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Quite simple: investors invested in a company that was going to grow exponentially. Now that it is not growing, they want out. Which, IMO, is fine. I wish we l
by untog 11y ago
Quite simple: investors invested in a company that was going to grow exponentially. Now that it is not growing, they want out.
Which, IMO, is fine. I wish we lived in an environment where Twitter could say "we're making money, we're successful enough, invest if you like what you see", but Silicon Valley is frequently hockey stick growth or death.
- bonaldi 11y agoI think a social network is slightly different from the other companies where that argument applies. The Internet was a fun place with 300m people on it, but growth made it better. Same with Facebook. People bring problems, but in general networks are better with more of them around.
- ethbro 11y agoSome crotchety old timers might argue that point. https://en.m.wikipedia.org/wiki/Eternal_September https://en.m.wikipedia.org/wiki/Eternal_September
- _cudgel 11y agoAs a crotchety old timer, I agree completely.
- bonaldi 11y agoYou'd take Usenet over everything else we got from the growth of the network, from Amazon to MP3s?
- ethbro 11y agoThere's a lot of different distinctions to be made (or argued against) regarding the "who" of the network, rather than the "what". I think HN comments would be a prime example that simpler-functionality-with-higher-quality-participants is a valued combination.
- _cudgel 11y agoI'd take fewer people online in general. The number of people that are glued to their smartphones because of all this supposed progress frightens me.
- shas3 11y agoAll companies grow exponentially. Any compounded growth is exponential. The k in e^(kt) can be anything. You perhaps meant to say, investors want way-better-than-S&P-and-in-line-with-APPL/GOOG/FB growth?
- baddox 11y agoAll companies? Surely some companies have linear growth.
- shas3 11y agoFinancial terminology doesn't distinguish between linear and exponential. Linearly growing companies would simply be assigned very low (close to 0 / positive) CAGRs.
- xyzzy4 11y agoI agree. For example, if you spend exactly $1000 on advertising a day, and have no network effects, you will get linear user growth.
- rubyn00bie 11y agoLinear growth is not really growth, in a financial sense, as growth is when the derivative (rate of change) is increasing/decreasing. Linear growth by how I interpret it, would have a derivative of zero, i.e. the rate of change is constant, or geometrically speaking, a straight line.
- jeremyjh 11y agoSuppose a company increases their gross revenue by 1MM every year. What do you call that? I'd call it linear, because it will be a straight line on a graph.
- shas3 11y agoThat would be linear only if the inflation is 0. Inflation adjusted growth rate will not be fully linear.
- 11y ago
- harryh 11y agoThey aren't making money though. They're losing money. They are not successful enough.
- nugget 11y agoKeep in mind that the major drag on profitability for many of these companies is labor/compensation costs and specifically the war for talent that Facebook started in 2011-ish. The 22 year old making $150k all in and their 27 year old boss clearing >$300k? That money doesn't come from thin air. Don't underestimate the degree to which the rank and file talent has benefited from the current ''bubble''. If enough downward pressure is exerted to depress salaries broadly across the board then a lot of these companies will benefit. Note that insofar as part of comp is paid in RSUs then this downward pressure is already being felt as public share prices decline.
- ryanSrich 11y agoExactly. My only knowledge of Twitter is from a user standpoint, but I've racked my brain for years wondering why Twitter is larger than 100 employees. I can't figure it out.
- _cudgel 11y agoNeither can they ;)
- rokhayakebe 11y agoBecause at X thousands employees: Too Big to Let Fail.
- majani 11y agoSpreading risk and blame, pressure from investors to spend the big raise money, the diplomatic roles that become necessary at a certain size, R&D employees. Mostly political reasons, but reasons nonetheless
- throwaway2048 11y ago