194 karma · joined April 5, 2011
I work on: thetechreporter.com
Located in San Francisco, CA.
This makes no sense. The switching costs for both consumers and businesses is basically zero, and there are aren't really any network effects like there are with Facebook, Twitter, etc. What did they expect to happen at the end of those 2 months? That consumers would ignore the hundreds of other deal players in the market and only buy from LivingSocial?
So, my commute isn't bad by any means but I decided to give Lyft Line a shot to see if I could do any better. The first day I tried hailing one in the morning, the app hung up looking for drivers; it said 1 minute to match with a driver but I waited 3 before quitting the app and deciding to take Muni. That afternoon, I tried again but ran into the same issue. The next afternoon, I was finally able to line up a ride but had to wait 10 minutes for the driver to get to me. Once he did and we were on our way, I had the joyful experience of sitting in traffic for blocks on end while watching Munis zip by in the designated lanes beside us. Not including wait time, the ride took around 20 minutes (double my normal commute time).
I'm sure there are some routes for which Line is a better option than public transportation, but I personally have a much better experience on Muni than I did with Line. I get why they're focused on rush hour; a service like Line requires a critical mass of people to use the app concurrently in order to make it work. But, the downside of this is that the times when it reaches this point are the times when traffic is the worst and public transportation offers a superior alternative in many cases. We'll see if this ends up taking off, but I know I won't be using it for my commute. Maybe this would be better suited for one-off events like Outside Lands, Giants games etc. but I'd imagine they'd run into the same problems.
Scenario one: Smart 20-year-old college grad accepts an offer to go work for Big Tech, Consulting, whatever. Their salary allows them to pay down any student loan debt they might have, build a cash cushion, and sock away $10K/year for retirement. At 35, when they've built valuable industry experience and connections, they decide to go out and do their own thing. They stop investing in their retirement account, putting their cash into the startup or raising money, and let the retirement account sit and grow with compound interest.[1]
Scenario two: Smart 20-year-old college grad decides against the BigCo route and founds a startup (assuming this is even feasible given any loan debt they might have). Maybe raises a small funding round, takes a low salary...everything goes back into the business. There is no investment into a retirement account. Let's say they meander through startup land up until 35, making some money here, losing some there and given the high failure rate of startups never really sees the "big exit". At 35, when things like marriage and family happen, they're forced to take a job at BigCo (or MediumCo, SmallCo, whatever) and finally have the means to start investing something into a retirement account. Let's get aggressive and say they put in the same $10K/year that scenario 1 grad did up until 65 (hard to do if you start having kids, buy a house, etc).
At 65, scenario 1 grad would have $2,046,783 in their retirement account after just 10 years of investing $10K/year and then letting it sit and collect compound interest. Scenario 2 grad would have just $1,010,730 in their retirement account after investing $10K/year over a period of 30 years. The difference between scenarios comes out to over a million dollars!
Obviously there's an endless list of variables that could throw a wrench in this model, but the point is that people who fail to assess the time value of money and the opportunity cost for a dollar spent (or not invested) today vs. one invested over the long term do so at their own peril. If you're 20, just $1,000 invested into the market once will turn into $21,000 when you're 65. If you keep putting money in regularly, this amount will grow significantly and the sooner you start the more it will grow. It's up to each individual to determine the right path for them, and I'm not saying it would never make sense to go do a startup when you're young (you have more energy, creativity etc), but you must be aware that the tradeoff is losing valuable years early in your financial path that you will never be able to get back. Arriving at the same spot at 35 that you could have started at at 20 will put you significantly behind others who have used those early years to put the miracle that is compound interest to work for them.
[1] http://www.moneychimp.com/calculator/compound_interest_calcu...
A few weeks later, I started getting emails and calls almost daily about past due payments for my PayPal balance, which I was confused about since I used my own funds and thought that was the end of it. Turns out, PayPal charged that $300 to my credit account with them instead of taking it out of my balance, so now I owed an extra $300 and had to pay interest and late payment fees. When I called in to customer service to ask what was going on, it took me almost an hour to finally reach someone and they told me there was nothing they could do.
After that, I paid my remaining balance, closed my account and never looked back. I've since used Venmo, Square, bank transfers, and good ol cash to accept payments from friends, but I will NEVER use PayPal again in my life. Fuck them.
By announcing it, though, he's drawing an incredible amount of attention to the game which leads me to believe this was the intended effect. Heck, it made me download it as I've never played it before.
Genius move.
tl;dr - The demand for this far outstrips the supply of people willing to rent their spots to strangers for a few bucks.