> While ranting; what the f*ck do you need $4M for?
According to the article the company has 12 employees. Assuming a fully loaded cost of $100,000 per employee (I expect most are coders). Then $4m covers 3.3 years of salaries. So they give themselves about 3 years of runway to actually make the site make money.
That's what you do with $4m.
> The whole iPaper thing is cute.
> But how do you build a working business model around it?
That's what $4m gives you 3 years to figure out. Also, I think iPaper is a bit more than 'cute'. I have a lot of different document types that I need to make public (e.g. PDFs, PPTs,Keynote, Excel, Numbers). Since Scribd can just take these and turn them into a common format for me it makes sense for me (when I get around to it) to convert everything to iPaper so that everyone can read them.
Sure! Looking for ways to burn through $4M in cash, even my 12 year old nephew will come up with some way! I bet I could do it with half the staff in have the time. Pissing away money is easy. However, this doesn't makes it good business.
And when you're already planning to take three years to come up with a business model, FOR GODS SAKE drop the whole thing and do something useful with your time and other peoples money.
If Scribd would be a technology startup in the sense that it would leverage NEW technology or develop NEW technology, it would make sense for it to take a longer period of time to become profitable.
However, Scribd is just another company leveraging the internet delivering a service to their customers. Nothing great and nothing fancy going on there and if the idea would indeed be worth the effort, they should have no problem starting of profitable or getting it profitable within the first year of operation.
Scribd is just another company leveraging the internet delivering a service to their customers.
You mean like Amazon, or eBay, or Google?
None of those companies make much of anything either.
Good point on responsiveness, my experience is that even pain-in-the-ass customers are important. Sometimes they're the most important ones over the long haul. But you're still a pain in the ass ;-)
I don't think you should condemn every company that raises material capital.
However, I know first hand that some companies definitely should not have raised capital, and were resting on the laurels of a previous success and a well-known name. These companies really haven't thought enough about what problem they're actually solving, and are almost arrogant about what the market really needs. "Of course the market will want this, because I'm awesome" syndrome.
In short, don't throw the baby out with the bathwater... there are plenty of companies that need that kind of capital that are doing great things. And if I had to guess, I'd bet that Scribd was one of them.
It's not just coming up with a business model that's hard. You need enough time to become fully self-sustaining and then profitable. Anyone who thinks it's outrageous to have $4M to fund a company for years is going to have a heart attack after reading Crunchbase for five minutes.
I have never seen a keynote file. If that's some open source format, then there is likely a windows port of the software needed to read it.
However, given that I have used the internet for years and never seen one, it doesn't strike me as important.
Edit: I don’t know why the parent is down-modded. I imagine this is one of the most common criticisms that Scribd will get. Why do I need it? And yes, I watched the intro video.
According to the article the company has 12 employees. Assuming a fully loaded cost of $100,000 per employee (I expect most are coders). Then $4m covers 3.3 years of salaries. So they give themselves about 3 years of runway to actually make the site make money.
That's what you do with $4m.
> The whole iPaper thing is cute.
> But how do you build a working business model around it?
That's what $4m gives you 3 years to figure out. Also, I think iPaper is a bit more than 'cute'. I have a lot of different document types that I need to make public (e.g. PDFs, PPTs,Keynote, Excel, Numbers). Since Scribd can just take these and turn them into a common format for me it makes sense for me (when I get around to it) to convert everything to iPaper so that everyone can read them.