10 ms·

It's quite amazing how this values SpaceX at 10bn, less than 50% of WhatsApp. This makes me think that there's something systemically wrong with the current inc

by cft 12y ago

It's quite amazing how this values SpaceX at 10bn, less than 50% of WhatsApp. This makes me think that there's something systemically wrong with the current incarnation of post-oligarchic shareholder-controlled short term interest based capitalism. One can argue that WhatsApp has better money making potential than SpaceX, but that is only because the whole system is warped.

narag 12y ago
SpaceX could be higher long term.
tuna-piano 12y ago
While I see your point, I think there are two important things to remember here. (Note: I understand the long term implications of an interplanetary species, just providing context) A) whatsapp improves the daily lives of hundreds of millions of people. You don't necessarily need an absurd customer lifetime value to get a $19b valuation with that many people using your product. B) SpaceX provides almost no current value to anybody. And the people it does provide value to are "free riders" in the sense that they love watching space travel and get to watch SpaceX regardless of whether or not they pay for it. Just an inexact thought experiment. Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10?
- sbov 12y ago
  While I can see how whatsapp can be valued higher than SpaceX, I don't see how this logic makes sense on any level. You could use the exact same logic to make any B2B company seem worthless when compared to a consumer app.
- raverbashing 12y ago
  "SpaceX provides almost no current value to anybody." Well, someone payed SpaceX for a delivery flight to the ISS the other day, they're certainly providing value in that context
  - vidyesh 12y ago
    This discussion is in terms of value to WhatsApp users ( average-joe user) to SpaceX users ( niche rich-audience / billion dollar agency )
    - deleted 12y ago
      [deleted]
  - threeseed 12y ago
    A naive way of looking at it: Benefit to humanity = Number of people it affects * Impact per person.
    - lazaroclapp 12y ago
      The advancement of science is of quite significant benefit to humankind in the long run and it affects everybody in a way a brand product implementing a known design does not. In fact, if it staves off extinction, even if it only matters in the far far future, the number of people affected could well be more than the one hundred billion who have lived on earth for the past 40,000 years.
      - icebraining 12y ago
        Maybe so, but does SpaceX really advance science in a significant way? That is, compared to the best next alternative?
        TeMPOraL 12y ago
        They're definitely advancing engineering. They're also significantly improving space transportation infrastructure, which is crucial to getting more space-related science (and that includes a lot of stuff that is of terrible importance to biotechnology, which is likely to be The Next Big Thing after IT). Apart from that, they're directly working towards making humans interplanetary species and - as we just learned - fixing communication infrastrucutre before that. Add to that the amount of interest they generate among people - they're beginning to achieve what Star Trek did once, making space cool again. I personally know people who are dreaming (and some moving towards) aerospace career because of SpaceX, and with the amount of hype you see around the Internet, I'm pretty sure we'll soon have a generation of engineers inspired by Elon's companies. Oh, and they do all that for dirt cheap. I don't know how good they're on an absolute scale, or compared to the next best alternative, but they're definitely very cost-effective in terms of current and potential benefits to humanity.
- krasin 12y ago
  they uplift communication satellites, this is quite a value, isn't?
- b3tta 12y ago
  Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10? I just wan't to add that the problem is not that SpaceX provides less to humanity than WhatsApp. The problem is that most people are not really far-sighted, but only see things which benefit themselves in a predictable amount of time. Why companies like SpaceX (or NASA) are important has already been answered with Why Explore Space? A 1970 Letter to a Nun in Africa https://launiusr.wordpress.com/2012/02/08/why-explore-space-a-1970-letter-to-a-nun-in-africa/ https://launiusr.wordpress.com/2012/02/08/why-explore-space-... https://news.ycombinator.com/item?id=4372563 https://news.ycombinator.com/item?id=4372563
  - hueving 12y ago
    >The problem is that most people are not really far-sighted, but only see things which benefit themselves in a predictable amount of time. Because most people are not upper middle class to wealthy. They are forced to be concerned about paying for food/healthcare/education so their life tends to have different priorities. The other problem is that your line of 'far-sighted' is completely arbitrary. Someone could easily argue that SpaceX is wasting its time with rockets and we should be spending more time studying theoretical physics to figure out better ways to travel long distances in space.
    - Dylan16807 12y ago
      I don't think that argument would be particularly easy. You need a mix of practical and theoretical experimentation.
      - hueving 12y ago
        Practical experimentation doesn't equate to rocket use at all if someone fundamentally believes that rockets are not the way forward. e.g. We don't try to launch things to other solar systems with sling shots, but that doesn't mean we aren't doing practical experimentation.
    - TeMPOraL 12y ago
- quattrofan 12y ago
  "improves the daily lives of hundreds of millions of people" really? I bit grandiose dont you think.
  - pjc50 12y ago
    .. by a small amount, yes. Communication is valuable to people. Having a better alternative to SMS is evidently something people prefer, however slightly.
    - quattrofan 12y ago
      Agreed communication is valuable, but there are many options available. Just when I see "improving lives" I think of say clean drinking water in parts of Africa that don't have it. Yeah I am being pedantic, but sometimes I get annoyed at how much these tech companies big themselves up when in the big scheme of human things they are largely irrelevant. This comes from a guy that loves tech by the way!
- firichapo 12y ago
  I am not so sure that is the reason for WhatsApp crazy validation. I feel that the reason for that was that it represented a danger for Facebook and Mark wisely acquired at any cost. WhatsApp is big outside of the US because (at least in Panama, were I was born) text messages are not included in the mobile phone plan; however, you can get a data plan for a monthly fee and keep in contact without additional charges. In the US most people use text messages to communicate.
- prbuckley 12y ago
  C) SpaceX also has considerable risk of failure so you have to factor this into a valuation and investment. Whatsapp has eliminated much of this risk and is already a developed and implemented product. I am not saying Whatsapp has anywhere near the potential value of SpaceX but it is important to factor the amount of risk given the stage a project is at.
lazaroclapp 12y ago
SpaceX comes with, well, an astronomical (snicker) level of risk attached to it. So I suppose the idea is that SpaceX might well end up being worth a lot more than WhatsApp, but WhatsApp and its user base are worth a lot now. It is also unlikely that they will end up not being worth anything in the future (if we hit a second dotcom bubble WhatsApp might end up being worth a lot less than their current valuation, but like AOL, it won't be literally worth nothing). SpaceX might. There is also some level of tragedy of the commons problem going on, in which SpaceX benefits all of us every time they successfully test a new design, but it only benefits their investors when they manage to get mining rights to the moon or set up martian tourism or the like. Goals which are possible - which is the impressive thing - but still very risky bets.
- threeseed 12y ago
  > when they manage to get mining rights to the moon or set up martian tourism or the like I always wonder if people actually seriously believe this. We are many, many decades away from this being even close to a reality.
  - davedx 12y ago
    Says who?
  - patmcc 12y ago
    >>We are many, many decades away from this being even close to a reality. If there aren't companies like SpaceX (or governments doing similar work) we'll never be any closer to that reality. Mines on the moon and O'Neill cylinders in space aren't going to pop into existence in 2098 or something, they're going to be built on top of the foundations being laid by SpaceX (and others) today. Maybe SpaceX will last long enough to profit from it, maybe they won't. It's still a better use of $1 billion of Google's money than another social network or whatever.
  - adrianN 12y ago
    No, we're not decades away, we're dollars away. A base on Mars in feasible with today's technology, see for example the Mars Direct plan by Zubrin. The only thing we need are about 30 billion dollars, that's like eight aircraft carriers or 1/3 ISS.
threeseed 12y ago
I'm amazed SpaceX is valued so highly. SpaceX is in an industry with better financed/politically connected companies and an unpredictable revenue stream. It's a risky business by every definition. WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform. And if you think that human-human communication is less valuable than putting a few satellites in space (NASA/ESA/ISRO/etc are the real keys to future space exploration) then I would argue your priorities are a bit warped.
- rplnt 12y ago
  WhatsApp (and similar) will never make any of the invested money back though. Its value is purely in chance that it will grow and someone else will buy you out in a few months or years. Its only valuable asset are users, and they will be gone. So someone at the end of long chain on of rich people will weep. With SpaceX, there is enormous value in the company as it is, even if it went bankrupt tomorrow.
- josteink 12y ago
  WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform. I'd rather phrase that as "WhatsApp by comparison is a currently stable, currently popular and growing generic platform implementable and implemented by thousands of companies and hobbyyists worldwide with nothing unique about the company except the current user-base, a (mostly free-loading) user-base which has shown great willingness to flock to the next great thing should this service ever do the wrong moves". You know... The sort of statement you don't make about 20 billion dollar companies. They should have a more solid footing than being trendy right now. To put it in the dryset terms possible: They have no unique value-proposition. SpaceX is doing real shit which might make an impact on the future of mankind. To me just comparing them in the same context seems offensive.
  - threeseed 12y ago
    Have you never heard of network effect ? Having one the size of WhatsApp is absolutely a unique value proposition since it is impossible to replicate due to acquisition costs. SpaceX is making something physical no doubt. But they aren't the only one and their competitors aren't cute little garage startups.
raldi 12y ago
WhatsApp has had a real, tangible, positive impact on the lives of hundreds of millions of people.
r00fus 12y ago
And what value do you place on, say, GNU/copyleft, or HTTP/HTML, or the Fourier transform? Market capitalization does not indicate importance to the human race, though it's easy to lose sight of that.
- TeMPOraL 12y ago
  > though it's easy to lose sight of that I think one of the reasons people lose sight of that is because they look back and see all those products, all that improvement in quality of life that capitalism brought us. Those things are undeniable. But one can't infer from this that the system will forever be awesome. It was aligned with human goals initially, but as time goes by, it's less and less aligned.
crystaln 12y ago
Value to humanity is not highly correlated to economic value. Value to humanity is but a small, often inconsequential segment of demand.
- punee 12y ago
  I think you're confusing "value to humanity" and nerd porn.
- TeMPOraL 12y ago
  People will disagree with you on that, but I think such disagreement misses a crucial observation - economic value was highly correlated to the value for humanity. But as we took all the low-hanging fruits we can see those two senses of value increasingly diverge. Hell, for a simple analogy, it's like with solid rocket boosters - you should appreciate how far they got you, but you definitely don't want to keep being attached to them when they burn out and decide to not go to space.
vidyesh 12y ago
Very weird and imo, wrong comparison. WhatsApp is a consumer product. It lives as it breathes. As long as people/consumer keeps pumping in money & time to it, its value will stay or rise from its current value. Once that stops and people/consumer stop using it, its value will eventually fall. SpaceX on the other hand is not a consumer product yet, but is aiming to become one. Consider it just like Boeing or AirBus, nobody would have valued them as a multi-billionaire company ( back in 1900s when they were founded). Their technological advancements and the development phase would have been same as SpaceX right now. But eventually it became a very integral part of human life. They have become a consumer product, their value is now because of people using it daily. And unlike WhatsApp people won't stop using air-travel. Everyday people do not invest directly into it like they do(?) for WhatsApp, but indirectly by using airline services they are paying for it. Similarly for SpaceX everyday people aren't investing in it right now but eventually ( as per SpaceX's ambition ) people would just like they are doing for air-travel.
- visakanv 12y ago
  Yeah, imagine investing in things like... the first electricity service provider, or the first telephone, or the first TV. All of those things are multi-billion dollar industries. I'm sure this entire exchange has been played out before for other emergent industries!
  - vidyesh 12y ago
    I am not sure if you are trying to be sarcastic or agreeing to my point. But yes, emerging technologies are not something every common-man invests in.
    - visakanv 12y ago
      Agreeing! "What use is electricity?" "What use is a newborn baby?"
    - arethuza 12y ago
      Are rockets an emerging technology? There have been commercial launches for decades.
hueving 12y ago
This has nothing to do with short term interest based capitalism. Whether privately held, a charity, or any other structure, if what you are making is not of general interest to the population at large, it's going to have a pretty hard time. The only way to fix that is to eliminate free markets and democracy so people of average or less intelligence/foresight have no say in the appropriation of resources.
new299 12y ago
My guess is that a part of the issue is that VCs can understand WhatsApp. They feel like that can assess it's worth, associated risk, and come up with a valuation independently. With science based startups the partner at a VC can't easily make an independent assessment. They have to rely on specialists to do tech D&D and they rarely trust them completely. So they shy away from those deals, or they factor the risk into their valuations. This behavior somewhat ironically can make these investments higher risk. There is a degree to which fund raising at a lower level makes a company a higher risk, because they have less money to work with and can't afford to make mistakes. (the converse is also somewhat true).
deciplex 12y ago
>post-oligarchic Post?
louhike 12y ago
I'm surprised it is the top comment. If I remember correctly, it has been discussed a lot of times on HN. And most of the times, people agreed it wasn't a fair comparison.
aleem 12y ago
SpaceX is the commercialisation of space exploration and that's just how valuation works in commercial applications. It is, however, remiss to value to science and progress in dollar terms. TCP/IP is far more valuable than all of the Internet companies combined but not in dollar terms.
- dingaling 12y ago
  Space transport has always been commercial. Who do you think designed and built the Saturn V? Redstone? Atlas? Ariane? Commercial companies making a profit.
  - termain 12y ago
    Roughly: Redstone: Designer: Army Ballistic Missile Agency (Now Marshall Spaceflight Center) Manufacturer: Chrysler Atlas: Convair and its successor interests (General Dynamics, Lockheed, ULA) Saturn V: NASA Marshall, Boeing, North American and Douglas Ariane: EADS Astrium and Arianespace/CNES (French Space Agency) So, yeah, they've always been commercial, but they haven't always been commerically driven or (entirely) commercially managed.
icebraining 12y ago
Valuations are not fixed in time. SpaceX is only starting up. Give it time.
stevenkovar 12y ago
That's similar to saying a toddler is less productive than a recent college graduate. That is to say: WhatsApp is much further along its individual trajectory than SpaceX is. In decades, the value of SpaceX is likely to eclipse WhatsApp, which in all likelihood won't even exist any longer.
- aclements18 12y ago
  In this analogy you seem to believe the trajectory for this toddler is set in stone. The reality is at it's infancy (which is where Space X is in the grand scheme) it can look very promising but turn out very bad, or a competitor can drastically outpace. Any valuation should discount for the level of risk. A lot can happen over time. 10 years ago MySpace was by far the dominant social network and Blackberry was the mobile powerhouse. Seemed like neither would fall with so much momentum behind them but we see how that played out.
jpadkins 12y ago
I think WhatsApp potential value caps out at 50B or so. SpaceX potential value might be in the trillions (low probability). So while their current valuations might seem 'wrong', the long term potential value might be closer to your value judgement. There are very few large investors with a 20 year time horizon. I am not sure if that is a fault of capitalism. I am not sure another system of resource allocation would do better, do you?
pc2g4d 12y ago
Perhaps it's partly because space is seen as higher-risk than social media? The valuation would then be lower because people lower their expectations based on the risk of failure.

by cft 12y ago

narag 12y ago

SpaceX could be higher long term.

tuna-piano 12y ago

While I see your point, I think there are two important things to remember here. (Note: I understand the long term implications of an interplanetary species, just providing context) A) whatsapp improves the daily lives of hundreds of millions of people. You don't necessarily need an absurd customer lifetime value to get a $19b valuation with that many people using your product. B) SpaceX provides almost no current value to anybody. And the people it does provide value to are "free riders" in the sense that they love watching space travel and get to watch SpaceX regardless of whether or not they pay for it. Just an inexact thought experiment. Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10?

sbov 12y ago
While I can see how whatsapp can be valued higher than SpaceX, I don't see how this logic makes sense on any level. You could use the exact same logic to make any B2B company seem worthless when compared to a consumer app.
raverbashing 12y ago
"SpaceX provides almost no current value to anybody." Well, someone payed SpaceX for a delivery flight to the ISS the other day, they're certainly providing value in that context
- vidyesh 12y ago
  This discussion is in terms of value to WhatsApp users ( average-joe user) to SpaceX users ( niche rich-audience / billion dollar agency )
  - deleted 12y ago
    [deleted]
- threeseed 12y ago
  A naive way of looking at it: Benefit to humanity = Number of people it affects * Impact per person.
  - lazaroclapp 12y ago
    The advancement of science is of quite significant benefit to humankind in the long run and it affects everybody in a way a brand product implementing a known design does not. In fact, if it staves off extinction, even if it only matters in the far far future, the number of people affected could well be more than the one hundred billion who have lived on earth for the past 40,000 years.
    - icebraining 12y ago
      Maybe so, but does SpaceX really advance science in a significant way? That is, compared to the best next alternative?
      - TeMPOraL 12y ago
        They're definitely advancing engineering. They're also significantly improving space transportation infrastructure, which is crucial to getting more space-related science (and that includes a lot of stuff that is of terrible importance to biotechnology, which is likely to be The Next Big Thing after IT). Apart from that, they're directly working towards making humans interplanetary species and - as we just learned - fixing communication infrastrucutre before that. Add to that the amount of interest they generate among people - they're beginning to achieve what Star Trek did once, making space cool again. I personally know people who are dreaming (and some moving towards) aerospace career because of SpaceX, and with the amount of hype you see around the Internet, I'm pretty sure we'll soon have a generation of engineers inspired by Elon's companies. Oh, and they do all that for dirt cheap. I don't know how good they're on an absolute scale, or compared to the next best alternative, but they're definitely very cost-effective in terms of current and potential benefits to humanity.
krasin 12y ago
they uplift communication satellites, this is quite a value, isn't?
b3tta 12y ago
Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10? I just wan't to add that the problem is not that SpaceX provides less to humanity than WhatsApp. The problem is that most people are not really far-sighted, but only see things which benefit themselves in a predictable amount of time. Why companies like SpaceX (or NASA) are important has already been answered with Why Explore Space? A 1970 Letter to a Nun in Africa https://launiusr.wordpress.com/2012/02/08/why-explore-space-a-1970-letter-to-a-nun-in-africa/ https://launiusr.wordpress.com/2012/02/08/why-explore-space-... https://news.ycombinator.com/item?id=4372563 https://news.ycombinator.com/item?id=4372563
- hueving 12y ago
  >The problem is that most people are not really far-sighted, but only see things which benefit themselves in a predictable amount of time. Because most people are not upper middle class to wealthy. They are forced to be concerned about paying for food/healthcare/education so their life tends to have different priorities. The other problem is that your line of 'far-sighted' is completely arbitrary. Someone could easily argue that SpaceX is wasting its time with rockets and we should be spending more time studying theoretical physics to figure out better ways to travel long distances in space.
  - Dylan16807 12y ago
    I don't think that argument would be particularly easy. You need a mix of practical and theoretical experimentation.
    - hueving 12y ago
      Practical experimentation doesn't equate to rocket use at all if someone fundamentally believes that rockets are not the way forward. e.g. We don't try to launch things to other solar systems with sling shots, but that doesn't mean we aren't doing practical experimentation.
  - TeMPOraL 12y ago
quattrofan 12y ago
"improves the daily lives of hundreds of millions of people" really? I bit grandiose dont you think.
- pjc50 12y ago
  .. by a small amount, yes. Communication is valuable to people. Having a better alternative to SMS is evidently something people prefer, however slightly.
  - quattrofan 12y ago
    Agreed communication is valuable, but there are many options available. Just when I see "improving lives" I think of say clean drinking water in parts of Africa that don't have it. Yeah I am being pedantic, but sometimes I get annoyed at how much these tech companies big themselves up when in the big scheme of human things they are largely irrelevant. This comes from a guy that loves tech by the way!
firichapo 12y ago
I am not so sure that is the reason for WhatsApp crazy validation. I feel that the reason for that was that it represented a danger for Facebook and Mark wisely acquired at any cost. WhatsApp is big outside of the US because (at least in Panama, were I was born) text messages are not included in the mobile phone plan; however, you can get a data plan for a monthly fee and keep in contact without additional charges. In the US most people use text messages to communicate.
prbuckley 12y ago
C) SpaceX also has considerable risk of failure so you have to factor this into a valuation and investment. Whatsapp has eliminated much of this risk and is already a developed and implemented product. I am not saying Whatsapp has anywhere near the potential value of SpaceX but it is important to factor the amount of risk given the stage a project is at.

lazaroclapp 12y ago

SpaceX comes with, well, an astronomical (snicker) level of risk attached to it. So I suppose the idea is that SpaceX might well end up being worth a lot more than WhatsApp, but WhatsApp and its user base are worth a lot now. It is also unlikely that they will end up not being worth anything in the future (if we hit a second dotcom bubble WhatsApp might end up being worth a lot less than their current valuation, but like AOL, it won't be literally worth nothing). SpaceX might. There is also some level of tragedy of the commons problem going on, in which SpaceX benefits all of us every time they successfully test a new design, but it only benefits their investors when they manage to get mining rights to the moon or set up martian tourism or the like. Goals which are possible - which is the impressive thing - but still very risky bets.

threeseed 12y ago
> when they manage to get mining rights to the moon or set up martian tourism or the like I always wonder if people actually seriously believe this. We are many, many decades away from this being even close to a reality.
- davedx 12y ago
  Says who?
- patmcc 12y ago
  >>We are many, many decades away from this being even close to a reality. If there aren't companies like SpaceX (or governments doing similar work) we'll never be any closer to that reality. Mines on the moon and O'Neill cylinders in space aren't going to pop into existence in 2098 or something, they're going to be built on top of the foundations being laid by SpaceX (and others) today. Maybe SpaceX will last long enough to profit from it, maybe they won't. It's still a better use of $1 billion of Google's money than another social network or whatever.
- adrianN 12y ago
  No, we're not decades away, we're dollars away. A base on Mars in feasible with today's technology, see for example the Mars Direct plan by Zubrin. The only thing we need are about 30 billion dollars, that's like eight aircraft carriers or 1/3 ISS.

threeseed 12y ago

I'm amazed SpaceX is valued so highly. SpaceX is in an industry with better financed/politically connected companies and an unpredictable revenue stream. It's a risky business by every definition. WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform. And if you think that human-human communication is less valuable than putting a few satellites in space (NASA/ESA/ISRO/etc are the real keys to future space exploration) then I would argue your priorities are a bit warped.

rplnt 12y ago
WhatsApp (and similar) will never make any of the invested money back though. Its value is purely in chance that it will grow and someone else will buy you out in a few months or years. Its only valuable asset are users, and they will be gone. So someone at the end of long chain on of rich people will weep. With SpaceX, there is enormous value in the company as it is, even if it went bankrupt tomorrow.
josteink 12y ago
WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform. I'd rather phrase that as "WhatsApp by comparison is a currently stable, currently popular and growing generic platform implementable and implemented by thousands of companies and hobbyyists worldwide with nothing unique about the company except the current user-base, a (mostly free-loading) user-base which has shown great willingness to flock to the next great thing should this service ever do the wrong moves". You know... The sort of statement you don't make about 20 billion dollar companies. They should have a more solid footing than being trendy right now. To put it in the dryset terms possible: They have no unique value-proposition. SpaceX is doing real shit which might make an impact on the future of mankind. To me just comparing them in the same context seems offensive.
- threeseed 12y ago
  Have you never heard of network effect ? Having one the size of WhatsApp is absolutely a unique value proposition since it is impossible to replicate due to acquisition costs. SpaceX is making something physical no doubt. But they aren't the only one and their competitors aren't cute little garage startups.

raldi 12y ago

WhatsApp has had a real, tangible, positive impact on the lives of hundreds of millions of people.

r00fus 12y ago

And what value do you place on, say, GNU/copyleft, or HTTP/HTML, or the Fourier transform? Market capitalization does not indicate importance to the human race, though it's easy to lose sight of that.

TeMPOraL 12y ago
> though it's easy to lose sight of that I think one of the reasons people lose sight of that is because they look back and see all those products, all that improvement in quality of life that capitalism brought us. Those things are undeniable. But one can't infer from this that the system will forever be awesome. It was aligned with human goals initially, but as time goes by, it's less and less aligned.

crystaln 12y ago

Value to humanity is not highly correlated to economic value. Value to humanity is but a small, often inconsequential segment of demand.

punee 12y ago
I think you're confusing "value to humanity" and nerd porn.
TeMPOraL 12y ago
People will disagree with you on that, but I think such disagreement misses a crucial observation - economic value was highly correlated to the value for humanity. But as we took all the low-hanging fruits we can see those two senses of value increasingly diverge. Hell, for a simple analogy, it's like with solid rocket boosters - you should appreciate how far they got you, but you definitely don't want to keep being attached to them when they burn out and decide to not go to space.

vidyesh 12y ago

Very weird and imo, wrong comparison. WhatsApp is a consumer product. It lives as it breathes. As long as people/consumer keeps pumping in money & time to it, its value will stay or rise from its current value. Once that stops and people/consumer stop using it, its value will eventually fall. SpaceX on the other hand is not a consumer product yet, but is aiming to become one. Consider it just like Boeing or AirBus, nobody would have valued them as a multi-billionaire company ( back in 1900s when they were founded). Their technological advancements and the development phase would have been same as SpaceX right now. But eventually it became a very integral part of human life. They have become a consumer product, their value is now because of people using it daily. And unlike WhatsApp people won't stop using air-travel. Everyday people do not invest directly into it like they do(?) for WhatsApp, but indirectly by using airline services they are paying for it. Similarly for SpaceX everyday people aren't investing in it right now but eventually ( as per SpaceX's ambition ) people would just like they are doing for air-travel.

visakanv 12y ago
Yeah, imagine investing in things like... the first electricity service provider, or the first telephone, or the first TV. All of those things are multi-billion dollar industries. I'm sure this entire exchange has been played out before for other emergent industries!
- vidyesh 12y ago
  I am not sure if you are trying to be sarcastic or agreeing to my point. But yes, emerging technologies are not something every common-man invests in.
  - visakanv 12y ago
    Agreeing! "What use is electricity?" "What use is a newborn baby?"
  - arethuza 12y ago
    Are rockets an emerging technology? There have been commercial launches for decades.

hueving 12y ago

This has nothing to do with short term interest based capitalism. Whether privately held, a charity, or any other structure, if what you are making is not of general interest to the population at large, it's going to have a pretty hard time. The only way to fix that is to eliminate free markets and democracy so people of average or less intelligence/foresight have no say in the appropriation of resources.

new299 12y ago

My guess is that a part of the issue is that VCs can understand WhatsApp. They feel like that can assess it's worth, associated risk, and come up with a valuation independently. With science based startups the partner at a VC can't easily make an independent assessment. They have to rely on specialists to do tech D&D and they rarely trust them completely. So they shy away from those deals, or they factor the risk into their valuations. This behavior somewhat ironically can make these investments higher risk. There is a degree to which fund raising at a lower level makes a company a higher risk, because they have less money to work with and can't afford to make mistakes. (the converse is also somewhat true).

deciplex 12y ago

>post-oligarchic Post?

louhike 12y ago

I'm surprised it is the top comment. If I remember correctly, it has been discussed a lot of times on HN. And most of the times, people agreed it wasn't a fair comparison.

aleem 12y ago

SpaceX is the commercialisation of space exploration and that's just how valuation works in commercial applications. It is, however, remiss to value to science and progress in dollar terms. TCP/IP is far more valuable than all of the Internet companies combined but not in dollar terms.

dingaling 12y ago
Space transport has always been commercial. Who do you think designed and built the Saturn V? Redstone? Atlas? Ariane? Commercial companies making a profit.
- termain 12y ago
  Roughly: Redstone: Designer: Army Ballistic Missile Agency (Now Marshall Spaceflight Center) Manufacturer: Chrysler Atlas: Convair and its successor interests (General Dynamics, Lockheed, ULA) Saturn V: NASA Marshall, Boeing, North American and Douglas Ariane: EADS Astrium and Arianespace/CNES (French Space Agency) So, yeah, they've always been commercial, but they haven't always been commerically driven or (entirely) commercially managed.

icebraining 12y ago

Valuations are not fixed in time. SpaceX is only starting up. Give it time.

stevenkovar 12y ago

That's similar to saying a toddler is less productive than a recent college graduate. That is to say: WhatsApp is much further along its individual trajectory than SpaceX is. In decades, the value of SpaceX is likely to eclipse WhatsApp, which in all likelihood won't even exist any longer.

aclements18 12y ago
In this analogy you seem to believe the trajectory for this toddler is set in stone. The reality is at it's infancy (which is where Space X is in the grand scheme) it can look very promising but turn out very bad, or a competitor can drastically outpace. Any valuation should discount for the level of risk. A lot can happen over time. 10 years ago MySpace was by far the dominant social network and Blackberry was the mobile powerhouse. Seemed like neither would fall with so much momentum behind them but we see how that played out.

jpadkins 12y ago

I think WhatsApp potential value caps out at 50B or so. SpaceX potential value might be in the trillions (low probability). So while their current valuations might seem 'wrong', the long term potential value might be closer to your value judgement. There are very few large investors with a 20 year time horizon. I am not sure if that is a fault of capitalism. I am not sure another system of resource allocation would do better, do you?

pc2g4d 12y ago

Perhaps it's partly because space is seen as higher-risk than social media? The valuation would then be lower because people lower their expectations based on the risk of failure.