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What's interesting is that they were able to raise $4 million, and rejected a $40 million acquisition by Twitter (according to http://www.businessinsider.com/fr

What's interesting is that they were able to raise $4 million, and rejected a $40 million acquisition by Twitter (according to http://www.businessinsider.com/frontback-app-shuts-down-2015-7 http://www.businessinsider.com/frontback-app-shuts-down-2015...)

downandout 11y ago
This should be somewhat instructive to founders of companies that get far enough to receive a buyout offer. Try to realistically evaluate your startup's place in the world; in most cases, a buyout offer is something that should be seriously considered. Your company is almost certainly not the next Facebook or Snapchat.
- drcross 11y ago
  This is a specious comment because you now have the value of hindsight. I suppose you also probably advised Mark Zucherburg to not sell?
  - jacquesm 11y ago
    > This is a specious comment because you now have the value of hindsight. No it isn't. The problem is to accurately put a value on your company and it's future. It isn't rare at all to find founders that are in the most literal sense of the word delusional about what the value of a company is. I've had this with one of my co-founders who held out for a much larger buy-out offer than one that we had on the table and then subsequently ended up being extremely upset when after blocking that particular deal he could not find a better one and ended up taking much less from the company than the offer that had been on the table already. I'm sure that his hindsight told him that maybe his valuation wasn't all that accurate after all. Hindsight being what it is - 20/20 - if you remember that a price is never right (sell it: you're too cheap, don't sell it: you're too expensive) that there is room on both sides and overlap between the ranges is required to make a deal. If you always hold out for better you will never make a deal. So knowing when an offer is 'good' is the key and being realistic about valuations will help you to figure out what is good. > I suppose you also probably advised Mark Zucherburg to not sell? Mark Zuckerberg (not Zucherburg) never intended to sell at all, that's a key difference.
    - mgkimsal 11y ago
      > It isn't rare at all to find founders that are in the most literal sense of the word delusional about what the value of a company is. Agreed. Example: him: "Got an idea!" me: "Let's hear it..." him: 'splains idea me: "neat - hold on" me: build quick mvp to get initial users - 2 days him: "oh but it needs xyz" me: "not until you talk to customers" him: weeks later, a bit of traction me: "cool - you know, if you/we can get some more users in this area, maybe up and down the coast, this would be a nice little acquisition from someone like 4square" him: "what?? i'd never sell" me: "we'd probably be looking at a couple million for less than a year of work, assuming you can get the traction" him: "this is going to be bigger than Facebook - this will be everywhere! don't you understand the value here?" me: "you're serious, aren't you?" Yes, he was deadly serious. Over the years, he's mellowed a bit in that intensity, but still seemed to hold on to the notion that having an idea and someone building an MVP = ownership of billion dollar marketplace. The notion that other people considered the idea and deemed it not worth pursuing, or perhaps have actually tried it and learned it's not the market that was assumed... genuinely never crossed his mind. Ever.
    - jt2190 11y ago
      > The problem is to accurately put a value on your company > and it's future. Valuing companies is "essentially complex". [1] (edit: Estimates have both accuracy and precision. Determining the precise value of a company with a high accuracy is very, very difficult. A less precise value (i.e. a range of values) for a company is much easier to do with accuracy, but a range runs contrary to the idea of finding the "correct" value.) [1] "Accidental complexity relates to problems which [people] create and can fix... Essential complexity is caused by the problem to be solved, and nothing can remove it" https://en.wikipedia.org/wiki/No_Silver_Bullet https://en.wikipedia.org/wiki/No_Silver_Bullet
- cnvogel 11y ago
  I think that's pretty sound advice, and different from "drcross" I don't think you'd have told Mark Zuckerbert that his company is not facebook ;-). On a more serious note: I'd say that from within a startup it's pretty hard to get an unbiased view on ones relation to competitors. So what categories would you recommend for a "realistic evaluation" of ones' company in the world?
- dawson 11y ago
  It's not always a founder's decision; having myself been in a similar situation which ended with the same outcome.
julien_c 11y ago
They're not shutting down as a company, though. Presumably they've burned through only half of those $4 million and will have enough air to execute something significant.
jackgavigan 11y ago
> ..rejected a $40 million acquisition by Twitter... Yikes. I always regarded Frontback as a feature, and assumed that they'd end up being acquihired. I'm astonished that they thought there was a real company to be built around it.
- dawson 11y ago
  Like snapping a photo or a video, and adding a caption is just a feature?
  - 72deluxe 11y ago
    It isn't unique though. Would you consider a company that sells you notebooks with the ability to draw on them and annotate your drawings to be a unique company to build around? I don't mean this in an argumentative way, but taking a video isn't a billion dollar feature.
    - dylanjermiah 11y ago
      Uniqueness is irrelevant, it's the 100 million+ DAU's which are valuable.
      - 72deluxe 11y ago
        You made me look up DAU. Thanks - an acronym I had never seen!
  - jackgavigan 11y ago
    Yeah, pretty much.

downandout 11y ago

This should be somewhat instructive to founders of companies that get far enough to receive a buyout offer. Try to realistically evaluate your startup's place in the world; in most cases, a buyout offer is something that should be seriously considered. Your company is almost certainly not the next Facebook or Snapchat.

drcross 11y ago
This is a specious comment because you now have the value of hindsight. I suppose you also probably advised Mark Zucherburg to not sell?
- jacquesm 11y ago
  > This is a specious comment because you now have the value of hindsight. No it isn't. The problem is to accurately put a value on your company and it's future. It isn't rare at all to find founders that are in the most literal sense of the word delusional about what the value of a company is. I've had this with one of my co-founders who held out for a much larger buy-out offer than one that we had on the table and then subsequently ended up being extremely upset when after blocking that particular deal he could not find a better one and ended up taking much less from the company than the offer that had been on the table already. I'm sure that his hindsight told him that maybe his valuation wasn't all that accurate after all. Hindsight being what it is - 20/20 - if you remember that a price is never right (sell it: you're too cheap, don't sell it: you're too expensive) that there is room on both sides and overlap between the ranges is required to make a deal. If you always hold out for better you will never make a deal. So knowing when an offer is 'good' is the key and being realistic about valuations will help you to figure out what is good. > I suppose you also probably advised Mark Zucherburg to not sell? Mark Zuckerberg (not Zucherburg) never intended to sell at all, that's a key difference.
  - mgkimsal 11y ago
    > It isn't rare at all to find founders that are in the most literal sense of the word delusional about what the value of a company is. Agreed. Example: him: "Got an idea!" me: "Let's hear it..." him: 'splains idea me: "neat - hold on" me: build quick mvp to get initial users - 2 days him: "oh but it needs xyz" me: "not until you talk to customers" him: weeks later, a bit of traction me: "cool - you know, if you/we can get some more users in this area, maybe up and down the coast, this would be a nice little acquisition from someone like 4square" him: "what?? i'd never sell" me: "we'd probably be looking at a couple million for less than a year of work, assuming you can get the traction" him: "this is going to be bigger than Facebook - this will be everywhere! don't you understand the value here?" me: "you're serious, aren't you?" Yes, he was deadly serious. Over the years, he's mellowed a bit in that intensity, but still seemed to hold on to the notion that having an idea and someone building an MVP = ownership of billion dollar marketplace. The notion that other people considered the idea and deemed it not worth pursuing, or perhaps have actually tried it and learned it's not the market that was assumed... genuinely never crossed his mind. Ever.
  - jt2190 11y ago
    > The problem is to accurately put a value on your company > and it's future. Valuing companies is "essentially complex". [1] (edit: Estimates have both accuracy and precision. Determining the precise value of a company with a high accuracy is very, very difficult. A less precise value (i.e. a range of values) for a company is much easier to do with accuracy, but a range runs contrary to the idea of finding the "correct" value.) [1] "Accidental complexity relates to problems which [people] create and can fix... Essential complexity is caused by the problem to be solved, and nothing can remove it" https://en.wikipedia.org/wiki/No_Silver_Bullet https://en.wikipedia.org/wiki/No_Silver_Bullet
cnvogel 11y ago
I think that's pretty sound advice, and different from "drcross" I don't think you'd have told Mark Zuckerbert that his company is not facebook ;-). On a more serious note: I'd say that from within a startup it's pretty hard to get an unbiased view on ones relation to competitors. So what categories would you recommend for a "realistic evaluation" of ones' company in the world?
dawson 11y ago
It's not always a founder's decision; having myself been in a similar situation which ended with the same outcome.

julien_c 11y ago

They're not shutting down as a company, though. Presumably they've burned through only half of those $4 million and will have enough air to execute something significant.

jackgavigan 11y ago

> ..rejected a $40 million acquisition by Twitter... Yikes. I always regarded Frontback as a feature, and assumed that they'd end up being acquihired. I'm astonished that they thought there was a real company to be built around it.

dawson 11y ago
Like snapping a photo or a video, and adding a caption is just a feature?
- 72deluxe 11y ago
  It isn't unique though. Would you consider a company that sells you notebooks with the ability to draw on them and annotate your drawings to be a unique company to build around? I don't mean this in an argumentative way, but taking a video isn't a billion dollar feature.
  - dylanjermiah 11y ago
    Uniqueness is irrelevant, it's the 100 million+ DAU's which are valuable.
    - 72deluxe 11y ago
      You made me look up DAU. Thanks - an acronym I had never seen!
- jackgavigan 11y ago
  Yeah, pretty much.