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HN who is going to pick this company up? Facebook, Twitter, Yahoo, Google or Microsoft?
While I have no idea what information investors are basing their decisions on, it's probably some evidence that Snapchat is starting to replace Facebook among some bellwether set of users. That could be a reasonable bet, depending on what the evidence is. But I don't know what the evidence is, and without it there is no way I can estimate what Snapchat's valuation should be. (Hint: and neither can The Washington Post…
If you tell me Snapchat is what all the kids are using I'm going to give it some leeway - though I still think there's a lot of greater fool investing going on.
My biggest concern with these services is the seemingly fickle nature of their audience. Even if they're able to turn the service into something profitable - how long can they maintain it?
To quote Paul Graham: "Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter. But if you're living in the future and you build something cool that users love, it may matter m…
That said, it may very well be worth $4billion, or north thereof. The article concedes that it's difficult to speculate from the outside (and thus labels it "insane"), but fails to concede the simple point that it may be entirely justified.
To quote Paul Graham: "Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter. But if you're living in the future and you build something cool that users love, it may matter m…
But things aren't as "sticky" as they used to be. You used to have to rent your phone from the telco, and you had no alternative providers. Today, users can drop their telco carrier and switch to a variety of alternatives - bring their number with them, or switch to VOIP altogether and keep similar functionality without a noticeable loss of functionality. The same is true for the app of the moment. Maybe it'll be hot for awhile, but the barrier to entering the marketplace is so dramatically reduced that it's difficult to see the same type of longevity from today's companies that you've seen from the previous generation of big businesses.
While I have no idea what information investors are basing their decisions on, it's probably some evidence that Snapchat is starting to replace Facebook among some bellwether set of users. That could be a reasonable bet, depending on what the evidence is. But I don't know what the evidence is, and without it there is no way I can estimate what Snapchat's valuation should be. (Hint: and neither can The Washington Post…
I'm torn on this, I didn't think Instagram was worth 1B until my 16 year old niece told me the only things she used was Twitter and Instagram. If you tell me Snapchat is what all the kids are using I'm going to give it some leeway - though I still think there's a lot of greater fool investing going on. My biggest concern with these services is the seemingly fickle nature of their audience. Even if they're able to tur…
The good thing about teenagers is that: 1. they're trendy or try to be 2. have short attention span
If you can get a teenager to understand and like your product, you have a good chance of going viral, popular, or whatever it is kids call it these days.
To quote Paul Graham: "Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter. But if you're living in the future and you build something cool that users love, it may matter m…
26 million free users vs 26 million customers paying $50-100 a month is apples and oranges.
On the other hand, from the article: "As long as I can sell it to someone else for more in six months, who cares what it's really worth?" It might be argued that it's "really worth" whatever you can sell it for. It's not crazy to buy a baseball card for $100 if you can sell it for $150. Why is stock different, except that it's more volatile?
To put it in perspective, they could spend that money /differently/. Blackberry is worth just a touch over $4 billion http://i.imgur.com/QcXiC9E.png
Forget about the hype, the amount of users, the "mindshare", the paradigm-shifting omg-teh-adsense-ponies. To a 'regular joe' like myself, all I think when I hear anything about these sorts of companies is this: Do they currently make money from the service they provide? If so, for how long will this be a viable revenue stream? If not, does anybody realistically expect this situation to magically change at some future date?
As others have pointed out, this kind of investment prospect is often an easy way to make a quick buck for people in the know/money. I do understand this.
What I don't understand is how there can be such a lack of retrospective caution exercised by so many people who may have a hand to play in the outcome of these IPOs.
Despite not having the slightest clue about stock markets and financial investments, when it comes to these 'Web 2.0' companies, I do know a viable business model when I see one.
How the hell do all these people involved in the artificial inflation of the value of these companies not think back to what happened with the first web/tech bubble of the late '90s and early '00s?
I'm an uneducated oaf in the tail end of my 20's and even I can recall the ridiculous shit that went on back then. How can people with so much more technical and financial wisdom seriously think services like these are worth so much?