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Without investors or a nice endowment it's hard to work the years needed to create a nice "r&d" product. If I launched twitter the first server bill would have

Without investors or a nice endowment it's hard to work the years needed to create a nice "r&d" product. If I launched twitter the first server bill would have put me out of business. There is a balance between making something cool and something "uncool" that people might pay for today.

jerguismi 16y ago
If you would be building the Twitter, had no money and server costs were exploding, I guess it would be pretty easy to get some money somewhere by just showing your visitor stats?
- mmaunder 16y ago
  That's correct for an angel round in the valley right now provided the stats are very recent and they're trending upwards i.e. your growth is accelerating. The reason is because growth is what all valley angels look for. So if you have growth you create (as Cialdini would put it) social scarcity for your stock which creates a feeding frenzy. This is only in the valley. Seattle (where I'm based) is different. Many startups here focus on generating revenue from early on and there is less growth based demand. The valuations here are also lower. I think the number of investors is the reason. Not enough for a feeding frenzy and less growth-based exit stories to fuel the appetite.
  - plaidhat 16y ago
    How long do you think the stark regional disparities in funding are going to persist?
    - mmaunder 16y ago
      Well it's only been 40 years. But financial armageddon is nigh so perhaps a decade from now China will be the new valley and the only thing the US will be good for is a place to base your servers since we're the center of the giant Internet star topology.
lsc 16y ago
really? Servers are cheaper than you think, if you don't use the cloud. I got a quote from one of my vendors the other day... fifteen hundred bucks a month for a full gigabit of traffic and 15 amps of power. (now, I haven't bought from this guy, so I dono... but he is reselling he.net bandwidth, which is fine stuff. I got another quote direct from he.net at a /much/ better data center for just the gigabit, and they wanted two grand a month, before negotiation. Now, for me, power is a big deal and bandwidth is less so... but both are pretty cheap when you get down to it.) that's enough power to run 9 single-socket 8 core 32GiB ram opterons, give or take. each one of those puppies is about two grand in parts, give or take, before disk. And a gigabit is a ridiculous amount of bandwidth, especially if you mostly push text and thumbnails. Now, I don't know how much ram/cpu/disk per user twitter uses. But you can push rather a lot of text with that much cpu/ram, and a grand and a half a month is pretty reasonable 'hacker with a job' sustaining money... hell, the 18 grand for the servers isn't any more than you'd pay for a low-end new car. Now, obviously, working full time and running a startup is /hard/ - but my point is that you don't need VC level money to do this... just about any fully employed hacker has the means to support a ridiculous amount of infrastructure.
- teisho 16y ago
  > Servers are cheaper than you think, if you don't use the cloud I'm confused why the cloud is viewed as expensive. For managed hosting on a big name provider perhaps, but there are dozens of virtualization providers who are capable of providing power and bandwidth for unbelievably small amounts of money. Sure you don't get the uptime, reliability, and support of a big name host, but it's usually good enough. From what I've gathered, twitter's growth has not been severely hampered by the fail whale, especially in the beginning. Once you've reached critical mass, you can move on to a larger host. I think it makes sense to rent rather than own, especially if you're just starting out.
  - lsc 16y ago
    I'm one of those virtualization providers... but even at my scale, which is pretty small, I price my services such that worst-case, I pay off my hardware in four months. that seems expensive to me. Of course, if you need small servers (and I only rent small VPSs) I'm saving you money. even if you get the server for free, (which isn't that difficult) finding someone to host a server with 512MiB of ram for $12/month is going to be really hard.

jerguismi 16y ago

If you would be building the Twitter, had no money and server costs were exploding, I guess it would be pretty easy to get some money somewhere by just showing your visitor stats?

mmaunder 16y ago
That's correct for an angel round in the valley right now provided the stats are very recent and they're trending upwards i.e. your growth is accelerating. The reason is because growth is what all valley angels look for. So if you have growth you create (as Cialdini would put it) social scarcity for your stock which creates a feeding frenzy. This is only in the valley. Seattle (where I'm based) is different. Many startups here focus on generating revenue from early on and there is less growth based demand. The valuations here are also lower. I think the number of investors is the reason. Not enough for a feeding frenzy and less growth-based exit stories to fuel the appetite.
- plaidhat 16y ago
  How long do you think the stark regional disparities in funding are going to persist?
  - mmaunder 16y ago
    Well it's only been 40 years. But financial armageddon is nigh so perhaps a decade from now China will be the new valley and the only thing the US will be good for is a place to base your servers since we're the center of the giant Internet star topology.

lsc 16y ago

really? Servers are cheaper than you think, if you don't use the cloud. I got a quote from one of my vendors the other day... fifteen hundred bucks a month for a full gigabit of traffic and 15 amps of power. (now, I haven't bought from this guy, so I dono... but he is reselling he.net bandwidth, which is fine stuff. I got another quote direct from he.net at a /much/ better data center for just the gigabit, and they wanted two grand a month, before negotiation. Now, for me, power is a big deal and bandwidth is less so... but both are pretty cheap when you get down to it.) that's enough power to run 9 single-socket 8 core 32GiB ram opterons, give or take. each one of those puppies is about two grand in parts, give or take, before disk. And a gigabit is a ridiculous amount of bandwidth, especially if you mostly push text and thumbnails. Now, I don't know how much ram/cpu/disk per user twitter uses. But you can push rather a lot of text with that much cpu/ram, and a grand and a half a month is pretty reasonable 'hacker with a job' sustaining money... hell, the 18 grand for the servers isn't any more than you'd pay for a low-end new car. Now, obviously, working full time and running a startup is /hard/ - but my point is that you don't need VC level money to do this... just about any fully employed hacker has the means to support a ridiculous amount of infrastructure.

teisho 16y ago
> Servers are cheaper than you think, if you don't use the cloud I'm confused why the cloud is viewed as expensive. For managed hosting on a big name provider perhaps, but there are dozens of virtualization providers who are capable of providing power and bandwidth for unbelievably small amounts of money. Sure you don't get the uptime, reliability, and support of a big name host, but it's usually good enough. From what I've gathered, twitter's growth has not been severely hampered by the fail whale, especially in the beginning. Once you've reached critical mass, you can move on to a larger host. I think it makes sense to rent rather than own, especially if you're just starting out.
- lsc 16y ago
  I'm one of those virtualization providers... but even at my scale, which is pretty small, I price my services such that worst-case, I pay off my hardware in four months. that seems expensive to me. Of course, if you need small servers (and I only rent small VPSs) I'm saving you money. even if you get the server for free, (which isn't that difficult) finding someone to host a server with 512MiB of ram for $12/month is going to be really hard.