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(Y Combinator)   Early evidence that Facebook's IPO disaster has popped the start-up bubble   (news.ycombinator.com ) divider line
    More: Interesting, IPO, Facebook, startup company, disasters  
•       •       •

4481 clicks; posted to Geek » on 05 Jun 2012 at 4:11 AM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



21 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2012-06-05 04:20:32 AM  
The Tl:DR version: Money is tightening up, so quit spending money on stupid shiat and learn to budget and you'll do fine.
 
2012-06-05 05:19:13 AM  
Yes, because turning millions into 75 billion instead of 100 billion is going to make investors run for the hills.

In my opinion, Facebook's IPO crashed because it was designed to crash. They will never admit that, but if you have a company that is worth, say, 60 Billion and you can convince enough people that its worth 100 billion to sell 10 percent of your company to them, wouldn't you?

Valuation of companies like this is subjective. You can claim to be worth 100 billion and not be lying, but not really believe it. If the value settles at 75 billion, the owners of the company haven't LOST anything, they were never worth 100 billion, they were just trying to see if they were. But they have GAINED the difference between the real value and the IPO price on the percentage that they offered for sale.

Most companies cant do this. Facebook has enough people who believe in it that they could. Zuckerberg was talking about being worth 100B years ago. They were just shooting for it to see if it would fly.
 
2012-06-05 05:43:10 AM  
www.plungemn.org

to the rescue!
 
2012-06-05 05:44:31 AM  
from the article comments-

"Agreed. Facebook could do everything.

Any economical transaction involves a social transaction as well. Facebook, can be the underlying architecture of every economy.

Facebook is at the core of a large, new economic ecosystem: apps, websites, ads, mobile, causes, almost everything you can think of. They can enter in any business, and for sure they are going to expand these below, to rich an enormous amount of revenue over the next years.

Ads: I don't know about any platform that will be able to show ads to (soon) +1B people. Their current page views is impressive, around 1 trillion/month. Ads revenue still small, compared to the amount of users they have, because the right formula to show the ads to the right people takes time to arrive at a perfect level. But when it does, it will be like a sniper, it will show a product/service you want, the moment you want. The social graph is becoming the DNA of the entire world population, it will increase its value as time passes.

Platform/Apps: They have built one of the biggest platforms with 9MM apps. Third-party apps integration and the entire FB platform is just one the most powerful things on the internet. It allowed new companies to plug into the FB community and scale a new user base quickly. FB is basically becoming an app ecosystem, maybe more powerful than Apple itself. Millions of devs are implementing their FB authentication system "FB connect", giving FB the ability to know every detail about an app usage, the ability to gather data and visualize those data to people that matter to them. Moreover, with the new App Center they can send a big portion of traffic to various mobile app stores and take a cut out of the revenue for all those "price x install" apps: in May 2012, 90MM users were sent directly to Apple's App Store. 7 of iOS Top 10 apps and 8 of Android Top 10 apps are integrated with Facebook. App maketing is very lucrative. The 'LIKE" button is having a tremendous impact on media, brands and basically on the overall internet traffic; it's a viral machine. And being able to show "events/actions" in a user timeline, is incredibly powerful; listen, watch, read, cook...can you get an idea?

Specific APIs: There is some sort of overlap between APIs and FB platform. As of today all FB APIs are free. But I don't believe in giving for free additional value will last forever. Directly or indirectly FB will start to monetize its API calls. Directly by charging the premium usage of the Social Graph data or other specific ad-hoc new APIs and indirectly by taking a cut of the revenue that third-party developers are generating by leveraging FB APIs. The Social Graph owns more than 100 Petabytes of user data, that's 2x the size of the entire written works of mankind. 12,8% of the world population generates real-time data, analyzed and stored by Facebook. Obviously, some APIs will remain free but the rest will be a cash machine.

Coupons/Deals: They failed here, but they will not give up. With FB Mobile, they know where you are. They can show you related deals the moment you enter in club or a grocery. A Groupon-like experience, but empowered with a more accurate location, your personal tastes and of course, friends with their recommendations.

Facebook Credits/Payments: I believe this is going to be a tremendous revenue stream over the years. It may even surpass the Ads revenue one day. I envision a world, where every time you have to pay over the internet and offline you will have to just click a button: "Pay with Facebook Credits" from Ebay to Expedia or use your FB mobile app at the cashier. It will become the universal currency.

Much more: there are a tons of things that they can do, from user subscriptions (imagine having just 10% of the users paying $9/month to access premium services); travels, to organize weddings. But you know what? They don't need to, there is the platform for that.

Facebook is basically becoming a new kind of telco. Facebook is speed. A new version of Facebook is released every Tuesday, there are 12,000 modifications per month, more than 1000 developers deliver code to be released each week. Facebook average employee is 26 years-old.

FB could do everything."


EVERYTHING this person said describes every reason why I do not want to live on this planet anymore.
 
2012-06-05 05:49:40 AM  

Wholesale Ass: from the article comments-

"Agreed. Facebook could do everything.

Any economical transaction involves a social transaction as well. Facebook, can be the underlying architecture of every economy.

Facebook is at the core of a large, new economic ecosystem: apps, websites, ads, mobile, causes, almost everything you can think of. They can enter in any business, and for sure they are going to expand these below, to rich an enormous amount of revenue over the next years.

Ads: I don't know about any platform that will be able to show ads to (soon) +1B people. Their current page views is impressive, around 1 trillion/month. Ads revenue still small, compared to the amount of users they have, because the right formula to show the ads to the right people takes time to arrive at a perfect level. But when it does, it will be like a sniper, it will show a product/service you want, the moment you want. The social graph is becoming the DNA of the entire world population, it will increase its value as time passes.

Platform/Apps: They have built one of the biggest platforms with 9MM apps. Third-party apps integration and the entire FB platform is just one the most powerful things on the internet. It allowed new companies to plug into the FB community and scale a new user base quickly. FB is basically becoming an app ecosystem, maybe more powerful than Apple itself. Millions of devs are implementing their FB authentication system "FB connect", giving FB the ability to know every detail about an app usage, the ability to gather data and visualize those data to people that matter to them. Moreover, with the new App Center they can send a big portion of traffic to various mobile app stores and take a cut out of the revenue for all those "price x install" apps: in May 2012, 90MM users were sent directly to Apple's App Store. 7 of iOS Top 10 apps and 8 of Android Top 10 apps are integrated with Facebook. App maketing is very lucrative. The 'LIKE" button is having a tremendous impact o ...


goddamnit son, that's enough weapons grade derp to contaminate this entire sector of the internets.
 
2012-06-05 06:10:54 AM  
I don't understand how FB is supposed to succeed in reviving AOL's "one stop internet shop" model.
 
2012-06-05 06:59:35 AM  

H31N0US: I don't understand how FB is supposed to succeed in reviving AOL's "one stop internet shop" model.


Stupidity is cyclic?
 
2012-06-05 07:15:11 AM  
not a repeat from 1998?
 
2012-06-05 07:47:20 AM  
Again???

You would think this was a cycle or something...
 
2012-06-05 08:15:28 AM  
Watching my fellow tech industry members try to apply their algorithmic, mathematical thinking to the highly irrational stock market is one of my great pleasures in life. It's like putting a kitten in the cockpit of an airliner.
 
2012-06-05 08:39:01 AM  
FTA: "The startups that really get hosed are going to be the ones that have easy money built into the structure of their company: the ones that raise a lot on easy terms, and are then led thereby to spend a lot, and to pay little attention to profitability. That kind of startup gets destroyed when markets tighten up. So don't be that startup. If you've raised a lot, don't spend it; not merely for the obvious reason that you'll run out faster, but because it will turn you into the wrong sort of company to thrive in bad times."

So, don't be stupid with your money. Valley start ups with your own chefs and dry cleaning onsite, free massages, and other stupid shiat - I'm looking at you. Focus on developing a good product and spend money on R&D and the right infrastructure, not top heavy exec/sales teams and silly, silly perks
 
2012-06-05 09:25:56 AM  
its not just FB's ipo mess, but also the banking crisis in europe.

Kayak already pulled its IPO indefinitely.
 
2012-06-05 09:37:06 AM  

Ed Willy: The Tl:DR version: Money is tightening up, so quit spending money on stupid shiat and learn to budget and you'll do fine.


This is nothing new, I remember reading some pundit back in the 90s who was predicting the burst of the dotcom bubble saying that you could tell by walking in the offices of a startup if it had a chance to succeed by judging on things like marble, water fountains, and the types of cars in the parking lot. His rule was simple: if it looks like an arabian prince villa: they're burning VC cash on frivolous stuff and you should run away. If you have to make your way across empty pizza boxes and hold your nose at the smell of people who haven't bathed in 4 days, these guys have their priorities straight and you can take a deeper look at their business plan before investing.
 
2012-06-05 10:10:12 AM  
The dotcom I once worked at was doing fairly well until September 11, 2001. The next week, every stock option I was ever given went underwater and stayed that way. I was the fourth last to walk out the door where previously hundreds worked.
 
2012-06-05 10:12:17 AM  

dumbobruni: its not just FB's ipo mess, but also the banking crisis in europe.

Kayak already pulled its IPO indefinitely.


Yurp may have a banking crisis, but we've got a crisis that could be a little worse.

Am I the only one that is sick of the cyclic bubble bursting? It's almost as if it's planned to be that way...
 
2012-06-05 10:32:57 AM  
The best solution is not to need money. The less you need investor money, (a) the more investors like you, in all markets, and (b) the less you're harmed by bad markets.
 
2012-06-05 10:52:59 AM  

Wholesale Ass: EVERYTHING this person said describes every reason why I do not want to live on this planet anymore.


I don't see why... I don't think that guy is actually living on this planet. He sounds like some kind of mutant Facebook fanboy or something. No other platform gets as many ad views as Facebook? Umm... Google, anyone?
 
2012-06-05 11:27:57 AM  

cleveralthere: not a repeat from 1998?


I was going to say 2001 but yeah same shiat
 
2012-06-05 12:13:12 PM  

I sound fat: Yes, because turning millions into 75 billion instead of 100 billion is going to make investors run for the hills.

In my opinion, Facebook's IPO crashed because it was designed to crash. They will never admit that, but if you have a company that is worth, say, 60 Billion and you can convince enough people that its worth 100 billion to sell 10 percent of your company to them, wouldn't you?

Valuation of companies like this is subjective. You can claim to be worth 100 billion and not be lying, but not really believe it. If the value settles at 75 billion, the owners of the company haven't LOST anything, they were never worth 100 billion, they were just trying to see if they were. But they have GAINED the difference between the real value and the IPO price on the percentage that they offered for sale.

Most companies cant do this. Facebook has enough people who believe in it that they could. Zuckerberg was talking about being worth 100B years ago. They were just shooting for it to see if it would fly.


forums.watchuseek.com
 
2012-06-05 01:43:24 PM  

I sound fat: Yes, because turning millions into 75 billion instead of 100 billion is going to make investors run for the hills.

In my opinion, Facebook's IPO crashed because it was designed to crash. They will never admit that, but if you have a company that is worth, say, 60 Billion and you can convince enough people that its worth 100 billion to sell 10 percent of your company to them, wouldn't you?


True, but the problem is that this isn't about the smart guys that put money into Facebook early on, who know that social networking is a low profit* business that you build up with large customer bases then hype up how much money it could make, then dump them at their peak. They still know that these sorts of business are bullshiat.

The problem is the people who buy the hype, think it's like printing money, and once they don't print money, get burnt. Having been burnt, they won't come back and might start putting their money into businesses that have profits backing up their value rather than some Alice in Wonderland story.

* Add up how much money is put into the development social networking websites around the world, subtract the total profits of all social networking websites, and I'll bet that there is very little net profit.
 
2012-06-05 04:17:14 PM  
25.media.tumblr.com
 
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