They intend to enter this new space, using their technology and their people.
As a courtesy they offered to hire you / throw a lot of money at you.
What would you have had them do instead?
Not compete with you, because you're a precious snow flake?
Acquire you and treat you like a prima donna, giving you your own team and allowing you to take your own technical direction?
Why should Facebook - or any competitor - do either of these things?
Seems to me like they acted pretty reasonably here.
Of all the things you said, this struck me as the weirdest:
> Strangely, your “platform developer relations” executive made no attempt to defend my position.
What do you think the purpose of the “platform developer relations” executive is? To advocate AGAINST Facebook and for random outside developers?
I'm not a fan of the Facebook app (not a member) or the company...but in this case, the firm seems to be acting 100% reasonably.
If they had been upfront about their intentions with the meeting, he probably would have never gone.
What do you think the purpose of the “platform developer relations” executive is?
To advocate AGAINST Facebook and for random outside developers?
While it is true that he said the thought he would be demoing, I don't think the discussion about an acquisitions was a problem in itself:
I said that if Facebook wanted to have a serious conversation about acquiring my team and product, I would entertain the idea.
I think his problem was that Facebook were negotiating from a position of strength (and were honest about that), and he didn't like it.
It really is odd how ecosystem developers always seem to act so shocked when they realize that the prime developer (the one who wrote the API agreement) turns out to hold all the power and control.
b) Even if there is an implicit promise, in this case Facebook acted very ethically in offering to buy him our when they decided to offer the same features. I can't imagine a better way to have handled that situation from Facebook's point of view.
As you note, the trust involved is invariably abused, but always within limits - vaguely defined as they may be. What Dalton Caldwell is observing is that these parameters appear to be shifting.
That's FB's prerogative, and I don't object to their exercising it. But there were two ways to handle the change. The first was to buy Dalton out, shut down the project, but provide jobs for his team. The second was to do what they did with Instagram, preserving the product and the team, and letting things evolve from there.
It seems like going the latter route would actually encourage people who really care about products to build on FB's platform. The former route also provides incentives, but of a much lower grade, and only appealing to people who don't really care about the products they develop, and see the compensated shut-down / aqui-hire as their highest goal.
There is a difference between "using something against you" and a platform keeping their options open.
But, to quote Tim Bray from 2003:
They own the ground you’re building on, and if they decide they don’t like you, or they can do something better with the ground, you’re toast. They can ship their own product and give it away till you go bust, then start charging for it; and use secret APIs you can’t see; and they can break the published APIs you use. All of these things have historically been done by platform vendors.
My point is that no platform has ever behaved differently to how Facebook are now, and Facebook are at least offering money to companies they are planning on competing with.
People will continue to develop for these platforms, though, because they offer the incredible lure of money - they are were the users are, and where the users are the money is too.
Agreed, but an honest question [and I'm no fan of FB, but...]: how could FB have requested a meeting without acting in bad faith and without being dumb? Seems dumb for FB to say to Dalton: hey, we're about to launch a competitive product and, since you're going to be squashed, we wanted you to come in to talk about an aqui-hire. Now Dalton has inside-ish info on FB (which he will have post meeting anyways) and can run around telling FB's competitors that FB is bidding for his company.
I suppose one of the VPs could have pinged Dalton about meeting for coffee, but then, assuming the informal meeting goes well, Dalton still has to meet all the other VPs, Dirs. Plus FB has a lot of these conversations with companies (I've been in 3 separate ones with 2 companies), so this is kind of the process.
I don't particularly see a better way for FB to handle the situation. Were I Dalton, I would have given myself some cool-down-room and, rather than blowing off the discussion, would have engaged the folks in a discussion and then told everyone that I'd get back to them first thing in the morning. Then I would have gone for a long run and let my thoughts settle. Or at last that's what I did when this happened to me 4 years ago.
I was hoping the outcome of this meeting would be executive-level support for my impending product launch.
What executive-level support would they give him except to buy him/his product? The bad faith here is going into this meeting with no intention of entertaining their obvious position.
If Facebook wanted an acqui-hire from this meeting here, they sold it awfully poorly. They don't have to care, of course, they'll likely just look elsewhere and scoop up 5 people to do the same thing, but from a business perspective this meeting would have seemed to be a waste of time for all concerned. Again, FB has the cash so who cares, but to drag people in with the hope that they'll forget themselves and jump at whatever opportunity is presented. They're taking time and attention away from the thing that attracted them to this person.
Heck, that they kind of throw offers around like this is kind of a lesson for future targets simply to triple their ask. "Sure, $50MM all cash." Screw those jerks.
Let's not insult Dalton. Let's assume Dalton is a smart guy and not a naive guy, but that he's in an unfamiliar situation and that THIS SHIT IS HARD. It's easy to sit on the sidelines and judge. It's quite another thing to figure out what to do when: you're a VP at FB who wants to talk with Dalton about an aqui-hire (seriously, how do you do this?); and when you're Dalton and you receive an email from said VP asking for an audience [what kind of audience?!?! who knows.].
>They could simply have explained their position in a way more
>appropriate for the kind of meeting they had portrayed.
My original comment suggested that they couldn't. You haven't provided any evidence to the contrary (in fact, you've suggested my "dumb" route without saying why it's not dumb). Let's assume everyone is a decent person [AFAICT this is a reasonable assumption]: this is not a soap opera; this is trying to figure out how to have a tense conversation with someone you respect.
>Heck, that they kind of throw offers around like this is
>kind of a lesson for future targets simply to triple their ask.
>"Sure, $50MM all cash." Screw those jerks.
This is a very dangerous comment. Of course, there are anecdotes to the contrary, but, by and large, few think the way you suggest they do and I'd warn fellow readers to take this as an anti-pattern. Those playing the game who get to the aqui-hire level are very high performers, not sell-outs. To suggest that the aqui-hirers are fools from whom to part money or that aqui-hires are sell-outs is to demonstrate extreme naivete. Google's top line really can benefit by adding high performance teams and Google is willing to pay for it. This is rational. At the same time, an acquired CEO, such as Kevin Systrom, can be happy that his biggest, in fact existential, competitor is now his partner. This, too, is rational.
Above all, this stuff is both hard and subjective. Let's look at how to use it to be more effective, rather than how to tabloid-ize it.
I don't have to provide evidence of an opinion, so I don't know where you're pulling that from.
My original comment suggested that they couldn't.
how could FB have requested a meeting without acting in bad faith and without being dumb?
Really? First of all that appears to be a false dichotomy. Secondly, they have a lot of brains at FB, yet idiocy and bad faith were the only two possible motivators for the meeting? They can figure it out, and if they can't, well, maybe they take the more-informative route.
Saying you are at a disadvantage for having everybody on the same page and not being oppositional or predatory is a sign of a bad mind to me. Can't tell him in advance that it's really about acqui-hire? Pretty much the same kind of arbitrary rule as "don't call her for three days." If you want to go through life accomplishing your goals in an antagonistic way, then follow their examples, but engaging in business this way in terms of romantic relationships is "The Rules" type poppycock. I'm not even going to address your assertion and denigration of decency and information as "soap opera."
Oh, but they "couldn't." How powerless FB is in this situation! How ever did they find themselves so?
this is trying to figure out how to have a tense conversation with someone you respect
Isn't that tension entirely related to preserving the hustle? Let's all shed a tear for the difficulties FB has in maintaining a powerful negotiating position.
Thing is, in this case I would say that what you identify as "tension" is a reflection of their powerlessness. Obviously they wanted him on board rather than building it themselves with other people, by sheer dint of coming to him before what other people wind up being their follow-on choices. So the hustle was functional in that they just decided to wield the bat of money that apparently is all they have to offer when manners fail them. Of course Mark Zuckerberg is known to be a rude person, so we can also see this episode as evidence (as you so require) of the fish rotting from the head.
To suggest that the aqui-hirers are fools from whom to part money or that aqui-hires are sell-outs is to demonstrate extreme naivete
Hey, all I'm saying is that if you're open to selling in the first place and FB comes sniffing around, ask for more than you would normally when being ambushed in a meeting. And yes, it's foolish to treat someone you want to work with in the way that they did here. Perhaps their negotiator end-points aren't as highly-performing as you say the acqui-hire targets are.
But I appreciate your point: decency is too much to ask of Facebook.
I thought that I covered this in my comment under the "dumb" option. I don't mean to be disparaging, but I'm not sure how else to take the suggestion, so switching to a not-great analogy:
Your suggestion is sorta like saying that people should walk into a car dealership and say "I want to buy this car. No, not that one. THIS car." It's a classic negotiating fail. If you know they're going to buy the car/company, you're going to milk them.
Of course, FB may think that THIS car/startup is absolutely perfect to acquire, but it's unrealistic to expect them to reveal that bit of info.
It just so happens that what FB were selling was a position of some repute within their organization, which they not only failed to do, but they misrepresented the product in the first place.
I don't understand why this is a big issue. What was the cost to him in going to this meeting? It would hardly have changed the outcome (outcome: he declines their offer and they build a service which clobbers his.)
Your team doesn’t seem to understand that being “good negotiators” vs implying that you will destroy someone’s business built on your “open platform” are not the same thing.
He then goes on to call out the root-cause of the problem as FB's understandable but unfortunate focus on ad-revenue. This puts them at odds with the developers who use the platform and that's clearly not a good dynamic. Both MS and Apple have long understood that getting developers and keeping them happy was essential to keep a platform fertile.
EDIT:fixing typo/poor construction in last sentence.
Microsoft refined the practice to the point they coined a new term for it:
As a recent example from Apple, they are now requiring sandboxing in the App store, which is heavily messing with a number of developers. But they are not sandboxing their own applications.
EDIT: this comment appears to be unpopular? what's the disagreement?
EDIT: Also, I should point out that apple didn't used to mess with developers, probably because they were primarily a hardware company, with low market share, so developers were key, and there was no competition. However, they have expanded and are now also a services company, so they have an incentive to mess with the environment in order to defend their services against competition. Microsoft, conversely, made quite a bit of money off of it's office products, so always had a reason to manipulate the environment.
Time, both in the meeting and in preparing, and in information transfer. He didn't specifically say what he went through, but he may have divulged pieces of the puzzle that they were unaware of.
In retrospect, our contact with the other side that had set up the meeting hadn't properly communicated to us what the meeting would be about, and presumably had not communicated much with his side about what they were looking for at this stage.
Their side was basically dysfunctional, with each person on their team having a different agenda.
I wouldn't say that meeting was mal-intentioned, just that their company was really screwed up.
Facebook may be in a similar stage at certain levels.
a) Facebook will knock on his door again at a later date asking to "acqu-hire".
b) Facebook will eventually release something in-house that will compete with his app (and most likely win due to Facebook's large momentum).
With the impending doom stuff aside, I still don't think that he should've expected getting exec-level support for his product walking in to the meeting. Facebook doesn't _need_ to give him anything. So yeah, he wasted his time, but that's _his_ problem, not Facebook's.
Also, relations does not mean advocate. He has relations with the customer, he is not obliged to advocate their views. Especially not when it goes against FBs interests.
Unfortunately this is a business. Not a university, non-profit or a government entity.
As an example from tech, I believe HN's 'jf' used to be a startup-relations person for Microsoft, whose job really did involve trying to advocate for their needs within Microsoft, reporting out of the product groups' normal management hierarchy to make sure he was giving them third-party input.
I definitely understand your point but I don't think it is correct to use the phrase "not that uncommon" with respect to "for-profit businesses" without defining what types of businesses you are referring to.
The overwhelming majority (anecdotal of course) of for-profit businesses do not have anything like an ombudsmen. I would agree that with respect to newspapers that statement would be correct from what I've seen and probably universities.
I wouldn't want to speculate on the percentages here, but if we believe the numbers as far as the amount of businesses of all sizes that are out there, I think it's safe to say that the majority don't have an ombudsmen. So I would say it is uncommon.
no, thats marketing.
Dev relations works with you once you are already using the platform. Don't get their intentions confused. They may be on your side with bug fixes and feature requests, but if you try to do something that goes against their company, why the hell would they be on your side?
The implication is that by having a large ecosystem with lots of developers, the company will benefit, but in this case, FB appears to have shot themselves in the foot.
Not compete with you, because you're a precious snow flake and
Acquire you and treat you like a prima donna, etc.
add nothing other than nastiness to Not compete with you and Acquire you, etc.
"You" did not refer to a generation, but to a person, so the language was personally insulting. The bar for personal insult is much higher and this comment doesn't pass it. First, the OP did nothing to deserve it, so it was out of place. Second, delete the insulting language and the comment not only doesn't lose information, its point (defending Facebook) becomes clearer. There was no need for arbitrary sticks in the eye. That's the meaning of "gratuitously rude".
I do think that the author's post came off as somewhat precious. Saying Not compete with you, because you're a precious snow flake? was less polite than perhaps is ideal, but OTOH the author's post was also less-than-polite.
 "I didn’t want to believe your company would stoop this low. My mistake.", "rotten-to-the-core “platforms” like Facebook", etc
Far be it from me on the day after Gore Vidal died to say that snideness is always a bad thing, but the community here is fragile and simply can't withstand the free flow of vitriol.
This argument has been made for likely as long as the human race has existed and is completely worthless. May as well say you walked up hill both ways through snow on your way to school every day.
And you try and tell the young people of today that, they won't believe you.
If Facebook went from expressions of support for the project to hostility, I think anyone would feel they'd acted in bad faith.
It's not illegal, and it's a fair point that developers should anticipate Facebook's conflicting interests. But it's also fair to publicly shame sleazy behavior when you see it.
It's one thing to use Facebook for authentication. It's easy and takes little investment. However, building a REAL product on the platform is a risk. If Facebook behaves like this, they show that it's a risk NOT worth taking, and they devalue their own platform, putting short term gain (product) over long term gain (platform).
Microsoft and Google are doing it with hardware. I imagine the phone/tablet manufacturers had a similar reaction as this guy, but didn't go blogging about it on the web. It's good for us that he did, because OEMs talk to each other in meetings. Small time devs best communicate a company's intentions via the web.
That said, the real difference is that Microsoft's platform was better. It offered more power for less risk.
You're absolutely right, I would. The OP has a point.
But let's be honest here, we're talking about a multi billion dollar company with thousands of employees, now traded on the stock market, so presumably aggressively trying to spin a profit.
Expecting said company to be "nice" is naive at best.
Nothing wrong with it at all. Go for it.
Let me know how that works out.
Yes, I agree that it is a sad state of affairs.
Whether you accept it or not, this is the world we've created for ourselves.
(Obviously you do accept it, as evidenced by the lawyers you mention)
What a depressing statement. Doubtless true but what a revealing and totally awful thing to take for granted. So now we live in a world in which not only are corporations people (thank you Judge Roberts) but they are psychopaths with no social conscience and we all take that pathology for granted.
Enjoy the next century. :)
In fact, this completely confirms my previous post from two weeks ago:
>All these aquisitions are more insidious, they are being done by the big players to stifle diversity in the market and continue to solidify their leads on online services under the guise of talent acquisition to better their companies - rather its an effort to prevent that talent from building something that would be a detriment to their positions
As well as:
>The acquiring of the teams is defensive in that they take that team and their IP etc off the market from their competition. It is offensive in that it squashes any possibility that whatever service it was the startup had would compete for their similar service.
>Attention is the resource that social services are harvesting from their users and monetizing.
Companies that provide features, utility and services that keep the attention of users (especially when providing no physical product) are those that will have longevity.
So, capturing those that would build things that direct user attention away from your product is critical to these huge companies.
Deception is occasionally a necessary tactic, but it would be insane to try to argue that it is a behavior that creates economic value. It should not be the expected default behavior, and in fact, is not. Which is why there are both civil and criminal penalties for fraud.
Deceptive behavior that is less than fraud may not be illegal, but it's still shame worthy in my view.
If we swapped out companies with strangers and HN with facebook, would these people be responding to their friends posting venting comments about whistlers on the bus to work with "It's a free country, they are allowed to whistle on the bus, so shutup."? To be honest, I don't think so. I think the reason this reply is absurd is patently is likely obvious to them when the subject of the criticism does not involve a corporation. It seems as far as they are concerned, as soon as a company enters the picture, all criticisms become invalid if they do not involve law-breaking.
Why this is the case I can only guess.
Because in contemporary North American culture the expectation for a company is basically sociopathic behavior within the law. But the expectation for an individual person is ethically aware and polite behavior in the face of public scrutiny.
Too many people playing poker games instead of building a world where we all get better lives.
I expect companies to not act ethically. In other words, I think of myself as a realist and this just seems to be how companies are going to act.
On the other hand, I expect them to act ethically. Meaning ethical behaviour is the behaviour that I demand from them.
Like when a parent says to their teenage kid who refuses to study for an exam, "Well I expect you to get an A". They don't expect that, but they do expect that of them.
Maybe these two sorts of "expect" get shorted out when corporations enter the picture? On the other hand, perhaps the expectation of a corporation in both senses really is sociopathic behaviour. All that "duty to the shareholders" crap...
I could invite you over to my house for dinner, and then ask you to pay for the raw materials after you've eaten. Legitimate, but still asshole-ish.
Legitimate is a low-bar.
It may be legitimate, but that doesn't mean there aren't consequences.
How many developers would continue using Facebook's platform if they knew Facebook would kill their product on a whim?
Those exact words have been uttered about both Microsoft and Apple in the past. Both have been wildly successful. At the end of the day developers will follow where the money is and absorb the risk.
Sorry but I don't think you know what those words mean.
People who do, know that the business of an infrastructure providers revolves around SLAs and contracts.
No good deed goes unpunished. Moreover, it's just not smart to publicly pick a fight with Facebook after they offered to acquire you. If you're the guys on the other side of the table, you might well brand this guy "unreasonable" and reckon that Kevin Systrom beat him once (score of $1B to $0), and Kevin is now playing for Facebook.
Seriously, this was not a good move on Dalton's part. As for this ("perhaps the public markets...will give you the time and goodwill to fix the obvious structural flaws"), he must be joking. Facebook has helicopter problems. Their dilemma is whether they are worth 20 billion dollars or 100 billion dollars. For Dalton to lecture Zuck in this tone, when Zuck has lapped him like 1 billion times over, and after they extended him a hand in good faith...just not smart.
Social media platforms should not be ad-supported.
This is just a continuation of that theme. He's saying, ~Your employees are doing asshole things to 3rd party developers, even though you're calling it a platform, because they have bad incentives, and that bad incentive is coming from the search for ad revenue~
Essentially, he's not so much mad at Mark, or even really caring whether Mark reads it or not. This is another piece of proof (to him and others that might listen), that social media platforms should not be ad-supported.
"The only way to get fulfillment is to help other people that believe what you believe." - Simon Sinek
You should watch the TED video where Simon Sinek talks about this. Dalton is basically putting this crazy idea out there about a non-ad supported social media platform (gasp!), and trying to find people who believes what he believes.
And, as a for profit business, they don't even have to hit anywhere near 100%. They just have to do well enough in how they operate not to loose business or somehow jeopardize what they have. It's really that simple.
This is a story that prior to the Internet nobody would ever hear about. No journalist would tell this story except in a magazine piece maybe that had an agenda and wanted to paint a picture.
This tale goes nowhere near even scratching the surface of how business operates. Spying. Payoffs. "Cut off their air supply" (Microsoft/Netscape)
Here's a story from when I started in business years ago. I called a friend of my fathers for a reference on someone who had worked with him in the past. He said "hmm, Bob left his job? Hmm." and then gave me a nice reference on him. Before I knew it he had hired Bob and basically told him "he's a startup you are wasting your time". I lost out on hiring Bob. This was a friend of the family. That may or may not be how any one of us would operate but in business as you say you can't be "a precious snow flake".
natrius: "Did they threaten to revoke API access?" (http://news.ycombinator.com/item?id=4325586)
dalton: "yep. That was presented as an option they could use by one exec, on a phone call." (http://news.ycombinator.com/item?id=4325593)
What they'd really be paying for is avoiding exactly this situation they're in now, with him talking quite loudly about how they shut him down. Can't blame 'em for trying, but they need to suss out their target a bit better before threatening them.
Or is Dalton complaining publicly now in the hopes that Facebook will pay him more later than they would have if he'd just gone along with their proposal now?
(Honestly curious: I do not have an opinion yet.)
Whether or not he is right, I'll give him a lot of respect for sticking with his guns and turning down something so outrageously tempting that hardly anyone else has turned down ever, just to chase his dreams. Props Dalton, and whether or not you get it, you deserve congrats and success for this.
When I do think about Dalton's motivations, I think he made a very risky bet and lost, and he's probably a bit angry with himself as much as he is with anyone else. Nothing wrong with that, I'd probably feel the same way.
It's Facebook's platform. Sometimes they are going to create internal products that compete with developers' ideas. The fact that they brought you in, explained what they were doing, and raised the possibility that they were willing to give you what I assume to be a boatload of cash to compensate you for your efforts seems almost comically generous to me.
The simple fact of the matter is that they CAN crush your business. They seem to be cognizant of that fact and were wiling to do something to help you. All I can say is that I'll bet most people reading this wish they had this kind of "problem" and would be writing "thank you" letters to Mark Zuckerberg, even if we ultimately rejected the offer. The title of this story could easily have been "This Just In: Facebook Has a Heart".
If FB did not declare itself a platform...if it had not encouraged others to build on its platform...if it had not encouraged DC to build his product on this platform...then you would be right. But if you are a platform, if you do encourage others to build on your platform (which is the whole point) and if you encourage a company to continue developing a product then it is not right. It may be realpolitik. It may be that having done all those things the platform company realizes that something it has encouraged is more strategic than it had realized, that it doesn't want a third party owning that product and it has to reel back its promises (which is what is sounds like here) but that is (a) a crippling result for the poor developer who took you at your word, and (b) and blow to your credibility as a platform. One incident like this won't kill you. Two won't. But at some point people just won't develop on your platform because there's no trust. ALL successful platforms have to walk this tightrope. Some do it better than others.
I build a product that pre-dated App Center by several months. Facebook dev relations people tested it and actively encouraged me to build it. I was assured that it was considered "good" and "helpful" as an example of using Open Graph. At an earlier point I was offered marketing help from Facebook for my launch.
I am not clear why some folks don't see the issue with building something that is encouraged by employees of a company, and then, in the matter of months, being told "never mind". That is not good for an ecosystem.
This letter doesn't make two things clear to me: 1) what exactly it is you're upset about and 2) what you think should have happened. Because of this, people in this thread are making a lot of assumptions which are uncharitable and inaccurate, and you come across as looking more naive than I suspect you actually are.
Clarifying in the thread is good, but it's damage control. I'm not sure if you wrote the letter when you were angry, or if it was originally written to people with more context, but I just wanted to share a part of why I think this thread is going the way it is.
2) Once Mark Zuckerberg gave personal blessing, he shouldn't have changed his mind. I have an interesting email thread along these lines.
I recently had an issue with a local group of 'investors' / tech people, and after learning more details I was clearly mislead into presenting to them.. What they were looking to invest in was absolutely not a match to what I am doing. Sure, it was under confidential and private settings, though I know I taught them a lot and exposed a lot I rather would not have - simply because I don't think these people have good intentions or are honest people - and I don't want to support that as a human being, because I don't think that's good for society.
I am no fan of facebook, but it seems like they offered to compensate you for your time. In fact, it seems like that entire meeting was designed to demonstrate to them that you'd actually built something that worked so that they could buy you off.
They didn't have to do that, they could have just squashed you. In the end, I think you should have taken their offer (perhaps all in cash and then leave ASAP , as someone else suggested) and then built something else.
The key point here is that you seem to value your autonomy, and a surprisingly few people on this board seem to see that. What I'm trying to say is that there was a way for you to exit a situation that was going to deny your autonomy in such a way that it could set you up for the next thing. Who knows? Perhaps it's not too late for that.
But he could, and he did.
You story also reminds me of a gentleman agreement I had with Don Dodge. His "blessing" and interest in my idea made me work days and nights to deliver asap, and at the end he totally backed out. It was painful and disappointing, but one cannot do nothing about it.
Did they threaten to revoke API access?
I don't have a recording to back up my claims of what was said in that phone call, so I chose not include those details.
P.S. did people here believe before this story broke that Facebook would never revoke API access when it is in their strategic interest to do so? What did Facebook say or do to give off that impression? Is this an industry norm I am not familiar with?
However, I can see your point. They should not have encouraged you to build it on your own if they were going to build it themselves. This seems like a lose-lose for both parties.
I've heard a lot of talk on how teams within facebook can work without much centralized oversight and this might be one of the drawbacks. Whoever you spoke to months ago might not have known that another team was working on it.
Then when they prep'ed for your meeting they found out someone had been working on it, felt guilty about leading you on months ago and offered a buy out.
It seems like a communication problem more than anything else.
disclosure: if it is not absolutely clear from my post, I'm speculating on events, I have no ability to gauge what really happened at facebook.
I would never have spent months and capital building this without constant support and encouragement from Facebook.
But when you dance with Godzilla, you will eventually get stepped on. Mostly by accident. There's little evidence they acted in bad faith. Big companies change their plans all the time, and they're entitled to do so absent an NDA.
What's the problem here? This is just business. Facebook has every right to develop that app, just like Dalton Caldwell did. If it makes sense for them to do it themselves, then they will. If it makes sense for them to buy an existing player, ditto. And if so, clearly they'd want to acquire that player at a good price, right?
I just don't see the ethical problem here. They didn't lie, and they offered a check (that it happens the OP didn't want).
Dalton was under the impression that he was going to be making a pitch for some higher level support from FB for his product. That does not automatically translate to wanting Facebook to hire him(which apparently was FB's intent).
Facebook's execs effectively ambushed Dalton during the pitch with an aquihire offer. That's where this turns into a bad faith negotiation, because he was not prepared for it, and would not have had the meeting in the first place if this was on the agenda.
It seems to me just like you say, the extent of the harm to Dalton is that he "would not have had the meeting in the first place." So basically facebook wasted his afternoon by forcing him to listen to some competition threats and trying to hand him an offer letter.
Why should we care? I still don't see any ethics issues here at all. Hard negotiation isn't "bad faith".
>Why should we care? I still don't see any ethics issues here at all. Hard negotiation isn't "bad faith".
You're absolutely correct that hard negotiation tactics are not bad faith. However, like you point out, there wasn't supposed to be any negotiation about an offer in the first place.
There was no negotiation. In fact, one party(Dalton) did not come to negotiate. The other party clearly did.
This was not just a meeting going off agenda. This was a calculated strategy to hire Dalton, and that's why this is a bad faith negotiation. Dalton did not walk into it prepared to negotiate employment, nor was he pitching for his product to be acquired by Facebook. But Facebook was clearly interested in it.
To be clear, the bad faith negotiation is really on Dalton's part, because he was forced into the negotiations. The fault lies with Facebook, though.
Is it that clear? We weren't there.
Perhaps the Facebook executives listened to a presentation about his product for an hour, and realized during that time that the presented product was basically identical to their own intended product, so the last part of the meeting ended up revolving around "hey, looks we might compete with you - or, we might hire you if that interests you".
Maybe it didn't go like that. Maybe they stopped him after 1 slide and told him "your app competes with us. Let us buy you, or die."
Huge range in between those two. You and I (unless you are one of the people that was in that meeting) can't know where things fell.
so "multi-billon dollar company uses hard-line negotiation tactics to increase own profit" is a headline now?
It makes FB less attractive to developers (unless they are trying to get acqui-hired). Also get a reputation as a bully rather than a good fun company may make it harder to attract good staff (or they may charge more if they are not being paid in cool).
It's also the tactic of the mafia and of Microsoft (1990s when people were still scared of them). It would be a shame if anything happened to your company...
Basically it is the big bully move not the cool kid everybody wants to be on his team move.
Edit: Added "for the moment".
The important part of the post is the latter half, which is consistent with his recently blog posts about this thesis:
"My thesis is that if you purport to be a platform, your business model needs to reflect your platform-ness. Because if you instead have an ad business model, and you’re not making enough money, you can end up slaughtering your ecosystem." - Dalton
This blog post is a continuation of that theme, wherein Facebook, a social media company platform, screwed with the user and 3rd party dev eco system due to bad incentives caused by a search for ad-revenue. The paragraph here illustrates the connection:
 "Mark, I know for a fact that my experience was not an isolated incident. Several other startup founders & Facebook employees have told me that what I experienced was part of a systematic M&A “formula”. " - Dalton
 "I don’t think you or your employees are bad people. I just think you constructed a business that has financial motivations that are not in-line with users & developers." - Dalton
 "Strangely, your “platform developer relations” executive made no attempt to defend my position. Rather, he explained that he was recently given ownership of App Center, and that because of new ad units they were building, he was now responsible for over $1B/year in ad revenue. The execs in the room made clear that the success of my product would be an impediment to your ad revenue financial goals, and thus even offering me the chance to be acquired was a noble and kind move on their part." - Dalton
HN lately has been a lot of people picking out one part of the article, because it incenses some "sensibility" on their part, when it doesn't have anything to do with the main point of the OP, and the come back to HN to rant about it.
And poor Dalton tried real hard to be clear by linking to all the stuff he was referring to also.
This isn't a letter so much to convince Mark that he is heading down the wrong path. I think Dalton is convinced FB as an organization has made too many promises. It's too late for FB too change direction. They are headed for and iceberg at 110 billion dollar speed and can't course correct in time.
Rather this is a letter to us. Dalton is pointing out the prediction that Facebook won't be around in 10 years. So don't build your apps on it. If you build your apps using Facebook you will be at its mercy. And as Facebook starts to die, you will feel the pain it inflicts on its closest "partners" as it scrambles to squeeze blood from turnips. It will use every nasty trick in the book to keep a monopoly on its market and squeeze every last drop of money and value (your personal info) it can from users.
Dalton has seen what people who run a company, with a dying business model, are capable of before. The Record/Music companies... He knows what a company, that is seeing its monopoly slip through its fingers, is willing to do to keep that monopoly just a little longer.
Intimidation and dishonest negotiation tactics are just the start. Will we soon see Facebook suing users? Lobbying congress for SOPA like laws to protect its monopoly? Remember GoDaddy was a main supporter of SOPA. It saw SOPA as a way to keep its URL retailing monopoly.
Dalton is warning you. Dalton cares about you. He has given up on saving Mark. Mark wants to kill the goose that laid the golden egg. Dalton wants to raise the goose that lays the silver egg. And share those eggs with us. Well, that's my interpretation of this open letter to Mark. I could be wrong, I often am.
The one line summary seems to be: Facebook and Twitter represent a closed model of social networking, which rails against the very nature of web and internet as a technology platform and it probably won't last.
Not saying if I agree or disagree with that statement and prediction, but I definitely see the argument.
The other reason: Putting a company with FB's reputation in your critical path is just asking for trouble.
This person is complaining because he didn't want to be acquired by Facebook but would like them to not compete with him. Oh well.
Edit: actually, we're both right, according to the alleged contents of a phone call http://news.ycombinator.com/item?id=4325586
From a business standpoint, that's just the way our society works.
The problem is the concept of business and how it controls all aspects of our lives and opposes technological progress.
Also other developers need to realize that Facebooks moves in this meeting are business as usual.
Put yourselves in their shoes and realize what their motives are as a company.
It sucks that you were naïve about this, but that's hardly Facebook's fault.
Moral: Make sure you're talking to the right people.
That doesn't mean never build on someone else's platform, it just means to be aware of the risk and include it in your planning.
Actually, he phrases it better here: http://news.ycombinator.com/item?id=4325566
His critique is tied to his project at http://join.app.net because the reason the platform isn't open according to Dalton is because Facebook needs the ad revenue to hit its performance numbers.
Typically, when someone doesn't like an acquisition offer, they decline it. Is it wrong for Facebook to build a platform that isn't open? I don't see why Mark Zuckerberg (or the public, as the comments on this submission indicate) would read this letter and decide that his employees acted improperly, which the letter seems to expect.
That's probably a true statement, but who the heck actually considers Facebook to be any sort of "open platform" in the first place? Honestly, how many times have we seen this lesson re-iterated here on HN in the past few months: It is very dangerous to build a product that depends on a platform that someone else controls.
And this isn't a new lesson either... remember "DOS ain't done until Lotus won't run?" (And it doesn't really matter if Microsoft were actually breaking Lotus on purpose or not... the risk was - and still is - there, and has to be accounted for).
There has never been a company-controlled ecosystem that has EVER thrived for long without the company swooping in to get that easy money.
In fact, now that Facebook is public, its their fiduciary duty to do just that. They could get sued if they DIDN'T try to cheaply build out their own versions of successful products.
The only surprise is that anyone is surprised by this, or thinks that Facebook has "lost their way", or had any other intentions when they started their platform. This is standard business practice - make a little ecosystem, let people futz around in it for a while. If it fails, shut it down; if it succeeds, go pick the low-hanging fruit.
Even the most stable company can decide to pivot their strategy, change management (i.e., your cheerleader/sponsor retires, gets fired or worse), and at that point, you're just collateral damage.
It sounds like Facebook used some hard-handed tactics, but I'm more curious as to your choice of timing.
Edit: not trying to be snarky, genuinely curious.
I have been blogging extensively about platform-risk issues for the past month, but have never come out and said this part: http://daltoncaldwell.com/
I'm not saying there aren't any really good answers to these questions, I'm just too thick to see it.
Now in reality no one owns English. Its an open form of communication that anyone can use, anywhere. You can even create variants of it and use it with your friends as long as they understand your dialect.
"Social Infrastructure" would require a common social protocol as a specification. This would open up an entire ecosystem of smaller players to contribute to it, providing delicious synergy and innovation along the way. Kind of like modding Minecraft, etc.
Not every company wants to become a billion dollar start up. There are many IT service providers and MSPs that are perfectly comfortable servicing 30 clients and making a lifestyle business for everyone involved. If its a commodity, it opens up locality and niche markets easier than a monolithic implementation.
Nothing but good would come from a true technological social protocol. Right now online social behavior is dictated through the mind of one man, which isn't really social at all.
The user value is in that the users have all the power. If social service providers are a commodity, if they misbehave or provide a bad user experience they could simply take their social graph somewhere else. This empowers the user. This is also why Facebook does everything in its power to retain hegemony.
And for someone to dethrone FB, an interoperable social bus would probably be a good idea. Of course, that would not what would bring users to it (digital empowerment seems too much an abstract idea to explain to my mom, for example), but rather a killer app or a series of them -- like Instagram.
Businesses who build on the Facebook platform are not users. They are attempting to extract value from the users--just like Facebook itself is. It is not surprising that they sometimes find themselves competing with Facebook.
The sort of open "infrastructure" Dalton advocates for would be great for platform businesses...of course they would love to have all the advantages of a platform (aggregated audience, aggregated data, well-defined API, etc.), without the downsides (changes to the API, competition from the platform owner).
But it doesn't really matter that much to users. I can easily take my personal social graph with me...I know who my friends and family are, and I can find them again on whatever new service seems better than Facebook. After all, Facebook did it to MySpace--and without access to MySpace's social graph.
From a certain perspective, the whole idea of Google is to get users off the search engine faster, which doesn't sound like a great way to make money as compared to Yahoo! whose core idea was to keep them on the site as long as possible to serve more ads at them. In the end, the Google idea is more profitable because users prefer to use things that don't parasite them by a huge margin, especially if both are free.
Caldwell's idea, as I understand it, is that there are a lot of interesting applications that could use Twitter's technology that aren't or can't be written because of their restrictions (or it would suck because of their ads), and that people would be willing to pay for a service like Twitter's if it enabled access to or the ability to author these applications. He thinks he can win at choosing to be the commodity by being first and doing the best job. The user value is hard to envision, because the apps that will be powered by this social infrastructure don't exist yet or are perverted by the presence of ads and Twitter's own self-interest.
Now you need to blessing of the landlord, and not be competing against them in any way.
a) the web is not really a welcoming place for large walled gardens,
b) if you want to build on someone else's infrastructure, pay them, so you become their customer, so their goal is to make your life easier.
Their "platform" is what it is. A highly flawed way to instantly reach astounding numbers of people for potentially deep or shallow exchanges of questionable value. Many your age have made millions for a half-year's work on this "joke" platform, as you call it. This is known, and blaming their tanking stock price for their behavior seems like a cheap shot at execs you don't even name.
I would advise you to get ready in case Apple calls. Unlike FB, they won't apologize after they gutpunch you.
Step 2) Complain when there is eventual feature overlap.
The simple fact is that as a company, FB have to meet their targets and Dalton's app is a bit of a conflict of interest. So, no surprises there.
However, I agree with his point about big "media company" social networks being eventually replaced by a much larger number of specific micro-networks. One network for photo sharing, music sharing (Soundcloud?), messaging etc.
Even once you have all these niches, I'm sure there's space for two or three due to the fact that people have different priorities and visual tastes.
As a company, Facebook aren't on course to die but I'm sure we're going to continue to see decisions like this being made that surprise us as the tech community due to the fact that they don't align with the vision we thought the company once had.
Representing yourself as a platform is something very different.
A platform a representation that you are providing a set of services on which others can safely build. It is a form of contract. And this representation has to be trusted because who in their right minds would otherwise invest on a 'platform' that turns out to be a flag of convenience? If a company loses this trust they ultimately lose the right to be called a platform. They lose developers and are ultimately left with a bunch of unused APIs.
Incidents like these described by DC are extremely important and should be publicly voiced because they bear directly upon the decision making of others who may be in the process of weighing their options. Should they or shouldn't they trust this alleged 'platform.' It is a huge strategic decision that can make or break a company. So people like DC who are prepare to go public with his experience are doing us all a favor because they are providing more perfect information, without which the market cannot operate accurately.
People can choose to criticize this or that dimension of the way various people played their parts, but that really isn't the key point, is it? Surely the key point is, can you trust the 'platformness' of FB? Did they imply one thing - that he was building a valuable product that they would be supporting - THEN choose to compete and wipe him out? That's the key point. The manners, the exact detail of how the wipeout was conducted aren't the point. If the story is accurate it is surely the breach of faith the is important. Some may argue that to expect otherwise is naive. But without some such faith there is no platform. You can't have your cake and eat it.
If you try to look at this from facebook's perspective the most likely out come looks something like:
> Ok, we've decided to go this app route. Wow app.net is really going to be steam rolled by this. We already have a relation ship with them, what can we do to help them out?
> Well I guess we can offer to aquire them, they probably have some expertise we can use and it will generate a lot of good will for us from our own developer community. Yes, this seems like a win win.
> Well this is a pretty delicate conversation so bringing it up over the phone is pretty bushleague. Let's do teh right thing and tell him face to face. I see we've already got them scheduled for a meeting in a couple of weeks.
> This seems to be working out perfectly for both of us. How much do you think we'll need to offer them to acquire their company?
I'm really having trouble seeing how people don't see this as the most likely way things happened.
We have long known Facebook's model, and the warning signs are everywhere. Facebook is a surveillance conglomerate, and it is granting you certain privileges - either as a so-called 'user' or as a developer - at its behest. Get in bed with that thing, and you just might get the cooties.
What evidence does the author have to support this? Is there communication from such VPs saying "We would like you to come in to meet us to measure the value of your service"?
> I was hoping the outcome of this meeting would be executive-level support for my impending product launch.
Again, who set the authors expectations here? And what exactly does "executive-level" support mean? Would they feature the app, simply because it was valuable for them?
Note - Expecation setting is one of the hardest things to do in business. And can also be used for negotiation tactics.
I'm sorry, but all I read from this is just (another) example of how a company with different corporate interests (read-> shareholder value) no longer puts time into something that doesn't drive bottom line. Is it a great example of what an IPO does to a company's interest? Absolutely. But I don't necessarily feel bad for the author nor do I feel like any unjust has been done. He's proved his point, seems extremely smart and will move on to the next cool and interesting project.
At the end of the day, its nothing new. Its a bit of a ponzi scheme where a company offers something (in case of Facebook or Twitter: an access to their dataset) under a false promise of achieving fame and/or fortune if you built something fun and cool and attract large audience. So you are welcome to try while we keep on building our company on this "don't be evil, connect people" promise. But rest assured if somehow someway you come close to making it a reality and bump on our radar, we will gladly shut you down this or another way.
And I'm having hard time blaming Facebook here. Perhaps that would be weird before IPO and an audience of stockholders watching their every move, but especially now where there is a crack in the boat and it runs 40% underwater, all eyes are on captain's hands. He needs to be as fierce and violent in his moves as possible and if someone even remotely comes close to eating up even little bit of his advertising cheddar, he/she will be torpedoed down.
So to me, Facebook never was a "platform", nor was Twitter, nor iOS. All these things are just gambles, business bets on the future based on things you hope are true. They may be good ones, profitable ones, but you were never guaranteed anything and you should be prepared to lose it all the minute your interests and your landlord's no longer coincide.
What do I consider "true" platforms? The closest are Android, Windows (not counting future versions), OSX (up until ML), in some sense the JVM and the browser. I don't know if the new versions of OSX and Windows will qualify as true platforms ... it remains to be seen how the effect of tightening controls on them plays out.
tldr; I wish we could stop calling playing in somebody else's ever changing walled garden with no guarantee of anything a "platform".
Which might go to explain how they are apparently excellent at putting themselves in the news as an heir to Twitter and a major Facebook competitor. Yet aren't actually either of those things. At least so far.. fascinating.
FreshBooks: These guys made me furious. We found that there were no good OSX based timers for this product so we built one. In the end they refused to put us up on their site, each time with a different excuse (we have promised exclusivity to this other app, or we are changing our app system). The developer relations guy was just a total jerk. In the end they asked us to change our name because they did not like it and even after immediately doing that, no love from them.
In short - it is getting tough to base a business on any of these third party API's that can change under your feet - yet there are still some out there that are tremendous.
I get the talent acquisition as a defensive play to keep a potential threat out of the market, but if Dalton's story is true then Facebook's execution around this entire engagement seems stupid and ham-fisted through and through.
I'm pretty sure I've seen this somewhere else... at least a dozen times.
Am I reading this correctly that the platform ad vp has $1billion number on his head and he is a little nervous about some competition? It looks a lot like fb is on tilt, from the bot clicks to different charge for friends to see content stories it doesn't look like all is well.
Great, line. Exactly what I was thinking as I was reading the letter. Completely necessary to to create an eco-system that developers/consumers will want to use. Monetizing the eco-system can come later, just as it did with Google search.
As someone that wants to build quality social software, software that doesn’t force users to re-create their friends list, or not use oAuth, etc., I have to endure huge platform risk.
If you build on Facebooks platform, there is a good chance you will end up competing with Facebook. Or Twitter.
We need a social platform that is distributed and that nobody "owns".