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> It seems no company is happy with being the virally adored single product little niche 50 employee powerhouse. Imagine you had such a company, someone offere

> It seems no company is happy with being the virally adored single product little niche 50 employee powerhouse. Imagine you had such a company, someone offered you $700 million for 10% of the company valuing it at $7 billion. You don't understand why they'd value it that highly. But if you're willing to pretend you do for a few years, you can siphon off enough of that money that even your great-great-great-grandkids won't have to work a day in their lives. Would you turn down that deal? Because I doubt I could resist it.

parthdesai 3y ago
Not saying I would turn down or won't turn down, but you've companies like 37signals and folks like DHH who are very happy making millions and not having a boss rather than making billions
- user_named 3y ago
  They are the bosses
- Justsignedup 3y ago
  37signals (basecamp now) is an exception. They didn't seek investment to get started. They are able to fully control their destiny because they don't have investors, they asked for Bezos to invest because they wanted him as an advisor, not because they needed the money. So yes DEFINITELY possible to do a 37signals, but you need starting capital. Or at least an ability to live for free for 24 months while you figure out how to make cash from your business. Most companies of that nature are started by either of the following scenarios: - Kid(s) from a middle-to-upper class family who can live off their parent/grandparent's money for a few years while they figure things out. Maybe even family throws in a few hundred grand as a gift to get you started. Definitely have collateral for a loan. - Already successful founders who have the ability to drop 200-500k into their company to get started, and already able to live off their wealth.
- danudey 3y ago
  37signals is profitable, though. It's easy to say "I'm happy just being a small company making a good product" if you're making enough to keep the lights on, but if you don't know how to monetize your audience and user base then the pressure to accept investor money starts getting pretty high.
jtode 3y ago
Why would you do that to your own kin?
- Spivak 3y ago
  Because there is no inherent goodness in working for others and fuck you money is by far the easiest way to secure your childrens' ability to live the lives they want. If you don't want your billions of dollars I'll happily take them of your hands.
  - heavenlyblue 3y ago
    > your childrens' ability to live the lives they want. How do they know what they want?
    - screamingninja 3y ago
      By not making decisions for them but instead just aspiring to provide them with better opportunities.
      - heavenlyblue 3y ago
        I don't understand how having little money implies making decisions for your children
    - mandeepj 3y ago
      > How do they know what they want? There's a LCD across humans, the bare minimum - a place to live, food, and clothes.
      - heavenlyblue 3y ago
        Then you don't need billions in order to provide for that.
        3y ago
teaearlgraycold 3y ago
I’d turn down any compromise to my work or my integrity if I already have enough money to retire. The kids and grandkids need to earn their own comfort after they are out of the house.
- screamingninja 3y ago
  Or perhaps one could create opportunities for their future generations by building generational wealth in the hope of ensuring a better life for their kids and grandkids. It's a matter of perspective.
  - wintogreen74 3y ago
    >> by building generational wealth in the hope of ensuring a better life for their kids and grandkids You could make a better life for your kids, and a lot more people, without building "generational wealth". The alternative in this case is not "run reddit in destitution". I'd argue those who pursue your "winner take everything" approach are the ones lacking perspective.
- sdfghswe 3y ago
  Ok Pinocchio.
  - teaearlgraycold 3y ago
    lol
JohnFen 3y ago
I'd turn down that deal. If they value it so highly, I'd prefer to just sell the company to them entirely over selling 10%. I know from experience that doing it any other way would make me utterly miserable.
wintogreen74 3y ago
What if an alternative was to make $70M or $7M a year without giving up anything? I know more companies that do turn down the crazy homerun deals and pursue the modest, yet still wildly profitable, ones on their own terms. We just don't hear about them.
- user_named 3y ago
  List those companies
- Justsignedup 3y ago
  Mental process: - I can make $20M today and sell my company off, and I'm set for pretty much anything I'd want for life, and I don't have to work if I don't want to. OR - I can make $1 mil a year and run this company indefinitely theoretically, and have to keep working. That's a more realistic expectation. Furthermore, trying to start a company with no real wealth to start with is a massive challenge, which means you're not starting a company alone, you're going to some sort of investor. And investors don't like "lifestyle" companies, they like make big money fast, and sell. So everything pressures you to go in one direction. Edit: If you sell off, the investor is in control. And investors want to be facebook.
kristopolous 3y ago
There's an amount of money that for me, for all my intents and purposes, is effectively infinity and when it comes to these types of deals, it's way lower than that, basically something like 2 * monthly burn * 12 / ln(1.02) With the 2 being a buffer, and 2% annualized being an inflation adjusted return. So, for instance, 5k/month spend gives you 6 million. So that gives some slack. If 10 million and 100 million is the same infinity you've got some negotiating leverage to prevent yourself from selling your soul
elorant 3y ago
A site like Reddit running its own ads could easily make $700M yearly. So yes, I would reject the money.
- qwytw 3y ago
  10x Price/Sales ratio for a company like Reddit (i.e. with limited growth potentially) seems a bit too optimistic barring a 2020/21 style bubble.
  - elorant 3y ago
    They're already making close to half a billion. They may not have much room for growth but they have shittons of content where you can strap ads on for pretty much everything.
jms703 3y ago
I fully understand that Reddit needs money to keep the site running and the way to do that is via premium or showing ads. The 3rd party apps should never have promised a "no ads" experience IMO. I'm ok if using a 3rd party app means paying a modest fee to use Reddit and not see ads. I have no idea what a reasonable rate is, but Reddit Premium is not it. I don't get that kind of value out of it.
- aaomidi 3y ago
  third party devs have asked Reddit multiple times for an ad endpoint in the API. The really good move here would’ve been profit sharing on ads between Reddit and third party apps. But heck these devs were fine displaying ads for Reddit for nothing in return. Reddit didn’t care.
  - poyu 3y ago
    While I do agree that Reddit probably doesn't care, the ad endpoint approach is harder to implement than one would imagine. Normally ads have strict requirements for the placement (show one ad every x amount of posts), which would be hard to enforce across all 3rd party clients. Not to mention that they might be targeted towards the user, measure exposure time, and record interactions. I think the only way to do this is having some sort of SDK, but they probably determined that the cost would be too high.
    - aaomidi 3y ago
      I honestly believe that Reddit has ad targeting figured out in the form of subreddits. Second, Reddit had/has an opportunity to hear to actually dictate the ad placement rules themselves. They don’t need to promise a certain number of placement, but rather a certain number of clicks. Finally, they could have made the ad API something that’s locked behind a human review until the app got popular enough. I agree that it’s simply not worth it to fully automate this. Realistically there’s less than 15 clients that would need to implement this.
- deleted 3y ago
  [deleted]
elif 3y ago
I'm not arguing it doesn't make sense in brutal capitalist terms, I'm arguing it doesn't make sense in a 'user of an internet of cool things' terms.
aaomidi 3y ago
I wouldn’t accept that deal. Honestly the headache of that seems not worth the money. I’d be making enough money to live and not worry. I’d have enough saved for my kids to get a pretty nice jump start too. My great great great grandkids? I don’t care. Heck I can’t predict next week. Having that much money could end up having them get killed in a future revolution.

parthdesai 3y ago

Not saying I would turn down or won't turn down, but you've companies like 37signals and folks like DHH who are very happy making millions and not having a boss rather than making billions

user_named 3y ago
They are the bosses
Justsignedup 3y ago
37signals (basecamp now) is an exception. They didn't seek investment to get started. They are able to fully control their destiny because they don't have investors, they asked for Bezos to invest because they wanted him as an advisor, not because they needed the money. So yes DEFINITELY possible to do a 37signals, but you need starting capital. Or at least an ability to live for free for 24 months while you figure out how to make cash from your business. Most companies of that nature are started by either of the following scenarios: - Kid(s) from a middle-to-upper class family who can live off their parent/grandparent's money for a few years while they figure things out. Maybe even family throws in a few hundred grand as a gift to get you started. Definitely have collateral for a loan. - Already successful founders who have the ability to drop 200-500k into their company to get started, and already able to live off their wealth.
danudey 3y ago
37signals is profitable, though. It's easy to say "I'm happy just being a small company making a good product" if you're making enough to keep the lights on, but if you don't know how to monetize your audience and user base then the pressure to accept investor money starts getting pretty high.

jtode 3y ago

Why would you do that to your own kin?

Spivak 3y ago
Because there is no inherent goodness in working for others and fuck you money is by far the easiest way to secure your childrens' ability to live the lives they want. If you don't want your billions of dollars I'll happily take them of your hands.
- heavenlyblue 3y ago
  > your childrens' ability to live the lives they want. How do they know what they want?
  - screamingninja 3y ago
    By not making decisions for them but instead just aspiring to provide them with better opportunities.
    - heavenlyblue 3y ago
      I don't understand how having little money implies making decisions for your children
  - mandeepj 3y ago
    > How do they know what they want? There's a LCD across humans, the bare minimum - a place to live, food, and clothes.
    - heavenlyblue 3y ago
      Then you don't need billions in order to provide for that.
      - 3y ago

teaearlgraycold 3y ago

I’d turn down any compromise to my work or my integrity if I already have enough money to retire. The kids and grandkids need to earn their own comfort after they are out of the house.

screamingninja 3y ago
Or perhaps one could create opportunities for their future generations by building generational wealth in the hope of ensuring a better life for their kids and grandkids. It's a matter of perspective.
- wintogreen74 3y ago
  >> by building generational wealth in the hope of ensuring a better life for their kids and grandkids You could make a better life for your kids, and a lot more people, without building "generational wealth". The alternative in this case is not "run reddit in destitution". I'd argue those who pursue your "winner take everything" approach are the ones lacking perspective.
sdfghswe 3y ago
Ok Pinocchio.
- teaearlgraycold 3y ago
  lol

JohnFen 3y ago

I'd turn down that deal. If they value it so highly, I'd prefer to just sell the company to them entirely over selling 10%. I know from experience that doing it any other way would make me utterly miserable.

wintogreen74 3y ago

What if an alternative was to make $70M or $7M a year without giving up anything? I know more companies that do turn down the crazy homerun deals and pursue the modest, yet still wildly profitable, ones on their own terms. We just don't hear about them.

user_named 3y ago
List those companies
Justsignedup 3y ago
Mental process: - I can make $20M today and sell my company off, and I'm set for pretty much anything I'd want for life, and I don't have to work if I don't want to. OR - I can make $1 mil a year and run this company indefinitely theoretically, and have to keep working. That's a more realistic expectation. Furthermore, trying to start a company with no real wealth to start with is a massive challenge, which means you're not starting a company alone, you're going to some sort of investor. And investors don't like "lifestyle" companies, they like make big money fast, and sell. So everything pressures you to go in one direction. Edit: If you sell off, the investor is in control. And investors want to be facebook.

kristopolous 3y ago

There's an amount of money that for me, for all my intents and purposes, is effectively infinity and when it comes to these types of deals, it's way lower than that, basically something like 2 * monthly burn * 12 / ln(1.02) With the 2 being a buffer, and 2% annualized being an inflation adjusted return. So, for instance, 5k/month spend gives you 6 million. So that gives some slack. If 10 million and 100 million is the same infinity you've got some negotiating leverage to prevent yourself from selling your soul

elorant 3y ago

A site like Reddit running its own ads could easily make $700M yearly. So yes, I would reject the money.

qwytw 3y ago
10x Price/Sales ratio for a company like Reddit (i.e. with limited growth potentially) seems a bit too optimistic barring a 2020/21 style bubble.
- elorant 3y ago
  They're already making close to half a billion. They may not have much room for growth but they have shittons of content where you can strap ads on for pretty much everything.

jms703 3y ago

I fully understand that Reddit needs money to keep the site running and the way to do that is via premium or showing ads. The 3rd party apps should never have promised a "no ads" experience IMO. I'm ok if using a 3rd party app means paying a modest fee to use Reddit and not see ads. I have no idea what a reasonable rate is, but Reddit Premium is not it. I don't get that kind of value out of it.

aaomidi 3y ago
third party devs have asked Reddit multiple times for an ad endpoint in the API. The really good move here would’ve been profit sharing on ads between Reddit and third party apps. But heck these devs were fine displaying ads for Reddit for nothing in return. Reddit didn’t care.
- poyu 3y ago
  While I do agree that Reddit probably doesn't care, the ad endpoint approach is harder to implement than one would imagine. Normally ads have strict requirements for the placement (show one ad every x amount of posts), which would be hard to enforce across all 3rd party clients. Not to mention that they might be targeted towards the user, measure exposure time, and record interactions. I think the only way to do this is having some sort of SDK, but they probably determined that the cost would be too high.
  - aaomidi 3y ago
    I honestly believe that Reddit has ad targeting figured out in the form of subreddits. Second, Reddit had/has an opportunity to hear to actually dictate the ad placement rules themselves. They don’t need to promise a certain number of placement, but rather a certain number of clicks. Finally, they could have made the ad API something that’s locked behind a human review until the app got popular enough. I agree that it’s simply not worth it to fully automate this. Realistically there’s less than 15 clients that would need to implement this.
deleted 3y ago
[deleted]

elif 3y ago

I'm not arguing it doesn't make sense in brutal capitalist terms, I'm arguing it doesn't make sense in a 'user of an internet of cool things' terms.

aaomidi 3y ago

I wouldn’t accept that deal. Honestly the headache of that seems not worth the money. I’d be making enough money to live and not worry. I’d have enough saved for my kids to get a pretty nice jump start too. My great great great grandkids? I don’t care. Heck I can’t predict next week. Having that much money could end up having them get killed in a future revolution.