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Decades ago companies competed in being the first to bring the product to the market, so enough prospects would try theirs first and become loyal users. These d

Decades ago companies competed in being the first to bring the product to the market, so enough prospects would try theirs first and become loyal users. These days the competition is about being the first to sell your story to the retail investor before the hype cools down and people get disillusioned about the entire business model (see GRPN, SNAP, etc). I'm truly wondering how sustainable is this and how hard the market correction will be...

whitepoplar 8y ago
My favorite thing about the public markets is that it doesn't matter how much hype a company garners on TechCrunch, where the founders went to school, or how slick the company office spaces are. A piece of shit is a piece of shit, and conversely, a diamond is a diamond. That's not to say that public companies can't run on hype--they absolutely can--but eventually hype wears off and a company must show that it's a real business.
- paxys 8y ago
  Have you met TSLA? Public markets are as much based on hype than anything else.
  - adventured 8y ago
    TSLA... the company that doubled its sales in the last three quarters and is outselling BMW and Mercedes in the US?
    - markus_orlandis 8y ago
      Just because they've been performing does not imply that they're not overvalued. TSLA has been overvalued for years. That doesn't mean it's a bad investment, it just means it brings along higher risk.
  - sethherr 8y ago
    Have you seen https://news.ycombinator.com/item?id=18618365 https://news.ycombinator.com/item?id=18618365 ? It brought interesting insight into additional factors in TSLA’s valuation
    - isoskeles 8y ago
      I don't understand how this brings insight into "additional factors" in their "valuation", as the article mentions nothing about their valuation, just that they have efficient batteries.
      - krn 8y ago
        Many people think of Tesla as a car company, when actually it's an energy company. Other car manufacturers are not.
        azhenley 8y ago
        Reminds me of a quote I once heard (but can't find now) about Ford or GM, that they aren't an automobile company but rather a finance/loan company.
        taneq 8y ago
        Kind of like big mining companies aren't actually mining companies, they're finance and investment companies. The actual mining is done by contractors three or four tiers down in the contract stack.
        quickthrower2 8y ago
        No company is a what it actually does company.
        sah2ed 8y ago
        > No company is a what it actually does company. Or perhaps that companies, like individuals, have facets. Someone calling Google a search engine company is no more correct than you saying they are an advertising company, technology company etc, or in a negative sense, a monopoly. Each of these epithets refer to the same entity, it's just that each emphasizes a particular trait over other traits for the point being made. A regulator is more much more likely to use "search engine" in conjugation with "monopoly" to characterize Google than with the term "technology company" since their goal is to highlight a potential case of abuse that is known to stem from such market power.
  - a_t48 8y ago
    If that’s true, couldn’t you short it?
    - admax88q 8y ago
      Shorts only work if the market corrects fast enough for it to be worth while.
  - artursapek 8y ago
    Tesla is definitely hyped, but that's not the only reason for its market value right now. They are _the_ electric car company, nobody wants other electric cars nearly as much as they want a Tesla.
- paulcole 8y ago
  Yes, no stock has ever been affected by hype. It can take YEARS for the market to get things right.
cft 8y ago
> sell your story. Their main product is equity now. Notice how instead of positions they now hire for "roles".
dmix 8y ago
This first-to-market strategy has largely been discredited in the business world. I remember reading a Harvard Business Review article many years ago about how it was the go-to strategy for companies launching products in the 80/90s. To gain the "First mover advantage". Turns out there's far too much risk for too little (potential) reward, which the graveyard of countless dead first-mover companies/products attests to. The dot-com boom really put a nail in the coffin of that idea. Especially for tech companies and any industry with highly capitalized organizations who can move quickly is far more valuable than being the first available. Plus you get to learn from the expensive mistakes the first companies almost always make.
- cobookman 8y ago
  Or buy out the winner, which is likely cheaper. For example look at Coca-Cola's history of sodas. At a certain scale they realized that buying out new brands was cheaper and less risky than doing the experimentation themselves
esoterica 8y ago
> These days the competition is about being the first to sell your story to the retail investor before the hype cools down That's an obviously false narrative. Companies are preferring to stay out of the public markets for longer than ever, hence the rise of the unicorn.
nradov 8y ago
Only a small fraction of IPO shares are allocated to retail investors. If anyone is selling a story it's to the institutional investors who buy most of the shares.

whitepoplar 8y ago

My favorite thing about the public markets is that it doesn't matter how much hype a company garners on TechCrunch, where the founders went to school, or how slick the company office spaces are. A piece of shit is a piece of shit, and conversely, a diamond is a diamond. That's not to say that public companies can't run on hype--they absolutely can--but eventually hype wears off and a company must show that it's a real business.

paxys 8y ago
Have you met TSLA? Public markets are as much based on hype than anything else.
- adventured 8y ago
  TSLA... the company that doubled its sales in the last three quarters and is outselling BMW and Mercedes in the US?
  - markus_orlandis 8y ago
    Just because they've been performing does not imply that they're not overvalued. TSLA has been overvalued for years. That doesn't mean it's a bad investment, it just means it brings along higher risk.
- sethherr 8y ago
  Have you seen https://news.ycombinator.com/item?id=18618365 https://news.ycombinator.com/item?id=18618365 ? It brought interesting insight into additional factors in TSLA’s valuation
  - isoskeles 8y ago
    I don't understand how this brings insight into "additional factors" in their "valuation", as the article mentions nothing about their valuation, just that they have efficient batteries.
    - krn 8y ago
      Many people think of Tesla as a car company, when actually it's an energy company. Other car manufacturers are not.
      - azhenley 8y ago
        Reminds me of a quote I once heard (but can't find now) about Ford or GM, that they aren't an automobile company but rather a finance/loan company.
        taneq 8y ago
        Kind of like big mining companies aren't actually mining companies, they're finance and investment companies. The actual mining is done by contractors three or four tiers down in the contract stack.
        quickthrower2 8y ago
        No company is a what it actually does company.
        sah2ed 8y ago
        > No company is a what it actually does company. Or perhaps that companies, like individuals, have facets. Someone calling Google a search engine company is no more correct than you saying they are an advertising company, technology company etc, or in a negative sense, a monopoly. Each of these epithets refer to the same entity, it's just that each emphasizes a particular trait over other traits for the point being made. A regulator is more much more likely to use "search engine" in conjugation with "monopoly" to characterize Google than with the term "technology company" since their goal is to highlight a potential case of abuse that is known to stem from such market power.
- a_t48 8y ago
  If that’s true, couldn’t you short it?
  - admax88q 8y ago
    Shorts only work if the market corrects fast enough for it to be worth while.
- artursapek 8y ago
  Tesla is definitely hyped, but that's not the only reason for its market value right now. They are _the_ electric car company, nobody wants other electric cars nearly as much as they want a Tesla.
paulcole 8y ago
Yes, no stock has ever been affected by hype. It can take YEARS for the market to get things right.

cft 8y ago

> sell your story. Their main product is equity now. Notice how instead of positions they now hire for "roles".

dmix 8y ago

This first-to-market strategy has largely been discredited in the business world. I remember reading a Harvard Business Review article many years ago about how it was the go-to strategy for companies launching products in the 80/90s. To gain the "First mover advantage". Turns out there's far too much risk for too little (potential) reward, which the graveyard of countless dead first-mover companies/products attests to. The dot-com boom really put a nail in the coffin of that idea. Especially for tech companies and any industry with highly capitalized organizations who can move quickly is far more valuable than being the first available. Plus you get to learn from the expensive mistakes the first companies almost always make.

cobookman 8y ago
Or buy out the winner, which is likely cheaper. For example look at Coca-Cola's history of sodas. At a certain scale they realized that buying out new brands was cheaper and less risky than doing the experimentation themselves

esoterica 8y ago

> These days the competition is about being the first to sell your story to the retail investor before the hype cools down That's an obviously false narrative. Companies are preferring to stay out of the public markets for longer than ever, hence the rise of the unicorn.

nradov 8y ago

Only a small fraction of IPO shares are allocated to retail investors. If anyone is selling a story it's to the institutional investors who buy most of the shares.