3 ms·

With yearly revenue of $340K, why couldn't they keep going? I realize that is smaller than their costs, but $340K is enough to pay 2-3 employees and the other c

by rpedela 13y ago

With yearly revenue of $340K, why couldn't they keep going? I realize that is smaller than their costs, but $340K is enough to pay 2-3 employees and the other costs (hosting, etc). Didn't they only have seven employees? Why are the total office expenses $128K? Why $565K for legal fees? Seems like they wasted a lot of that $2.3 million investment.

akbar501 13y ago
The reason is that $340k is not worth their time.
- dhoulb 13y ago
  Exactly! It's kinda sad that unless a company has crazy hockey stick growth, it's not worth it. Everyone: the founders, the early employees and the venture people, we're all in it to make tens of millions, so while it was a viable business in every other sense, no-body involved cared. But, why should they? All of those people are probably capable of making loads more money in other places. The early employees can get $100k at an established company, the venture people can invest in some other flash-in-the-pan venture with a better chance of an exit, and the founders believe their next idea can stand a better chance of making them millions. I don't really have a side here, I just think it's weird when a business with revenue shuts down and doesn't continue in any capacity. Surely one or two guys could've maintained it and made $150,000 each - a pretty good income! The founders could've had it running on autopilot for a few years to give them an income while they started their next project.
- rpedela 13y ago
  The assumption is that the business would continue to grow but slower than they would like. I don't think $340K was the ceiling.
- thatthatis 13y ago
  No. The reason is that 340 was revenue, and COGS was higher than 340. A 340k per year profit machine is easily worth a few million. Revenue != profit.
  - akbar501 13y ago
    I never stated whether I was referring to profit or revenue. However, from the article one can infer that the entire discussion is about revenue.
jonathanjaeger 13y ago
Someone posted an in-depth overview about why their business model was flawed. If you're selling something for less than it costs you, you can generate a ton of revenue, but it's still at a loss. This is why they couldn't keep it going: http://research.ivanplenty.com/2014-economics-everpix-shutdown-decision http://research.ivanplenty.com/2014-economics-everpix-shutdo...
- rpedela 13y ago
  Interesting. Thanks.
- deleted 13y ago
  [deleted]
- georgeecollins 13y ago
  That post on the economics was great, and it offers a convincing explanation of why they shut down. The funny thing is that the author often thanks the team for making their numbers public. But he also calls them reckless and irresponsible. I think people's judgement looks worse in hindsight. And if you are benefiting from someone's candor it would be smart to speak of them more charitably, if only to encourage future candor. But that link is a great analysis.

by rpedela 13y ago

akbar501 13y ago

The reason is that $340k is not worth their time.

dhoulb 13y ago
Exactly! It's kinda sad that unless a company has crazy hockey stick growth, it's not worth it. Everyone: the founders, the early employees and the venture people, we're all in it to make tens of millions, so while it was a viable business in every other sense, no-body involved cared. But, why should they? All of those people are probably capable of making loads more money in other places. The early employees can get $100k at an established company, the venture people can invest in some other flash-in-the-pan venture with a better chance of an exit, and the founders believe their next idea can stand a better chance of making them millions. I don't really have a side here, I just think it's weird when a business with revenue shuts down and doesn't continue in any capacity. Surely one or two guys could've maintained it and made $150,000 each - a pretty good income! The founders could've had it running on autopilot for a few years to give them an income while they started their next project.
rpedela 13y ago
The assumption is that the business would continue to grow but slower than they would like. I don't think $340K was the ceiling.
thatthatis 13y ago
No. The reason is that 340 was revenue, and COGS was higher than 340. A 340k per year profit machine is easily worth a few million. Revenue != profit.
- akbar501 13y ago
  I never stated whether I was referring to profit or revenue. However, from the article one can infer that the entire discussion is about revenue.

jonathanjaeger 13y ago

Someone posted an in-depth overview about why their business model was flawed. If you're selling something for less than it costs you, you can generate a ton of revenue, but it's still at a loss. This is why they couldn't keep it going: http://research.ivanplenty.com/2014-economics-everpix-shutdown-decision http://research.ivanplenty.com/2014-economics-everpix-shutdo...

rpedela 13y ago
Interesting. Thanks.
deleted 13y ago
[deleted]
georgeecollins 13y ago
That post on the economics was great, and it offers a convincing explanation of why they shut down. The funny thing is that the author often thanks the team for making their numbers public. But he also calls them reckless and irresponsible. I think people's judgement looks worse in hindsight. And if you are benefiting from someone's candor it would be smart to speak of them more charitably, if only to encourage future candor. But that link is a great analysis.