5 ms·

Reunion.com Raises Massive $25 Million Series A Round

9 points by farmer 19y ago

pg 19y ago
I've been resisting the idea, but I have to say that this is starting to feel like another Bubble.
- dpapathanasiou 19y ago
  Not yet, because the exit isn't as obvious. In the last bubble, you had some control over the process (there was a brief window when anything "Internet" could be sold to institutional buyers via an IPO). Right now it's all acquisitions: dumb deals will get made, but in general, the buyers tend to be much savvier (and warier). Also funding does not equal payoff. If anything, they've just created a huge burden for themselves because the payoff has to be orders of magnitude higher to satisfy their investors.
- abstractbill 19y ago
  Out of interest, do you think anything about YC would be likely to change if this did turn out to be Bubble2.0? Would you be likely to scale it back, or to continue funding companies and hope that some of them could ride out the storm for however many years it takes?
  - create_account 19y ago
    do you think anything about YC would be likely to change if this did turn out to be Bubble2.0? Ya-huh: sell that overvalued portfolio faster than you can say "Common Lisp".
    - abstractbill 19y ago
      I was thinking more in terms of them remaining an available source of early-stage funding even if other investors are panicking (in the event that a bubble bursts). I know people have made good money this way in the past...
  - pg 19y ago
    I do wonder what we'd do if the weather suddenly got worse. We might have to encourage companies to be more self-funding. Maybe we'd accept fewer.
    - zaidf 19y ago
      It is actually cool to do a startup following a burst in some ways. I remember early days of my uncle's start-up in 2001 and there was little pressure of making something to sell off in a year or two. You knew if you did a start-up it was either for the long haul or you don't do one. That is an important lesson for hacker entrepreneurs today: just because you CAN launch another idea technically you shouldn't if you already have something promising going on. Plus it made for nice media stories to "survive" the bubble. I forgot to mention the current salary is 2-3x what was being demanded back in '01-02 in India.
- zaidf 19y ago
  That is precisely why it isn't a bubble:) When you can see a bubble, you can avoid it while others go down when it bursts.
  - JMiao 19y ago
    Interesting to see if that's what people were thinking in 1999.
    - zaidf 19y ago
      I was a kid admittedly but from what I remember and heard, few used the word "bubble" until it actually burst. I love the following excerpt from an article: "Do you think that a $300 million valuation of a combined company is realistic?" "No question," said the older one, spreading his hands. "The Internet? Slam dunk," said the younger. You can read the entire thing here: http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html
      - JMiao 19y ago
        No, I hear ya. =) But my question is if few people could recognize the coming of a bubble in 1999, what makes you think they're better at calling one out today? i.e. how easy it is to say "get out before the bubble bursts"
        zaidf 19y ago
        You really have to understand the bubble of '99. Such a bubble isn't even possible today. Yes there are few odd investments here and there but that is vastly different from having deadbeat IPOs of '99 era that were based on pure hype. Closest bubble bursting we might see this time around may be IF adsense/adwords collapse. Even then it will be on a much smaller scale than before. And to be honest, knowing the smart folks behind google, I don't see such a thing happening overnight. At the helm of '99 bubble were young grads and hype filled underwriters; at the helm of the bubble today(if you can even call it a bubble) are a buncha PhDs and a very smart CEO(Eric Schmidt).
- Alex3917 19y ago
  I think one of the biggest factors fueling the initial bubble was the misconception that the costs of doing business online would rapidly drop to zero, so it didn't matter if companies were spending way more than they were making in the short term. The bubble burst because investors figured out that: A) The cost of hardware wasn't dropping to zero because companies needed to upgrade hardware to keep up with the competition, rather than doing the same thing at a lower cost. B) By far the biggest costs of doing business were the people and not the hardware, and those costs were going to remain fixed. Do you see any underlying ideas fueling this bubble that will ultimately be proven false, leading the bubble to pop? To my thinking this reunion.com thing is just a case of stupid business, rather than some underlying common fallacy that's pervading the web. (The closest thing I can think of is that we are all just overvaluing the ability of startups to create wealth, but if this is true then the bubble also has a lot more room to grow before it pops.)
  - pg 19y ago
    To the extent this deal is bubbly, it's not because it reflects some conceptual misunderstanding but more that some VC firm has too much money to invest. That was a big cause of the original Bubble too.
Readmore 19y ago
I agree but I don't think we'll see the same kind of fallout as last time. The fact that we (app devs), can maintain sites with much less cost means that even if people go bust with stupid ideas it should be much easier for good ones to weather the storm.
brett 19y ago
28 million users? Has anyone even heard of them before? The premium account seems to add features that are anti-community fostering. If you're working on a social network I would think it's a bad thing if a writeup about you includes the phrase "snooping features".
- jcwentz 19y ago
  That is very fishy. Where can that 28m number come from? From some popular widget they bought or something?
danielha 19y ago
I cringed when I saw the $25 million number and I cringed again when I saw what the site was.
mattjaynes 19y ago
Wow. Yes, this is a scary development. This could easily be built by a couple of hackers with a few thousand dollars. I wrote about taking unnecessary money like this a few weeks ago at: Outside Money and Irritable Bowel Syndrome http://blog.nanobeepers.com/2007/02/20/outside-money-and-irritable-bowel-syndrome/ http://blog.nanobeepers.com/2007/02/20/outside-money-and-irritable-bowel-syndrome/

9 points by farmer 19y ago

pg 19y ago

I've been resisting the idea, but I have to say that this is starting to feel like another Bubble.

dpapathanasiou 19y ago
Not yet, because the exit isn't as obvious. In the last bubble, you had some control over the process (there was a brief window when anything "Internet" could be sold to institutional buyers via an IPO). Right now it's all acquisitions: dumb deals will get made, but in general, the buyers tend to be much savvier (and warier). Also funding does not equal payoff. If anything, they've just created a huge burden for themselves because the payoff has to be orders of magnitude higher to satisfy their investors.
abstractbill 19y ago
Out of interest, do you think anything about YC would be likely to change if this did turn out to be Bubble2.0? Would you be likely to scale it back, or to continue funding companies and hope that some of them could ride out the storm for however many years it takes?
- create_account 19y ago
  do you think anything about YC would be likely to change if this did turn out to be Bubble2.0? Ya-huh: sell that overvalued portfolio faster than you can say "Common Lisp".
  - abstractbill 19y ago
    I was thinking more in terms of them remaining an available source of early-stage funding even if other investors are panicking (in the event that a bubble bursts). I know people have made good money this way in the past...
- pg 19y ago
  I do wonder what we'd do if the weather suddenly got worse. We might have to encourage companies to be more self-funding. Maybe we'd accept fewer.
  - zaidf 19y ago
    It is actually cool to do a startup following a burst in some ways. I remember early days of my uncle's start-up in 2001 and there was little pressure of making something to sell off in a year or two. You knew if you did a start-up it was either for the long haul or you don't do one. That is an important lesson for hacker entrepreneurs today: just because you CAN launch another idea technically you shouldn't if you already have something promising going on. Plus it made for nice media stories to "survive" the bubble. I forgot to mention the current salary is 2-3x what was being demanded back in '01-02 in India.
zaidf 19y ago
That is precisely why it isn't a bubble:) When you can see a bubble, you can avoid it while others go down when it bursts.
- JMiao 19y ago
  Interesting to see if that's what people were thinking in 1999.
  - zaidf 19y ago
    I was a kid admittedly but from what I remember and heard, few used the word "bubble" until it actually burst. I love the following excerpt from an article: "Do you think that a $300 million valuation of a combined company is realistic?" "No question," said the older one, spreading his hands. "The Internet? Slam dunk," said the younger. You can read the entire thing here: http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html
    - JMiao 19y ago
      No, I hear ya. =) But my question is if few people could recognize the coming of a bubble in 1999, what makes you think they're better at calling one out today? i.e. how easy it is to say "get out before the bubble bursts"
      - zaidf 19y ago
        You really have to understand the bubble of '99. Such a bubble isn't even possible today. Yes there are few odd investments here and there but that is vastly different from having deadbeat IPOs of '99 era that were based on pure hype. Closest bubble bursting we might see this time around may be IF adsense/adwords collapse. Even then it will be on a much smaller scale than before. And to be honest, knowing the smart folks behind google, I don't see such a thing happening overnight. At the helm of '99 bubble were young grads and hype filled underwriters; at the helm of the bubble today(if you can even call it a bubble) are a buncha PhDs and a very smart CEO(Eric Schmidt).
Alex3917 19y ago
I think one of the biggest factors fueling the initial bubble was the misconception that the costs of doing business online would rapidly drop to zero, so it didn't matter if companies were spending way more than they were making in the short term. The bubble burst because investors figured out that: A) The cost of hardware wasn't dropping to zero because companies needed to upgrade hardware to keep up with the competition, rather than doing the same thing at a lower cost. B) By far the biggest costs of doing business were the people and not the hardware, and those costs were going to remain fixed. Do you see any underlying ideas fueling this bubble that will ultimately be proven false, leading the bubble to pop? To my thinking this reunion.com thing is just a case of stupid business, rather than some underlying common fallacy that's pervading the web. (The closest thing I can think of is that we are all just overvaluing the ability of startups to create wealth, but if this is true then the bubble also has a lot more room to grow before it pops.)
- pg 19y ago
  To the extent this deal is bubbly, it's not because it reflects some conceptual misunderstanding but more that some VC firm has too much money to invest. That was a big cause of the original Bubble too.

Readmore 19y ago

I agree but I don't think we'll see the same kind of fallout as last time. The fact that we (app devs), can maintain sites with much less cost means that even if people go bust with stupid ideas it should be much easier for good ones to weather the storm.

brett 19y ago

28 million users? Has anyone even heard of them before? The premium account seems to add features that are anti-community fostering. If you're working on a social network I would think it's a bad thing if a writeup about you includes the phrase "snooping features".

jcwentz 19y ago
That is very fishy. Where can that 28m number come from? From some popular widget they bought or something?

danielha 19y ago

I cringed when I saw the $25 million number and I cringed again when I saw what the site was.

mattjaynes 19y ago

Wow. Yes, this is a scary development. This could easily be built by a couple of hackers with a few thousand dollars. I wrote about taking unnecessary money like this a few weeks ago at: Outside Money and Irritable Bowel Syndrome http://blog.nanobeepers.com/2007/02/20/outside-money-and-irritable-bowel-syndrome/ http://blog.nanobeepers.com/2007/02/20/outside-money-and-irritable-bowel-syndrome/