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

jacquesmattheij.com

21–30 of 269 posts

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

#21
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…

41 million for growth for an app before it launches?

[deleted]

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

#23
It is not necessarily a bubble yet. I think investors think the mobile-social-local market will be owned by very few companies. (Only a few can survive because of the network effect). They invest into one company and hope that with a lot of advertisement money they can win. There would be a bubble if they would invest the same money into 10-20 or more similar companies randomly.

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

#24
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 entrepreneurs managed to get people to shell out $41M. That takes serious talent.

- Getting $41M for color is insulting to a lot of other entrepreneurs that have dedicated their lives to products like color and received nothing. Give half of that $41M in $250,000 chunks to 80 other startups and Color would still have $20M to play with.

If you know how these large investments work, $41M in Color may seem very sane, but to a large percentage of the population, it does appear crazy, particularly in light of the dot com bubble.

Perhaps you could point us to a good article showing why this is a sound investment?

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

#25
post #4

One of the arguments I've heard that state that things are different this time around goes like this: it is far less capital intensive to do a startup now rather than in the late 90s because of open source software stacks and cloud computing providers. I agree with this statement but it means that the average software startup doesn't need a lot of cash to develop their product. Apart from ads and perhaps domain names…

Just because there might be a bubble doesn't mean that all startups will autofail. However, if I ran a startup with ads as my main source of revenue, I would be worried as advertising budgets are the first thing to be axed in a crisis. For entrepreneurs crashes are the best times to innovate and launch new ventures because while everyone else is angsting about cutbacks and surviving just another day, the entrepreneur…

Do you mean crashes are the best time? During bubbles everything gets more expensive.

I agree that a bubble doesn't mean all startups with autofail. I would like to learn from the past and understand what worked.

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

#27
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…

41 million for growth for an app before it launches?

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.

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

#28

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.

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

#29
post #11
post #7

At least the domain name is worth some dollars. I actually quite like the concept - makes group photo sharing fun & easy. But worth $41m? Not yet

I wonder how much they paid for the @color Twitter account.

Twitter doesn't allow selling twitter accounts.

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

#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 my twitter app?
  Ask HN: How do you like my facebook app?
  Ask HN: How do you like my iphone app?
  Ask HN: How do you like my facebook app that writes twitter apps?
  Ask HN: How do you like my game?
  Ask HN: How do you like my photo sharing app?
  Ask HN: How do you like my video sharing app?
  Ask HN: How do I monetize my free flashcard app?
  Ask HN: How do you like my app that helps other hackers to do ?
  Ask HN: How do I get traffic to my freemium app?
  Ask HN: How do I get angels/VCs interested?
  Ask HN: Look what I wrote this weekend!
  Ask HN: Look what I wrote in one night!
  Ask HN: Look what I wrote in 7 seconds!

  Customer 1: How can we sell through Amazon.com?
  Customer 2: How can we reduce inventory by $300 million?
  Customer 3: How can we increase conversion from 2% to 4%?
  Customer 4: How can we use software to reduce energy costs?
  Customer 5: How can we migrate one app into another?
  Customer 6: How can we get our phones to talk to our legacy apps?
  Customer 7: How can we take orders through the internet?
  Customer 8: How can we get our software package to do ?
  Customer 9: How can we reduce credit card fraud?
  Customer 10: How can we increase SEO effectiveness?
  Customer 11: How can we connect fulfillment and ecommerce?
  Customer 12: How can we increase revenue?
  Customers 13-200: How can we increase profitability?
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