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If 37signals put thier money where the mouth was & actually shorted the companies (FB & Twitter), they would be in a lot of pain now. This original post by Jas

by nrao123 13y ago

If 37signals put thier money where the mouth was & actually shorted the companies (FB & Twitter), they would be in a lot of pain now. This original post by Jason Fried was making fun of Twitter which went from 1bn to 25bn. More background here: http://www.forbes.com/2009/10/15/venture-capital-software-technology-enterprise-37signals.html http://www.forbes.com/2009/10/15/venture-capital-software-te... Another post from DHH said that the value of FB was not 33bn & it's now roughly 120BN http://37signals.com/svn/posts/2585-facebook-is-not-worth-33000000000 http://37signals.com/svn/posts/2585-facebook-is-not-worth-33... Not saying 25BN & 120BN are the "right" valuations but most people would agree that the prices that 37s made fun of seems like great deals. They could still go back to less than 1bn & 33bn (users leave, consumer trends change, get bored etc) but those are different risks not monetization risks that 37s is making fun off.

calinet6 13y ago
It would be insane to short any of these companies, because the perception is so far from reality; and it's perception driving the price, not reality. That's the point.
mdparker89 13y ago
The market isn't necessarily efficient at a given point in time. Just because the stocks are going up, doesn't mean the valuations represent the intrinsic value of the company. Shorting is a dangerous strategy, especially if you feel the prices are delusional. "The market can stay irrational longer than you can stay solvent."
- nrao123 13y ago
  Yes- agree with you. I think DHH/JF & 37s were not making as much fun of the actual valuation but the lack of monetization. If we stretched the valuation analogy, it could be applicable to AMZN/Bezos as well- where there is always discussion on their lack of profits & nose bleed valuation. FYI - Bezos is an investor in 37signals. I have lots if respect for Bezos, JF, DHH etc. I just think it's a little "unfair" (for lack of a better term) to make fun of companies before their monetization plans have kicked in.
paul_f 13y ago
No. You're missing the point. FB and TWTR have already made it. If you could, short the vast pool of VC-backed pointless startups in the space that have not IPO'd yet and you would make a fortune.
- nrao123 13y ago
  Hmm- you may well be right. Because VC as an asset class have underperformed. But- you wouldn't have made a fortune shorting it. Maybe, even lost a little money but not much. On the other hand, if you shorted USV/Sequoia/Benchmark's portfolios you would be hurting a lot.

by nrao123 13y ago

calinet6 13y ago

It would be insane to short any of these companies, because the perception is so far from reality; and it's perception driving the price, not reality. That's the point.

mdparker89 13y ago

The market isn't necessarily efficient at a given point in time. Just because the stocks are going up, doesn't mean the valuations represent the intrinsic value of the company. Shorting is a dangerous strategy, especially if you feel the prices are delusional. "The market can stay irrational longer than you can stay solvent."

nrao123 13y ago
Yes- agree with you. I think DHH/JF & 37s were not making as much fun of the actual valuation but the lack of monetization. If we stretched the valuation analogy, it could be applicable to AMZN/Bezos as well- where there is always discussion on their lack of profits & nose bleed valuation. FYI - Bezos is an investor in 37signals. I have lots if respect for Bezos, JF, DHH etc. I just think it's a little "unfair" (for lack of a better term) to make fun of companies before their monetization plans have kicked in.

paul_f 13y ago

No. You're missing the point. FB and TWTR have already made it. If you could, short the vast pool of VC-backed pointless startups in the space that have not IPO'd yet and you would make a fortune.

nrao123 13y ago
Hmm- you may well be right. Because VC as an asset class have underperformed. But- you wouldn't have made a fortune shorting it. Maybe, even lost a little money but not much. On the other hand, if you shorted USV/Sequoia/Benchmark's portfolios you would be hurting a lot.