4 ms·

With GroupMe’s acquisition, zero revenue companies are back in style

26 points by bond 15y ago

sabat 15y ago
could be the first indication that the zero-revenue company is back in style. I'm not sure that "it happened this one time" equates to "back in style".
EGreg 15y ago
I don't think it's zero-revenue companies. I think it's group messaging apps that actually got traction and users. Beluga Kik Messenger GroupMe all of them got snapped up in short order. There is obviously a demand for the team and the userbase.
- nir 15y ago
  The fact it has users actually makes it a negative-revenue company, since every message the users send costs GroupMe money. At 100M msg/mo, that's probably a bit more expensive than keeping some servers running.
  - nknight 15y ago
    That's less than 40 messages/second. Even if every message goes out to an average of 20 people, that's less than 800 messages/second. If each message averages 1KB (and why would it be that large?), 800KB/sec, or less than 7mbps. For high availability, I'd guesstimate maybe 6 physical servers in geographically diverse locations. If they're spending more than a couple thousand a month on raw infrastructure, I'd be utterly shocked. Edit: By the way, this kind of thing is nothing new. IRC networks have handled traffic with similar properties for 20 years.
    - semanticist 15y ago
      GroupMe was sending SMS text messages, and while they're nominally just a tiny amount of data, the cellcos don't bill the same way as your local upstream internet provider.
      - mgkimsal 15y ago
        Correct. So... use that 800/sms/second. Even assuming they were getting SMS at a bit over .1 cents per SMS (highly unlikely - probably much higher than that), that's about 80 cents per second - round it up to $1/second that would be $3600/hour. Sheesh - is my math right on that, or did I move a decimal place? I'm guessing they weren't burning through thousands per hour every hour on SMS fees, but even hundreds would put a serious dent in a startup's pocket.
damonpace 15y ago
I see this as a talent/technology grab instead of a revenue play. Obviously, Skype will be able to integrate the technology and find a way to monetize it with their user base. There have been multiple companies purchased before they even launch a product. What's the difference?
- dan_manges 15y ago
  The difference is the price. Most talent acquisitions don't go for $85 million.

26 points by bond 15y ago

sabat 15y ago

could be the first indication that the zero-revenue company is back in style. I'm not sure that "it happened this one time" equates to "back in style".

EGreg 15y ago

I don't think it's zero-revenue companies. I think it's group messaging apps that actually got traction and users. Beluga Kik Messenger GroupMe all of them got snapped up in short order. There is obviously a demand for the team and the userbase.

nir 15y ago
The fact it has users actually makes it a negative-revenue company, since every message the users send costs GroupMe money. At 100M msg/mo, that's probably a bit more expensive than keeping some servers running.
- nknight 15y ago
  That's less than 40 messages/second. Even if every message goes out to an average of 20 people, that's less than 800 messages/second. If each message averages 1KB (and why would it be that large?), 800KB/sec, or less than 7mbps. For high availability, I'd guesstimate maybe 6 physical servers in geographically diverse locations. If they're spending more than a couple thousand a month on raw infrastructure, I'd be utterly shocked. Edit: By the way, this kind of thing is nothing new. IRC networks have handled traffic with similar properties for 20 years.
  - semanticist 15y ago
    GroupMe was sending SMS text messages, and while they're nominally just a tiny amount of data, the cellcos don't bill the same way as your local upstream internet provider.
    - mgkimsal 15y ago
      Correct. So... use that 800/sms/second. Even assuming they were getting SMS at a bit over .1 cents per SMS (highly unlikely - probably much higher than that), that's about 80 cents per second - round it up to $1/second that would be $3600/hour. Sheesh - is my math right on that, or did I move a decimal place? I'm guessing they weren't burning through thousands per hour every hour on SMS fees, but even hundreds would put a serious dent in a startup's pocket.

damonpace 15y ago

I see this as a talent/technology grab instead of a revenue play. Obviously, Skype will be able to integrate the technology and find a way to monetize it with their user base. There have been multiple companies purchased before they even launch a product. What's the difference?

dan_manges 15y ago
The difference is the price. Most talent acquisitions don't go for $85 million.