3 ms·

You realise that Twitter is profitable, right? And Facebook wasn't profitable once, too.

by nl 6y ago

nicbou 6y ago
Has it made up for the decade of losses? EDIT: Yes, it's apparently up ~53 million now. I replaced Twitter with 5 other giant companies that are losing money.
- virgilp 6y ago
  This does show you the fallacy in your line of thinking, right? Twitter was on that list, and now it's not. In 5 years, maybe none of the companies in your list will be in it; sure you will easily find "replacements" that are just as popular/well known, but the thing is that that's exactly the model: "grow aggressively, capture the market, become profitable once you're market leader". It doesn't always work, but it's hard to dispute that it sometimes works, and when it does, it yields tremendous profits. It's not a bug, it's a feature :)
  - thu2111 6y ago
    But 53M is not much for a decade of business at that scale. For the size of some of these VC investments they could just put it into the market and get similar returns, I'd think?
    - nl 6y ago
      The VCs made their (large) returns on the share price of Twitter, not anything to do with profits Twitter made. Profits are just money a company has been unable to invest in growth.
  - fakedang 6y ago
    Twitter hasn't captured the market, but has become only slightly profitable compared to its industry peers. Meanwhile Doordash or Deliveroo or Uber could capture entire markets, but that would rapidly make them prone to regulation or outright bans.
adventured 6y ago
Facebook is a rather extraordinarily bad example to hold up. They lost money for a short amount of time for a VC backed company - about 4 1/2 years. Asana by contrast is 13 years into losing money. Here is Facebook's early financial history (2004, 2005, 2006 all showed losses): 2007 | $153m sales | -$138m net income 2008 | $272m sales | -$56m net income 2009 | $777m sales | $229m net income 2010 | $1.97b sales | $606m net income 2011 | $3.71b sales | $1b net income By the time Facebook was 13 years old it was running at ~$16 billion profit.
- nl 6y ago
  Sure. My point was exactly this really. Both Twitter and FB were founded at roughly the same time and went public at roughly the same time. One was a huge success, one wasn't. Asana hadn't been a big success, but Trello was. There is some luck involved here, but the VC game is about trying to find the outsized returns, not avoiding losses.

You realise that Twitter is profitable, right? And Facebook wasn't profitable once, too.

by nl 6y ago

You realise that Twitter is profitable, right? And Facebook wasn't profitable once, too.

Has it made up for the decade of losses? EDIT: Yes, it's apparently up ~53 million now. I replaced Twitter with 5 other giant companies that are losing money.

virgilp 6y ago
This does show you the fallacy in your line of thinking, right? Twitter was on that list, and now it's not. In 5 years, maybe none of the companies in your list will be in it; sure you will easily find "replacements" that are just as popular/well known, but the thing is that that's exactly the model: "grow aggressively, capture the market, become profitable once you're market leader". It doesn't always work, but it's hard to dispute that it sometimes works, and when it does, it yields tremendous profits. It's not a bug, it's a feature :)
- thu2111 6y ago
  But 53M is not much for a decade of business at that scale. For the size of some of these VC investments they could just put it into the market and get similar returns, I'd think?
  - nl 6y ago
    The VCs made their (large) returns on the share price of Twitter, not anything to do with profits Twitter made. Profits are just money a company has been unable to invest in growth.
- fakedang 6y ago
  Twitter hasn't captured the market, but has become only slightly profitable compared to its industry peers. Meanwhile Doordash or Deliveroo or Uber could capture entire markets, but that would rapidly make them prone to regulation or outright bans.

adventured 6y ago

Facebook is a rather extraordinarily bad example to hold up. They lost money for a short amount of time for a VC backed company - about 4 1/2 years. Asana by contrast is 13 years into losing money. Here is Facebook's early financial history (2004, 2005, 2006 all showed losses): 2007 | $153m sales | -$138m net income 2008 | $272m sales | -$56m net income 2009 | $777m sales | $229m net income 2010 | $1.97b sales | $606m net income 2011 | $3.71b sales | $1b net income By the time Facebook was 13 years old it was running at ~$16 billion profit.

nl 6y ago
Sure. My point was exactly this really. Both Twitter and FB were founded at roughly the same time and went public at roughly the same time. One was a huge success, one wasn't. Asana hadn't been a big success, but Trello was. There is some luck involved here, but the VC game is about trying to find the outsized returns, not avoiding losses.