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Qwiki Epitomizes the Current Startup Bubble

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Re: Qwiki Epitomizes the Current Startup Bubble

#41

Post by slantyyz »

ejwcom wrote: post #33
arnorhs wrote: post #26

I simply don't agree with Eric on this one. His main argument seems to be that this startup isn't adding anything of any value to the space. The way I see it is this: Wikipedia is not very consumer friendly. It's dull looking and the entries are usually filled with a lot of text. The modern internet consumer is constantly facing more and more attention disorders and a lot of people don't simply like to read. The sear…

These are some use cases that I do not deeply consider, actually. They might change the context a bit. I still don't see it as anything more than a toy, even in these cases, and how the valuation could be at all justified, especially given their usage trend while in the alpha, even with all the TC hype.

I can only think of a weird elementary school analogy to this whole Wikipedia/Qwiki thing.

Back in the days when I was a student, there were two easy (read lazy) ways out of reading a book/play: Cliff's Notes (in Canada, they were called Cole's Notes) or watching the movie version.

Neither was really a good substitute for the original, although the Cliff's Notes were invariably better than watching a movie.

If you were to see Wikipedia as the "Cliff's Notes" of a particular subject area, then isn't Qwiki just the "movie version" of the Cliff's Notes?

Re: Qwiki Epitomizes the Current Startup Bubble

#42

Post by PaulHoule »

intellectronica wrote: post #13

I don't know about Qwiki, but these sort of seemingly unlikely capital rounds are often something that happens to well connected startups with business management savvy people behind it (either in the company's executive team or among its early stage investors). These people simply know how to raise money and spin businesses around, and they have access to sources of capital that the average hacker doesn't. To a hack…

And that's the problem. Being good at "raising money and spinning businesses around" doesn't mean these guys are good at making new technologies or constructing profitable businesses in the long term.

Re: Qwiki Epitomizes the Current Startup Bubble

#43

Post by jdp23 »

pclark wrote: post #18
dstein wrote: post #17

The thing that bothers me about Qwiki is their "technology" is just a smoke and mirrors reproduction of things we see in the movies when a robot or A.I. talks to the characters. It's made to look and sound like A.I. except what they're doing doesn't involve machine learning or anything A.I-related. It's a simple mashup with a well-oiled marketing campaign (Techcrunch) behind them.

They raised a seed round of $1.5M to build a proof of concept and have now doubled down and raised $8M. What is bothering about that, isn't it ideal to "get something out the door asap" for this ambitious a goal (a visual search engine)?

It depends. Sometimes the goal of raising money is to give yourself enough time to tackle a really hard problem. QWiki's got huge upside so if they've got an innovative approach and a credible plan, $9.5M isn't an obscene amount to spend on the early stages.

Re: Qwiki Epitomizes the Current Startup Bubble

#44

Post by sfphotoarts »

while I agree that like many I don't see the point in having wikipedia read to me, in their favor they do have pretty design. This looks more like a visual communications senior year project than a company, but maybe they have something else up their sleeve.

Then again I thought the same about dropbox, its just rsync, some server managed storage and a webapp on top. But they seem to be well liked. It's hard to predict what will stick and what won't.

Re: Qwiki Epitomizes the Current Startup Bubble

#45

Post by holman »

[Qwiki's] $8 Million round was led by primary investor Eduardo Saverin, a co-Founder of Facebook.

Through my extensive knowledge of The Social Network (watched it twice!), I'm pretty sure Saverin was that guy whose girlfriend lit his bed on fire. This may shed some light on why the author thinks Qwiki seems poised for failure. I think.

Re: Qwiki Epitomizes the Current Startup Bubble

#46

Post by psyklic »

ry0ohki wrote: post #34
mjfern wrote: post #19

There has been increasing commentary lately about a "current startup bubble." Aside from Qwiki, people have pointed to the valuation of Facebook, Zynga, Groupon, and others. An important question is, do recent valuations indicate a second industry-wide Internet bubble, much like the bubble and subsequent crash in 2000? Or is something else more fundamental going on? A look at the progression of other infrastructural…

Your post, while insightful, doesn't really provide much reason as to why there seems to be a huge influx currently of high funding rounds for seemingly basic or non-profitible companies, the likes that I have not seen since the 90s. The companies you mentioned, Pandora, Dropbox, and Facebook are probably the exceptions, and don't release financials to my knowledge. It will be interesting to see what Facebook actuall…

Should companies only be highly funded if they are similar to popular companies already making huge exits? Wouldn't this sort of be "missing the train"?

Re: Qwiki Epitomizes the Current Startup Bubble

#47

Post by lefstathiou »

ry0ohki wrote: post #34
mjfern wrote: post #19

There has been increasing commentary lately about a "current startup bubble." Aside from Qwiki, people have pointed to the valuation of Facebook, Zynga, Groupon, and others. An important question is, do recent valuations indicate a second industry-wide Internet bubble, much like the bubble and subsequent crash in 2000? Or is something else more fundamental going on? A look at the progression of other infrastructural…

Your post, while insightful, doesn't really provide much reason as to why there seems to be a huge influx currently of high funding rounds for seemingly basic or non-profitible companies, the likes that I have not seen since the 90s. The companies you mentioned, Pandora, Dropbox, and Facebook are probably the exceptions, and don't release financials to my knowledge. It will be interesting to see what Facebook actuall…

I think the answer is a bit more simple than that. Where else should people put their money if not in high tech?

Industrials correlate to GDP, and GDP is projected to be flat. Same goes with consumer products and volatility is too high in media. If you have capital to put to work, Tech appears to have the highest risk/return profile.

Phrased differently: if you had $10mil, where would you put it?

Re: Qwiki Epitomizes the Current Startup Bubble

#48

Post by Evgeny »

lefstathiou wrote: post #47
ry0ohki wrote: post #34

Earlier quoted context omitted.

Your post, while insightful, doesn't really provide much reason as to why there seems to be a huge influx currently of high funding rounds for seemingly basic or non-profitible companies, the likes that I have not seen since the 90s. The companies you mentioned, Pandora, Dropbox, and Facebook are probably the exceptions, and don't release financials to my knowledge. It will be interesting to see what Facebook actuall…

I think the answer is a bit more simple than that. Where else should people put their money if not in high tech? Industrials correlate to GDP, and GDP is projected to be flat. Same goes with consumer products and volatility is too high in media. If you have capital to put to work, Tech appears to have the highest risk/return profile. Phrased differently: if you had $10mil, where would you put it?

Phrased differently: if you had $10mil, where would you put it?

25% stocks, 25% bonds, 25% gold, 25% cash?

(That's literally what the "Fail-Safe Investing" book boils down to. http://en.wikipedia.org/wiki/Fail-Safe_Investing)

Re: Qwiki Epitomizes the Current Startup Bubble

#49

Post by intellectronica »

PaulHoule wrote: post #42
intellectronica wrote: post #13

I don't know about Qwiki, but these sort of seemingly unlikely capital rounds are often something that happens to well connected startups with business management savvy people behind it (either in the company's executive team or among its early stage investors). These people simply know how to raise money and spin businesses around, and they have access to sources of capital that the average hacker doesn't. To a hack…

And that's the problem. Being good at "raising money and spinning businesses around" doesn't mean these guys are good at making new technologies or constructing profitable businesses in the long term.

Of course, but this is extremely common. Most money changing hands in the form of investments isn't very productive. Ultra successful hacker startups are the exception, not the norm.

Re: Qwiki Epitomizes the Current Startup Bubble

#50

Post by intellectronica »

rst wrote: post #20
intellectronica wrote: post #13

I don't know about Qwiki, but these sort of seemingly unlikely capital rounds are often something that happens to well connected startups with business management savvy people behind it (either in the company's executive team or among its early stage investors). These people simply know how to raise money and spin businesses around, and they have access to sources of capital that the average hacker doesn't. To a hack…

Unfortunately, there's only so much that a great team can do with a really lousy idea. One of the things pets.com was supposed to have going for it was a CEO (Julie Wainwright) who had been successful at multiple previous ventures, who'd been specifically picked out for the post by one of the VCs (Ann Winblad of Hummer Winblad). That wasn't enough to keep the business going.

pets.com is an amusing piece of Internet history, but it is also a rounding error. For every pets.com there are thousands of companies that lost a (relatively) small sum of money and hundreds that made a small return.
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