in silicon valley ;)
(12 billion purchase price / 800000 paying customers)
But can't fault them. Congrats to the entire mailchimp team! You all deserve all the rewards, especially for bootstrapping.
Hope everyone there made out like bandits, and may this give them the financial freedom to pursue new passions in their lives.
For those curious about the founding story, How I Built This did a podcast with Ben Chestnut (released July 12, 2021): https://www.npr.org/2021/07/09/1014699766/mailchimp-ben-ches...
Small tidbit: mailchimp was a major pivot into SaaS (before that was a phrase) from another already successful services business (building websites). The team realized scaling a software product was a better idea than selling their time.
From 2015 on the corporatization took over, the flat hierarchy was completely discarded in favor of multi-tier CwhateverO monster departments, team fragmentation and purposeful reassignments, and basically a 100% annual employee count growth mandate.
That's also around when the big raises and bonuses stopped, and everyone was assigned to a role and level which has a set salary value range etc.
For me 2018 was the end of my patience for it, but I think some are trapped believing in an older version of themselves.
As much as I appreciate equality goals (what role, level, value ranges are there for), and believe their benefits outweigh their costs, they function by lowering ceilings and lifting floors. The only way to earn outsize bonuses these days is to be directly tied to outsize earnings (e.g. commissions), and that's hard to do with engineers.
The engineers route to that kind of risk/reward dynamic is by founding / joining something early (that actually grants options) and trying to make it huge.
Our decision to "grow up" was more a decision to try addressing non-email markets, and hire so many people and buy so much real estate that profit then depended on that choice.
Now they have half the talented staff because of boneheaded management decisions, half the loyal customers because the team stopped being able to address their needs, etc. If that's "mature" to bankers or VC's then I'd call them over-mature.
Ignoring the shifting sands would’ve likely meant a more gradual decline, instead of an unpleasant growth, and would’ve almost certainly yielded less than the chosen path.
The talented people and half the customers would’ve likely bailed either way.
From what I heard from friends, it was a great place to work. But I guess most of that will change when the corporate overlords decend and start optimizing things.
Not in the scheme of things, especially with regard to comp. Plus, they had a shitty PHP stack that was a spaghetti web.
I desperately tried to convince my Atlanta Mailchimp friends to quit and join me at a pre-IPO company. No takers. After our IPO, I made a life changing amount. Enough to retire before 30. They got paltry "bonuses" every year.
Mailchimp had some weird cool aid that made people like working there despite there being plenty of better alternatives. I just wish I could have convinced my friends to leave.
A company can just be a great place to work. No cool aid necessary.
It would have been a solid choice.
But there’s a lot to be said for staying to work at a company you love and enjoy, especially if your compensation is already enough for a very comfortable life.
Imposter syndrome is a bitch, when there's always someone better than you out there, so there's probably a lot of Kool Aid in making people feel like they've made it, are part of the tech party, and are valued employees.
And working customer-facing is always a cooler cocktail party gig than being a master of the universe behind the curtain at Oz. For some.
Different folks optimize for different things. I doubt they'd turn down you buying the next round of drinks, and for some people... that's enough.
Mailchimp had run it's course. It was a marketing play, and e-mail marketing has become a commodity business. Atlanta is, at it's heart, a marketing town. But even there, that can only take a marketing company so far.
Mailchimp is also paying out $300M in bonuses https://twitter.com/Shubham/status/1437532055173226499
Oppose with what many said, delivery to gmail.com is easisest. Now, where it's land is another question. Their spam filtering also very quick to learn.
icloud and hotmail are the worst because no way to get unblocked. You just fill in the form and wait in the dark. If you got luckly enough, they work on your ticket and unblock the ip. And here is the thing, they outright reject connection so your email cannot event reach the spam inbox.
So when launch a new IP, you should check on https://ipcheck.proofpoint.com and https://sendersupport.olc.protection.outlook.com/snds/data.a...
Any host providers that are cheap are most liklely has their IP blocked by proofpoint or microsoft already.
My strategy was to use server on Hetzner, then try to buy float IP then I can attach to any server. I have to try like 40 before I was able to get a pair of IP that aren't blocked by proofpoint/outlook.
Then I tried to warm up and build reputation by having a bunch of inbox email each others like 100 email per day then up to 1000 email per day.
Even with that I got blocked by proofpoint for no reason time by time...
So it's hard but with right strategy you can still do it. Just take more time and plan to build up and keep good reputation of your IPs.
But if I can offer a suggestion, it sounds like you were blocked by proofpoint while actively trying to spoof legitimate traffic in order to avoid detection by proofpoint. That's hardly "no reason at all," despite your having the best of intentions.
Last I checked (which was a while ago), APNIC has enough IPs to give new applicants two /24s with justification which will get you started without spending a lot of time/money in the IP resale market. If you're in ARIN or the RIPE regions I think you need to go to the market (but also need to justify, so you're looking for a single /24 to start). I don't know of it's accurate, but blog posts and auction sites seem to show about $15,000 for a /24, which is kind of a lot, but doable. You'll also need to arrange some hosting somewhere that you can credibly BGP with at least two networks to justify having an AS... There are some providers that will tunnel you to an internet exchange point and services like Vultr that might help you get started without a lot of investment.
And you'll need to learn BGP on the job. But I think you can do a lot with a simple unix box, you may not need a giant cisco router these days.
When forwarding email, we are receiving email from unknow domains. If we rewrite the FROM headers then the DKIM will invalid, so service will have to rewrite the FROM and clear out DKIM.
This is a well-known SES issue and project has to work around https://github.com/arithmetric/aws-lambda-ses-forwarder
For example, if an email sent by Jane Example <firstname.lastname@example.org> to email@example.com is processed by this script, the From and Reply-To headers will be set to:
From: Jane Example at firstname.lastname@example.org <email@example.com>
To override this behavior, set a verified fromEmail address (e.g., firstname.lastname@example.org) in the config object and the header will look like this.
We want to forward email as it is and retain everything so we have to run our own postix in order to do that.
Even though all the docs and technology is there, you really can't do it without the help of a big company like Amazon due to the following reasons:
- almost all residential ips are blocked.
- most data center ips are mostly blocked because there are like 100s of blacklists and every blacklist has it's own unique way of getting delisted.
- every big email provider has its own version of FBL and it's often a big black box. For example till date gmail won't even give Amazon access to its fbl(1)
- spam filtering is not an exact science and while there are things like spf, dkim, dmarc etc to ensure the authenticity of message at the end of the day it all comes down to your reputation as a sender and managing it is nothing short of a full time job.
Genuine questions, how do companies like Mailchimp get started then?
Mailchip is 20. Campaign Monitor is 17 (and have been buying up other email related companies/brands for years). SendGrid is about 12. Mailgun is 11.
There's a lot of competition out there, and it's not easy to overcome all the blocklist challenges - paying customers aren't willing for you to experiment with their customer's getting their email.
If you were to try to start one today, I suppose you could rely on sending via another company like Amazon until you have a big enough customer base, then roll out your own infrastructure.
Agreed. I think the hardest part is getting started; folks not familiar with hosting their own email just don't have as much awareness of what to do and how to do it. But take a bit of time to learn, get a reputable ISP, don't spam people, and you can do just fine without too much effort. I got a cheap VPS specifically to host email, and the worst I've had to do is fill out a Spamhaus form one time.
"Everything is hard at scale."
The number one thing you are selling is deliverability. The second thing you are selling is the tracking (opens, bounces, unsubscribes, etc.). Next, you are selling segmentation for subscriber lists (i.e being able to send the right message to the right consumer at the right time). You have to be diligent about your customers too, because if you are letting bad actors use your system... there goes your reputation and there goes your business.
But deliverability is the key. We had relationships with ISPs so we could fix $MAJOR_CORP's million email pre-holiday sales campaign while it was sending and we staffed the teams to do that, 24/7. This had nothing to do with programming and everything to do with company mission, reputation, contacts at Google, MSN, Yahoo, ..., and the history of having done it. We were "lucky" enough to have started as the industry matured.
* I say "lucky" because the founder's really caught this vision at the right time (2000/2001) and made it happen.
The value in what Mailchimp does is not so much just sending email, but in all the things around it, like managing subscribers, tracking opens, easily creating nice-looking emails that look good in a variety of mail clients, etc.
Contrary to some of the replies you've received here, it definitely is possible to run your own mail server with good deliverability, and we routinely did this for companies, even fairly small ones, physically on-prem and in datacenters, and cloud. It is not trivial, but far from impossible, and will likely involve communicating with a human when getting a static IP to find a good one. With that being said, I do not recommend you run your own mail server starting out, that is probably not the problem you are trying to solve.
You also need to monitor your customers to make sure they aren’t doing things that will get you blocked.
My own assumption about why the system doesn't work.
So asking "How do I start my own spamming service and not get spamlisted" is kind of a silly question.
Mailchimp emails are well known for having 1 click unsubcribe by default.
There has been a huge resurgence in email newsletters for companies and content creators to have a direct relationship with their audience.
Mailchimp have done well because email seems to continually survive as a medium.
Sorry if the question is a bit noob, feel free to point me at any resources and I can do some reading myself too
Once you get big enough, you can consider buying an IP address prefix, getting your Autonomous System number, setting up peering, etc. For example Mailchimp seems to have AS14782.
I’d guess that’s for personal, product, and customer service emails respectively.
It will always be a dance. I own a small IT company in the UK and have always managed to run local SMTP. I've done it for about 22 years. I could not run a Mail Chimp.
For starters, I could not live with myself! I don't do spam. MailChimp is a spammer for hire by definition. Your idea of spam and mine may be different. OK: Unsolicited Bulk Email is the key phrase. At which point are you solicited or unsolicited? Opt out or opt in? Where do you get your lists and how do you monetize this beast? How do you vet your customers or do you even care? What standards of ethics do you ascribe to?
I could possibly create another MailChimp because I know rather a lot about SMTP and own a fair few IPv4s and could cycle them and I'm fairly IPv6 savvy so I'll use that to get some more mileage. I know DMARC/DKIM/SPF and all the rest and can play those little games to up the authenticity score.
Can't be arsed to spam the world. I prefer to host recipients than senders.
I’m just not seeing the “synergy” between these two companies other than they both focus on SMB.
Which alone is probably worth a substantial amount of the purchase price in advertising / sales time equivalency.
Intuit is also pivoting themselves to being a data aggregator, who sells products powered by that (see: Mint purchase). And they seem to realize that whoever owns the collection point wins (see: Google). Consequently, mailchimp gets them a durable product and data coverage of a difficult to target and lucrative market (SMB).
Intuit Inc. is an American business that specializes in financial software. The company is headquartered in Mountain View, California, and the CEO is Sasan Goodarzi. As of 2019, more than 95% of its revenues and earnings come from its activities within the United States. Intuit's products include the tax preparation application TurboTax, personal finance app Mint and the small business accounting program QuickBooks.
we often think of synergy being where you can apply your skill in solving problem Y to problem X even though the markets for those solutions are wildly different.
but you can also think about the "thing" as being "selling to a particular category of customer". you can cross sell, bundle, gain some forms of economy of scale.
this is basically the internet equivalent of WB Mason selling you toner, coffee, paper, chairs, and water coolers.
Also, if you look at mailchimp recent product changes with addition of MC stores, they are positioning themselves to compete against ecommerce platforms. This could be planned beforehand to be part of the package for the acquisition.