7 ms·

I hate to be That Guy, but I think this demands a bit more rigor. $1.2B is certainly a big number, but let's unpack what it means. Do you think it's impossible

by pc 13y ago

I hate to be That Guy, but I think this demands a bit more rigor. $1.2B is certainly a big number, but let's unpack what it means. Do you think it's impossible that MongoDB gets to $100M of net income? For a company that sells to the enterprise and whose product has significant adoption, that definitely doesn't sound implausible to me. Given their financials and growth figures, how would you value MongoDB?

yo-mf 13y ago
Dear "That Guy", spot on.
venus 13y ago
I don't know. I haven't seen these financials. But it's a frigging database, and not a particularly good one. A billion dollars!? Look, I'm not claiming to be omniscient. I'm sure they're smart people. But would you buy stock in MongoDB at a 1.2b valuation? Would you? As for me - Absolutely not.
- pc 13y ago
  > I don't know. I haven't seen these financials. But it's a frigging database, and not a particularly good one. A billion dollars!? Salesforce is a frigging CRM tool; SAP is a frigging ERP system; Oracle is a frigging database. And not particularly good ones at that, in the estimation of many of their users. Their market caps are $30 billion, $90 billion, and $150 billion, respectively. I'm disappointed that yours is the top-voted comment. We can do better than this.
  - AlisdairO 13y ago
    > Oracle is a frigging database It's really not. Oracle has an enormous middleware portfolio, and plenty of other niches to boot. And, to be honest, much as it may be unfriendly, it's a pretty good database.
    - pc 13y ago
      Yeah, I was being hyperbolic to try to make the point -- you can dismiss anything as merely a frigging X. You're absolutely right with regard to Oracle. (Tangent: for anyone interested in Oracle's history/business, or just enterprise software in general, I highly recommend http://www.amazon.com/dp/0743225058 http://www.amazon.com/dp/0743225058)
      - prayag 13y ago
        This book is highly recommended by Aaron Levie from Box too. Fantastic book.
      - stingraycharles 13y ago
        I agree with you: at one point in time, Oracle probably was worth $1.2 billion. For all we know, MongoDB could grow into a company that spawns a lot of NoSQL middleware whatevers.
        awavering 13y ago
        Oracle had a net income of over $10B in 2013. That's some serious cashflow. https://www.google.com/finance?q=NASDAQ:ORCL&fstype=ii&ei=lMH6UPjjJcXLlAXw4QE https://www.google.com/finance?q=NASDAQ:ORCL&fstype=ii&ei=lM...
  - Confusion 13y ago
    Back then, when they were the age 10gen/MongoDB is now, nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion, because there was no clue they would be the winners. All investors then were just overly cautious? Or perhaps there are now others ways to make money off of a company, not tied to the companies actual success and the value it adds to the economy?
    - pc 13y ago
      > Back then, when they were the age 10gen/MongoDB is now, nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion, because there was no clue they would be the winners. Actually, MongoDB (formerly 10gen) is 6 years old. After 6 years, Salesforce's market cap was around $3 billion. (They IPO'd after 5 years.)
      - hackula1 13y ago
        Ok, but Salesforce was also the fastest company to ever reach a billion dollars. They are definitely an outlier.
      - Confusion 13y ago
        A market cap after n years is something different from a valuation derived from venture capital raised in prior years. Such a difference is precisely what makes for a good investment. Salesforce revenue in the year of their IPO: $96M. IPO: $110M MongoDB revenue last year: $36M [1] [1] http://wikibon.org/wiki/v/Big_Data_Vendor_Revenue_and_Market_Forecast_2012-2017#Big_Data_Vendor_Revenue http://wikibon.org/wiki/v/Big_Data_Vendor_Revenue_and_Market...
    - wallflower 13y ago
      > nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion One counterpoint. My friend worked at a university. This was back in the era of punch-cards. Oracle came in with their relational database sales pitch (they were basically a very small sales team). His manager (who managed the punch-carders) saw the huge potential that everyone else did not (e.g. 'never going to happen'). Bought Oracle stock right when it went public (mid-80s). Kept on buying it. Retired in her mid 40s. Now lives on her own farm, tending her own sheep (not sure if it was sheep or some other livestock), in the country.
  - monstrado 13y ago
    > Salesforce is a frigging CRM tool Not really, they do a whole lot more than that, especially in the SDK land, I hear they even have their own IDE for coding the Salesforce way. > SAP is a frigging ERP system Another one of those companies that has its hand in a lot of cookie jars, for example, they sell HANA (http://www.saphana.com/welcome http://www.saphana.com/welcome), which is a very fast in-memory analytical database (SQL). > Oracle is a frigging database Oracle database is actually just a small part of Oracle these days, look at their Sun aquisition. I mean, Oracle even has their own flavor of RHEL now.
    - threeseed 13y ago
      No SAP is an ERP company. HANA sales have been woeful from what I've heard. Likewise for Salesforce. They are still very much a one product company.
  - mattmanser 13y ago
    Seriously? You're a stripe cofounder and you seriously can't see the difference between Salesforce, SAP, Oracle and a minor OSS DB? Like all of the others charge for everything they do, have massive market penetration and one of them's fairly small can't charge for much? The OSS DB one?
    - pc 13y ago
      Of course there's a difference (as reflected by MongoDB's relatively tiny valuation). The question is how likely it is that they can expand significantly from their current position. The trajectories of Salesforce, Oracle, and SAP — all of whom had similarly inauspicious beginnings — suggest that it's at least possible.
  - adamconroy 13y ago
    This evaluation is absurd. And comparing mongo with oracle is even more absurd.
  - riggins 13y ago
    I don't know. I haven't seen these financials. this made me chuckle. nothing like have a strong opinion based on nada.
- wslh 13y ago
  The issue here is that it does not matter if you like the current state of the product. The vision here is about the potential of the company. If they need to improve the product, hire/fire people to be there, they will (assuming competence).
- mcgwiz 13y ago
  MongoDB is not a particularly good database. But it is a pretty good in-memory cache that can persist to disk, which is a valuable technical niche. It's a small change in perspective (that is betrayed by their marketing) but has a huge impact on expectations, use and value. I would have named it something like MongoCache.
  - deleted 13y ago
    [deleted]
  - nasalgoat 13y ago
    Actually, it's a really poor in-memory cache, since it pages back and forth to disk constantly.
    - mcgwiz 13y ago
      No one's arguing that disk paging is high-performance. In fact, MongoDB themselves explicitly recommend that you keep your working set size below physical memory size.
      - nasalgoat 13y ago
        Our data is 1/10th of available memory and MongoDB still pages back and forth to disk constantly. This is what happens when you rely on the OS to handle paging.
  - RSASecure 13y ago
    I would stick to in memory cache solutions like redis, memcache over mongo
    - tracker1 13y ago
      Depending on your needs, mongo has a much nicer interface than redis... Not to mention supporting indexing in the DB instead of having to DIY your own... I used it at a site that did mostly classified listings, and the performance was a lot better than the SQL RDBMS that was being used for search/display.
- anatari 13y ago
  I think your reaction is mostly an emotional speculation based on your dislike of their technology. As you pointed out yourself, we do not know the financials, their adoption rate numbers or other relevant facts to make a sound judgement on the valuation. I absolutely would buy the stock if I had insight into the relevant information and liked what I saw.
- ensignavenger 13y ago
  I don't believe there is any law that says they can't make anything other than a database. Perhaps they have plans to expand to other areas. Without seeing their finances, and knowing their future plans and the capabilities of the company as a whole, perhaps your judging the book by its cover :)
- malandrew 13y ago
  MongoDB is at a scale community-wise where they are growing by leaps and bounds as MongoDB ends up in many places where MySQL used to rule and for many newer applications where the relational and transaction benefits of MySQL are unnecessary. You can find mature MongoDB bindings for everything and now assume that they are mature for pretty much every community you care about. When people come to programming for the first time, many are likely to now learn MongoDB as their first DB and not MySQL. With all this in mind, MongoDB is now basically a large snowball picking up lots of small wins everywhere because of ubiquity and gaining mass. MongoDB is the second major open source DB win since MySQL. Given conformity, social proof, product awareness, large enough community to bet your non-tech business on it, do you doubt that it can't grow a bunch over the next 5+ years? It might be dead to you, but it's the next big thing to the rest of the world who are not as enlightened as we.
- moneyrich4 13y ago
  I think it’s a crazy amount, but not necessarily wrong. Mongo is the most popular NoSQL db The interweb of the last 5-6 years created a large demand for JavaScript developers; this db (and or NodeJS) allows them to get into DB programming. Now that I think about that its like Windows did for OSes or Word for typing or HTML for web. So the growth potential is pretty large. I think the best deal on a biz like this they can sign support contracts with an infinite number of customers to support their product, saving the customers money when shit breaks. That alone is a few million a year.
tlogan 13y ago
The value of MongoDB is how much Larry Ellison is willing to pay for them. That is that.
- scorpion032 13y ago
  Cannot be emphasised enough. Less than 1% of Oracle's market cap; and pretty sure they could complete their offering with a NoSQL database.
  - tlogan 13y ago
    Exactly: Oracle will first try to write the code and if that does not work Oracle will write a check.
  - pron 13y ago
    Oracle already has a NoSQL database, and from what I hear, it's pretty good: http://www.oracle.com/technetwork/products/nosqldb/overview/index.html http://www.oracle.com/technetwork/products/nosqldb/overview/...
    - druiid 13y ago
      Yeah. They came in once and tried to sell us on it. Wasn't all that interesting honestly and I believe we'll keep on using Couchbase.
dbags 13y ago
More importantly, the number is utterly and completely meaningless without the rest of the term sheet. To be extreme, think of the difference between this investment as all common stock, versus this investment as participating preferred with 3x liquidation preferences. I've seen companies trade liquidation preferences for higher valuations before, because they wanted to pretend a down round wasn't, or because they wanted to feign a greater level of success than had been earned. It wouldn't be unprecedented, particularly from a marketing-savvy company like Mongo that knows a 3 comma valuation would help close deals.

by pc 13y ago

yo-mf 13y ago

Dear "That Guy", spot on.

venus 13y ago

I don't know. I haven't seen these financials. But it's a frigging database, and not a particularly good one. A billion dollars!? Look, I'm not claiming to be omniscient. I'm sure they're smart people. But would you buy stock in MongoDB at a 1.2b valuation? Would you? As for me - Absolutely not.

pc 13y ago
> I don't know. I haven't seen these financials. But it's a frigging database, and not a particularly good one. A billion dollars!? Salesforce is a frigging CRM tool; SAP is a frigging ERP system; Oracle is a frigging database. And not particularly good ones at that, in the estimation of many of their users. Their market caps are $30 billion, $90 billion, and $150 billion, respectively. I'm disappointed that yours is the top-voted comment. We can do better than this.
- AlisdairO 13y ago
  > Oracle is a frigging database It's really not. Oracle has an enormous middleware portfolio, and plenty of other niches to boot. And, to be honest, much as it may be unfriendly, it's a pretty good database.
  - pc 13y ago
    Yeah, I was being hyperbolic to try to make the point -- you can dismiss anything as merely a frigging X. You're absolutely right with regard to Oracle. (Tangent: for anyone interested in Oracle's history/business, or just enterprise software in general, I highly recommend http://www.amazon.com/dp/0743225058 http://www.amazon.com/dp/0743225058)
    - prayag 13y ago
      This book is highly recommended by Aaron Levie from Box too. Fantastic book.
    - stingraycharles 13y ago
      I agree with you: at one point in time, Oracle probably was worth $1.2 billion. For all we know, MongoDB could grow into a company that spawns a lot of NoSQL middleware whatevers.
      - awavering 13y ago
        Oracle had a net income of over $10B in 2013. That's some serious cashflow. https://www.google.com/finance?q=NASDAQ:ORCL&fstype=ii&ei=lMH6UPjjJcXLlAXw4QE https://www.google.com/finance?q=NASDAQ:ORCL&fstype=ii&ei=lM...
- Confusion 13y ago
  Back then, when they were the age 10gen/MongoDB is now, nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion, because there was no clue they would be the winners. All investors then were just overly cautious? Or perhaps there are now others ways to make money off of a company, not tied to the companies actual success and the value it adds to the economy?
  - pc 13y ago
    > Back then, when they were the age 10gen/MongoDB is now, nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion, because there was no clue they would be the winners. Actually, MongoDB (formerly 10gen) is 6 years old. After 6 years, Salesforce's market cap was around $3 billion. (They IPO'd after 5 years.)
    - hackula1 13y ago
      Ok, but Salesforce was also the fastest company to ever reach a billion dollars. They are definitely an outlier.
    - Confusion 13y ago
      A market cap after n years is something different from a valuation derived from venture capital raised in prior years. Such a difference is precisely what makes for a good investment. Salesforce revenue in the year of their IPO: $96M. IPO: $110M MongoDB revenue last year: $36M [1] [1] http://wikibon.org/wiki/v/Big_Data_Vendor_Revenue_and_Market_Forecast_2012-2017#Big_Data_Vendor_Revenue http://wikibon.org/wiki/v/Big_Data_Vendor_Revenue_and_Market...
  - wallflower 13y ago
    > nobody valued those companies at (the appropriately adjusted equivalent of) 1.2 billion One counterpoint. My friend worked at a university. This was back in the era of punch-cards. Oracle came in with their relational database sales pitch (they were basically a very small sales team). His manager (who managed the punch-carders) saw the huge potential that everyone else did not (e.g. 'never going to happen'). Bought Oracle stock right when it went public (mid-80s). Kept on buying it. Retired in her mid 40s. Now lives on her own farm, tending her own sheep (not sure if it was sheep or some other livestock), in the country.
- monstrado 13y ago
  > Salesforce is a frigging CRM tool Not really, they do a whole lot more than that, especially in the SDK land, I hear they even have their own IDE for coding the Salesforce way. > SAP is a frigging ERP system Another one of those companies that has its hand in a lot of cookie jars, for example, they sell HANA (http://www.saphana.com/welcome http://www.saphana.com/welcome), which is a very fast in-memory analytical database (SQL). > Oracle is a frigging database Oracle database is actually just a small part of Oracle these days, look at their Sun aquisition. I mean, Oracle even has their own flavor of RHEL now.
  - threeseed 13y ago
    No SAP is an ERP company. HANA sales have been woeful from what I've heard. Likewise for Salesforce. They are still very much a one product company.
- mattmanser 13y ago
  Seriously? You're a stripe cofounder and you seriously can't see the difference between Salesforce, SAP, Oracle and a minor OSS DB? Like all of the others charge for everything they do, have massive market penetration and one of them's fairly small can't charge for much? The OSS DB one?
  - pc 13y ago
    Of course there's a difference (as reflected by MongoDB's relatively tiny valuation). The question is how likely it is that they can expand significantly from their current position. The trajectories of Salesforce, Oracle, and SAP — all of whom had similarly inauspicious beginnings — suggest that it's at least possible.
- adamconroy 13y ago
  This evaluation is absurd. And comparing mongo with oracle is even more absurd.
- riggins 13y ago
  I don't know. I haven't seen these financials. this made me chuckle. nothing like have a strong opinion based on nada.
wslh 13y ago
The issue here is that it does not matter if you like the current state of the product. The vision here is about the potential of the company. If they need to improve the product, hire/fire people to be there, they will (assuming competence).
mcgwiz 13y ago
MongoDB is not a particularly good database. But it is a pretty good in-memory cache that can persist to disk, which is a valuable technical niche. It's a small change in perspective (that is betrayed by their marketing) but has a huge impact on expectations, use and value. I would have named it something like MongoCache.
- deleted 13y ago
  [deleted]
- nasalgoat 13y ago
  Actually, it's a really poor in-memory cache, since it pages back and forth to disk constantly.
  - mcgwiz 13y ago
    No one's arguing that disk paging is high-performance. In fact, MongoDB themselves explicitly recommend that you keep your working set size below physical memory size.
    - nasalgoat 13y ago
      Our data is 1/10th of available memory and MongoDB still pages back and forth to disk constantly. This is what happens when you rely on the OS to handle paging.
- RSASecure 13y ago
  I would stick to in memory cache solutions like redis, memcache over mongo
  - tracker1 13y ago
    Depending on your needs, mongo has a much nicer interface than redis... Not to mention supporting indexing in the DB instead of having to DIY your own... I used it at a site that did mostly classified listings, and the performance was a lot better than the SQL RDBMS that was being used for search/display.
anatari 13y ago
I think your reaction is mostly an emotional speculation based on your dislike of their technology. As you pointed out yourself, we do not know the financials, their adoption rate numbers or other relevant facts to make a sound judgement on the valuation. I absolutely would buy the stock if I had insight into the relevant information and liked what I saw.
ensignavenger 13y ago
I don't believe there is any law that says they can't make anything other than a database. Perhaps they have plans to expand to other areas. Without seeing their finances, and knowing their future plans and the capabilities of the company as a whole, perhaps your judging the book by its cover :)
malandrew 13y ago
MongoDB is at a scale community-wise where they are growing by leaps and bounds as MongoDB ends up in many places where MySQL used to rule and for many newer applications where the relational and transaction benefits of MySQL are unnecessary. You can find mature MongoDB bindings for everything and now assume that they are mature for pretty much every community you care about. When people come to programming for the first time, many are likely to now learn MongoDB as their first DB and not MySQL. With all this in mind, MongoDB is now basically a large snowball picking up lots of small wins everywhere because of ubiquity and gaining mass. MongoDB is the second major open source DB win since MySQL. Given conformity, social proof, product awareness, large enough community to bet your non-tech business on it, do you doubt that it can't grow a bunch over the next 5+ years? It might be dead to you, but it's the next big thing to the rest of the world who are not as enlightened as we.
moneyrich4 13y ago
I think it’s a crazy amount, but not necessarily wrong. Mongo is the most popular NoSQL db The interweb of the last 5-6 years created a large demand for JavaScript developers; this db (and or NodeJS) allows them to get into DB programming. Now that I think about that its like Windows did for OSes or Word for typing or HTML for web. So the growth potential is pretty large. I think the best deal on a biz like this they can sign support contracts with an infinite number of customers to support their product, saving the customers money when shit breaks. That alone is a few million a year.

tlogan 13y ago

The value of MongoDB is how much Larry Ellison is willing to pay for them. That is that.

scorpion032 13y ago
Cannot be emphasised enough. Less than 1% of Oracle's market cap; and pretty sure they could complete their offering with a NoSQL database.
- tlogan 13y ago
  Exactly: Oracle will first try to write the code and if that does not work Oracle will write a check.
- pron 13y ago
  Oracle already has a NoSQL database, and from what I hear, it's pretty good: http://www.oracle.com/technetwork/products/nosqldb/overview/index.html http://www.oracle.com/technetwork/products/nosqldb/overview/...
  - druiid 13y ago
    Yeah. They came in once and tried to sell us on it. Wasn't all that interesting honestly and I believe we'll keep on using Couchbase.

dbags 13y ago

More importantly, the number is utterly and completely meaningless without the rest of the term sheet. To be extreme, think of the difference between this investment as all common stock, versus this investment as participating preferred with 3x liquidation preferences. I've seen companies trade liquidation preferences for higher valuations before, because they wanted to pretend a down round wasn't, or because they wanted to feign a greater level of success than had been earned. It wouldn't be unprecedented, particularly from a marketing-savvy company like Mongo that knows a 3 comma valuation would help close deals.