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Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

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Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#61

Post by johnnybgoode »

pg wrote: post #28
startingup wrote: post #11

Basically it appears like Facebook made the rational calculation that hiring the developer at retail is a lot cheaper than buying the company wholesale. That is consistent with what I have argued in HN comments: with the glut of start-ups (50 from YC alone this year?) prices will drop towards replacement value. The replacement value of a start-up amounts to a hiring bonus for its developers. This is likely true even…

Note to the reader: don't believe every plausible-sounding explanation of events you read on a comment thread.

If the grandparent poster is correct, it's quite possible that YC's model has serious flaws. Considering these implications, wouldn't a reasoned counterargument be more appropriate than snark?

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#62

Post by pg »

startingup wrote: post #59
pg wrote: post #55

Earlier quoted context omitted.

I'd like to know why you think this isn't close to reality. Because I was there in person when reality took place.

These are what outsiders know: a) Facebook and many acquirers looked at the company and passed b) Company ran out of money c) Facebook hired the developer, who also posts in the blog that his idea would work far better as part of Facebook or Twitter. I am not asserting that (a) and (c) are directly connected. It is perfectly possible that the people who looked at the acquisitions aren't the same ones who made the hir…

"However the one thing no one outside Facebook can really know is why they passed on the acquisition."

I know exactly why they passed on the acquisition, and it was not because they thought it would be cheaper to hire someone.

It's strange to watch you keep insisting on this. You said something mistaken when there was no evidence, and now that evidence has emerged contradicting you, instead of changing your theory, you fight to find a way to make the facts conform to it. It's like watching a creationist respond to geology.

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#63

Post by pg »

johnnybgoode wrote: post #61
pg wrote: post #28

Earlier quoted context omitted.

Note to the reader: don't believe every plausible-sounding explanation of events you read on a comment thread.

If the grandparent poster is correct, it's quite possible that YC's model has serious flaws. Considering these implications, wouldn't a reasoned counterargument be more appropriate than snark?

Did you happen to see this?

http://news.ycombinator.com/item?id=779693

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#64

Post by benatkin »

ghshephard wrote: post #60
startingup wrote: post #59

Earlier quoted context omitted.

These are what outsiders know: a) Facebook and many acquirers looked at the company and passed b) Company ran out of money c) Facebook hired the developer, who also posts in the blog that his idea would work far better as part of Facebook or Twitter. I am not asserting that (a) and (c) are directly connected. It is perfectly possible that the people who looked at the acquisitions aren't the same ones who made the hir…

If Facebook thought there was value, then $5mm for the company + founders, particularly in a stock deal, wouldn't have caused Facebook to make a decision not to buy. The reality is that Facebook has a fairly large engineering contingent, and that writing a tipping application for the Facebook platform, will likely be a "from scratch" exercise - so there is little value in the codebase IP from TipJoy. The actual archi…

"their small size worked against them"

Thanks. That clears it up for me a bit. If in a hypothetical case there had been three developers, and a company hired all three of them without buying the company, things would have looked suspicious to more than a few people. With one person, it's easier to argue that it just made sense, given a particular scenario.

This, along with the fact that many startups have more to offer than just founder experience, also makes me think that this is unlikely to start a trend of hiring without acquiring.

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#65

Post by adrianwaj »

pg wrote: post #54
adrianwaj wrote: post #43

Earlier quoted context omitted.

I wonder if they fell through, because in Kirigin's words: "We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party." So at that realization the acquirers decided to build rather than buy.

No.

I know how TipJoy could make money fairly easily. Would like to help.

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#66

Post by Goladus »

kyro wrote: post #45
mattmaroon wrote: post #39

Earlier quoted context omitted.

This is my favorite online "journalism" technique ever. When someone you want a scoop from won't comment, just make a bunch of crap up and then when they get angry say "hey feel free to comment".

No Matt, it's not that. It's writing up a story, not having received comments from one party, explaining how you've given the party many chances to comment on the matter, for honesty's sake and the integrity of journalism, yet never considering that perhaps that party's refusal to comment could be due to other matters, legal or what have you, and indirectly making that party look shady for not returning the honest ge…

Assuming he is a moderately competent journalist that has done his homework about the subject he is writing about, he's aware of this:

http://news.ycombinator.com/item?id=777010

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#67

Post by pakafka »

ghshephard wrote: post #58
pakafka wrote: post #40

Earlier quoted context omitted.

What part is made up?

"Some basic, undisputed facts: ... he and his wife are shutting TipJoy down and returning what’s left of the $1 million they had raised to their investors." Do you have any sources, documentation or other reason to believe that TipJoy raised $1 million?

Re: Tipjoy's Series A. Multiple reports pegged it at $1M. http://www.techcrunch.com/2008/09/24/tipjoy-raises-1-million... http://www.thedeal.com/dealscape/technology/angel-investor/e... Are you saying those reports are wrong? Or that the company didn't call down the entire round?

Re: Comments. I reached out to Ivan and Abby more than 24 hours before I published the story. I understand why they'd be reluctant to respond, and I told them that.

I appreciate the back and forth on this board -- Paul's comments have been particularly enlightening -- but I'm going to bow out now. Please contact me directly if you have specific comments or questions. Thanks. pk

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#68

Post by randallsquared »

mattmaroon wrote: post #51
gizmo wrote: post #49

Earlier quoted context omitted.

The part about the $1 million VC money. But perhaps it wasn't you who made it up.

It was him who called it an indisputable fact.

Er, "undisputed" is not the same as "indisputable". Just sayin'.

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#69

Post by randallsquared »

gnaritas wrote: post #47
amichail wrote: post #44

Earlier quoted context omitted.

From: http://web.bsu.edu/cob/econ/research/papers/bohanon2002ir.pd... Public-choice scholars have long argued that voting is instrumentally irrational because the probability that a single vote will change the outcome of an election is nearly zero. Dennis Mueller made the point well when he noted that "the probability of being run over by a car going to or returning from the polls is similar to the probability of cas…

By that logic no one should bother voting, in which case the entire system would fail to work at all, obviously a flawed outcome. Thus voting does matter, so you should vote. Worrying about the probability of your vote being the winning vote is pointless, there is no winning vote. If the election was decided by a single vote, then every single vote counted and as mattered just as much as the last vote. While your ind…

By that logic no one should bother voting, in which case the entire system would fail to work at all, obviously a flawed outcome.

An outcome you do not prefer is not automatically irrational. You just don't prefer it. The solution is not to wish everyone would act against their own interests to produce your preferred outcome, but to change the incentives so that your preferred outcome is the natural result of rational choices.

Re: Facebook, TipJoy, the Deal that Didn’t Happen and the Hire that Did

#70

Post by Goladus »

pakafka wrote: post #67
ghshephard wrote: post #58

Earlier quoted context omitted.

"Some basic, undisputed facts: ... he and his wife are shutting TipJoy down and returning what’s left of the $1 million they had raised to their investors." Do you have any sources, documentation or other reason to believe that TipJoy raised $1 million?

Re: Tipjoy's Series A. Multiple reports pegged it at $1M. http://www.techcrunch.com/2008/09/24/tipjoy-raises-1-million... http://www.thedeal.com/dealscape/technology/angel-investor/e... Are you saying those reports are wrong? Or that the company didn't call down the entire round? Re: Comments. I reached out to Ivan and Abby more than 24 hours before I published the story. I understand why they'd be reluctant to respo…

From your article:

You could see why some of TipJoy’s backers, which include BetaWorks, the Accelerator Group, ex-Googler Chris Sacca and the Y Combinator start-up factory, might cry foul.

Have any of them actually cried foul? I recommend following up with them if you are really interested in the facts.

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