5 ms·

> Is SoundCloud worth a billion dollars? This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cas

> Is SoundCloud worth a billion dollars? This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cash out once popularity peaks. SoundCloud was never thought as a real business. Everybody involved in the music industry should have known that it's not possible to build a solid business based on the oligopoly of three music labels and with Spotify having a headstart of 50m users and being still not profitable. But still all these VCs with USV leading the way told us it's the next billion dollar unicorn. Old-school pump and dump.

rrdharan 9y ago
Traditionally pump and dump meant taking advantage of unsophisticated retail investors. I don't think this qualifies as pump and dump unless you mean the earlier stage VCs somehow managed to cash out at the expense of some later naive shareholders? In this case sounds like everyone (except maybe Ljung) lost out..
- thinbeige 9y ago
  Technically you are right. Still it's a long-term pump and dump game. VCs praise their investments to the utmost (which is their job and because their believe in their investments) but mainly to attract more investors (pump) and at some point to find potential buyers (dump) where you can exchange retail investors with dumb corporations.
  - pas 9y ago
    Intent matters. If they promote it, and honestly believe in it, and want to cash out at an IPO, then it's just good old investing. You don't have to think it's the best thing ever. Or that it'll surely work. But you can still think that it's a pretty decent investment, high risk, high expected payout.
    - gcb0 9y ago
      not really. they will have to prove they could see a profitable exit. which in this case is dubious since there were other companies doing what they promoted years ahead of them and all had the same outcome. I could try to sell you a magic goose and I can really believe it will lay golden eggs any time now. interested? I even have ten of them myself!
      - pas 9y ago
        > other companies doing what they promoted years ahead of them and all had the same outcome. of course not exactly the same thing, not in the same environment. sure, comparisons are important, but it's not beyond reasonable to doubt that for some stated reason soundcloud will be different. and they're not dead [yet]. (I'm not affiliated with them anyhow, and I too think that their UI is pretty shit.)
- nothrabannosir 9y ago
  > In this case sounds like everyone (except maybe Ljung) lost out.. Well, the users of Soundcloud have, arguably, not lost out. All in all, I've gotten mostly positive experiences from it. You hear the same style of argument made w.r.t. Uber: VCs subsidizing our rides. VCs subsidizing our... whatever-you-call-soundcloud.
- gcb0 9y ago
  but that's exactly what they did. who do you think people got their shares from when people bougth in after the high valuation?
- mcguire 9y ago
  I suppose my take on the most rational explanation of the VC/startup environment is the entrepreneurs playing pump-n-dump games.
awkwarddaturtle 9y ago
> This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cash out once popularity peaks. This is why you should cash out when you have a decent return. Otherwise, you could become what is called a "bagholder".

rrdharan 9y ago

Traditionally pump and dump meant taking advantage of unsophisticated retail investors. I don't think this qualifies as pump and dump unless you mean the earlier stage VCs somehow managed to cash out at the expense of some later naive shareholders? In this case sounds like everyone (except maybe Ljung) lost out..

thinbeige 9y ago
Technically you are right. Still it's a long-term pump and dump game. VCs praise their investments to the utmost (which is their job and because their believe in their investments) but mainly to attract more investors (pump) and at some point to find potential buyers (dump) where you can exchange retail investors with dumb corporations.
- pas 9y ago
  Intent matters. If they promote it, and honestly believe in it, and want to cash out at an IPO, then it's just good old investing. You don't have to think it's the best thing ever. Or that it'll surely work. But you can still think that it's a pretty decent investment, high risk, high expected payout.
  - gcb0 9y ago
    not really. they will have to prove they could see a profitable exit. which in this case is dubious since there were other companies doing what they promoted years ahead of them and all had the same outcome. I could try to sell you a magic goose and I can really believe it will lay golden eggs any time now. interested? I even have ten of them myself!
    - pas 9y ago
      > other companies doing what they promoted years ahead of them and all had the same outcome. of course not exactly the same thing, not in the same environment. sure, comparisons are important, but it's not beyond reasonable to doubt that for some stated reason soundcloud will be different. and they're not dead [yet]. (I'm not affiliated with them anyhow, and I too think that their UI is pretty shit.)
nothrabannosir 9y ago
> In this case sounds like everyone (except maybe Ljung) lost out.. Well, the users of Soundcloud have, arguably, not lost out. All in all, I've gotten mostly positive experiences from it. You hear the same style of argument made w.r.t. Uber: VCs subsidizing our rides. VCs subsidizing our... whatever-you-call-soundcloud.
gcb0 9y ago
but that's exactly what they did. who do you think people got their shares from when people bougth in after the high valuation?
mcguire 9y ago
I suppose my take on the most rational explanation of the VC/startup environment is the entrepreneurs playing pump-n-dump games.

awkwarddaturtle 9y ago

> This reminds me of the current ICOs and the token economy. Early adopters try to push new currencies like crazy to cash out once popularity peaks. This is why you should cash out when you have a decent return. Otherwise, you could become what is called a "bagholder".