This is something that always strikes me about the amount of money swilling around in tech. $90M is an absurdly huge amount of money. By absolutely any outside objective measure of work put in to payoff it is off the scale. To look at this as the founders having lost out is almost comical.

Well apparently you can play baseball and make $330m.

Yes, it’s a lot, but to build a $30b company and make 90m pre-tax (maybe 50m post in CA) is something...

The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber.

> The obvious comparison is Travis Kalanick

That's why I said outside objective measure. By any objective standard 90M is an insane amount of money for one person to have. One billion is so far off the scale it is impossible to describe.

I’m making the point that you have two cos whose main US product is virtually indistinguishable from one another. The founder from one became a multi billionaire and the others are 1/20th of the way of becoming one.

I'm making the point that when you look at both objectively rather than in comparison they are both absurd amounts of money.

But you're injecting that point into a discussion about a different point as though it provides more insight. It's not particularly interesting; we get it, they're fabulously wealthy. But no one contested that, which is why several people are trying to explain that it's not what they were talking about.

An S-1 filing encourages relative financial comparisons by design and intention. It's not surprising that Lyft's founders are extremely well off now. What could be surprising is the degree of dilution they experienced. Those kinds of financial technicalities require us to engage in discussion that treats objectively fantastic returns in terms of relativities.

We're about four replies deep into a conversation chain by now. I would have imagined that if people didn't want to talk about my original observation they would have simply not replied to it! "Interesting" is an obviously subjective term, I find the relative measures that Silicon Valley apples to wealth absolutely fascinating.

If you had a billion dollars, would you immediately give away $900mm, since you appear to be arguing the difference is meaningless? Just because they're both a lot of money doesn't mean it's not important to the people who have said money.

Lyft and Uber's revenue numbers are quite distinguishable from each other.

> The obvious comparison is Travis Kalanick, who is definitely a billionaire and retained much more of Uber.

That's because Kalanick got screwed by VC's previously and made sure that wasn't going to happen again.

On the other hand, the baseball player will create much more than that in value while Lyft has lost billions of dollars. If someone here is underpaid it's not the Lyft founders.

Lyft has enriched its investors far more than any baseball player could even dream of. You're just looking at accounting losses. But when this IPOs, early stage investors will have all made billions.

But that's not creating value. Unless the lottery creates value for people who buy the right tickets.

The current price is the market's expectation of value throughout the existence of the company. The market believes that these past cash flows are not indicative of the company's future ability to create accounting value. And you may choose to value a growth company by its historical cash flows, but the market doesn't.

The value was created on the company itself, thanks to the early funds of the investors. Value was definitely created..

What value is exactly a baseball player creating? Lyft has provided WAY more value to society over its lifetime.

Drawing viewers' eyes to lucrative television timeslots for advertisers, selling tickets to local stadiums, and selling merchandise such as jerseys and figures.

Those are all wealth transfers, though, not really value creation. The only value creation by the baseball players is the entertainment provided (which is definitely not nothing).

How about getting a massage? “Wealth transfer”? Or “value creation”?

Value creation, they're fixing/entertaining the customer.

The baseball player brought joy to other humans, which is the whole bottom-line point of the entire economic system.

Lyft has burned piles of investor cash to give people artificially cheap taxi rides; the wealth-transfer is zero-sum and it's actually worse than that because their dumping distorts the real transport market (and exacerbates the negative externalities of cars). You could argue they've done some genuine value creation by being a more efficient taxi dispatcher, but if there was any substance to that then they'd have a profitable business.

There is always a greater goal to achieve that requires more money: 90M to retire? Sure, it’s plenty of money. 90M to do greater and better things? Not so much. Hell, even Bill Gates would gladly take more money that what he already has in order to achieve his foundation goals.

Your point of view is not objective, but subjective to how much money you need to have in order to do the things you are planning to do.

But they did lose out. You're confusing a comment about relativities for a comment about absolutes.

No one is saying they're not going to be well off, or that it wasn't a worthwhile use of their time to build the company. They're just saying the return is smaller than it could have been. Your "objective outside measure" isn't enlightening in that sense, because the point is specifically about relative measures.

Responding to a discussion about funding dilution by saying, "well they're well off anyway!" is kind of odd, because that's not really relevant. Dilution also materially impacts non-founding employees, and small changes in dilution could have outsized impacts on their returns.

It's also comparable to negotiating with a company who tells you that you're still getting a lot of money "by any objective measure" even if they won't meet your ask, because their offer is higher than the median wage for your locale. Yeah, sure, but that's a pretty empty observation isn't it?

The founders (theoretically) created $20B in value and you think $90M is sufficient compensation?

$90M is definitely enough to be more than comfortable the rest of your life. But a $5B payout would have meant they could start a VC firm, invest in the next several generations of startups, partially self-fund something ambitious like a Space-X, start funded non-profits, etc.

> The founders (theoretically) created $20B in value and you think $90M is sufficient compensation?

...yes? I don't really see what's so absurd about that idea.

It also seems more than a little disingenuous to suggest that the founders were the only ones that created that $20B in value. They didn't single handedly create the apps, the marketing platform, drive the cars, etc. etc.

> But a $5B payout would have meant they could start a VC firm...

https://en.wikipedia.org/wiki/Y_Combinator

> In 2009, Sequoia Capital led the $2 million investment round into an entity of Y Combinator which would allow the company to invest in approximately 60 companies a year as opposed to their previous 40 companies a year. The following year, Sequoia led a $8.25 million funding round for Y Combinator to further increase the number of startups the company could fund.

I think they'll be OK if this is their goal.

I’m as pro founder as it gets but they alone did not create that value. Tons of employees, and the investors who put up the money, helped along the way.

You can do all of those things and more - easily - with $90m.

Elon invested more than $100M in SpaceX and they came very close to death before they finally succeeded with their last rocket. So it's not clear that you can do all of those and more, easily, with $90M.

> A family worth 90 million will still have a lot of financial anxiety

My god, get out of the valley for even 2 minutes. $90,000,000 is an obscene amount of money literally anywhere in the world.

Not to mention even by that standard, owning your house outright and having 10x its value in wealth is not "financial anxiety"

You must be joking. $90m, even in the valley is massive, generational wealth. It is the top 1% of the 1% if not higher. You could buy some of the largest mansions in America. It puts you around the wealthiest 30,000 people in America.

Is this a quote from the HBO show "Silicon Valley" ?

Idk. I’m very bearish on Lyft. It’s a pure bet on US ridesharing. They didn’t expand internationally (now those markets are saturated) and didn’t get into delivery (Uber Eats alone is worth 5-7b).

Do you think ridesharing is just going to die as a product or do you think it will become easily commoditized and all margins will essentially disappear? I think it's going to be around for at least another 10-15 years, and considering how much money uber and lyft had to burn to get to where they are now, I feel like it will be quite hard for competitors to capture relevant amounts of market share in the US

The business is clearly not sustainable..it’s not that there’s changes in demand but the company will literally run out of money in a very short amount of time unless something drastically changes with their business model

Looks to me like they've made out pretty well on the personal front considering they've run their business at a loss every year.

Unfortunately that's not what matters to Wall Street or VCs. They could arguably have scaled slower and made sure each market was profitable, but since everyone wants "growth over everything", they were forced to scale as quickly as possible.

They are actually successful in the minds of VCs because their revenue has been growing.

I know a couple of bootstrapped founders running businesses with $10M+ ARR. They own the business in full. Any exit event would net them the same figure as Lyft's founders.

Makes you wonder if raising money to run a business like Lyft is worth it from a personal financial perspective. The bootstrapped founders I mentioned are extremely satisfied with no outside interference or investors breathing down their necks

But then again, not everyone can build a $10M ARR business

Companies like Lyft, Uber or Airbnb changed the world. Literally.

They probably de-risked their stake with some buyback during some of the rounds.

you could have made that much with a few good crypto choices

I mean if I went all in on crypto from the start and sold around end of 2017/beginning 2018 I would have been a multi billionaire. But that's not the point. Similarly, if I "only" bought far OTM option on FANG between 2010 and 2017 but not march 2014-2015 I would have also been a multibillionaire. Heck, I could have went long volatility at high leverage in February 2018 and be a good way to a billionaire. The point is, of course, if you make "good choices" one can be a multibillionaire in many ways. Alas, I am not a multibillionaire because "good choices" are good mostly in retrospect.

Would you please work on commenting more substantively? We're aiming for the kinds of discussion in which we stand to learn something.

https://news.ycombinator.com/newsguidelines.html

Sure, or by picking the right Powerball numbers.