3 ms·

But there are also plenty of businesses with millions of users that only get revenue later in their life. For the first few years, traction besides revenue is c

But there are also plenty of businesses with millions of users that only get revenue later in their life. For the first few years, traction besides revenue is certainly acceptable evidence of progress.

potatolicious 14y ago
> "But there are also plenty of businesses with millions of users that only get revenue later in their life." No. No. NO. This is one of the most common stories told in the Valley, but it's also an immense case of confirmation bias. How many companies with millions users had no revenue for a long time and then became immensely successful later on with a viable monetization strategy? Google. Maaaaaybe Facebook, the jury is still out on that... aaaaaand that's about it. The overwhelming, typical case for the "no revenue, all traction" business is death, an acquihire if you're lucky. The fact that there exist a few (by a few I mean one or two) huge outliers does not represent 'plenty of businesses', nor does it represent some kind of trend. Traction-first business with no revenue model baked in have always been the longest throws in software business. So no, traction is absolutely not an acceptable replacement for revenue when representing a business' viability.
- wtvanhest 14y ago
  I think you are right. A year after getting $100,000 in seed money, they should have some revenue. Maybe not a lot, probably not profitable, but they should have some sales. Worst case, they should be right on the edge of releasing their product. By year 2, no revenue would be a complete disaster for this program. Having 1 in 6 or 1 in 10 make it would also be a disaster.
  - randomdata 14y ago
    Is the goal for Thiel to see a quick return on his investment? Or is it set these people up for a better career in the future? I have always understood it to be the latter. From what I have interpreted, Thiel believes that just getting out into the world and getting to work will put you as good, if not better standing than someone who went to college with respect to future income and employment opportunities†. That doesn't mean they are going to be millionaires on day one. They still have much to learn, like anyone else. One year later doesn't really tell us anything about the success or failure of his program. † within reason; you are not going become a doctor without the right credentials and he openly speaks to that.
- deleted 14y ago
  [deleted]
- srathbun 14y ago
  I assumed this viewpoint was always understood. After all, business is easy. If you at least break even, you are a going concern. Otherwise, business failure is inevitable.
- acgourley 14y ago
  What if you weight it by dollars earned instead of just successful companies? Having google and maybe facebook on your side isn't so bad then.

potatolicious 14y ago

> "But there are also plenty of businesses with millions of users that only get revenue later in their life." No. No. NO. This is one of the most common stories told in the Valley, but it's also an immense case of confirmation bias. How many companies with millions users had no revenue for a long time and then became immensely successful later on with a viable monetization strategy? Google. Maaaaaybe Facebook, the jury is still out on that... aaaaaand that's about it. The overwhelming, typical case for the "no revenue, all traction" business is death, an acquihire if you're lucky. The fact that there exist a few (by a few I mean one or two) huge outliers does not represent 'plenty of businesses', nor does it represent some kind of trend. Traction-first business with no revenue model baked in have always been the longest throws in software business. So no, traction is absolutely not an acceptable replacement for revenue when representing a business' viability.

wtvanhest 14y ago
I think you are right. A year after getting $100,000 in seed money, they should have some revenue. Maybe not a lot, probably not profitable, but they should have some sales. Worst case, they should be right on the edge of releasing their product. By year 2, no revenue would be a complete disaster for this program. Having 1 in 6 or 1 in 10 make it would also be a disaster.
- randomdata 14y ago
  Is the goal for Thiel to see a quick return on his investment? Or is it set these people up for a better career in the future? I have always understood it to be the latter. From what I have interpreted, Thiel believes that just getting out into the world and getting to work will put you as good, if not better standing than someone who went to college with respect to future income and employment opportunities†. That doesn't mean they are going to be millionaires on day one. They still have much to learn, like anyone else. One year later doesn't really tell us anything about the success or failure of his program. † within reason; you are not going become a doctor without the right credentials and he openly speaks to that.
deleted 14y ago
[deleted]
srathbun 14y ago
I assumed this viewpoint was always understood. After all, business is easy. If you at least break even, you are a going concern. Otherwise, business failure is inevitable.
acgourley 14y ago
What if you weight it by dollars earned instead of just successful companies? Having google and maybe facebook on your side isn't so bad then.