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Zuckerberg should be commended for his talent and vision but if you have do take out a loan to keep your company afloat because you don't have enough revenue (a

Zuckerberg should be commended for his talent and vision but if you have do take out a loan to keep your company afloat because you don't have enough revenue (as was widely reported) and you are STILL not worried about having a business model something is wrong. He recites his "we are not worried about revenue for at least a few years, we just want to grow" line religiously but it seriously sounds like entrepreneurial advice crica 2006. Get with the program!

river_styx 18y ago
This is the modus operandi for basically every web 2.0 company. I think never before in history has there been such a large number of businesses springing up and carrying on blithely with no idea how they're going to make money.
- unalone 18y ago
  It's because they were told sometime in the last decade that you could make a site profitable through ads alone. Because it worked for Google so incredibly. They forgot that Google works because they target massively relevant ads to people who are looking for links to begin with. Interestingly enough, Facebook's revenue plan involves making money off of Live Search ads, as of the last month or so. Essentially, they're ripping off Google as honestly as they can: by emulating them. I'm interested in seeing how they'll fight against embedded Google search: that's their huge competitor right now.
- alaskamiller 18y ago
  Is there something inherently wrong with this?
  - river_styx 18y ago
    I don't see anything inherently wrong, really. It's just strange that, given the point of starting a business is to make money, there would be so many businesses out there running along seemingly without much concern as to revenue. If your aim is to build a large user base and flip, that's fine, but keep in mind that it's an unsustainable business model. It's basically a crapshoot.
    - alaskamiller 18y ago
      Again, what is strange about that? There's hundreds of variations to end a chess game as there are hundreds of variations to make a business work. If you're already determined to be an entrepreneur you wouldn't be a stranger to crapshoots and experimentation.
      - river_styx 18y ago
        I'm not saying that one person taking on an extreme high risk endeavor is strange. Happens all the time. What's strange is that such a huge cluster of people are doing it. The anomaly is the multiplicity of the occurrence, not the occurrence itself.
        alaskamiller 18y ago
        It should be applauded. Free market. Good things bubble up and stay alive. Their personal choice in allocating their labor. Good for everyone. Blah blah. All that jazz. <3
- biohacker42 18y ago
  I think never before in history has there been such a large number of businesses springing up and carrying on blithely with no idea how they're going to make money. Ahem... web 1.0
alaskamiller 18y ago
I find it hilarious that you think a company with 100 million users need to have revenue figured out within 5 years.
- iigs 18y ago
  Are you implying that it doesn't? How are you supposed to pay for all of those salaries? It seems like until they have the business model figured out it's not a business -- it's a charity.
  - alaskamiller 18y ago
    0. Almost every major corporation leverage in order to grow in order to capitalize. 1. Companies don't have time-lines to figure out how to make money. Google didn't hit on AdSense until years later. Amazon didn't get out of silly pro-forma victories until after a long time. Who are you to claim they need to figure out a slam dunk business model? 2. Facebook has revenue, it has enough revenue to cover its overhead, what is it doing wrong? 3. It uses the ginourmous amount of investment money for infrastructure to grow bigger -- which for all intents and purposes they are experiencing, why is this faulty? 4. Calling it a charity seems like naivete or glibness on your part.
    - kwamenum86 18y ago
      Bringing up examples where a bad plan happened to work is not evidence to follow the example. Google and Amazon took the hard road and it isn't like many companies survive and thrive with the "defer" model. If I create a website tomorrow where I give DRM-free music away legally on an ad-free site I will have 110 million users in 2 years. I will still lose millions a year and my business model will still read [fill in the blank]. Having a lot of users is not an excuse not to have a business model.
      - unalone 18y ago
        His point is that Facebook IS making revenue. And they do it from ads, mostly. If you gave away DRM-free music on an ad-supported site, and found a way to make people want to click those ads, you'd have a good model - providing you found a good way to provide DRM-free music that people wanted. For Facebook, the problem is that they took a long time getting an ad model to work. Their new one is a pretty effective one that takes advantage of the best parts of Facebook. I think they've rounded a difficult corner.
wschroter 18y ago
This is a very familiar path among hyper growth companies - the point where the expense of growth outstrips their ability to convert to revenue. As long as the site keeps growing and adding users, they will continue to have a strong ability to feed the beast with more raised capital. I mean really - how many other companies are growing like they are? Especially in this market. They should have no problems at all getting access to more capital.
- kwamenum86 18y ago
  Most companies don't grow in this type of market because they are not giving the product away for free. Give me a good product, and let me give it away for free and I will give you a fast-growing company.

river_styx 18y ago

This is the modus operandi for basically every web 2.0 company. I think never before in history has there been such a large number of businesses springing up and carrying on blithely with no idea how they're going to make money.

unalone 18y ago
It's because they were told sometime in the last decade that you could make a site profitable through ads alone. Because it worked for Google so incredibly. They forgot that Google works because they target massively relevant ads to people who are looking for links to begin with. Interestingly enough, Facebook's revenue plan involves making money off of Live Search ads, as of the last month or so. Essentially, they're ripping off Google as honestly as they can: by emulating them. I'm interested in seeing how they'll fight against embedded Google search: that's their huge competitor right now.
alaskamiller 18y ago
Is there something inherently wrong with this?
- river_styx 18y ago
  I don't see anything inherently wrong, really. It's just strange that, given the point of starting a business is to make money, there would be so many businesses out there running along seemingly without much concern as to revenue. If your aim is to build a large user base and flip, that's fine, but keep in mind that it's an unsustainable business model. It's basically a crapshoot.
  - alaskamiller 18y ago
    Again, what is strange about that? There's hundreds of variations to end a chess game as there are hundreds of variations to make a business work. If you're already determined to be an entrepreneur you wouldn't be a stranger to crapshoots and experimentation.
    - river_styx 18y ago
      I'm not saying that one person taking on an extreme high risk endeavor is strange. Happens all the time. What's strange is that such a huge cluster of people are doing it. The anomaly is the multiplicity of the occurrence, not the occurrence itself.
      - alaskamiller 18y ago
        It should be applauded. Free market. Good things bubble up and stay alive. Their personal choice in allocating their labor. Good for everyone. Blah blah. All that jazz. <3
biohacker42 18y ago
I think never before in history has there been such a large number of businesses springing up and carrying on blithely with no idea how they're going to make money. Ahem... web 1.0

alaskamiller 18y ago

I find it hilarious that you think a company with 100 million users need to have revenue figured out within 5 years.

iigs 18y ago
Are you implying that it doesn't? How are you supposed to pay for all of those salaries? It seems like until they have the business model figured out it's not a business -- it's a charity.
- alaskamiller 18y ago
  0. Almost every major corporation leverage in order to grow in order to capitalize. 1. Companies don't have time-lines to figure out how to make money. Google didn't hit on AdSense until years later. Amazon didn't get out of silly pro-forma victories until after a long time. Who are you to claim they need to figure out a slam dunk business model? 2. Facebook has revenue, it has enough revenue to cover its overhead, what is it doing wrong? 3. It uses the ginourmous amount of investment money for infrastructure to grow bigger -- which for all intents and purposes they are experiencing, why is this faulty? 4. Calling it a charity seems like naivete or glibness on your part.
  - kwamenum86 18y ago
    Bringing up examples where a bad plan happened to work is not evidence to follow the example. Google and Amazon took the hard road and it isn't like many companies survive and thrive with the "defer" model. If I create a website tomorrow where I give DRM-free music away legally on an ad-free site I will have 110 million users in 2 years. I will still lose millions a year and my business model will still read [fill in the blank]. Having a lot of users is not an excuse not to have a business model.
    - unalone 18y ago
      His point is that Facebook IS making revenue. And they do it from ads, mostly. If you gave away DRM-free music on an ad-supported site, and found a way to make people want to click those ads, you'd have a good model - providing you found a good way to provide DRM-free music that people wanted. For Facebook, the problem is that they took a long time getting an ad model to work. Their new one is a pretty effective one that takes advantage of the best parts of Facebook. I think they've rounded a difficult corner.

wschroter 18y ago

This is a very familiar path among hyper growth companies - the point where the expense of growth outstrips their ability to convert to revenue. As long as the site keeps growing and adding users, they will continue to have a strong ability to feed the beast with more raised capital. I mean really - how many other companies are growing like they are? Especially in this market. They should have no problems at all getting access to more capital.

kwamenum86 18y ago
Most companies don't grow in this type of market because they are not giving the product away for free. Give me a good product, and let me give it away for free and I will give you a fast-growing company.