5 ms·

FB IPO is bad for the startup world

by ddet 14y ago

benjaminwootton 14y ago
Agreed. I wonder how much of the current froth is based on people trying to be the next Facebook or Instagram? If Facebook takes off and justifies their early valuation, the startup/angel/incubator/VC world would go into the stratopshere. If it continues to languish, people are going to be much more skeptical in making investments and even starting web based businesses. A lot hinges on this stock price for the rest of us....
- il 14y ago
  I don't think the possibility of a $50B exit vs a $100B exit will make any difference for most angel investors.
  - waterlesscloud 14y ago
    What will make a difference is that neither Instagram or Pinterest would get anywhere near as much of a valuation today as they did a month ago.
- awj 14y ago
  > If it continues to languish, people are going to be much more skeptical in making investments and even starting web based businesses. Is the latter part of that really true? Starting a web based business is worlds easier/cheaper than just about any other kind. I see this more as injecting a dose of reality and doing away with the give-things-away-to-get-big-then-monetize-somehow "business plan".
pbreit 14y ago
No it's not. Facebook is an anomalous company so there's not much worth in comparing it to the rest of the industry. The fact is, some $10 billion dollars just entered investor hands who will no doubt be ploughing it back into (mostly Bay Area) startups for years to come. And Facebook becoming more acquisitive certainly helps as well.
bradgessler 14y ago
Not necessarily. If FB valuations keep slipping, it will put downward pressure on all social startup valuations, which means those companies have less money to throw around. This is great new for non-social startups. It could mean everything from cheaper rent for office space in SF to a larger pool of available talent to recruit from.
MisterBastahrd 14y ago
FB's IPO is based on imaginary numbers. 900 million users? How many actual users. Seems to me that the suits REALLY wanted to make this a $100B company regardless of how much worth it actually had. There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebook and Google when it comes to figuring out what ads people want to see. Let's say I'm on Facebook and I ask my friends for advice on which is the best lead pencil to purchase. They might tell me a few recommendations, and Facebook may even start producing ads based upon that conversation should I choose to revisit it. But then I want to actually PURCHASE the lead pencil. Where am I going to go to look for that? Google. It will give me price recommendations, and once I've done the search, Google will continue to follow me around with ads tailored to my search.
- bignoggins 14y ago
  It's 900 million monthly active users. Say what you will about FB but they don't use vanity metrics.
  - ryanmerket 14y ago
    50% of which are daily active users.
    - Tloewald 14y ago
      If someone is working for a like-selling network and using 100 FB accts to earn their pittance, they'll constitute 100 active daily users.
  - tatsuke95 14y ago
    >It's 900 million monthly active users This number has always irked me. How many of those are unique? And I don't mean unique accounts, I mean actually unique people. I did some work in the social gaming space. We would routinely discover people with 5, 10, sometimes 20+ Facebook accounts that would be logged in and actively used in order to "game" social gaming mechanics ("add 10 friends!", "log in 10 days in a row and get a prize!", "complete these offers to get game currency!"). There are businesses on the internet that can get your page thousands of "likes" in the span of hours, by using multiple accounts. Having a single account was the exception. And even though this was against FB's terms of use, I don't recall anyone, ever, getting banned for it. What would Facebook's incentive be to do so?
fijal 14y ago
FB IPO is bad for the inflated startup world around the FB ecosystem. All stuff "social" and "connected". It's hopefully good for everyone else who is bringing some value, but was turned down/undervalued, because they're not social enough.

FB IPO is bad for the startup world

by ddet 14y ago

FB IPO is bad for the startup world

Agreed. I wonder how much of the current froth is based on people trying to be the next Facebook or Instagram? If Facebook takes off and justifies their early valuation, the startup/angel/incubator/VC world would go into the stratopshere. If it continues to languish, people are going to be much more skeptical in making investments and even starting web based businesses. A lot hinges on this stock price for the rest of us....

il 14y ago
I don't think the possibility of a $50B exit vs a $100B exit will make any difference for most angel investors.
- waterlesscloud 14y ago
  What will make a difference is that neither Instagram or Pinterest would get anywhere near as much of a valuation today as they did a month ago.
awj 14y ago
> If it continues to languish, people are going to be much more skeptical in making investments and even starting web based businesses. Is the latter part of that really true? Starting a web based business is worlds easier/cheaper than just about any other kind. I see this more as injecting a dose of reality and doing away with the give-things-away-to-get-big-then-monetize-somehow "business plan".

pbreit 14y ago

No it's not. Facebook is an anomalous company so there's not much worth in comparing it to the rest of the industry. The fact is, some $10 billion dollars just entered investor hands who will no doubt be ploughing it back into (mostly Bay Area) startups for years to come. And Facebook becoming more acquisitive certainly helps as well.

bradgessler 14y ago

Not necessarily. If FB valuations keep slipping, it will put downward pressure on all social startup valuations, which means those companies have less money to throw around. This is great new for non-social startups. It could mean everything from cheaper rent for office space in SF to a larger pool of available talent to recruit from.

MisterBastahrd 14y ago

FB's IPO is based on imaginary numbers. 900 million users? How many actual users. Seems to me that the suits REALLY wanted to make this a $100B company regardless of how much worth it actually had. There's only so much you can glean out of a social network where the vast majority of the time people are talking about how their day went. I think that some people fundamentally misunderstand the difference between Facebook and Google when it comes to figuring out what ads people want to see. Let's say I'm on Facebook and I ask my friends for advice on which is the best lead pencil to purchase. They might tell me a few recommendations, and Facebook may even start producing ads based upon that conversation should I choose to revisit it. But then I want to actually PURCHASE the lead pencil. Where am I going to go to look for that? Google. It will give me price recommendations, and once I've done the search, Google will continue to follow me around with ads tailored to my search.

bignoggins 14y ago
It's 900 million monthly active users. Say what you will about FB but they don't use vanity metrics.
- ryanmerket 14y ago
  50% of which are daily active users.
  - Tloewald 14y ago
    If someone is working for a like-selling network and using 100 FB accts to earn their pittance, they'll constitute 100 active daily users.
- tatsuke95 14y ago
  >It's 900 million monthly active users This number has always irked me. How many of those are unique? And I don't mean unique accounts, I mean actually unique people. I did some work in the social gaming space. We would routinely discover people with 5, 10, sometimes 20+ Facebook accounts that would be logged in and actively used in order to "game" social gaming mechanics ("add 10 friends!", "log in 10 days in a row and get a prize!", "complete these offers to get game currency!"). There are businesses on the internet that can get your page thousands of "likes" in the span of hours, by using multiple accounts. Having a single account was the exception. And even though this was against FB's terms of use, I don't recall anyone, ever, getting banned for it. What would Facebook's incentive be to do so?

fijal 14y ago

FB IPO is bad for the inflated startup world around the FB ecosystem. All stuff "social" and "connected". It's hopefully good for everyone else who is bringing some value, but was turned down/undervalued, because they're not social enough.