That's because making a big pile of money the Silicon Valley way requires two things: a product, and a moat. It's not hard to create an email product, but email moats are hard because it's an anarchist technology by design.

Would you mind explaining what does "a moat" mean in this context?

Warren Buffet talks about "moats" all the time. Basically a business with a moat is just a business with a defensible advantage.

If you think of your business as a castle, a moat is something that stops others from taking your castle from you. This could be anything from a network effect (Facebook, LinkedIn), economies of scale (Amazon, Walmart), to patents (most biotech companies) to brand (Coke).

The way he put it was something like, "If you gave me 100 billion dollars to take Coke's market, I can't. They've been investing in infrastructure and brand all over the world for decades. Even if I could make a better tasting beverage, people would still buy Coke. They have a moat".

http://www.valuewalk.com/2015/09/warren-buffett-on-economic-...

Platform lock-in.

It's a ditch dug around a castle to stop people getting in. i.e. the 'wall' in the walled garden.

So, "wall" != "moat" Some castles had a wall and a moat. Anywho. I think there is a differences in kind here that is material to the discussion.

A moat is a competitive advantage that's hard for competitors reproduce or otherwise overcome. Coke's moat is its near universal brand awareness and affinity. Comcast's moat is its infrastructure and political clout. Crossing a moat in any conventional way is very resource intensive and often leaves the challenger vulnerable.

You can make an alright pile of money without the moat. Perhaps the problem is the kool-aid level in the companies making this stuff...

Though they are making good things, so it's hard to be too critical.

I thought the business proposition of Mailbox and Carousel was providing more utility/centralization around Dropbox services/storage (via file attachments and photo storage). Which never was a great idea, but still.

Yet that same Silicon Valley rewarded Mailbox with $100MM in an acquisition...

That's exactly my point. Silicon Valley rewards "go big or go bust", it doesn't reward "small, sustainable business".

I don't for a second blame the founders of Mailbox for doing what they did. When the market creates a strong set of incentives like this you can't really expect anyone to do anything other than take the $100m. But this is the side-effect.

VC is generally designed for big bets and big payoffs (invest in 10 risky bets in the hope that 1 pays off to cover your losses on the other 9). Less risky ventures with smaller payoffs take longer to grow, and don't satisfy the payoff requirements of the VC model.

That doesn't mean they're bad companies, but there's definitely a funding gap for the type of company that will require $3M in investment up front and be worth $10M in 5 years. That's still a great return, but right now it's the domain of private equity.

VCs themselves aren't the problem. Big bets are fine. The problem is acquihiring. It's:

- good for founders - they get a big fat paycheck and a chance for a job in a big company

- good for VCs - a payoff, even if small, is better than no payoff at all, so they want their 9 not-so-good startups to be bought

- good for the buying company - they can literally just kill the competition by throwing money at them, + they get some proven and experienced employees, which may be worth it given the unreliability of the standard hiring process

Care to guess who this deal is not good for?

Startups are (and are being heavily marketed as) a get-rich-quick scheme. Most of the people involved are self-selected to follow this process. And all this talk about providing value to the users? That's the part of the scheme where you get used.

This may be a contrarian view, but: I'm not convinced it's good for the buying company. Good engineers are hard to find, but this is an awfully expensive way to hire; you may not keep the good people for very long; and if you're the kind of company that has a really hard time hiring good people, you may not also be very good at getting engagement and productivity out of the people you acquihired.

My view on acquihires is that to some extent it's a trick the acquiring company plays on itself. Some manager is getting to hire a few good people using money (the acquisitions budget) they wouldn't otherwise have access to.

Acquihires are more about hiring functioning teams composed of engineers and executives who are used to working with each other. That's a lot more expensive to build than just the salaries; and you can generally take that team and throw them at a problem with a reasonable expectation they'll accomplish something.

Also, there's generally some amount of IP and customer data involved as well.

"you can generally take that team and throw them at a problem with a reasonable expectation they'll accomplish something"

For about 6 months to a year, after which time most of them have left, or have gone into "waiting for the golden handcuffs to come off" zombie-worker mode on a project they have no inherent interest in.

Totally anecdotal but the couple of acquihires I've seen from the inside have gone like this and it seems to be the natural state of them based on what I've heard second-hand from others.

I agree with this based on the 20 or so people I've known to go through this process to join a large company (amazon, google, etc). I've heard first-hand accounts of people even re-negotiating deals just to get out of the golden handcuffs they thought they could tolerate but couldn't. I understand this sounds a bit hoaky and I would love to give names and companies here, but obviously can't.

Agreed; they tend not to be great deals for the acquiring companies long-term. But short term you can rally that team to build something else, and your likelihood of finding the mythical 10x developer (or manager) is statistically higher in a startup that successfully launched a product in a compressed time frame (even if the market didn't work out for them).

Any acquisition involves a lot of turnover. Guaranteed that this turnover is built into the models they use when evaluating acquihires. Consider how expensive most company's talent acquisition costs are though (upwards of $100k+ per candidate hired for top talent) and it starts to make sense.

VCs are totally the problem here. It's not that VCs are bad people who want to screw over users, but their business model requires them to get payback on their bets, even if it's small. It can be hard to know up front if an idea is viable as a hockey-stick software company or if customer acquisition is much, much harder - often because you don't know who your target customer will be specifically until you've iterated a few times.

And many times, there's no other exit option for the VCs. Does it suck for users? Absolutely - which is why companies often have lots of apprehension about being early adopters of a startup's technology. It's why B2B startups are really hard, and why they tend not to hockey-stick because the customer acquisition costs are high and don't shrink with scale.

It's up to the founders to convince their VCs to pass on the acquihire because they think the company still has hockey-stick potential. Zuckerberg did this a number of times - it was still really arrogant, but it paid off for Facebook and shows why founders need a bit of arrogance to be successful. It's a lot harder to do this if you're running a startup that doesn't have a lot of market traction.

I think most VCs would rather see the company stick it out and go for the hockey-stick & IPO. An acquihire is a blip on their returns; it's basically worthless. They're usually arranged as a courtesy to founders, so that if you work your butt off for 3 years, do everything right, and still don't find success, you don't leave with hard feelings toward the other people you worked with.

You get acquihires when the assumptions behind the company's business model have been proven false and there's basically no way to solve it other than rebooting the company. Arguably this is an argument to not take VC until you've got the hockey-stick trajectory, so you can pivot & reboot at will without dissolving an existing organization. But even this sucks for customers, if you have any.

>VCs are totally the problem here. It's not that VCs are bad people who want to screw over users, but their business model requires them to get payback on their bets, even if it's small.

Doesn't that make them bad though? I mean it's like saying "It's not that the mafia are bad people who want to screw over people, but their business model requires them to blackmail and occasionally kill" (not comparing levels of "badness" of course, merely showing the problem in said reasoning).

It's not like following a particular "business model" is not a decision people get to make. And if people take the VC model that favours acquihires, then they very much have decided to do stuff that screws with users.

Another thing that should be mentioned is that most VC's have a close relationship with bigger tech companies. Its a way to move money out of the public markets and back into private. There are multiple implications with this type of behavior.

But this totally negates your point about "there isn't enough money in an email app". Clearly Dropbox thought there was at least a $100MM opportunity...either talent to produce $100MM+ in value, customers to convert into $100MM+ value, or staving off competition that would result in $100MM in potential loss.

> "Clearly Dropbox thought there was at least a $100MM opportunity"

The opportunity was the team, not the product they were producing.

Say you had a room full of math prodigies, but all they were doing was watching TV all day. You hire these math prodigies for $X and put them to work solving math problems - this doesn't mean that watching TV is worth $X, in fact it likely means the opposite, that their value is underutilized by whatever they're doing right now.

So there isn't enough money in making email apps, but a team capable of producing a great email app can be put to use doing things that do make a lot of money - but it sure isn't making email apps.

And that's unfortunate, because as users we're missing out on a lot of great products. The dark side of the immense growth in software (and immense growth in software salaries) is that entire products and services are no longer economical, even though we'd all love to see them. The VC system that drives these early acquisitions and acquihires is just one more factor among many that limit the field of what can be economically produced.

Yeah but that's ridiculous, they had only 13 employees that's 7.6MM per employee over the span of 2.5 years, some of them I'm sure they left already... You tell me when this starts making sense because it just doesn't right now.

Too much money! I don't care how big of a genius you are you're not worth that as a developer of an email client, and honestly to write an Email client is not genius level shit. The UI was dope, and their invite process was funny, that's all.

Looks like Dropbox fucked up, that's all, bad business decision, trying to copy Google and do better than them in the end they did the same.

The deal was stock and cash, so it is pretty much impossible to judge how good a deal this was for Dropbox[1]. Stock is a very cheap way for a company to acquire another.

[1] http://techcrunch.com/2013/03/15/mailbox-cost-dropbox-around...

"Stock is a very cheap way for a company to acquire another."

Not exactly. Could be the other way round too. It depends on whether the stock of the company is worth more or less than cash in the long run.

Yes.

Except since it is the company issuing stock in itself you can't really think of it as fungible. If it ends up being worth more than the strike price then literally one of the events that led to that price was the purchase stock being issued. Of course that doesn't mean the is a causal link, but in a very real sense the stock was free for the company itself.

The only cost to the company is opportunity cost.

"in a very real sense the stock was free for the company itself"

Stock always has value, especially to management.

Unless the company has poor self-esteem. :)

The reason so many technology companies today make acquisitions using stock is because they (correctly) understand their stock to be inflated, relative to intrinsic value. If that were not the case, if they understood their stock to be undervalued, then they would definitely not be giving it away in transactions. They would be making all-cash offers instead.

> " I don't care how big of a genius you are you're not worth that as a developer of an email client, and honestly to write an Email client is not genius level shit. The UI was dope"

But that's the key isn't it? I think you're looking at this from too narrow a point of view.

Yeah, email clients aren't worth much money, so its development isn't worth much either (when's the last time anyone you know paid for an email client?).

The point isn't to acquire a "developer of email clients" it's to acquire a "developer of top-of-class mobile apps", which is considerably valuable. Think of the average quality of a mobile app you use on your phone, the bar is pretty low. Producing truly amazing mobile apps (like you said, the UI was dope) is hard, and requires the flawless, cohesive operation of a lot of facets from engineering to UX design.

Truly excellent mobile teams are very rare, and worth a lot of money. To the tune of $7.6MM over 2 years? Beats me, but it doesn't seem completely out of the question.

Talented developers are worth a lot of money - teams of talented developers, designers, and product people who have a track record of producing stellar work together are worth a multiple of their individual values.

> " and honestly to write an Email client is not genius level shit."

It's not genius level shit, but it's a surprisingly rare skill, and by that I mean writing very, very good frontends. Most people here can write a functional email client if they had to, but how many of them can write a really fucking good one, so good and so easy to use that people - and not just the technorati - sing its praises from the rooftops and get their friends and family to download it?

The Mailbox team was operating at a level well above nearly all mobile app teams, and the quality of their work was easily an order of magnitude better than the industry norm of its time. This may not justify their acquisition price, but I think you're selling them short a bit. They're a team of people known for exceptional quality work, and command a high price for it.

I'm sure some of them are still there, however. They shutdown the product and put the team members to work elsewhere. So it could be prorated over a longer period depending on the acquisition deal.

This seems like a too-generous take.

Dropbox could have thought that and just been wrong. Even in the normal economy, per The Economist about half of all acquisitions destroy value. In our little hothouse, I'd expect a much larger percentage of value-destroying takeovers.

But there are plenty of other reasons deals get done than a company-wide coherent calculation of economic value. E.g., I've heard of acquisitions happening because a CEO needs to demonstrate to the board that they're doing something. Or incentive structures set up to reward an M&A team based on how many deals they do. Or executives wanting to bring in their old buddies from another company. Or, "gosh, money is so cheap right now we'd better spend it because our competitors are spending."

It's pretty clear that Dropbox valued Mailbox for its potential to be something other than the standalone email app it was. And you might be right - there might well be enough talent on the Mailbox team to produce $100M+ in value - but not making a standalone email app.

If we're being ultimately generous with Dropbox then what they are doing is exactly correct - taking a team that can create a $100M+ product and reassigning them somewhere that they can fulfill that potential. But that's of scant consolation to all the people that want to continue using the email app.

By the same logic not shutting it down would result in greater than a $100M loss.

"That's exactly my point. Silicon Valley rewards "go big or go bust", it doesn't reward "small, sustainable business"."

Because if that's your goal, you clearly aren't passionate about what you're doing. You might as well go work for a 9-5 company doing CRUD apps. /s

That went to founders and investors. Mailbox has clearly received a bullet.

> there isn't enough money to be made to satisfy VC investors. Mailbox and the like could have lived quite comfortably as paid-for apps with comfortable

I'm not sure that's true (see: Sparrow). I just don't think there is enough demand for people to want to pay for an email client. I imagine for a huge majority of people, default mail client's work fine enough for personal use.

Not to mention, if you're old like me, you remember paying (I think?) $100 and then eventually $49 for eudora / upgrades for eudora. In approx 1990 dollars. We now live in a world where people pitch tantrums about paying $10 for an app, and expect perpetual upgrades for that price! So simultaneously expectations have skyrocketed and prices have plummeted.

Part of the problem is, unlike say Pinboard, an email client doesn't feel like 1-3 devs worth of work. The protocols are horrendous, you have to understand the quirks of lots of servers, etc. Plus all the UI and backend and search work. I'm not sure it's approachable as a small indie company.

There's also, of course, bad behavior by large companies such as mozilla: Thunderbird made it very difficult to build an indie email client because you have to compete on merits and against free, but they eventually got bored and just quit making it. Not to mention competing with free/ad-supported. And the semi-annual YC/vc supported email client company.

Not to mention what is coming close to active sabotage of productivity apps by the ios and mac app stores (lack of trials, lack of upgrades, etc).

I remember paying for The Bat! and loving it.

Pegasus mail was pretty good, even if a bit enterprisy. I just searched and wow... it's still being developed! The website even still lists the msdos version. http://www.pmail.com/

I'm sorry, I apologise in advance, but this irks me.

"We now live in a world where people pitch tantrums about paying $10 for an app"

Where do users/customers get these expectations? Call it market forces, race to the bottom, whatever... do a little root cause and not blame joe public please.

That's a long running debate and for our purposes unimportant.

It's still a prominent, maybe even the most prominent, item on my personal list of "reasons I shouldn't build an email app."

point taken.

Yup. I still don't see why everyone complains about current mail clients. Mail.app on OS X / iOS, Outlook on Windows, works for me.

To make me switch, you would have to show me why the new thing was so much better. Like how Google search results were always better than Yahoo! (IMHO, no objective measurements used) so I switched. You would also have to explain it in a sentence I could immediately understand, whereas all the recent clients I've ready about either (a) claim to make things better but don't tell/show me how before I get bored of the page, or (b) use manager speak that I can't understand or is vague and abstract promises to increase collaboration or something. Therefore I've given almost no attention to any recent attempt to change email.

There's a big distance between "works for me" and "delights me."

I use Thunderbird on Linux and Windows. It "works for me," in the sense that it's stable and predictable and doesn't lose my data. But it also has lots of niggly little problems that annoy me, like UI decisions that made more sense ten years ago than they do today and limited tools to support people like me who have a ton of mail.

So while I use and recommend Thunderbird, I also would love to see something come along that is so much better that it makes me fall in love with it, instead of just shrugging my shoulders and resigning myself to this being as good as things get.

How much are you looking to pay for this? How many people are looking for delight in their email client? Do these numbers multiplied add up to a few tens of millions?

"I'm not sure that's true (see: Sparrow). I just don't think there is enough demand for people to want to pay for an email client."

Yeah, this is definitely what I saw with Sparrow. For it to become popular it has to be adopted by a substantial number of people. However, I find that only really tech savvy people cared about Sparrow and its streamlined interface. When I showed it to other people, they were reluctant to use anything else because they were afraid to move from their Apple Mail. I'm guessing if Sparrow had existed for windows it would've been the same thing with people using Outlook.

And then there's people who don't even use e-mail, who think it's outdated and prefer PM messaging as a form of communication. It's easy to see why a lot of these promising mail client apps don't really take off the way other apps and services do.

Nevertheless, Sparrow will always have a home in my Mac, as long as it keeps working on OS X.

Same. Sparrow is still my favorite email app on the Mac. Sadly had to give up on it with iOS as it just got super wonky. Will use it as long as it works on OSX.

Still using Sparrow, but wondering if it works on El Capitan? Does anybody use it on El Capitan?

I use it with El Capitan. Still works fine.

Better than fine. Works great. Still the best email client, even after not being updated for years. That's saying something.

And you are limited by a 30 year old standard (IMAP) with an insane message format. Building a truly new email experience would require a new protocol as well.

There's JMAP protocol (from fastmail.com): http://jmap.io/

I really hope this protocol takes off and gains widespread adoption.

Me too :) Hoping to announce a bunch more support in the Cyrus IMAP server very soon!

It could be worse. I still have relatives using POP--across multiple devices!

Do you think Nylas is headed towards this eventual doom too?

I guess Mailpile isn't trying to be commercial, so perhaps it will keep soldiering on the power of donations for as long as that keeps up.

Hey there-- I work at Nylas.

We've structured our business to... actually have a business. Our team spent the first year selling APIs to developers [1] which already power lots of paid apps. The N1 mail app we released two months ago[2] follows this and will have paid features next year.

Plus both are open source free software, and quite popular on GitHub. [3]

[1] https://nylas.com/features/

[2] https://nylas.com/n1

[3] http://github.com/nylas/

Can you compare yourself to Mailpile? I want an email client (and maybe server) that is privacy-conscious and easy to configure. Are you two completely different projects?

We're two totally different projects. We focus on a lot of stuff in addition to privacy (like great design).

I understand what Mailpile is. It's a self-hosted email web client.

What is Nylas? The website doesn't seem to be written for me, but for PHBs. Apparently you have great business, design, and APIs, but what is it that those things do? Are you an email client? A server? A webmail service?

What makes you different from Gmail or from Mailpile?

Nylas is two things:

1. APIs for developers that replace IMAP/SMTP/Exchange. Use this to build any app that integrates with a user's mailbox, calendar, or address book.

2. A new extensible email app, built on web technologies (Chromium+NodeJS). This is called N1 and was released about 2 months ago.

We sell the APIs as an infrastructure business (like AWS).

This is the first I've heard of N1. It looks appealing, but after following the links and looking at it on GitHub, it seems like installing the sync server for self hosting is still non-trivial.

I went to the "releases" tab on GitHub and it looks like the last one was in 2014. I see things in the GitHub repo that suggest there are Dockerfiles and Debian packages, but I don't see an actual Debian package repository or an entry on the Docker Hub. Is the recommended way to use it today just cloning the git repo? Or is there a stable release of the sync server that's tested/known to work with the binaries of the client?

Yep, just clone the git repo and set up on Debian (like Ubuntu 12.04) and run setup.sh. Most developers run it in a VM.

We don't have "releases" because we are constantly releasing to production. Check out the `production` branch on GitHub for what we're running right now. Usually it's just a handful of hours behind master (at most).

I’d pay to have delete actually delete email completely (not just from my inbox, but from all as well).

@softawre: He's asking for it to delete on the receivers side too.

I think certain enterprise-y email solutions have this, but there's no way to have that happen in the distributed email ecosystem unless all your messages were just links to a website that could delete the content centrally, or similarly, jpg's of rendered text that were somehow forced to be remotely fetched each time.

And, indeed, that sort of functionality runs counter to the idea that once something has been sent to me, it's "mine" to keep/delete/whatever without someone else having the ability to change or delete it without my permission.

You have no idea how much some managers love this idea.

I know I had a former boss that loved to try using the outlook "unsend the stupid thing i sent" feature.

Little did he know the cients could turn that bit of functionality off. He hated when we replied to the emails he had "purged".

in order to do that, you can send an unique link as content so you can have total control over what you sent. doubt that many would click but i couldn't think of any other way.

other than that, i don't think receivers like the idea that others can control what's in their inbox.

Well there is https://www.criptext.com/

What?

I think he means he'd like to be able to irretrievably destroy all records of an email.

Yeah right now it labels the email with “trash” in the all folder instead of actually deleting it.

You wouldn't expect Slack to be able to make so much off of messaging - there's got to be some way to be better enough to make money.

Slack is a corporate product that sells subscriptions to their native-only service. An e-mail client that only let you see your last 30 days of e-mail without paying for it likely wouldn't catch on because people have different expectations for how e-mail should work/openness than they do with a corporate communications platform.

Side effect of this is that Mailbox was the first to support out of the box notifications on my Apple Watch + gmail accounts. Apple mail doesn't monitor/push emails from Gmail so you don't get notified on the watch.

Also, it's not 'disruptive' which isn't very sexy. At the same time, no one's really disrupted email (probably since gmail) and even sms for the most part, as a form of communication because they are the only cross platform with a very low barrier to entry. Note that all the sms replacement apps still use sms as a fall back since it's a shit show of walled garden apps.

I'm starting to believe that any idea of "disrupting" communications via a private company should be culled in its infancy. Market can't do infrastructure. Most companies will do their utmost to lock you in, and then abandon the product as soon as it's even marginally more profitable to do something else. Doubly so with Internet startups, for which the barrier to exit is incredibly low.