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Dog-walking startup Wag raised $300M, then things got messy

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Re: Dog-walking startup Wag raised $300M, then things got messy

#61

Post by kristopolous »

dang wrote: post #42
kristopolous wrote: post #30

Earlier quoted context omitted.

What the person is trying to say is these startups are essentially playing by the rules of "crossing the chasm", "the lean startup" etc, but only in the most theatrical and vapid of ways. It's an application of the startup playbook on something essentially meaningless. Wag is an idea that could be well executed in about 2 million - a trendy app, some "social networking" for dogs and their owners, a form of payment an…

Your comment comes closer to being substantive, which is often the case with the reactions people post to our requests not to post unsubstantive comments. Even so, while I understand your perception and like most people I intuitively feel like it must be true in many cases, I'm missing any sense of what specifically makes it true in this case, other than that "dog-walking" sounds trivial. A line of the form "Wag is a…

Tabloiding specific people in public forums is certainly bad form.

I've run across people at wag and other x as a service companies, it's all the same, just some niche carving of fiverr or taskrabbit with a lot of hype and very little substance.

Some like deliveroo out of the UK are genuinely competent but most are just doing theater

Re: Dog-walking startup Wag raised $300M, then things got messy

#62

Post by slimsag »

tempsy wrote: post #60

I think Softbank's main problem is that they fund opportunity without considering execution at all. It's very possible that a dog walking service could be a multibillion opportunity (millennials/gen Z choosing to have pets over kids in greater numbers and working FT), but was there really anything special about this specific team that would lead anyone to believe they could execute with a $300m injection? I don't thi…

But.. they said they are all experts and care about animals! And the founders are super-genius hackers from MIT!

Re: Dog-walking startup Wag raised $300M, then things got messy

#63

Post by southerndrift »

petra wrote: post #31
pdq wrote: post #27

Earlier quoted context omitted.

The problem when you have so much money to invest is that your customers need to actually invest it. It's much harder to invest $1-$5M at a time when you can just go back to the WeWork pool and drop $2B. It's like painting a wall mural using fine tipped brushes, rather than wide paint rollers or a paint gun. You get the job done so much faster, but your quality will suffer tremendously.

What about scaling a VC organization ? With hundreds of managers, A lot of institutional knowledge, helpful infrastructure for said company, and deep ties between companies ? Come to think of it, it has many similarities to Google X. But that's extremely hard to build.

Where do you get the people to entrust millions or billions? The organization will be flooded with networks of people who will scam away all money.

Such an organization has to be grown slowly. But that takes too much time if you have the opportunity to manage huge amounts of money right away.

Re: Dog-walking startup Wag raised $300M, then things got messy

#64

Post by huac »

threeseed wrote: post #37
huac wrote: post #24

Earlier quoted context omitted.

uber (see stock), cruise (tbf, everyone overvalued the AV space), slack (see stock), zume pizza (come on), brandless ( https://techcrunch.com/2019/06/26/report-softbank-backed-bra... ), compass ( https://www.wsj.com/articles/softbank-backed-real-estate-bro... ) ... Which investments are doing well? Maybe Paytm?

Zume Pizza isn't just about making pizzas. It's about being able to build autonomous restaurants. Combine that with autonomous deliveries and you have the potential for food to be delivered to people without any people involved. Given we have an ageing population which may involve lots of people unable to leave the house this could be a trillion dollar market.

that's a very expensive vision (though I agree that it can be meaningful!), and getting there requires a lot of capital. even though it might not be about pizza in the future, it definitely is right now, and a $2B+ valuation is very rich there, esp compared to Dominos at $10B which is also very tech and automation focused, and delivering to more than 3 communities in the Peninsula/East Bay.

achieving capital intensive goals either involves having strong cash flow to reinvest into your R&D (which is what Amazon did) or having continued cash infusements (which is the Softbank strategy). WeWork is a great example of what happens when the money runs out.

the Softbank-specific angle here is that they promised 7% yearly payouts to the Saudis. the yearly dividend means that they need to extract liquid cash value out of their investments each year. surely you would agree that Zume and other similar investments are long-term speculations, and in the short term are not likely to pay much of a dividend or return through IPO either. however, Softbank is incentivized to push their investments to return value in the short term. so I'm personally very skeptical that their short-term commitments can allow them to be good stewards of companies with very long-term ambitions.

Re: Dog-walking startup Wag raised $300M, then things got messy

#65

Post by TheAlchemist »

dang wrote: post #46
zaroth wrote: post #15

Earlier quoted context omitted.

Can we make a small exception for when the comment perfectly elucidates what everyone is actually thinking while reading the article? I’m sorry, all due respect, but.... a dog walking company .

Well, let's apply the HN guidelines [1] and, more importantly their spirit, to this case. That spirit is to be reflective rather than reflexive [2], which means to interrupt the rapid reflex that springs up immediately ("what everyone is actually thinking"), inhibit the temptation to react, and give the slower, reflective part of the brain time to catch up. When I do that, the first thing that comes to me is that the…

Wow ! If I ever need to explain to somebody what's so special in HN, I will point them to this answer.

Thank you for fantastic work.

Re: Dog-walking startup Wag raised $300M, then things got messy

#68

Post by codesushi42 »

loganfrederick wrote: post #16

What I don't get about the Vision Fund is how so many of its investments lack (pun intended) vision. Other than the ARM, Nvidia, and a few billion in biotech (about $3 billion[1]) investments, so much of the fund has gone into pretty "obvious" traditional startups. If I had a $100 billion fund, I wouldn't be swinging for these singles and doubles (which Uber and WeWork were by the time Softbank got involved, although…

Instead of 3% biotech and 20% Uber and WeWork and Wag, I'd have flipped those two numbers.

LMAO! Yes, Uber, WeWork and Wag are terrible investments. But you clearly have no understanding of biotech or how time horizons work for investments. Biotech research is long, expensive, and risky. It is not on a 4 year time horizon like tech, nor can you go to market within 12-18 months.

Re: Dog-walking startup Wag raised $300M, then things got messy

#69

Post by drstewart »

velox_io wrote: post #57

Reading the title has affirmed to me that we are living in a bubble (and it doesn't look good). I just can't get it through my head how an investment of that size will EVER pay off. A major reason people buy dogs is because they want to get out and walk more. If they can't they outsource it to a teenager you or your friends know, there's no need for a middleman in most cases. (If it was baby-sitting I could understan…

People have been "sure" there's a bubble for a decade now. I mean take this HN article, posted Apr 19, 2012: https://news.ycombinator.com/item?id=3865744

How much are you investing on your suredness that there's a bubble? Because if you did it in 2012, you'd be down about 70% right now.

Re: Dog-walking startup Wag raised $300M, then things got messy

#70

Post by synaesthesisx »

loganfrederick wrote: post #16

What I don't get about the Vision Fund is how so many of its investments lack (pun intended) vision. Other than the ARM, Nvidia, and a few billion in biotech (about $3 billion[1]) investments, so much of the fund has gone into pretty "obvious" traditional startups. If I had a $100 billion fund, I wouldn't be swinging for these singles and doubles (which Uber and WeWork were by the time Softbank got involved, although…

Right - there are incredible cancer immunotherapy and other biotech startups that are on the cusp of HUGE things. Softbank is clearly at a point where it has more capital than sense.
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