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I'm not laughing. I'm just perpetually a tad depressed that stuff like this is apparently more valuable than defeating aging, fixing our economy in fundamental

by api 12y ago

I'm not laughing. I'm just perpetually a tad depressed that stuff like this is apparently more valuable than defeating aging, fixing our economy in fundamental ways, or making life mulitplanetary. Hell, it's usually more more valuable and profitable than even minor and mid tier innovations in the IT sector.

serve_yay 12y ago
The point isn't really Groupon, the point is that VCs and other investors are commonly thought of as chasing shiny, stupid things. But in the case of Groupon, public-market investors overvalued Groupon and in that way acted like our caricature of dumb, credulous, bubble-agitating VCs.
- notahacker 12y ago
  Few of the people that called Groupon a pump and dump before it happened ever had much regard for the institutional[1] and retail investors they dumped the stock on. Interestingly enough, one of the founders disagrees with all those listed "buy" ratings to the extent of selling >90% of his shareholding on the open market at well below their price targets at the back end of last week. http://sleekmoney.com/bradley-a-keywell-sells-500000-shares-of-groupon-stock-grpn/115584/ http://sleekmoney.com/bradley-a-keywell-sells-500000-shares-... [1]although some of the mutual fund investors the article sniggers at for rushing to buying secondary market shares in the private market probably made out before the post-IPO bubble burst too... Edit: I stand corrected on the founder share sale, which appears to be part of a more orderly divestment than my source claimed.
  - adambratt 12y ago
    He's been selling 500,000 shares every month since they've IPO'd. That link totally misquoted how much he has remaining. He has over 30 million shares still. I have no idea where the author pulled out that 40,000 share remark. http://www.nasdaq.com/symbol/grpn/insider-trades http://www.nasdaq.com/symbol/grpn/insider-trades
gibybo 12y ago
>stuff like this is apparently more valuable than defeating aging, fixing our economy in fundamental ways, or making life mulitplanetary. It's not. Groupon is worth $5 billion. Any of those things would be worth trillions.
- Kalium 12y ago
  The difference is that Groupon is many times easier to execute than any of those.
- api 12y ago
  "Any of those things would be worth trillions." So where's the investment capital for them then? They're all chronically underfunded. The difference, I think, is risk. Any one of those would be worth trillions if it worked, but the risk of any approach failing is very high.
  - ianferrel 12y ago
    The other difference is capturing the surplus. Fixing the economy would be worth trillions, but how do you get your piece of it? It's much easier to capture the surplus if you can insert yourself into the payment process for an already existing product.
    - api 12y ago
      That's why IMHO only governments can do those kinds of things right now. Only governments can make high-risk-high-payoff extremely broad and long-duration investments and then capture the upside through overall economy-wide growth (via taxation and other means). Nobody else can both afford the risk and capture some of the upside. It's possible that in the future someone will invent financial vehicles to make it possible to make those kinds of investments in the private sector, but it hasn't happened yet. Edit: in a sense there is already something, namely government bonds, ETFs, and long-term positions in currency markets. But those are too coarse-grained. What we need is some way for private investors to make private investments in things that are all of: high risk, high payoff, and broad payoff.
savanaly 12y ago
Marginal value versus total value, my friend. While those endeavors you mentioned would probably have enormous benefit once achieved, they are so lofty that the marginal usefulness of a dollar put towards them is much less than the marginal usefulness of a dollar put towards a more modest goal. And it's worth noting that Groupon seems to have a social purpose that I'm not sure most people who aren't economists would be able to articulate: abetting price discrimination, and presumably eeking us closer to the efficiency in those markets that use it.
- lurcio 12y ago
  Beautifully put. Marginal innovations are like a greedy algo, & its not like the lofty goals are devoid of funding. Progress there feels so slow because the search space is so complex/expansive and there are so many local minima to flounder in.
mikeash 12y ago
Defeating aging? I'd never be able to afford that even if it happened. Fixing our economy? The guys at the top will always find a way to screw me regardless. Making life multiplanetary? I won't be able to go, nor my kids, so what's the point? Oh, save 50% on a meal at a restaurant I never went to before? Hell yes, sign me up! This will distract me from the depressing reality of life for a good ninety minutes at least. (This is a parody of the average Joe, not actually my own thoughts.)
- lurcio 12y ago
  They seem quite rational to me.
  - mikeash 12y ago
    I'm not passing judgment. I disagree with those statements but I have a pretty hard time giving any actual reasons for why.
ta75757 12y ago
It's not more valuable, it's just possible, unlike most (all?) of the things you listed. (Not trying to be a jerk, those things are just virtually impossible with today's technology.)
imgabe 12y ago
Google and Fidelity just invested $1 billion [1] for 10% of SpaceX, putting its valuation at $10 billion, or twice that of Groupon, so I'm not sure where you're getting information that things like space exploration are less valued. It would probably be much higher, but at this point space travel is still very risky, so there's a high chance it won't pay off at all, compared to something technologically much easier to accomplish, like emailing people coupons. Any one pharmaceutical company would be valued a couple of orders of magnitude higher than Groupon, let alone one that actually "defeated aging". Billions and billions are already invested in that. Pfizer for example, has a market cap over $200B. [2] [1] http://www.nytimes.com/2015/01/21/technology/google-makes-1-billion-investment-in-spacex.htm http://www.nytimes.com/2015/01/21/technology/google-makes-1-... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#safe=off&q=pfizer+market+cap https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
- api 12y ago
  Well with SpaceX I was thinking more of the WhatsApp comparison. WhatsApp sold for $19 billion.
  - kkhire 12y ago
    The 2nd piratebay dude had the same argument, and there is definitely some value to that notion -- convincing all these bright engineers to go join the so/lo/mo products instead of helping to build upon the BIG ideas.
dominotw 12y ago
http://en.wikipedia.org/wiki/Fallacy_of_relative_privation http://en.wikipedia.org/wiki/Fallacy_of_relative_privation Why is increasing population indefinitely such a priority. Isn't there enough of us already?
- juliangregorian 12y ago
  http://en.wikipedia.org/wiki/Terror_management_theory http://en.wikipedia.org/wiki/Terror_management_theory

by api 12y ago

serve_yay 12y ago

The point isn't really Groupon, the point is that VCs and other investors are commonly thought of as chasing shiny, stupid things. But in the case of Groupon, public-market investors overvalued Groupon and in that way acted like our caricature of dumb, credulous, bubble-agitating VCs.

notahacker 12y ago
Few of the people that called Groupon a pump and dump before it happened ever had much regard for the institutional[1] and retail investors they dumped the stock on. Interestingly enough, one of the founders disagrees with all those listed "buy" ratings to the extent of selling >90% of his shareholding on the open market at well below their price targets at the back end of last week. http://sleekmoney.com/bradley-a-keywell-sells-500000-shares-of-groupon-stock-grpn/115584/ http://sleekmoney.com/bradley-a-keywell-sells-500000-shares-... [1]although some of the mutual fund investors the article sniggers at for rushing to buying secondary market shares in the private market probably made out before the post-IPO bubble burst too... Edit: I stand corrected on the founder share sale, which appears to be part of a more orderly divestment than my source claimed.
- adambratt 12y ago
  He's been selling 500,000 shares every month since they've IPO'd. That link totally misquoted how much he has remaining. He has over 30 million shares still. I have no idea where the author pulled out that 40,000 share remark. http://www.nasdaq.com/symbol/grpn/insider-trades http://www.nasdaq.com/symbol/grpn/insider-trades

gibybo 12y ago

>stuff like this is apparently more valuable than defeating aging, fixing our economy in fundamental ways, or making life mulitplanetary. It's not. Groupon is worth $5 billion. Any of those things would be worth trillions.

Kalium 12y ago
The difference is that Groupon is many times easier to execute than any of those.
api 12y ago
"Any of those things would be worth trillions." So where's the investment capital for them then? They're all chronically underfunded. The difference, I think, is risk. Any one of those would be worth trillions if it worked, but the risk of any approach failing is very high.
- ianferrel 12y ago
  The other difference is capturing the surplus. Fixing the economy would be worth trillions, but how do you get your piece of it? It's much easier to capture the surplus if you can insert yourself into the payment process for an already existing product.
  - api 12y ago
    That's why IMHO only governments can do those kinds of things right now. Only governments can make high-risk-high-payoff extremely broad and long-duration investments and then capture the upside through overall economy-wide growth (via taxation and other means). Nobody else can both afford the risk and capture some of the upside. It's possible that in the future someone will invent financial vehicles to make it possible to make those kinds of investments in the private sector, but it hasn't happened yet. Edit: in a sense there is already something, namely government bonds, ETFs, and long-term positions in currency markets. But those are too coarse-grained. What we need is some way for private investors to make private investments in things that are all of: high risk, high payoff, and broad payoff.

savanaly 12y ago

Marginal value versus total value, my friend. While those endeavors you mentioned would probably have enormous benefit once achieved, they are so lofty that the marginal usefulness of a dollar put towards them is much less than the marginal usefulness of a dollar put towards a more modest goal. And it's worth noting that Groupon seems to have a social purpose that I'm not sure most people who aren't economists would be able to articulate: abetting price discrimination, and presumably eeking us closer to the efficiency in those markets that use it.

lurcio 12y ago
Beautifully put. Marginal innovations are like a greedy algo, & its not like the lofty goals are devoid of funding. Progress there feels so slow because the search space is so complex/expansive and there are so many local minima to flounder in.

mikeash 12y ago

Defeating aging? I'd never be able to afford that even if it happened. Fixing our economy? The guys at the top will always find a way to screw me regardless. Making life multiplanetary? I won't be able to go, nor my kids, so what's the point? Oh, save 50% on a meal at a restaurant I never went to before? Hell yes, sign me up! This will distract me from the depressing reality of life for a good ninety minutes at least. (This is a parody of the average Joe, not actually my own thoughts.)

lurcio 12y ago
They seem quite rational to me.
- mikeash 12y ago
  I'm not passing judgment. I disagree with those statements but I have a pretty hard time giving any actual reasons for why.

ta75757 12y ago

It's not more valuable, it's just possible, unlike most (all?) of the things you listed. (Not trying to be a jerk, those things are just virtually impossible with today's technology.)

imgabe 12y ago

Google and Fidelity just invested $1 billion [1] for 10% of SpaceX, putting its valuation at $10 billion, or twice that of Groupon, so I'm not sure where you're getting information that things like space exploration are less valued. It would probably be much higher, but at this point space travel is still very risky, so there's a high chance it won't pay off at all, compared to something technologically much easier to accomplish, like emailing people coupons. Any one pharmaceutical company would be valued a couple of orders of magnitude higher than Groupon, let alone one that actually "defeated aging". Billions and billions are already invested in that. Pfizer for example, has a market cap over $200B. [2] [1] http://www.nytimes.com/2015/01/21/technology/google-makes-1-billion-investment-in-spacex.htm http://www.nytimes.com/2015/01/21/technology/google-makes-1-... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#safe=off&q=pfizer+market+cap https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...

api 12y ago
Well with SpaceX I was thinking more of the WhatsApp comparison. WhatsApp sold for $19 billion.
- kkhire 12y ago
  The 2nd piratebay dude had the same argument, and there is definitely some value to that notion -- convincing all these bright engineers to go join the so/lo/mo products instead of helping to build upon the BIG ideas.

dominotw 12y ago

http://en.wikipedia.org/wiki/Fallacy_of_relative_privation http://en.wikipedia.org/wiki/Fallacy_of_relative_privation Why is increasing population indefinitely such a priority. Isn't there enough of us already?

juliangregorian 12y ago
http://en.wikipedia.org/wiki/Terror_management_theory http://en.wikipedia.org/wiki/Terror_management_theory