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David Karp signed off on his official Yahoo!-tumblr buyout letter with “Fuck yeah, David”. Excellent.
Why do corporations feel the need to buy out every fucking thing. Are they not happy enough with 80 million dollars a year…they just want more and more and more.
Because people are willing to sell.
There are only a few revenue streams and there are even fewer exit strategies for start-ups. Building a product that’s targeted at an established company with the hopes that they will take notice and offer you a buy out is an entrepreneur’s dream.
David Karp, who’s already wroth $200+ million, is going to triple that with the stroke of a pen on Monday. He can retire at the age of 26, if he wanted to (probably doesn’t want to.)
Seems like a great thing that giant corporations are willing to buy out start-ups.
Minimum Wage Business Realities
Why do some employers favor a raise in the minimum wage? Profit per employee plays a major role.
See Also
Costco is doing what Amazon just did, trying to play an ignorant public to help make the market more hostile for their own competitors.
Costco would love for the minimum wage to go up to a point that’s higher than the average starting pay of their competitors but below the starting pay at Costco. It has zero impact on Costco’s business model but will severely hurt the bottom line of others, like Walmart or Target.
Costco plays this off as if they are trying to help the people, in reality, they are aiming to hurt or even shutdown their competition, and they want to do this not through better business models but through legislation that comes from misguided economical theory based solely on emotions.
Amazon did the same thing when it lobbied for an internet sales tax. Many people thought that, “Oh, it must be a legitimate tax if the biggest online retailer is lobbying for it!”. What these people didn’t realize is that Amazon is building local warehouses and would now have to pay local and state sales tax and they wanted the government to levy an Internet Sales Tax so that they could ensure that their competition, who don’t have local warehouses, would have to pay taxes just like Amazon.
No one is better at playing politics than the CEOs of giant corporations. Always remember that and take what they say with a cargo container of salt.
Gov. Rick Perry has long proclaimed Texas as a state favorable to business and has limited environmental protections and regulatory rules. Just how favorable is evident in the news that West Fertilizer Co. had only $1 million in insurance after an explosion that killed 15 people and injured 200 — and caused an estimated $100 million in damages. The insurance lobby has long opposed mandatory insurance laws and this case may be an example of the public cost of that success.
Texas is not unique in allowing companies to maintain minimal insurance coverage. The question is now who will pay for the damage if the company is insolvent. The state and county has already paid millions in recovery costs and are unlikely to accept responsibility. United States Fire Insurance Co. says that it will only extend $1 million for the damage under its policy.
The company maintained this ridiculously low level of insurance despite the fact that it housed extremely dangerous chemicals on its property. West Fertilizer reportedly had 270 tons of ammonium nitrate on site as of the end of last year. Texas Insurance Commissioner Eleanor Kitzman issued a statement insisting that her role is to “assess and quantify risk; we regulate the insurers that help consumers and businesses insure their risk.” Apparently they do not regulate well in the case of a company with a huge amount of potentially explosive material.
Lawyers note that if you want to drive a truck on the interstate, you need $750,000 in coverage, but this plant was allowed to maintain just $250,000 more.
The article below notes that a local resident insured her 5-acre property for $1 million because it had a stock tank on it.
In this case, Texas was great for business, just lousy for citizens.
Source: Dallas News
Yes, allowing businesses to decide just how much coverage they should get is good for business.
But not getting proper insurance coverage is bad for business, but that’s the businesses mistake.
This plant will never reopen and be able to operate again. Even if they recovered or had enough funds to rebuild the plant, they’d still be stuck under millions of dollars worth of liability suits as well as millions of dollars of lawyer fees. They’re going to be paying out their own pockets and that’s due to their mistake of not getting proper coverage.
Besides, just how much insurance do you think this plant was going to buy or how much was the state going to force them to buy? You think they’d have enough insurance to cover $100 million in damages? Do you know what such a policy would cost? Chances are this business wouldn’t even exist if it had to have $100 million in coverage. Unless Rick Perry was some sort of oracle, I think it’s safe to say that no regulator could have foreseen just how much insurance would be needed at this plant.
But the same principle applies to the residents. If you live near such a plant and we all know how explosive fertilizer can be, why would you not take the proper responsibility and get proper insurance to cover your own personal property?
One must always take a vigilant stance when it comes to their own property and personal safety. You can’t rely on others to look out for your best interest and you certainly can’t depend on government to provide the proper blanket legislation to cover you and everyone else.
Take responsibility, be a diligent member of society. If most everyone did that, we wouldn’t have such irresponsible issues in society.
Bitcoin Investment and Profitability.
Bitcoin has been building up quite a head of steam lately and I’ve decided to pay attention. I’ve been doing a lot of reading and the idea seems sound, to a degree. I haven’t looked too much into the programming and I probably won’t since I don’t speak that specific dialect of nerd. But one thing I have looked into is the profitability or value of converting or at least investing in some Bitcoins.
Last night I was doing some crude math with bitcoin values just trying to see where bitcoin is and where it can end up. . It’s probably safer to assume that bitcoin, if successful, will only be one of a number of major currencies in use (I can best imagine a scenario or 3 or 4 different currencies at play). It’s also highly likely that bitcoin will fail. There are some programming or coding weaknesses, especially in privacy/anonymity, and other issues regarding government intervention and regulation, outlawing and so on. For simplicity’s sake, I’ve assumed that bitcoin will eventually replace the entire US currency system but not the entire world’s system. I’m sure if I my intrigue of bitcoin grows a little more, I’ll probably build a few models, factoring in growth, size and risk factors but for now just plain crude math.
Here’s some simple numbers:
- There will only ever be 21 million bitcoins created
- Each bitcoin is currently valued at around $75 a coin (3/25/2013)
- In 2009 there was about $8 trillion US dollars in existence.
- Since 2009, the Fed has significantly increased the world’s US Dollar supply, but I don’t know the exact number. Let’s leave this figure at $8 trillion for now.
I won’t try to calculate bitcoin’s value based on the world’s total money value because that would first of all be beyond optimistic, even more so than this post is already and secondly bitcoin is supposed to bring about a new revolution in money where people have competing, free market currencies, so it would be pointless to assume bitcoin will hold a monopoly on the world’s currency. It was never supposed to do such a thing.
So, what happens if bitcoin replaces the US dollar completely? Well, it would have to carry the weight of the value of those dollars, or come close to doing so. But for the sake of simplicity, let’s just say that it would have to replace the dollar completely.
This means that 21 million coins would have to hold a value of 8 trillion dollars.
That’s an absurd amount. How absurd?
Well, each bitcoin is currently worth about $75. There are 10 million or so coins currently in circulation. Let’s assume that the total value of bitcoins stays static until 21 million coins are released. Each coin would be worth about $36.
That’s about 0.01% of what a bitcoin would have to be worth for it to replace the US Dollar. If you’re not good at math, that means that each of the 21 million bitcoins would have to be valued at $358,000 each. That’s an increase of over 4,700%.
Just to bring some gravity to the situation, this is all calculated on extremely gracious assumptions. There are still very real risks in investing in bitcoin.
The price needs to stabilize for the currency to become something more than just an investment. If the price keeps climbing people will only invest and hoard bitcoin. Very few will be willing to pay with or trade bitcoins out of fear that they might lose out on the next price jump. Some of this is due to the fact that some “investors” still look at the dollar as their main currency and see bitcoins as investments. Others because bitcoin isn’t accepted as a payment method in the overall marketplace. Unless people start to openly accept bitcoin, there’s no real way to obtain or capitalize on the value of bitcoins short of “cashing out”.
Here’s where competing with governments hurts bitcoin. Governments can still step in and make it illegal to buy, sell or hold bitcoins. This would mean that unless you can use bitcoins to buy things, there’s no way to extract the value and the investment is now useless.
There are other real fears with bitcoin; The whole thing could be a big scheme by early adopters to pump and dump. The code can theoretically be hacked or manipulated at some point. Electronic records are much more potent that standard paper keeping. In the electric world no one is really anonymous, some just do a better job of hiding their tracks.
It’s safe to say that it’s probably worth investing $100, $500 and maybe even a $1,000 in bitcoins, if you can afford it just for the fun of it. It will make for a good story, if nothing else.
I’m personally still holding out but watching with a curious eye and a fist full of money to invest.
Starbucks CEO tells shareholders disappointed with company support for marriage equality can invest somewhere else
Starbucks supports Open Carry, the 2nd Amendment and Gay Marriage.
Starbucks has their shit together. Some highly logical people running a great business, and I’m telling you all of this as someone who doesn’t even drink coffee.
It’s the 21st century, get liberty or GTFO.
You Do Not Own Your Labor
“This line of argument is confused because of an over-reliance on vague metaphor. We have to stop thinking of contract as binding promises or obligations. We have to think of it, as Evers and Rothbard argue, as transfers of title to owned resources. And we have to recognize that these owned resources are only scarce, physical goods—not “labor.” You do not own your labor. You own your body. That gives you the right to perform actions (labor), but you do not own your actions. If I perform an action that you like, and pay me for, you do not own my action. You do not even “receive” my action. You simply prefer that I engage in it, for a variety of reasons.
In other words a labor contract may be viewed as an exchange only economically, but not legally. Economically, the employer gives up title to money, in “exchange” for you performing some action. But legally, it’s not an exchange at all, it’s just a one-way transfer of title: a conditional transfer of future title to future money, conditioned on the occurrence of a certain event happening (namely: that the “employee” does a certain action). That is, if you mow my lawn, then title to this gold coin transfers to you. Again, the transfer of title in this case is both expressly conditional and future-oriented. Title to the coin transfers only if the lawn is mowed, and I still own the coin.
The performance of the action triggers the transfer of money from the employer, but the action is not literally “sold” because the employee did not “own” his labor, and the employer does not own it after it is performed. We have to stop thinking sloppily and overusing metaphors.”
— Stephan Kinsella, A Libertarian Theory of Contract
Stephan Kinsella posted a link to this on his facebook page today and I responded there and I’ll post my response here, as well:
One caveat I would add is that employers pay you to perform an action and this is a one way transfer but they do so with the expectation that your performance will result in a 3rd party transferring them some sort of payment, and usually greater than the original payment for your action.
If that second transfer isn’t possible or relied on or there is no expectation of a reciprocating action/reaction then most, if not all, employers would not initiate the initial action of transferring payment to you in the first place.
The secondary action can even be a negative. For example if you pay someone to stand guard as security on your property, your expected reciprocation from 3rd parties is that they will NOT bother you or enter your property.
You’re therefore paying for an action and expecting non-action in return.
Varoufakis on Valve, Spontaneous Order, and the European Crisis
Yanis Varoufakis of the University of Athens, the University of Texas, and former economist-in-residence at Valve Software talks with EconTalk host Russ Roberts about the unusual structure of the workplace at Valve. Valve, a software company that creates online video games, has no hierarchy or bosses. Teams of software designers join spontaneously to create and ship video games without any top-down supervision. Varoufakis discusses the economics of this Hayekian workplace and how it actually functions alongside Steam—an open gaming platform created by Valve. The conversation concludes with a discussion of the economic crisis in Europe.
This was a great podcast about the unusual structure of Valve Software’s (creator of Half Life video games) organizational structure, where there are no bosses, no supervisors and the employees make the rules, create content, decide strategy and marketing and even vote on bonuses and raises for co-workers.
If you’re thinking about starting a business or if you own a business, listen to this and consider the ideas presented in it.
I don’t know why so many of you hate corporations and the fact that they are treated as a legal entity.
