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41,000,006 reasons why I think we're in a bubble

jacquesmattheij.com

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Re: 41,000,006 reasons why I think we're in a bubble

#51

Post by pclark »

arkitaip wrote: post #28
citricsquid wrote: post #14

What's the difference between proof of it being a bubble and these guys just making a ridiculous investment based on hype?

What's worrying is that these guys are Bain Capital, Sequoia Capital, and Silicon Valley Bank - some of the most influential tech investors in the world. They should know better. That or they have some incredible inside info on the Color team and their product.

They obviously have incredible inside information - you think they invested based on the Techcrunch post? Is it silly day on Hacker News or something?

Re: 41,000,006 reasons why I think we're in a bubble

#52

Post by blantonl »

MatthewPhillips wrote: post #36
blantonl wrote: post #27

Earlier quoted context omitted.

Color has launched on both iOS and Android. In addition, they didn't spend 41 million, they received funding in the amount of 41 million.

I understand that. My comment was why invest in scaling when the need to scale hasn't been established?

Bain Capital, Sequoia Capital, and Silicon Valley Bank, the ones who are funding this, see great potential in the team that is bringing color to market.

They've given a long runway to Color, and if the airplane takes off those investors reap far more rewards then they would have if Color is wildly successful and other investors were able to participate in subsequent rounds of investment.

I cannot emphasize enough that this is a strong team (investors and owners). There are almost certainly specific targets and objectives this team needs to meet before they collectively decide to spend the entire 41 million.

Which means this thing could crash and burn after spending 3 million, and they unwind from there.

Re: 41,000,006 reasons why I think we're in a bubble

#53

Post by karanbhangui »

eli wrote: post #41

I'm pretty sure Dropbox paid a lot more than $7.95 for "dropbox.com" It's actually somewhat difficult to find an unregistered, pronounceable domain that's under 6 or 7 characters.

Dropbox had an already successful product operating on getdropbox.com. When you have some revenue numbers to play with, it makes sense to invest serious capital.

Re: 41,000,006 reasons why I think we're in a bubble

#54

Post by jules »

eli wrote: post #41

I'm pretty sure Dropbox paid a lot more than $7.95 for "dropbox.com" It's actually somewhat difficult to find an unregistered, pronounceable domain that's under 6 or 7 characters.

Is it actually important to have a short domain name? I either seldom visit a site, in which case I visit it through google, or I often visit the site, in which case it's in my url history completion list.

Re: 41,000,006 reasons why I think we're in a bubble

#55

Post by digisth »

We might be, but are bubbles always bad? Lots of money gets thrown around. More people get jobs. Ideas are everywhere. People get experience starting and running companies. Interpersonal and business networks are built. Lots of bad ideas are funded, sure, but a few great ones also emerge.

We shouldn't condemn bubbles as automatically bad. We should be aware of them, though.

Re: 41,000,006 reasons why I think we're in a bubble

#56

Post by pclark »

kovar wrote: post #24
pclark wrote: post #8

Hmph. If nothing else, posts like this are terribly offensive to the entrepreneurs that dedicate their lives to products like Color. Did anyone consider that maybe Sequoia, who have invested in companies that make up over 10% of the NASDAQ know what they are doing? Companies like Color, AdKeeper and Flipboard have "crazy" valuations based on the founders having ridiculous resumes. They have all created billions of do…

- If it is going to take them a few years to get to their eventual, profitable, goal, why invest $41M now? Why not invest $20M now and another $21M when they're on the track that will be truly profitable, once they've demonstrated where they are going? - Is calling the investment "crazy" really offensive to the entrepreneurs? It is more a compliment to them than anything else. The investment may be crazy, but the ent…

I cannot point to an article about why this is a sound investment, I guess my entire point was that I do not understand why everyone has to jump all over this as to why it is a bad investment, since you have such a hilariously small data point to base any opinion on.

Re: 41,000,006 reasons why I think we're in a bubble

#57

Post by arkitaip »

edw519 wrote: post #30

I don't know about the rest of the world, but we sure are in a bubble here at Hacker News. There seems to be a real disconnect between what people want to build/invest in and what people in the real world actually need and want to pay for. Just as sample of what I've witnessed in the past few years: Ask HN: How do you like my file sharing app? Ask HN: How do you like my social app for niche ? Ask HN: How do you like…

Which is why you never engage in business ventures based on what customers claim they need/want. How many companies expressed a need that would make Twitter or Facebook happen? Yet these services are nowadays a crucial part of many companies marketing efforts simply because a bunch of business people had a vision or scratched their own itches.

Re: 41,000,006 reasons why I think we're in a bubble

#59

Post by Tyrannosaurs »

pclark wrote: post #35
Tyrannosaurs wrote: post #33

Earlier quoted context omitted.

Yes but knowing what you'd do with it and that being a good thing to do with it are different things. I don't see what they need $40m for that's going to deliver real value.

Why would you see what they need $40m from when you are on the outside looking in on a single product? Seriously.

Fair point, just $40m is a lot of money for a start up software business.

If they're looking at something with a bricks and mortar component that would be different but I'm generally with DHH on this one - businesses of this sort can grow quickly without the need for this sort of capital.

Re: 41,000,006 reasons why I think we're in a bubble

#60

Post by michaelcampbell »

I don't know if it's a bubble or not, nor do I have any idea if it's just because of where I browse (self selection), but I've noticed a trend lately. The trend is that people are excited about a startup BECAUSE IT'S A STARTUP, and not because of what the underlying value of the business' model/idea/value. As if the fact something is a startup is, in and of itself, somehow magical and has intrinsic worth.

It reminds me of a few years ago when people were all googaw over social networks, because they were social networks. That seems to have passed now and they're focusing a bit more on how social can help this cause or that business model.

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