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It is amazing that someone is willing to pay $3 billion for SnapChat, but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although

It is amazing that someone is willing to pay $3 billion for SnapChat, but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although many people took issue with it). But we're still in the early days of the internet and smartphone era. It's still a gold rush where people are running after get-rich-quick ideas. Eventually we'll hit saturation and those quick exits will become less common. That will force investors to look for new opportunities elsewhere.

anigbrowl 13y ago
True, but at least Snapchat already works and has users. I like Elon Musk but I LOLed when I saw his estimate of $6 billion.
- kamaal 13y ago
  I am not sure why that is hilarious. India just sent a probe to Mars at $69 Million. Musk has himself built a rocket company with a million dollar scale investment. There is no reason to dismiss, especially when he has a track record of delivering great stuff on time and in budget.
  - anigbrowl 13y ago
    Because the cost is not just technological. There's also major land use issues, which get expensive in CA. His idea that putting it along the middle of the freeway will obviate these is not credible. I estimate $20bn to build it, minimum. Rocketry is simple by comparison.
    - david927 13y ago
      Maybe, maybe not. I don't see how running it along the freeway is not credible. But here's the upshot: Snapchat is a photo-sharing app that will hardly be around in 10 years; the Hyperloop would be. This seems to be lost on all those in Silicon Valley who sit for hours every day in traffic to go to their one-story prefab work box, only to then sit in the same traffic later to return to their prefab home box. There's investment to make your money grow and investment in the future. We need less of the former and more of the latter.
    - jwr 13y ago
      I also have my estimates. And I think that one day, after I create a successful company that builds electric cars on a scale no one has tried before, and after I create a company that designs and builds rockets that deliver cargo on commercially-contracted terms, people will even take my estimates seriously. Until then, I'll keep them to myself and not criticize others unless I have a really, really good justification.
      - im3w1l 13y ago
        We are talking about no one will invest in hyperloop. If it is because people suspect Musk's cost estimates are off then that is worth bringing up.
  - nightski 13y ago
    Yes, but even Elon Musk admits they were very close to failure in 2008 and almost had to call it quits. No matter the track record these projects are extraordinarily risky (with a potentially massive payout).
  - michaelt 13y ago
    I'm not saying it's impossible, but when the California High-Speed Rail project [1] goes at a third the speed using much more conventional technology and costs ten times as much, an investor's got to ask if hyperloop is too good to be true. It's also a big high-profile project, so if your investment failed you couldn't sweep it under the rug; and mass transit is an industry that hasn't had many high profile successes in recent years. [1] https://en.wikipedia.org/wiki/California_High-Speed_Rail https://en.wikipedia.org/wiki/California_High-Speed_Rail
    - ericd 13y ago
      How does a project that's been horribly managed being much worse than this suggest that this is suspect? (Unless you expect that horrible management is a given in any CA government-related project)
- jokoon 13y ago
  IT is cheap to make, you only need programmers, rent a place, some hosting and done, you make a quick buck. Building a railroad require much more concrete things, like steel, construction and utility vehicles, fuel, many workers, a place for those workers to sleep near the site, etc. I'm amazed that you're comparing IT and a railroad. I would be glad to see a second internet bubble. It's like saying having a smartphone is more important than transporting people.
- weland 13y ago
  True, but at least Hyperloop can actually be useful for someone and improve people's lives. To me, the thought that 3 billion were paid for Snapchat is not hilarious, it's horrifying.
  - vdaniuk 13y ago
    Arguably, there is nothing more important for a human being as an sentient organism than an endorphin fix obtained from various sources: love, surprise, food, etc. Snapchat provides that in a form of secure ephemeral messaging allowing users to share private information pseudosecurely. That is real value. If you find human nature horrifying I can't blame you, but saying that messaging apps do not improve people's lives is intelectually dishonest.
    - romaniv 13y ago
      What's intellectually dishonest is pretending that "endorphin fix" constitutes the purpose of human existence, whereas it is just a byproduct. How it is attained matters. In fact, ability to reason about that is what makes humans self-aware. Besides, "endorphins" are just a roundabout, cowardly (and factually incorrect) way to refer to general human happiness. You're implying that Snapchats of this world make people feel happy and fulfilled. They don't. There are hundreds of these social media start-ups, yet 1 in 10 Americans takes antidepressants. (Which is a diagnosis problem, but it does illustrate how many people feel seriously unhappy.)
    - weland 13y ago
      > Arguably, there is nothing more important for a human being as an sentient organism than an endorphin fix obtained from various sources: love, surprise, food, etc. On one hand, the balance of values is more complex than "there is nothing more important than the endorphin fix that allows you to translate your values into pleasures for your brain". Hookers and weed give you ten times the endorphin fix Snapchat gives you, and yet there aren't too many people who would eagerly applaud investment in that. So no, I don't think that I am intellectually dishonest in claiming that the umpteenth incremental improvement over a photo sharing app significantly improves people's lives. Snapchat isn't shaping the form of future communication, it doesn't bring people closer together any closer than IRC already does, it's not encouraging communities anymore than a dinner conversation is. It just makes sexting somewhat trendier, and twenty years from now we will look upon Snapchat the same way that we now look at elm. On the other hand, Snapchat is not the same as "the messaging apps". I'm not claiming messaging applications in general are useless; I'm claiming that Snapchat is just a slightly trendier one. The money that were invested in it, while creating financial profit in the short term, are hardly used for any significant impact. Some people will end up with fuller pockets, big deal.
- TheCondor 13y ago
  It is silly without some sort of state intervention. In Colorado the cost is nearly $2billion for light rail from Longmont to Boulder and then to Denver and some of the track already exists. (Actually the longest stretch of track already exists) There is the cost, then there is the cost when government does it, then there is the cost when government does it and there is some sort of eminent domain issues and I think people simply multiply numbers by 5 to 10 when that happens.
7Figures2Commas 13y ago
> It is amazing that someone is willing to pay $3 billion for SnapChat, but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although many people took issue with it). No, it isn't. Reports/rumors indicate that Facebook, Google and Tencent were interested in acquiring SnapChat, a real service with real users, for $3 billion or more. Facebook, Google and Tencent are multi-billion dollar businesses that have reasonable justification to be interested in a company like SnapChat, even if the amounts they were supposedly willing to pay for it may seem unjustifiably rich to many. Hyperloop doesn't exist. It is a concept. The OP is criticizing venture capitalists for not wanting to invest in making such a concept a reality. It's easy to criticize venture capitalists, and a good amount of criticism is valid. But the OP doesn't seem to understand how venture capital works. Venture firms are not businesses that produce capital in the same fashion as Facebook, Google or Tencent. They raise their capital from limited partners ("rich people", institutions, etc.) and are tasked with growing that capital through investment. They realistically would not be able to raise this capital if their funds were entirely unfocused and they stated an intention to bet hundreds of millions of dollars at a time on mere concepts. Venture capital has already experienced significant changes over the past decade and there is good reason to expect that it will continue to change as trends evolve and the ongoing experiments in monetary policy play out. But anyone expecting venture capital to become the source of funding for concepts that require seed funding to the tune of hundreds of millions or billions of dollars is going to be sorely disappointed. In short, the OP's apparent distaste for venture capitalists is misplaced. Those who expect [insert some idea] to be financed to the tune of billions of dollars might as well blame every person on the Forbes billionaires list, every CEO of a major corporation or bank, and every Western politician for the lack of funding because they're arguably just as responsible as the khaki crew on Sand Hill Road.
- danielbarla 13y ago
  Also, there is a small possibility that most of the world will one day use SnapChat, making it hugely profitable. Since the Hyperloop is tied to a specific physical location, this is not really a possibility. I guess investors are betting that software businesses are easier to scale than "hardware" / construction businesses.
marincounty 13y ago
I'm still trying to grasp Snapchat's worth. I can't quite figure out exactly what the patent protects(I'm no expert though). If Facebook is will to give them 3 billion dollars, the patent must be Bullet proof? If not, we are in a bigger Internet Bubble than the 90's. I'm still dumbfounded they didn't accept the money. I guess I getting old, but the right person(honest nonprofit) could help a lot of people and animals with that kind of money. Yes, I would help the poor, and start up free clinics for any animal that needs medical assistance.
- roymurdock 13y ago
  You might find this helpful: http://roymurdock.com/essays/2013/11/snapchat-is-intrinsically-worthless/ http://roymurdock.com/essays/2013/11/snapchat-is-intrinsical...
macspoofing 13y ago
>but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although many people took issue with it). Hyperloop is not a product that needs only $6 billion to get to market. It needs $6 billion to test the feasibility, and God knows how much more to commercialize it over years or decades. Worse, there is no guarantee that anything will come out of it, that you won't get ripped off (once you prove the concept, why wouldn't GE, Lockheed or any some State corporation simply build it themselves), or that it is any better than high-speed trains or airplanes. Snapchat is one in-app ad from generating revenue to cover operations and probably 3-5 years from a $5-$15 billion IPO valuation. I'd respect anybody who puts up the money to fund this moon-shot project, but the risk profile between Hyperloop and Snapchat is like night and day.
prostoalex 13y ago
Does $6 bln include the land? Seems kinda cheap if we're talking California, leave alone the fact that the price will "suddenly" go up, when a landowner discovers that his tract is included in the design.

anigbrowl 13y ago

True, but at least Snapchat already works and has users. I like Elon Musk but I LOLed when I saw his estimate of $6 billion.

kamaal 13y ago
I am not sure why that is hilarious. India just sent a probe to Mars at $69 Million. Musk has himself built a rocket company with a million dollar scale investment. There is no reason to dismiss, especially when he has a track record of delivering great stuff on time and in budget.
- anigbrowl 13y ago
  Because the cost is not just technological. There's also major land use issues, which get expensive in CA. His idea that putting it along the middle of the freeway will obviate these is not credible. I estimate $20bn to build it, minimum. Rocketry is simple by comparison.
  - david927 13y ago
    Maybe, maybe not. I don't see how running it along the freeway is not credible. But here's the upshot: Snapchat is a photo-sharing app that will hardly be around in 10 years; the Hyperloop would be. This seems to be lost on all those in Silicon Valley who sit for hours every day in traffic to go to their one-story prefab work box, only to then sit in the same traffic later to return to their prefab home box. There's investment to make your money grow and investment in the future. We need less of the former and more of the latter.
  - jwr 13y ago
    I also have my estimates. And I think that one day, after I create a successful company that builds electric cars on a scale no one has tried before, and after I create a company that designs and builds rockets that deliver cargo on commercially-contracted terms, people will even take my estimates seriously. Until then, I'll keep them to myself and not criticize others unless I have a really, really good justification.
    - im3w1l 13y ago
      We are talking about no one will invest in hyperloop. If it is because people suspect Musk's cost estimates are off then that is worth bringing up.
- nightski 13y ago
  Yes, but even Elon Musk admits they were very close to failure in 2008 and almost had to call it quits. No matter the track record these projects are extraordinarily risky (with a potentially massive payout).
- michaelt 13y ago
  I'm not saying it's impossible, but when the California High-Speed Rail project [1] goes at a third the speed using much more conventional technology and costs ten times as much, an investor's got to ask if hyperloop is too good to be true. It's also a big high-profile project, so if your investment failed you couldn't sweep it under the rug; and mass transit is an industry that hasn't had many high profile successes in recent years. [1] https://en.wikipedia.org/wiki/California_High-Speed_Rail https://en.wikipedia.org/wiki/California_High-Speed_Rail
  - ericd 13y ago
    How does a project that's been horribly managed being much worse than this suggest that this is suspect? (Unless you expect that horrible management is a given in any CA government-related project)
jokoon 13y ago
IT is cheap to make, you only need programmers, rent a place, some hosting and done, you make a quick buck. Building a railroad require much more concrete things, like steel, construction and utility vehicles, fuel, many workers, a place for those workers to sleep near the site, etc. I'm amazed that you're comparing IT and a railroad. I would be glad to see a second internet bubble. It's like saying having a smartphone is more important than transporting people.
weland 13y ago
True, but at least Hyperloop can actually be useful for someone and improve people's lives. To me, the thought that 3 billion were paid for Snapchat is not hilarious, it's horrifying.
- vdaniuk 13y ago
  Arguably, there is nothing more important for a human being as an sentient organism than an endorphin fix obtained from various sources: love, surprise, food, etc. Snapchat provides that in a form of secure ephemeral messaging allowing users to share private information pseudosecurely. That is real value. If you find human nature horrifying I can't blame you, but saying that messaging apps do not improve people's lives is intelectually dishonest.
  - romaniv 13y ago
    What's intellectually dishonest is pretending that "endorphin fix" constitutes the purpose of human existence, whereas it is just a byproduct. How it is attained matters. In fact, ability to reason about that is what makes humans self-aware. Besides, "endorphins" are just a roundabout, cowardly (and factually incorrect) way to refer to general human happiness. You're implying that Snapchats of this world make people feel happy and fulfilled. They don't. There are hundreds of these social media start-ups, yet 1 in 10 Americans takes antidepressants. (Which is a diagnosis problem, but it does illustrate how many people feel seriously unhappy.)
  - weland 13y ago
    > Arguably, there is nothing more important for a human being as an sentient organism than an endorphin fix obtained from various sources: love, surprise, food, etc. On one hand, the balance of values is more complex than "there is nothing more important than the endorphin fix that allows you to translate your values into pleasures for your brain". Hookers and weed give you ten times the endorphin fix Snapchat gives you, and yet there aren't too many people who would eagerly applaud investment in that. So no, I don't think that I am intellectually dishonest in claiming that the umpteenth incremental improvement over a photo sharing app significantly improves people's lives. Snapchat isn't shaping the form of future communication, it doesn't bring people closer together any closer than IRC already does, it's not encouraging communities anymore than a dinner conversation is. It just makes sexting somewhat trendier, and twenty years from now we will look upon Snapchat the same way that we now look at elm. On the other hand, Snapchat is not the same as "the messaging apps". I'm not claiming messaging applications in general are useless; I'm claiming that Snapchat is just a slightly trendier one. The money that were invested in it, while creating financial profit in the short term, are hardly used for any significant impact. Some people will end up with fuller pockets, big deal.
TheCondor 13y ago
It is silly without some sort of state intervention. In Colorado the cost is nearly $2billion for light rail from Longmont to Boulder and then to Denver and some of the track already exists. (Actually the longest stretch of track already exists) There is the cost, then there is the cost when government does it, then there is the cost when government does it and there is some sort of eminent domain issues and I think people simply multiply numbers by 5 to 10 when that happens.

7Figures2Commas 13y ago

> It is amazing that someone is willing to pay $3 billion for SnapChat, but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although many people took issue with it). No, it isn't. Reports/rumors indicate that Facebook, Google and Tencent were interested in acquiring SnapChat, a real service with real users, for $3 billion or more. Facebook, Google and Tencent are multi-billion dollar businesses that have reasonable justification to be interested in a company like SnapChat, even if the amounts they were supposedly willing to pay for it may seem unjustifiably rich to many. Hyperloop doesn't exist. It is a concept. The OP is criticizing venture capitalists for not wanting to invest in making such a concept a reality. It's easy to criticize venture capitalists, and a good amount of criticism is valid. But the OP doesn't seem to understand how venture capital works. Venture firms are not businesses that produce capital in the same fashion as Facebook, Google or Tencent. They raise their capital from limited partners ("rich people", institutions, etc.) and are tasked with growing that capital through investment. They realistically would not be able to raise this capital if their funds were entirely unfocused and they stated an intention to bet hundreds of millions of dollars at a time on mere concepts. Venture capital has already experienced significant changes over the past decade and there is good reason to expect that it will continue to change as trends evolve and the ongoing experiments in monetary policy play out. But anyone expecting venture capital to become the source of funding for concepts that require seed funding to the tune of hundreds of millions or billions of dollars is going to be sorely disappointed. In short, the OP's apparent distaste for venture capitalists is misplaced. Those who expect [insert some idea] to be financed to the tune of billions of dollars might as well blame every person on the Forbes billionaires list, every CEO of a major corporation or bank, and every Western politician for the lack of funding because they're arguably just as responsible as the khaki crew on Sand Hill Road.

danielbarla 13y ago
Also, there is a small possibility that most of the world will one day use SnapChat, making it hugely profitable. Since the Hyperloop is tied to a specific physical location, this is not really a possibility. I guess investors are betting that software businesses are easier to scale than "hardware" / construction businesses.

marincounty 13y ago

I'm still trying to grasp Snapchat's worth. I can't quite figure out exactly what the patent protects(I'm no expert though). If Facebook is will to give them 3 billion dollars, the patent must be Bullet proof? If not, we are in a bigger Internet Bubble than the 90's. I'm still dumbfounded they didn't accept the money. I guess I getting old, but the right person(honest nonprofit) could help a lot of people and animals with that kind of money. Yes, I would help the poor, and start up free clinics for any animal that needs medical assistance.

roymurdock 13y ago
You might find this helpful: http://roymurdock.com/essays/2013/11/snapchat-is-intrinsically-worthless/ http://roymurdock.com/essays/2013/11/snapchat-is-intrinsical...

macspoofing 13y ago

>but nobody is willing to pay $6 billion for Hyperloop (which was Musk's estimate, although many people took issue with it). Hyperloop is not a product that needs only $6 billion to get to market. It needs $6 billion to test the feasibility, and God knows how much more to commercialize it over years or decades. Worse, there is no guarantee that anything will come out of it, that you won't get ripped off (once you prove the concept, why wouldn't GE, Lockheed or any some State corporation simply build it themselves), or that it is any better than high-speed trains or airplanes. Snapchat is one in-app ad from generating revenue to cover operations and probably 3-5 years from a $5-$15 billion IPO valuation. I'd respect anybody who puts up the money to fund this moon-shot project, but the risk profile between Hyperloop and Snapchat is like night and day.

prostoalex 13y ago

Does $6 bln include the land? Seems kinda cheap if we're talking California, leave alone the fact that the price will "suddenly" go up, when a landowner discovers that his tract is included in the design.