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EBay acquires Hunch for $80m

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Re: EBay acquires Hunch for $80m

#81

Post by dylangs1030 »

arctangent wrote: post #22
arturadib wrote: post #17

Earlier quoted context omitted.

> everyone who has a CS background should just start something on the side if a deal like this is possible Chris Dixon is a veteran investor and entrepreneur, with enormous visibility in the tech world. Contacts with potential acquirers are a non-issue for him. A poor CS fellow could have created a version of Hunch that was 100x better and they still would have 1,000x less of an exit opportunity as compared to any st…

If this really is true then it's a sad indictment of the state of the startup scene. Perhaps your hypothetical fellow should focus on building a "lifestyle business" instead of trying to get big and then get acquired...

C'est la vie. It's not the startup scene - it's a basic principle of society, unfortunately. Who you know is just as important as what you know or can do. The best thing to do is find people to know by showing them what you can do.

Re: EBay acquires Hunch for $80m

#82

Post by profitbaron »

flinty wrote: post #43
sunahsuh wrote: post #18

Earlier quoted context omitted.

I dunno, their recommendation engine was scary good -- the technology Ebay's acquiring isn't anything to sniff at. They reportedly have a defensive portfolio of pending patents: http://www.formspring.me/hunch/q/169651283274266480 Ebay's been on a spending spree this past year and I'd say this is one of the better deals they've made, depending on how long they've locked in Hunch's team.

I wonder if Google was in on the action for Hunch.

Apparently Google bid $60million for Hunch - http://www.businessinsider.com/not-for-sale-hunch-has-turned...

Re: EBay acquires Hunch for $80m

#83

Post by mdda »

kennystone wrote: post #50
AznHisoka wrote: post #30

Earlier quoted context omitted.

It's also one thing to say something. But the situation changes when a ton of money is actually thrown right in front of you.

If the number is right, $80m is not a ton of money for people who have already had big exits and took $20m in VC to start this company.

It could also be that the company is doing far worse than the business plan they originally showed out to the VCs : If there's lower growth rates, it's far better for everyone to notch up a quick 3x, rather than see the business dwindle into obscurity (the alternative case, in the minds of the VCs, if they're not going to 'go big').

Re: EBay acquires Hunch for $80m

#84

Post by benhalllondon »

Anyone have any suggestions about how Hunch would scale to eBay levels?

Seems Hunch has gone the 'Mega Machine' route (1 T RAM, 48 Core [1]), from 700k users (80m Total TTHY / 113THAYs [1]), make 250k API users

How do you scale that out to eBay numbers?

[1]http://blog.hunch.com/wp-content/uploads/2011/05/110509-HUNC...

Re: EBay acquires Hunch for $80m

#85

Post by jpdoctor »

kmfrk wrote: post #21
hassy wrote: post #13

Earlier quoted context omitted.

I am somewhat disappointed since Chris Dixon has said Hunch would be in it for the long-term. (I've followed Hunch since it's early days* and always wanted to see it go big.) $80m is a nice pay-out though, the systems they've built have the potential to bring an immense amount of value to eBay's offerings, and a lot of that money will trickle down to other startups via angel investments. * http://hassy.posterous.com/…

Hunch is not for sale. The founders have already sold companies before and have no desire to sell Hunch. We want to build it into a large company. hunch responded one year ago http://www.formspring.me/hunch/q/1392572735

> Hunch is not for sale.

All companies are for sale.

Re: EBay acquires Hunch for $80m

#86

Post by blacksmythe »

danssig wrote: post #7
dr_ wrote: post #2

I never used Hunch much, and I'm not sure if an 80 million exit with 20 million in VC funding is so great for the founders, but I suppose it gives eBay a footing in NYC - that's the part of the article I found most interesting.

15 million a piece. I don't know how long they were working on it but the very top billed actors tend to make, what, 20 million for movies that take ~3 years to make.

Top billed actors have an excellent chance of making their full rate on an average movie.

Founders have an excellent chance of making nothing on an average startup.

Re: EBay acquires Hunch for $80m

#87

Post by nikcub »

drusenko wrote: post #69
socratic wrote: post #63

Could someone experienced breakdown what a transaction like this looks like for everyone involved? I'm super curious. I've never been acquired, so I really have no insight into the process other than what I've read. Here's the facts as I see them: Crunchbase says Hunch started in September of 2007 and had 23 employees on LinkedIn when they exited. (TechCrunch calls it a 20-person team, so I'm presuming that's all the…

Here's a wild, random-ass guess: - Let's keep it simple and say that since this is an experienced team, the investors invested $20m at a $60m post, so they have 1/3 of the company. Since it is an experienced team, I'm going to guess no participation or anything else hokey. 1x liquidation preference is likely but won't matter in this scenario b/c preferred will convert to common. - With a 20 person team, you've probab…

I would be surprised if the investors agreed to this acquisition without having a 2x liquidity preference.

This is worthwhile for eBay, since only a 1 or 2% improvement in recommendations could be worth millions of dollars a year.

Re: EBay acquires Hunch for $80m

#88

Post by nikcub »

hello_moto wrote: post #49
achompas wrote: post #37

Earlier quoted context omitted.

Agreed, this is completely absurd. Say what you will about Chris Dixon (zomg he doesn't code, wtf!!!!!111), but the engineering team at Hunch is second-to-none. Grandparent makes it sound like Dixon pulled this off in his spare time. He assembled a team of A-level engineers, then secured millions in funding so they could develop an awesome recommendation engine with almost no clear revenue stream. I challenge anyone…

I think we need to move away from all the nonsense of "A-level engineers" or superstar developers and so and so and so. Carl Henderson of Flickr fame looked like an A-level engineer back then (especially with his O'reilly book) yet some of the Flickr engineers baffled when they saw the Flickr codebase. Sometime it's all smoke and marketing hype.

A few years ago I met a 'superstar' type developer who was considered hot shit amongst the usual crowd. I met him with a view of hiring him (or, trying to) mostly because of his reputation.

I think i must have been the first person who really drilled into his knowledge, because he was more interested in talking about who he knew, projects he had been associated with etc.

I got a funny feeling about him, and asked that he do a simple code project. A week overdue later, he asks for our FTP credentials to upload it. I say that we don't run ftp anywhere, and that he needs to scp to the box. He said he had no idea that ssh can 'copy files'. urgh. He later worked out that his GUI FTP client supported SSH and got so excited about it that he messaged me to tell me about it.

I have never judged the capabilities of a developer based on reputation since.

Re: EBay acquires Hunch for $80m

#89

Post by nl »

kennystone wrote: post #50
AznHisoka wrote: post #30

Earlier quoted context omitted.

It's also one thing to say something. But the situation changes when a ton of money is actually thrown right in front of you.

If the number is right, $80m is not a ton of money for people who have already had big exits and took $20m in VC to start this company.

FlickR only sold for $35 million. They took some funding prior to that too, so it wouldn't have been a huge payout for Fake.

Re: EBay acquires Hunch for $80m

#90

Post by danssig »

ebaysucks wrote: post #10
danssig wrote: post #7

Earlier quoted context omitted.

15 million a piece. I don't know how long they were working on it but the very top billed actors tend to make, what, 20 million for movies that take ~3 years to make.

So you assume the VC's only scored a 1x on this deal and had no special treatment for their preferred shares such as accrued dividends, liquidity preference, participating preferred, etc?

I went by what the GP said.
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