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AngelList acquires Product Hunt

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Re: AngelList acquires Product Hunt

#91

Post by gberger »

2drew3 wrote: post #82
pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

>relatively small community Lmk when you create a website with this much traffic. http://www.alexa.com/siteinfo/producthunt.com

The number of daily visitors is behind a paywall.

Re: AngelList acquires Product Hunt

#92

Post by birken »

pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

1) An investor isn't marking a 1x as a win. Locking up their LP's money for many years to return 1x isn't making anybody happy.

2) AngelList isn't giving PH investors/employees $28M cash, or $20M cash, or whatever the figure is reported as. They are very likely giving them mostly stock, stock in a private company with an unknown valuation. Probably only enough cash to cover the taxes (10-20%). The 20M figure is pulled out of thin air based on whatever AL thinks their valuation is. How much stock do you think they'd have to give out to hire 20 people? How much stock are they giving out to acquire a company with 20 employees?

3) People said Google had no hope of ever making money, they were just a search engine and those don't make any money. Sitting on the sidelines and saying every investment is stupid is really easy when 95% of them fail.

Re: AngelList acquires Product Hunt

#93

Post by Alex3917 »

double0jimb0 wrote: post #79
Alex3917 wrote: post #54

Earlier quoted context omitted.

> What on earth would you need funding for when you do a site like Product Hunt? Because even though there are 300,000 - 500,000 new consumer products launched in the U.S. each year, 99% are generic commodities like a new kind of 2% milk or whatever. The number of new products that are actually interesting is very small, which means that there is a very high cost of discovering and reaching out to enough of these pro…

Because even though there are 300,000 - 500,000 new consumer products launched in the U.S. each year, 99% are generic commodities like a new kind of 2% milk or whatever. The number of new products that are actually interesting is very small, which means that there is a very high cost of discovering and reaching out to enough of these product makers to make the site viable. and from your letter: The typical budget of…

It wasn't a sales product, we were hosting events to connect startups with bloggers, and also building scaleable promotion tools.

The issue with the food space is that most new products start out at their local farmers market, then get into Whole Foods, and then maybe attend the Fancy Food Show. And that's it for a long time. Trying to displace any of those channels is basically impossible. Building an additional channel is possible, but in addition to needing an exceedingly good cost/benefit ratio, you also need a very large source of targeted inexpensive leads.

Re: AngelList acquires Product Hunt

#94

Post by daveed »

pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

If it had no discernable value, why would AngelList shell out to buy PH? That's nontrivial money to them, and they certainly aren't doing this as a favor to PH's investors.

Re: AngelList acquires Product Hunt

#95

Post by wwalser »

AznHisoka wrote: post #86
wwalser wrote: post #31

Earlier quoted context omitted.

The price is going to be some multiple on their revenue, I'd guess somewhere in the 4-6x range. $20MM is enough to get investors ($7MM invested) off your back and let the acquisition go forward and there is plenty of opportunity for back-end deals where key players have an earn out not represented by the acquisition price.

How do they make revenue currently? I don't see any ads, and I don't even see anywhere I can promote my product for a fee. I'll go out on a limb and suggest it's 40-60X revenue, and even that may be too low (anyone from ProductHunt reading, please correct me, but I doubt it).

You could be correct but I'd assume they are making reasonable money on referral programs and direct sales. I know for a fact that direct sales are a thing (or were at one point)[0]. Basically the "get it" button becomes a checkout for for some products instead of a link to the site. Taking advantage of referral programs also seems like an obvious thing that they _should_ be using. Especially for companies which want a product hunted and already have a referral program in place.

0. https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-r...

Re: AngelList acquires Product Hunt

#97

Post by conductr »

jaoued wrote: post #87
pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

I think you underestimate the global reach PH has achieved within such a short time across the five continents. Most startups everywhere - including mine - building their product has a key milestone - almost as a habit- to get it on PH and shout loud about that this is a significant milestone for their users and customers to know about. I am grateful to PH and the team lead by Ryan because they helped MyAppConverter…

I also feel that PH itself has no chance of generating meaningful revenue. That's not to say they don't add value to the users/products that get featured. I feel like if they try to monetize it, what they built will be lost.

I see HN is a combo of PH and very early Digg; with added bonus of better community discussion. What if HN started charging users $20/mo and/or $100 to post. Would it generate meaningful revenue? Would it remain "the same" enough to continue generating that revenue in the future? I don't think so.

That said, I think AL may have some strategery at work. They want to bring early stage companies into their AL network. These often start as just products, so it kind of makes sense, although I don't know if it makes XX million sense

Re: AngelList acquires Product Hunt

#99

Post by stale2002 »

pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

OK, but if this is "slimy" and "almost fraud" then who is the person being screwed over?

The investors??

I feel like if you are going to call something almost fraud you have to point to a group of people being actually damaged.

Re: AngelList acquires Product Hunt

#100

Post by wwalser »

jonathankoren wrote: post #60
wwalser wrote: post #21

Earlier quoted context omitted.

I don't disagree with your assertions and in fact I think you're pointing out something that's important for people to generally understand. However, It's important to understand that this is more of a _rule_ than an exception. Very similar accusations could be leveled against most anything that's A) popular but not ubiquitous B) vote driven. Hacker News and Reddit have voting rings as well. I'd go so far as to say t…

It's not just voting rings on PH though. There's an clique of PH friends that skip the voting completely and go directly to the front page. (See previous HN discussion [0]) PH even admitted that this is the case, and then defended it with the standard Silicon Valley "meritocracy" bullshit that there's just no smarter and better people than my friends and investors, so it's cool. That's just good ol boy bullshit. Afte…

Again I don't disagree. I acknowledge the very likely truth in the claims. I get why it pisses people off. I'm a founder, I want distribution as much as the next person and being bootstrapped I know it's less likely for me than for someone who sold 20% of their company to someone with connections. Those facts just doesn't disqualify PH as a source of interesting things to look at for me. For clarity though I've spend a grand total of like 4 hours on PH in my life[0], I just don't have that much time to waste.

HN has super voters. There's also a trait that your account can be tagged with which makes content that you share less likely to get to the front page (all votes on your content count as some percentage of a "real" vote). That attribute is usually added to non-insiders whose content often makes it to the front page.

I don't think they do it out of malice. They are design decisions in service of amplifying/dampening some desirable/undesirable effect. It doesn't make the creators evil, it just means that they have goals, metrics or influences other than the purity of their voting mechanisms. Community sites are super fucking hard and the people who have built successful ones have my respect.

0. https://twitter.com/wewals/status/798759401892941826

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