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Don’t Try To “Pull An Instagram.” Here’s Why …

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Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#11

Post by msuster »

dmk23 wrote: post #4

The post is missing the most important point. Instagram would not be worth $1B to Facebook if it has not raised a large round. Without the resources to fuel the expansion, build out the product, develop an application platform, invest in revenue team and so on Instagram would be in no position to threaten Facebook. As soon as the funding closed Facebook was suddenly facing a viable threat in mobile vs. just another r…

I didn't miss that point. I agree with what you say. But - there are very few companies that could pull this off so my post was to point this out to people.

It may be obvious to you but all the chatter this week has been about getting big rounds of VC before M&A. My thesis was that this will backfire for 99% of companies. In Instagram's case it worked like a charm. Precisely because they were so valuable to Facebook.

So, yes, I think Instagram "pulled an Instragram" if I could be so recursive.

Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#12

Post by csallen »

abiekatz wrote: post #9
csallen wrote: post #2

Charlie Munger (Warren Buffett's partner) has kept a long-running list of psychological tendencies that commonly affect people's judgment. There's one item on this list that he's termed "Availability-Misweighing Tendency." In a nutshell, it's an observation that people tend to overweigh extra-vivid evidence, which (necessarily) means under-weighing evidence that isn't so vivid. In this case, the extra-vivid evidence…

Here's the text of Munger's speech: http://www.loschmanagement.com/Market%20Comment/Client%20Let... It is well worth a read.

He actually revised the entire speech, added a few more principles, and turned it into a formal essay called "The Psychology of Human Misjudment". I'm not sure if it's online, but it appears as the last chapter in Poor Charlie's Almanack.

Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#13

Post by johngalt »

A more detailed way of saying: "Taking too much VC money will close more doors than it opens, and you should know which ones are closing"

I'd assign weight 0 to 'interested acquirers' opinions. Until there is a deal on the table, there is no reason to risk running out of cash and being bought at fire sale prices.

Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#14

Post by blhack »

rokhayakebe wrote: post #7

My contention is Instagram already decided to sell to FB prior to the investement. However Mark, being the Zuckester he is, wanted to do the large majority of the deal using stocks only (that's gangster). Instagram raised money so the founders and team would have cash, and the investors get a chance to have more pre-IPO FB stock. Note: Maybe this is what the post is about. I have not read t yet.

Totally, totally gangster.

(seriously, what?)

Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#19

Post by kabuks »

csallen wrote: post #12
abiekatz wrote: post #9

Earlier quoted context omitted.

Here's the text of Munger's speech: http://www.loschmanagement.com/Market%20Comment/Client%20Let... It is well worth a read.

He actually revised the entire speech, added a few more principles, and turned it into a formal essay called "The Psychology of Human Misjudment". I'm not sure if it's online, but it appears as the last chapter in Poor Charlie's Almanack.

Found a copy here: http://law.indiana.edu/instruction/profession/doc/16_1.pdf

Re: Don’t Try To “Pull An Instagram.” Here’s Why …

#20

Post by Create »

dmk23 wrote: post #4

The post is missing the most important point. Instagram would not be worth $1B to Facebook if it has not raised a large round. Without the resources to fuel the expansion, build out the product, develop an application platform, invest in revenue team and so on Instagram would be in no position to threaten Facebook. As soon as the funding closed Facebook was suddenly facing a viable threat in mobile vs. just another r…

Facebook saw the need to take Instagram off the table.

instagram's former marketing director could say that is BS (former, because being still around would have raised eyebrows).

Just look at the people behind fb/inst and rejoice on the "pulling another round before acquisition" -- as if that would have come as a surprise to any of the parties involved.

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