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"When Secret came out, the addiction bug bit me hard too -- it was _extremely_ compelling....Then it took a nasty turn. There was gossip, there were attacks. Th

by timr 12y ago

"When Secret came out, the addiction bug bit me hard too -- it was _extremely_ compelling....Then it took a nasty turn. There was gossip, there were attacks. They didn't get too bad, but the tone changed." And all of that, from what I recall, in the course of maybe three months. It wasn't hard to predict the decline -- the Greater Internet Fuckwad Theory has been around since what, 2004? Maybe the investors who dump money into this kind of flash-in-the-pan stuff ought to wait a few minutes before signing the term sheets. But, oh yeah...because we're in a white-hot investment market, the Fear of Missing Out (aka Fear of the Greater Fool) doesn't let you stop to think.

jusben1369 12y ago
It seems to me that VC's take heat for investing too early, too late, too much and too little. Being too conservative or too risky. They're an easy punching bag.
- timr 12y ago
  I don't ordinarily care what VC's do with their money (i.e. mostly lose it), but it's disingenuous to suggest that there aren't clear trends: it's very difficult to raise a series A, but if you're the hype-driven flavor-of-the-moment, you can close a round with little to no diligence, few metrics and none of the proof traditionally required of a series A investment. We're still seeing money get shoved at companies who had a moment in the sun on ProductHunt or Reddit, with zero validation of the underlying business prospects (or even much in the way of critical thinking). So yeah, VC's do take heat for investing too early, too late, too much and too little. It isn't a contradiction -- it's what people do when they act as a herd.
  - nostrademons 12y ago
    Because the best validation is people using your product. Or technically, the best validation is people paying for your product, but if they're doing that in amounts great enough for a VC to notice then you don't need to raise VC. The herd behavior comes from everyone having more-or-less the same metrics for what constitutes success: people using your product. If that metric isn't evident, you fall back on the fundraising strategy for people who don't have traction: try lots of VCs and hope that one buys into your vision enough to invest. If the next better metric - lots of revenue - is evident, then it's too late and chances are that someone else has already invested, or they don't need investment.
    - timr 12y ago
      Ehhh. Traction is a necessary, but insufficient condition for getting a series A. There's a "hotness" component here that's contributing to the overreaction. You can't explain things like (for example) Meerkat raising a big round and cratering the very next week without considering the importance of hype. Meerkat and Color and Secret are walking out the door with big checks while lots of other entrepreneurs with great metrics are waiting for their fifteenth meeting...because they're not in the tech gossip rags. Say what they will in public, I'll bet you that Meerkat's investors are wishing they'd sat on that term sheet for a couple of days.
j1o1h1n 12y ago
1993 > http://en.wikipedia.org/wiki/Eternal_September http://en.wikipedia.org/wiki/Eternal_September

by timr 12y ago

jusben1369 12y ago

It seems to me that VC's take heat for investing too early, too late, too much and too little. Being too conservative or too risky. They're an easy punching bag.

timr 12y ago
I don't ordinarily care what VC's do with their money (i.e. mostly lose it), but it's disingenuous to suggest that there aren't clear trends: it's very difficult to raise a series A, but if you're the hype-driven flavor-of-the-moment, you can close a round with little to no diligence, few metrics and none of the proof traditionally required of a series A investment. We're still seeing money get shoved at companies who had a moment in the sun on ProductHunt or Reddit, with zero validation of the underlying business prospects (or even much in the way of critical thinking). So yeah, VC's do take heat for investing too early, too late, too much and too little. It isn't a contradiction -- it's what people do when they act as a herd.
- nostrademons 12y ago
  Because the best validation is people using your product. Or technically, the best validation is people paying for your product, but if they're doing that in amounts great enough for a VC to notice then you don't need to raise VC. The herd behavior comes from everyone having more-or-less the same metrics for what constitutes success: people using your product. If that metric isn't evident, you fall back on the fundraising strategy for people who don't have traction: try lots of VCs and hope that one buys into your vision enough to invest. If the next better metric - lots of revenue - is evident, then it's too late and chances are that someone else has already invested, or they don't need investment.
  - timr 12y ago
    Ehhh. Traction is a necessary, but insufficient condition for getting a series A. There's a "hotness" component here that's contributing to the overreaction. You can't explain things like (for example) Meerkat raising a big round and cratering the very next week without considering the importance of hype. Meerkat and Color and Secret are walking out the door with big checks while lots of other entrepreneurs with great metrics are waiting for their fifteenth meeting...because they're not in the tech gossip rags. Say what they will in public, I'll bet you that Meerkat's investors are wishing they'd sat on that term sheet for a couple of days.

j1o1h1n 12y ago

1993 > http://en.wikipedia.org/wiki/Eternal_September http://en.wikipedia.org/wiki/Eternal_September