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> But did Instagram have revenue? This is a tired argument. Everything is a tradeoff. In this case it's a tradeoff between adoption and revenue. Hipstamatic

by ericflo 14y ago

> But did Instagram have revenue? This is a tired argument. Everything is a tradeoff. In this case it's a tradeoff between adoption and revenue. Hipstamatic chose the revenue-first approach (they apparently made plenty of money) and Instagram chose the adoption-first approach. Which one is more valuable (and you must include strategic value in this evaluation!) right now? Clearly Instagram. > Also he's right that now that Instagram was valued at $1 billion, we're already starting to see others like Square immediately looking to raise capital at huge valuations, just because Instagram was valued so high. I'm very, very skeptical that this is the case. Has anyone involved in the situation made any statement hinting at that? > Shouldn't companies be valued based on how much potential for making money they have in the future Yep! That's what people are doing.

dkrich 14y ago
> Hipstamatic chose the revenue-first approach (they apparently made plenty of money) and Instagram chose the adoption-first approach. Which one is more valuable (and you must include strategic value in this evaluation!) right now? Clearly Instagram. Not necessarily. You're assuming that had Hipstamatic chosen the adoption-first approach they would have been a more valuable business. That assumes that both products are basically identical and the successes and failures turn only on whether the app is paid. Conversely, you're assuming that the only reason Instagram got such widespread adoption is because it was a free app. > Yep! That's what people are doing. Um, no they aren't. Most companies in the social space are valued based on how much hype they can generate, not how much money. A lot of people assume that an app like Path must be worth at least a billion. Is that based on money-making potential? I'm not buying it.

by ericflo 14y ago

dkrich 14y ago

> Hipstamatic chose the revenue-first approach (they apparently made plenty of money) and Instagram chose the adoption-first approach. Which one is more valuable (and you must include strategic value in this evaluation!) right now? Clearly Instagram. Not necessarily. You're assuming that had Hipstamatic chosen the adoption-first approach they would have been a more valuable business. That assumes that both products are basically identical and the successes and failures turn only on whether the app is paid. Conversely, you're assuming that the only reason Instagram got such widespread adoption is because it was a free app. > Yep! That's what people are doing. Um, no they aren't. Most companies in the social space are valued based on how much hype they can generate, not how much money. A lot of people assume that an app like Path must be worth at least a billion. Is that based on money-making potential? I'm not buying it.