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I didn't say dot com got anything wrong. I'm saying raising hundreds of millions of VC dollars and practically giving it away is a dot com era strategy. Rememb

by abalone 13y ago

I didn't say dot com got anything wrong. I'm saying raising hundreds of millions of VC dollars and practically giving it away is a dot com era strategy. Remember when PayPal paid out a $20 referral bonus for each new customer? Yeah, those days.

netcan 13y ago
If you say dotcom, the association is over-investing, ridiculously irrational valuation of companies/users/hits, pets.com, bankruptcy, find-the-bigger-fool, etc.
- drited 13y ago
  Dotcom days also implies flawed business models that are unlikely to ever be profitable for the company, nevermind investors. I think it was a relevant use of the word considering the point of abalone's argument.
crazygringo 13y ago
Well, you're not saying that didn't work out for PayPal, are you? :)
- jacquesc 13y ago
  It worked out for them (being bought), but I think you could relate it to a pump and dump scheme.
  - PeterisP 13y ago
    It's called solving the chicken-and-egg problem by funding one of them. There was an Elon Musk interview about that stage - IIRC they invested/gifted ~100 million (!) in such activities; but this marketing paid back afterwards in billions.
- abalone 13y ago
  No, I'm really not. All I'm saying is it's a similarly audacious, capital-intensive strategy that can only happen in very favorable capital markets. It's worth looking at how PayPal tried to steer towards profitability in later days, though. They basically became more evil. When paying merchants, they try to trick you into preferring ACH transfers direct from your checking account over using your credit/debit card. The former has weaker consumer protections, no rewards and risks overdraft fees, but lets PayPal keep almost all of their 2.9% + $0.30 fee, since ACH costs just pennies. Not saying Square is going to become evil. Just saying they'll have to figure out how to break even with it eventually, because right now there's a built-in operational loss that scales with usage.

by abalone 13y ago

netcan 13y ago

If you say dotcom, the association is over-investing, ridiculously irrational valuation of companies/users/hits, pets.com, bankruptcy, find-the-bigger-fool, etc.

drited 13y ago
Dotcom days also implies flawed business models that are unlikely to ever be profitable for the company, nevermind investors. I think it was a relevant use of the word considering the point of abalone's argument.

crazygringo 13y ago

Well, you're not saying that didn't work out for PayPal, are you? :)

jacquesc 13y ago
It worked out for them (being bought), but I think you could relate it to a pump and dump scheme.
- PeterisP 13y ago
  It's called solving the chicken-and-egg problem by funding one of them. There was an Elon Musk interview about that stage - IIRC they invested/gifted ~100 million (!) in such activities; but this marketing paid back afterwards in billions.
abalone 13y ago
No, I'm really not. All I'm saying is it's a similarly audacious, capital-intensive strategy that can only happen in very favorable capital markets. It's worth looking at how PayPal tried to steer towards profitability in later days, though. They basically became more evil. When paying merchants, they try to trick you into preferring ACH transfers direct from your checking account over using your credit/debit card. The former has weaker consumer protections, no rewards and risks overdraft fees, but lets PayPal keep almost all of their 2.9% + $0.30 fee, since ACH costs just pennies. Not saying Square is going to become evil. Just saying they'll have to figure out how to break even with it eventually, because right now there's a built-in operational loss that scales with usage.