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How Tilt Went From Hot $375 Million Startup To Fire Sale (fastcompany.com)
tedlistens writes: Not long ago, social payments company Tilt seemed to have it all -- a hot idea; cool, young founders with Y Combinator pedigrees; and $67 million in funding -- not to mention a $375 million valuation. But Tilt was more successful at cultivating its user growth and fun, frat-tastic office culture than at nailing down a viable business model. When Tilt finally ran out of cash, the party ended with the company's sale at fire-sale prices to fellow Y Combinator alums Airbnb in an aqui-hire deal. Where did it all go wrong? Here's an excerpt from the report: "Tilt was based on the premise that 'something like PayPal and Facebook would collide,' Tilt founder and CEO James Beshara says. The company aspired to be a social network for money -- instead of sharing photos and videos, users exchanged digital cash for birthday ragers and beer runs. During Tilt's early years, the pitch was simple, and carefully calibrated for Silicon Valley boardrooms: 'Let's prove that we can dominate the globe.' [...] By early 2013, millions in venture dollars were pouring into Tilt's coffers. Investors were lured by the same strong social metrics (viral coefficient, for example, a measure of user growth) that had marked Facebook as a winner. But the hopes embedded in Tilt's $375 million valuation came crashing down to earth last year. Beshara hadn't built a business; instead, he had manufactured a classic Silicon Valley mirage. While investors were throwing millions of dollars at the promise of a glittering business involving 'social' and 'money,' their Mark Zuckerberg-in-the-making was basking in the sunny glow of Bay Area praise and enjoying the ride with his bros. Revenue was not a top priority -- a remarkable oversight for any company, and a particularly galling one for a payments company. Eventually, with cash running low, Tilt went looking for a buyer..."
that there is a shortage of skilled intelligent STEM workers!
1) Expand universities to recruit even more naive wide-eyed dreamers into STEM. Generate debt to transfer public money into private coffers via tuition.
2) Lobby for more H1B visas.
3) Make fun of over 40 engineers and claim that they're too old to understand what you're doing.
4) Don't forget to shove a broom up your ass so you can wipe the floor on the way out when the bailiffs come to execute the eviction notice on your startup...
And someone gave them $67M? Ha ha.
Some other idiot decided they were worth $375 million too. Apparently.
Venture capitalists are greedy parasites. They are arrogant, yet stupid as a bag of rocks. However they got their money, I am pleased to hear whenever they lose their "investment" in a craptastic venture. Yes, I have had an encounter with one of those morons.
A dingo ate my sig...
Tilt? Never heard of it, literally.
Oh, I'm sure it was huge, but it made less of an impact than a BB hitting a battleship. I'm not exactly a stranger to the internet, but I never heard of it before this obituary.
Just cruising through this digital world at 33 1/3 rpm...
"Revenue was not a top priority"
Well there's your problem.
Just cruising through this digital world at 33 1/3 rpm...
At least this time I won't have to find someone to buy my leftover Flooz.
SJW: Someone who has run out of real oppression, and has to fake it.
Can Uber and Lyft be far behind? They're cab dispatchers without the cabs. That's it. It is impossible to be worth $28 billion just by shaking down cabbies for a couple of years.
I'm reading "Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley" by Antonio Garcia Martinez. The author and his two engineers leave the startup they worked at to create a startup at Y Combinator to create a better version of the Digg toolbar (remember toolbars?) for Google advertisers in 2010. I'm at the part where the author sends his engineers to Twitter while he goes to Facebook in a three-way deal. Fun times.
I doubt this book will replace Startup: A Silicon Valley Adventure by Jerry Kaplan as my favorite Silicon Valley startup book.
And after reading more than half the article, I still had no idea what the company actually did. Guess that I am not one of those thinkfluencers who could see their vision. *shrug*
That's pretty much all you need to know; it has failure written all over it.
> Why the heck would anyone value Ford or GM more than Tesla. Ford and GM's unrealistically optimistic dream would be "be in the exact same place we are now 20 years from now."
Ford and GM are making $10 billion profit each year, and have been for a long, long time. They've been making money for over a hundred years. The question for Ford and GM is whether they'll make $9.5 billion next year or $10.5 billion. So yeah it would be just terrible for them to "be in the exact same place we are now 20 years from now." I sure hate to be making $10 billion every year.
Tesla, on the other hand, has lost money every year. Tesla MIGHT start making money at some point. Eighty years from now, Tesla might be making $10 billion / year. Also Tesla might go the way of Myspace. We'll find out in a few decades.
> "Tilt was based on the premise that 'something like PayPal and Facebook would collide,'
And this has happened years ago. It is called Weixin, and the west has completely missed it
>Ycombinator
Don't invest in Ycombinator startups. Ycombinator is a pyramid scheme - saying this with all seriousness.
They claim gynormous valuations for unsubstantial businesses due to big initial financing rounds.
All funds that push Ycombinator early rounds use hot money from sale of shares of earlier Ycombinator companies that they get at discount - this is an industrialised pump and dump scheme on a grand scale.
Some other idiot decided they were worth $375 million too. Apparently.
Same idiots, not different ones. That latest tranche of investment (some large fraction of the $67 million) will have been for a certain percentage of the shares. That implies a certain price per share. Multiply that price per share for the total number of shares issued and you have the valuation.
SJW n. One who posts facts.
I watched one of Y Combinator's Startup School videos. The presenter was talking about how ideas aren't that important and how so many startups pivot.
VCs don't bet on ideas, they bet on people.
All the 'out-of-the-park' VC successes were based on existing ideas with a new implementation. This is why so many of them have to pivot - the best people realise when the idea is no good. A founder who is fully committed to the idea is a bad idea (pun intended), because if the idea later proves to be infeasible you want someone to ruthlessly kill that effort and focus energy and resources into something that will succeed.
I'm a minority race. Save your vitriol for white people.
And this has happened years ago. It is called Weixin, and the west has completely missed it
Most of these technologies are there to work around limitations in the banking system. Paypal arose when it was hard to do person-to-person transfers. Now it's trivial for me to send money to anyone I know from my phone or tablet using my bank's web site or app, with no fees. Why would I use an intermediary to do it, and if I did then how would the intermediary make any money competing with a free service? These things have been popular in places where most people don't have bank accounts or where banking infrastructure makes person-to-person payments hard.
I am TheRaven on Soylent News
Uber is more like Groupon. It's a service company with a dubious business model, a deteriorating reputation, an overhyped market valuation and a strong likelihood that it could come crashing down at any moment. The only reason people still fund it is they hope to cash out at a profit to some other sucker before that happens.
If your bank is so insecure that giving me a cheque or bank transfer with your details on lets me empty your account, the problem is with your bank. (This is ignoring any additional social engineering done to get your password or whatever).
To have a right to do a thing is not at all the same as to be right in doing it
*TADUM* *CRASH* *THUD*
Thank you, thank you, I'm here all week.
Tip your waiter and try the fish.
We suffer more in our imagination than in reality. - Seneca
I read a recent article that claimed the bubble will burst any moment with the massive layoffs of... 3K people... in Silicon Valley. LinkedIn advertised that there were 133K job openings the week before. That number dropped to 130K job openings the following week.
For historical comparison, 1M people moved out of Silicon Valley after the dot com bust.
You have to be joking! Next thing you're going to expect is they worry about profitability!
Browsing at +1 - no ACs, I ignore their posts. So refreshing!