Slashdot Mirror
How Snapchat Could March Startups Right Off the Cliff, Lemming-Style
Nerval's Lobster writes "Two investors are Tweeting that Instagram, had it stayed an independent company, could be worth between $5 billion and $15 billion today. That's led to talk of whether Snapchat was right to (reportedly) shoot down Facebook's bid of $3 billion for its business, considering its growth and sizable user base. Snapchat's founders evidently think they can score a better deal within the next few quarters. If they manage to sell their startup a year from now for twice as much, they'll be lauded as extraordinarily smart businessmen—perhaps smarter than the folks at Instagram who sold for a 'measly' $1 billion (and all this despite Snapchat making no revenue). But for other startups in the space, the Snapchat and Instragram stories won't do them much good. Propelled by dreams of ever-increasing millions (perhaps billions!) startup founders could end up turning down perfectly good acquisition offers in favor of continuing to bootstrap — and find their businesses eroding and imploding, as the market for their particular app or service either fades away or (more likely) ends up crowded out by competing software. The startup market is a shark-tank, and most of those who don't get out of the water as soon as possible are eaten, dreams of grandeur or no."
"One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley." - Louis Winthorpe III
Snapchat was made by frat bro's who royally screwed the guy who did all the real work.
A *real* tech thought it up and made it, then his rich friends stole his idea...
An idea for a way for people to send drunk videos to each other w/o consequences, which the frat-bro's took to the logical place they would, which is to drunken college girls...
**that's Snapchat**
Facebook.com offered $3Billion b/c facebook.com is *hemoragging* young users & it will do anything to buy other system's users (ex: Instagram) for them to vampire the life force from for advertising profit
that's it: facebook.com wants to buy Snapchat's users
all the noise about 'IPO valuation' is absolutely standard issue tech-bubble startup stuff that **we all know** how the cycle goes!
snapchat is only good as long as drunken hotties use it to send consequence free drunk selfie videos
Thank you Dave Raggett
If Facebook offered them that much money, they are complete nimrods to turn it down.
Maybe they didn't think that the alternative is Facebook (and maybe others) dropping a cool $1B on a similar app of their own that better integrates with existing social platforms. Wonder how much their company will be worth then?
Idiocy. Greed and idiocy. Will be hilarious if they can't even sell for $0.5B in 6 months.
Up to a point, yes. But I'd also factor this in: If I'm a startup founder and am ever in a position to hold $50 million, I could take that, invest it relatively sanely in the stock market, and be living extremely comfortably for the rest of my life. There's such a thing as "enough", and there's no particular reason to press your luck when you already have it.
I am officially gone from
The lesson in most cases is to take the million, walk, then buy back your old company for pennies on the dollar in a couple of years.
If Slashdot were chemistry it would look like this:Cadaverine
Didn't you read the summary??? Two investors sent TWEETS!!!! Case closed.
Gently reply
There's such a thing as "enough", and there's no particular reason to press your luck when you already have it.
The snapchat founders have been able to monetize their situation such that they've already got at least 10 million in the bank. That's enough "FU money" to press their luck and ride this thing all the way to the end, glory or otherwise.
When information is power, privacy is freedom.