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You might want to let their investors (who include Y Combinator) know - because they keep pouring money into Quora at ever higher valuations.
by arfliw 12y ago
You might want to let their investors (who include Y Combinator) know - because they keep pouring money into Quora at ever higher valuations.
- jarek 12y agoThe greater fool theory of investing
- jacquesm 12y agoPouring money into a company more or less requires ever higher valuations otherwise it would be much harder to find future investors. The question then becomes what kind of assumptions underly their businessplan that they use to justify these higher valuations. These can make for very interesting reading, usually they translate into a loose form of: for every 'x' dollars of investment we can generate 'y' dollars (usually a multiple of 'x' ;) ) of turnover keeping the ship afloat long enough to pull in the next round of funding. As long as the funding keeps coming it will look really good to the untrained eye. The real issue of course is what the expected lifetime value is of the customers when taking into account the amount of overhead. If the balance here is close to zero it can become quite hard to distinguish the ultimate losers from the winners. 'At scale' then becomes the key, if you can't make it fly at a small size the theory is that the company will do just fine if you just scale it up drastically while keeping the overhead steady. This is a hard problem. Since Quora's investors presumably did financial due diligence before they invested it is safe to assume that the story is a complex one and any variation on the theme mentioned above will be hard to dig up. The degree of desperation with which they try to monetize their traffic is a good indicator about what's going on behind the scenes. Barometer: slowly dropping.
- serve_yay 12y agoOh, well, the investors said so. They're always right!