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One of the main arguments used to distinguish the current tech landscape from the dot-com bubble is that today's companies have real products and real revenues
by bkjelden 12y ago
One of the main arguments used to distinguish the current tech landscape from the dot-com bubble is that today's companies have real products and real revenues to back up their valuations, whereas many dot-com companies soared to huge valuations without a real product.
But Jet.com is a company worth $600M with no product... so where does that leave us in relation to 1999?
- coralreef 12y agoIs it public money (IPO) or private money? This makes a difference.
- ojbyrne 12y agoThe article says "convertible debt" and lists some investors. Google Ventures, Goldman Sachs, etc.
- coralreef 12y agoI know, I was referring to the bubble comments. If private money wants to value a company at a stupid high valuation, thats their prerogative. If it was public money valuing this company, we'd definitely be in a bubble.
- jsprogrammer 12y agoNo product? A mailing list is a product, no?
- prostoalex 12y agoNo launched product. These are the guys who have done it before, so can probably model some numbers. Goldman and Coatue presumably like those models.
- objclxt 12y agoI can think of quite a few examples of people who had "done it before" and went on to have a very disappointing experience. Often, the people who have done it before will fail because they assume the same strategy will result in the same payoff. It is often easy to overlook the importance of luck and chance.
- dougabug 12y agoGoldman liked credit default swaps, too.
- eloff 12y agoExactly. These guys are the opposite of the lean startup. All air and venture funding with ambitious growth plans. No product, nothing tested, just on theory. That seems like how a lot of famous dotcom companies launched to great fanfare only to discover the market wasn't interested. Pets.com and webvan come to mind.
- x0x0 12y agoamazon proves enough people will buy many things online costco (and even amazon prime) prove the membership model past experience proves the founder can build a large ecommerce company there is a little more validation than just theory
- api 12y agoThat sort of high level speculation has a mixed history at best. Anyone can model some numbers for a big market and make impressive Kurzweil shaped graphs.
- eloff 12y agoThat sounds good in theory, but there's no way to know if it will be like that in practice. Those are unproven assumptions when applied to a new entity. Many of the same things could have been said of Pets.com. Just like no battle plan survives contact with the enemy, no startup survives contact with its customers.
- tjradcliffe 12y ago
- staunch 12y ago> But Jet.com is a company worth $600M with no product This is a common misconception. They are not "worth" $600M just because investors put a little money in at that valuation. Buying 10% of an old car for $60M doesn't make it worth $600M to anyone.
- garazy 12y agoExactly right, "worth" should only really be used if someone else would pay $600M for it today.
- x0x0 12y agogetting, no doubt, investor shares -- ie their cash is out first
- deleted 12y ago[deleted]
- aaardvark 12y agoBut buying one share of a publically traded company makes it worth number of shares * value of share?
- kolev 12y agoWhere's the Snapchat's revenue or Instagram's or WhatsApp's?
- samsolomon 12y agoIt appears that WhatApp was profitable in 2014 with $16m in revenue and $13.5m in expenses. With that said, the value to Facebook was purely strategic and was worth far more than their business model. http://techcrunch.com/2014/10/28/whatsapp-revenue/ http://techcrunch.com/2014/10/28/whatsapp-revenue/
- kolev 12y agoAnd that justifies $16B?! There were strategies during the Dot-com bubble as. Facebook's leading strategy for acquisitions is insecurity.
- samsolomon 12y agoI was responding to your point about revenue. I agree that $16 Billion is an outrageous amount for that company.