6 ms·

I obviously can't prove any of this since I don't have inside evidence, but my theory (explained below) is supported by a few ideas reported by the news: 1. Wh

by olympus 11y ago

I obviously can't prove any of this since I don't have inside evidence, but my theory (explained below) is supported by a few ideas reported by the news: 1. When ISIS moves into a city they appropriate everything of value. During their initial expansion they built up quite a war chest, but their expansion has stopped for now so they are not adding funds that way. 2. ISIS makes most of its money by taxing civilians. The oil bombings are targeting the small piece of pie, not the big piece. Here's my theory: ISIS ran into a classic problem seen by several startup companies. They saw initial success and had fast growth. They wanted to keep growing so they recruited heavily. To recruit a lot of soldiers they promised generous pay and benefits and even offered to support the families of soldiers so dads could go fight. Their burn rate was astronomical, but was okay because they were staying ahead of it through growth. But the growth ended up being unsustainable, because competition arrived and contained them. They kept it up for a long time because they had a lot of funding, but their burn rate finally caught up to them since they haven't been able to keep growing as before. Leadership did not/have not made the transition from wild startup CEOs that give pitch talks and sell to investors into the sensible, sustainable CEOs that manage a company in a saturated market with an eye toward creating a mature company. Remaining in the mode of a wild growth startup company is not an option for these guys. There is no viable strategy for a terrorist group that says "we'll grow like crazy and then sell out to Apple/Facebook/Google/Microsoft while we are popular and they'll handle the maturity stages. Terrorists have to make the maturity transition themselves because they can't be bought out.

jacquesm 11y ago
Next step: IPO.
- hartator 11y ago
  Or being bought out by one of the big player, US or Russia.
  - nova22033 11y ago
    If they get bought by Al-Queda in Iraq, would that make it an AQIhire?
woah 11y ago
Perhaps they could grow to the point where they can make an alliance with the US (we would do it for strategic reasons, like in the case of Saudi Arabia). There would be a re-branding into the "Free Syrian Republic" or some such, and the buy out would be complete. Assad out of power, oil controlled by the US. It's what we wanted back when we gave ISIS (then known as the "Free Syrian Army") their initial startup capital and weaponry.
- olympus 11y ago
  This makes so much sense that I am afraid it will happen. It's not like the US hasn't gotten in bed with unpopular countries before, and what the government really wants is for the major geopolitical power in the Middle East to be allied with us so we can secure cheap energy.
- tdkl 11y ago
  > they can make an alliance with the US It's hard to make an alliance with someone who already funded you.
- rmc 11y ago
  > when we gave ISIS (then known as the "Free Syrian Army") There are several sides to the Syrian Civil War. The Free Syrian Army is different from ISIS
- Cyph0n 11y ago
  The FSA and ISIS are two different entities. Both still exist. The third major player is Al Nusra Front, which falls under Al Qaeda. FSA and Al Nusra are fighting ISIS, the Syrian government, and Hezbollah. In a very interesting interview conducted by Al Jazeera a few months back, the head of Al Nusra Front stated that ISIS and the Syrian government/Hezbollah never really fought each other.
  - seren 11y ago
    I am sure that at least some area some local commander of either Al Nusra or FSA have joined Isis, for various reasons, like being besieged by Assad's forces, running out of munition, etc. This is also the messy part of civil war to survive alliances are fleeting. And so it is totally believable that some weapons given by the West to support FSA ended up in Isis hand willingly.
misja111 11y ago
According to this (http://ig.ft.com/sites/2015/isis-oil/ http://ig.ft.com/sites/2015/isis-oil/) Financial Times article, oil is ISIS' single greatest source of revenue. It is supposed to bring in 1.1 million dollars a day. A funny thing about the oil transports is that until not so long ago they were sort of a public secret. Because it was Turkey, USA's NATO ally, where most of those transports were going to, but Turkey was of course denying that.
- jfoutz 11y ago
  I bet it's almost all this [1]. it was like $100+ a barrel back in 2014. It's a tough time to be in the oil business. http://www.cnbc.com/2016/01/19/oil-prices-fall-further-on-glut-worries-us-crude-slumps-below-28.html http://www.cnbc.com/2016/01/19/oil-prices-fall-further-on-gl...
- jcrites 11y ago
  So, ISIS earns 1/5th the daily revenue of than Clash of Clans, or about the same revenue as ~250 McDonalds stores? http://www.gamesindustry.biz/articles/2014-02-11-clash-of-clans-daily-revenue-at-5.15-million-hacker http://www.gamesindustry.biz/articles/2014-02-11-clash-of-cl...
  - Retric 11y ago
    As a sanity check: ISIS soldiers earn between $400 and $1,200 a month, plus a $50 stipend for their wives and $25 for each child, according to the Congressional Research Service. Call it ~1,000 / month or ~30$ a day. Let's assume 1/3 of that 1 million / day goes to fighters and the rest is overhead. ~= 10,000 fighters which is a significant force and importantly it's replaceable with new recruits. PS: Though that could significantly understate things if the average is closer to say 500$ per month and / or overhead is lower and paid with other income sources.
    - gohrt 11y ago
      Those numbers seem far too high. ISIS pays soldiers more than China and Russia do?
diezge 11y ago
"ISIS ran into a classic problem seen by several startup companies" Bro culture?
- olympus 11y ago
  Also, yes. But considering that women are marginalized in several of the competing companies as well (Saudi Arabia, Iran, etc.) I don't think it's a differentiating factor.
pinkrooftop 11y ago
When you have a hammer all problems are nails. ISIS isn't a startup company, and the analogy to one fails beyond the initial thought. >There is no viable strategy for a terrorist group that says "we'll grow like crazy and then sell out to Apple/Facebook/Google/Microsoft What ?
- olympus 11y ago
  That's harsh pinkrooftop. I'm not a startup employee or founder, and I read HN because I find the non-startup related submissions interesting. I was deployed at the end of 2012-2013 and my boss called ISIS as a big threat even as it was developing (although he may have just gotten lucky). I wasn't trying to force this into a startup picture, I just saw a lot of parallels between ISIS and a lot of "unicorns" that look awesome and then deflate once reality takes hold and it turns out their business plan is unsustainable. And a lot of startups have an exit strategy to get bought out by a larger tech company. The point I was trying to make is that they can't keep acting like their growth will continue forever and they just realized that they don't have the money to pretend like it will. If you want to pick apart my comparison, use specific details rather than complaining that the "analogy fails" without offering any support. Sure, startup companies don't kidnap and murder innocent civilians, but I think its a fair comparison when talking about financials and paying employees.
  - pinkrooftop 11y ago
    It just doesn't seem worthwhile to fit ISIS into a startup model. It's a terroristic cult focused on Sharia Law. So the business model would be conquer and impose Islamic law, and start a world wide Islamic Caliphate to serve God by means of ushering in the apocalypse, thru innovative disruption of basic human rights? The only similarities to a startup are that they need leadership and money to achieve their goals. Which is what I said before, the analogy fails after the initial idea.
- kleer001 11y ago
  > ISIS isn't a startup company Why do you say that? I think that's exactly what it is. It's a shitty business though. It's business is war and conquest and rape and pillage and destruction. But in the end it has a budget, it has a start date, it has employees, it has a stated plan, it recruits, etc... What else do you want in an organization to make it a company? If it looks like a duck and sounds like a duck... https://news.vice.com/article/a-leaked-budget-may-finally-show-how-the-islamic-state-makes-its-money https://news.vice.com/article/a-leaked-budget-may-finally-sh... http://www.npr.org/2015/12/10/459249994/leaked-budget-document-provides-glimpse-into-how-isis-makes-money http://www.npr.org/2015/12/10/459249994/leaked-budget-docume...
guyzero 11y ago
Less a startup than a Ponzi scheme.
- BrainInAJar 11y ago
  same diff, in most cases
moheeb 11y ago
This is the classic Civ IV problem; you add too many cities too fast and your economy can't keep up.
deleted 11y ago
[deleted]
petke 11y ago
Your second point. That Isis makes much of its money by taxation. Got any source on that? Taxing the local people sounds like a sure way to lose support. As far as I understand Sunni locals support Isis as their militia.

by olympus 11y ago

jacquesm 11y ago

Next step: IPO.

hartator 11y ago
Or being bought out by one of the big player, US or Russia.
- nova22033 11y ago
  If they get bought by Al-Queda in Iraq, would that make it an AQIhire?

woah 11y ago

Perhaps they could grow to the point where they can make an alliance with the US (we would do it for strategic reasons, like in the case of Saudi Arabia). There would be a re-branding into the "Free Syrian Republic" or some such, and the buy out would be complete. Assad out of power, oil controlled by the US. It's what we wanted back when we gave ISIS (then known as the "Free Syrian Army") their initial startup capital and weaponry.

olympus 11y ago
This makes so much sense that I am afraid it will happen. It's not like the US hasn't gotten in bed with unpopular countries before, and what the government really wants is for the major geopolitical power in the Middle East to be allied with us so we can secure cheap energy.
tdkl 11y ago
> they can make an alliance with the US It's hard to make an alliance with someone who already funded you.
rmc 11y ago
> when we gave ISIS (then known as the "Free Syrian Army") There are several sides to the Syrian Civil War. The Free Syrian Army is different from ISIS
Cyph0n 11y ago
The FSA and ISIS are two different entities. Both still exist. The third major player is Al Nusra Front, which falls under Al Qaeda. FSA and Al Nusra are fighting ISIS, the Syrian government, and Hezbollah. In a very interesting interview conducted by Al Jazeera a few months back, the head of Al Nusra Front stated that ISIS and the Syrian government/Hezbollah never really fought each other.
- seren 11y ago
  I am sure that at least some area some local commander of either Al Nusra or FSA have joined Isis, for various reasons, like being besieged by Assad's forces, running out of munition, etc. This is also the messy part of civil war to survive alliances are fleeting. And so it is totally believable that some weapons given by the West to support FSA ended up in Isis hand willingly.

misja111 11y ago

According to this (http://ig.ft.com/sites/2015/isis-oil/ http://ig.ft.com/sites/2015/isis-oil/) Financial Times article, oil is ISIS' single greatest source of revenue. It is supposed to bring in 1.1 million dollars a day. A funny thing about the oil transports is that until not so long ago they were sort of a public secret. Because it was Turkey, USA's NATO ally, where most of those transports were going to, but Turkey was of course denying that.

jfoutz 11y ago
I bet it's almost all this [1]. it was like $100+ a barrel back in 2014. It's a tough time to be in the oil business. http://www.cnbc.com/2016/01/19/oil-prices-fall-further-on-glut-worries-us-crude-slumps-below-28.html http://www.cnbc.com/2016/01/19/oil-prices-fall-further-on-gl...
jcrites 11y ago
So, ISIS earns 1/5th the daily revenue of than Clash of Clans, or about the same revenue as ~250 McDonalds stores? http://www.gamesindustry.biz/articles/2014-02-11-clash-of-clans-daily-revenue-at-5.15-million-hacker http://www.gamesindustry.biz/articles/2014-02-11-clash-of-cl...
- Retric 11y ago
  As a sanity check: ISIS soldiers earn between $400 and $1,200 a month, plus a $50 stipend for their wives and $25 for each child, according to the Congressional Research Service. Call it ~1,000 / month or ~30$ a day. Let's assume 1/3 of that 1 million / day goes to fighters and the rest is overhead. ~= 10,000 fighters which is a significant force and importantly it's replaceable with new recruits. PS: Though that could significantly understate things if the average is closer to say 500$ per month and / or overhead is lower and paid with other income sources.
  - gohrt 11y ago
    Those numbers seem far too high. ISIS pays soldiers more than China and Russia do?

diezge 11y ago

"ISIS ran into a classic problem seen by several startup companies" Bro culture?

olympus 11y ago
Also, yes. But considering that women are marginalized in several of the competing companies as well (Saudi Arabia, Iran, etc.) I don't think it's a differentiating factor.

pinkrooftop 11y ago

When you have a hammer all problems are nails. ISIS isn't a startup company, and the analogy to one fails beyond the initial thought. >There is no viable strategy for a terrorist group that says "we'll grow like crazy and then sell out to Apple/Facebook/Google/Microsoft What ?

olympus 11y ago
That's harsh pinkrooftop. I'm not a startup employee or founder, and I read HN because I find the non-startup related submissions interesting. I was deployed at the end of 2012-2013 and my boss called ISIS as a big threat even as it was developing (although he may have just gotten lucky). I wasn't trying to force this into a startup picture, I just saw a lot of parallels between ISIS and a lot of "unicorns" that look awesome and then deflate once reality takes hold and it turns out their business plan is unsustainable. And a lot of startups have an exit strategy to get bought out by a larger tech company. The point I was trying to make is that they can't keep acting like their growth will continue forever and they just realized that they don't have the money to pretend like it will. If you want to pick apart my comparison, use specific details rather than complaining that the "analogy fails" without offering any support. Sure, startup companies don't kidnap and murder innocent civilians, but I think its a fair comparison when talking about financials and paying employees.
- pinkrooftop 11y ago
  It just doesn't seem worthwhile to fit ISIS into a startup model. It's a terroristic cult focused on Sharia Law. So the business model would be conquer and impose Islamic law, and start a world wide Islamic Caliphate to serve God by means of ushering in the apocalypse, thru innovative disruption of basic human rights? The only similarities to a startup are that they need leadership and money to achieve their goals. Which is what I said before, the analogy fails after the initial idea.
kleer001 11y ago
> ISIS isn't a startup company Why do you say that? I think that's exactly what it is. It's a shitty business though. It's business is war and conquest and rape and pillage and destruction. But in the end it has a budget, it has a start date, it has employees, it has a stated plan, it recruits, etc... What else do you want in an organization to make it a company? If it looks like a duck and sounds like a duck... https://news.vice.com/article/a-leaked-budget-may-finally-show-how-the-islamic-state-makes-its-money https://news.vice.com/article/a-leaked-budget-may-finally-sh... http://www.npr.org/2015/12/10/459249994/leaked-budget-document-provides-glimpse-into-how-isis-makes-money http://www.npr.org/2015/12/10/459249994/leaked-budget-docume...

guyzero 11y ago

Less a startup than a Ponzi scheme.

BrainInAJar 11y ago
same diff, in most cases

moheeb 11y ago

This is the classic Civ IV problem; you add too many cities too fast and your economy can't keep up.

deleted 11y ago

[deleted]

petke 11y ago

Your second point. That Isis makes much of its money by taxation. Got any source on that? Taxing the local people sounds like a sure way to lose support. As far as I understand Sunni locals support Isis as their militia.