91–100 of 276 posts
Earlier quoted context omitted.
This is just the market reflecting reality. Most of the "unicorns" aren't actually worth the billion or so dollars their valuations are at. They don't generate enough of really anything that is worth the silly valuations they get. This is why free markets are a good thing. They eventually correct themselves.
Exactly. I honestly don't see the problem. Some VC lost a bunch of money? Oh well!
To be clear, it's lost XX% of it's market cap. The market cap is a knowingly-flawed assessment of earnings potential for a company. Its actual value is probably unchanged.
Angie's List: from $28 in Jul 2013 to $9[0] Box: from $24 in Jan 2015 to $10[1] GoPro: from $87 in Oct 2014 to $11[2] Groupon: from $26 in Nov 2011 to $2.60[3] GrubHub: from $46 in Apr 2015 to $21[4] Twitter: from $70 in Jan 2014 to $18[5] Yelp: from $97 in Mar 2014 to $21[6] Zillow: from $121 in Feb 2015 to $22[7] Zynga: from $15 in Mar 2012 to $2[8] 0: http://www.google.com/finance?q=ANGI 1: http://www.google.com/f…
Facebook: $38.23 to $94.97 (May '12 - present) [0] Wayfair: $32.18 to $37.81 (Oct '14 - present)[1] TripAdvisor: $27.91 to $70.63 (Dec '11 - Present)[2] Hubspot: $29.05 to $50.04 (Oct '14 - Present) [3] Tesla: $10.40 to $204.99 (Jul '10 - Present ) [4] ZenDesk: $15.25 to $23.10 (May '14 - Present) [5] LinkedIn: $90.09 to $196.10 (May '11 - Present) [6] 0: https://www.google.com/finance?q=facebook&ei=OGyZVsiyEYqNmAG..…
The only way to settle this is for someone to make a weighted index of tech IPOs in the last n years.
"over-hyped gimmicky thing trendy with hipsters out-of-touch with reality starts to fail over short period of time" not surprised one bit. i echo the sentiment of other commenters who give other examples. this is only surprising if you are also out of touch with reality
I wonder if we can quantify a higher incidence of surprise in the Bay Area startup scene?
Earlier quoted context omitted.
Disagree entirely. Twitter? No good way to monetize. Groupon? Failed to monetize effectively after virality faded and without a moat competitors did the same thing. Yelp? A web version of the BBB protection scheme whose profit comes from the shake down protection racket against small businesses, not from users. Zynga had no moat and other companies quickly did the same thing with much leaner overhead, like King and a…
> On the flip side, every time someone takes an Uber or rents a room on AirBnb, they pay the company. Yes, but Uber and AirBnB do not have (from a technical perspective) innovative products, nor strong lock-in businessmodels. Everybody could start a competitor. In fact, Uber faces a lot of competition already; see e.g. [1], [2]. [1] http://www.forbes.com/sites/liyanchen/2015/09/09/uber-wants-... [2] http://www.wsj.co…
Earlier quoted context omitted.
Soon we will see uber, airbnb and dropbox added to this list. The problem is the new VC-funded startup model is a sham to rip off the public. Basically build a bunch of hype around fad-based, unprofitable companies with unsustainable business models and capture massive valuation of ~50x sales before going IPO and then insiders dump all the overvalued shares on the naive dumb money and only stick around long enough to…
Disagree entirely. Twitter? No good way to monetize. Groupon? Failed to monetize effectively after virality faded and without a moat competitors did the same thing. Yelp? A web version of the BBB protection scheme whose profit comes from the shake down protection racket against small businesses, not from users. Zynga had no moat and other companies quickly did the same thing with much leaner overhead, like King and a…
Angie's List: from $28 in Jul 2013 to $9[0] Box: from $24 in Jan 2015 to $10[1] GoPro: from $87 in Oct 2014 to $11[2] Groupon: from $26 in Nov 2011 to $2.60[3] GrubHub: from $46 in Apr 2015 to $21[4] Twitter: from $70 in Jan 2014 to $18[5] Yelp: from $97 in Mar 2014 to $21[6] Zillow: from $121 in Feb 2015 to $22[7] Zynga: from $15 in Mar 2012 to $2[8] 0: http://www.google.com/finance?q=ANGI 1: http://www.google.com/f…
Facebook: $38.23 to $94.97 (May '12 - present) [0] Wayfair: $32.18 to $37.81 (Oct '14 - present)[1] TripAdvisor: $27.91 to $70.63 (Dec '11 - Present)[2] Hubspot: $29.05 to $50.04 (Oct '14 - Present) [3] Tesla: $10.40 to $204.99 (Jul '10 - Present ) [4] ZenDesk: $15.25 to $23.10 (May '14 - Present) [5] LinkedIn: $90.09 to $196.10 (May '11 - Present) [6] 0: https://www.google.com/finance?q=facebook&ei=OGyZVsiyEYqNmAG..…
Earlier quoted context omitted.
Soon we will see uber, airbnb and dropbox added to this list. The problem is the new VC-funded startup model is a sham to rip off the public. Basically build a bunch of hype around fad-based, unprofitable companies with unsustainable business models and capture massive valuation of ~50x sales before going IPO and then insiders dump all the overvalued shares on the naive dumb money and only stick around long enough to…
> The problem is the new VC-funded startup model is a sham to rip off the public. That has always been the VC-funded startup model. The difference between now and the dotcom boom is that the public isn't so gullible anymore (or at least not so soon after the financial crisis). Your grandma in Wisconsin has long since shut down her brokerage account, and has no intention of reopening it.
No it hasn't. Intel, Apple, 3Com, Compaq, DEC, and Lotus are all companies that took venture capital to get started. They are also all companies whose business model was "make things and then sell them for more than they cost to make" instead of "aggregate a lot of eyeballs and then figure out how to make money off them later." There's nothing special about venture capital that requires one model or the other.
What's changed is the underlying need for venture capital in the first place. It was originally needed because the things startups wanted to make and sell required a huge up-front investment to get started -- building fabs or factories, hiring lots of engineers and programmers, etc. There was just no way to bootstrap a business that needed so much cash up front, so VC money made businesses possible that otherwise could not have ever gotten off the ground.
Nowadays the cost lots of that stuff that people had to expensively do for themselves has been commoditized down to nearly nothing, so nobody really needs VC just to get started anymore. What they need VC for is to get big faster than their competitors, in order to muscle those competitors out of the marketplace. And VCs need horses to bet on, so when all the horses are running the "get big fast" game, their money is going to flow towards the companies that show the best possibility of getting big fast. Which is to say, companies that make stuff and then give it away for free.
And there's a prisoner's dilemma element to that -- if you are the one VC who's still interested in funding companies that make stuff to sell at a profit, your investments will get clobbered by competitors funded by all the other VCs who are giving it away. So you have to play the game, whether you want to or not.
Angie's List: from $28 in Jul 2013 to $9[0] Box: from $24 in Jan 2015 to $10[1] GoPro: from $87 in Oct 2014 to $11[2] Groupon: from $26 in Nov 2011 to $2.60[3] GrubHub: from $46 in Apr 2015 to $21[4] Twitter: from $70 in Jan 2014 to $18[5] Yelp: from $97 in Mar 2014 to $21[6] Zillow: from $121 in Feb 2015 to $22[7] Zynga: from $15 in Mar 2012 to $2[8] 0: http://www.google.com/finance?q=ANGI 1: http://www.google.com/f…
GoPro: from 64$ to 11$ http://www.google.com/finance?q=GPRO