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Secret was one of the most aesthetically impressive apps I'd seen on iOS, ever. It had all of the little usability details nailed on its first attempt. Even tho

by numair 11y ago

Secret was one of the most aesthetically impressive apps I'd seen on iOS, ever. It had all of the little usability details nailed on its first attempt. Even those of us who didn't appreciate its use case (myself included) couldn't help but feel jealous of the technical ability of its creators. The founders weren't random "immature assholes," and one would hope that the investors weren't either. A lot of people were chasing those guys with money, and they all knew what they were getting into. I wish people would spend less time obsessing over the money and more time figuring out why the company (and the two cofounders) fell apart; that's far more useful to learn/discuss. Hating on people just because they got a couple mil is pretty stupid and childish, especially when they are clearly more technically talented than their critics. If there is a bubble in this industry, it is a bubble of amateurs; people who shouldn't be investing or working in a field that is driven by extremes, and always has been. Extreme people chasing extreme success at extreme odds. And you know, everything in those extremes is going to look weird to people on the outside. Young Gates also wrecked sports cars and nearly went to jail; maybe these are all anecdotal, but the fact remains that you've got to accept a bit of eccentricity in this industry, if you want eccentric returns. If this whole Secret backlash thing continues, the kids in this industry might need a history lesson on why Peter Thiel called his VC firm the Founders Fund, and why it was so novel at the time. Investors always want to give founders a tough time; until Thiel and Co. came along, Valley VCs practically colluded to ensure that young entrepreneurs remained poor until an exit. I'm sure they would love for that era to return, but thankfully there's just too much capital for such a thing to happen anytime soon.

dmix 11y ago
This is a great analysis. The founders parlayed multiple VCs chasing them into gaining $3m for themselves. I don't see anything wrong with that personally, it's the investors money and it was voluntary. I agree with Bill Maris though that it was far too early in the startup to be doing that. The VC must have assumed their pull in the VC scene would take them to some sort of success later on - so why not. But that is a risky gamble.
- pbiggar 11y ago
  I don't agree that it was too early to take money off the table. It's about aligning incentives: the founders likely had other liquidity offers that must have looked mighty tempting at the time. $3m each keeps everyone pointing in the same direction. It should be pointed out that the investors were no amateurs. Redpoint and Index are Tier 1 VCs, who know exactly what they're doing. They were investing in the next Facebook, and it turned out this was not it. That's the game VCs play.

by numair 11y ago

dmix 11y ago

This is a great analysis. The founders parlayed multiple VCs chasing them into gaining $3m for themselves. I don't see anything wrong with that personally, it's the investors money and it was voluntary. I agree with Bill Maris though that it was far too early in the startup to be doing that. The VC must have assumed their pull in the VC scene would take them to some sort of success later on - so why not. But that is a risky gamble.

pbiggar 11y ago
I don't agree that it was too early to take money off the table. It's about aligning incentives: the founders likely had other liquidity offers that must have looked mighty tempting at the time. $3m each keeps everyone pointing in the same direction. It should be pointed out that the investors were no amateurs. Redpoint and Index are Tier 1 VCs, who know exactly what they're doing. They were investing in the next Facebook, and it turned out this was not it. That's the game VCs play.