On one hand no, it was definitely a 3rd party that allowed sent snaps to be permanently saved.
On the other hand, perhaps Snapchat is making an unreasonable promise to their users (send data to someone else that will be auto-deleted) that is fundamentally impossible to enforce.
The leaks to this point have showed him as obnoxious, careless etc. This one shows him as focused, driven and smart (the details don't really matter anymore and will likely be forgotten anyway). While I think most people who have experience dealing with the media probably assumed this was the case, now most people will see it without any surrounding PR.
Overall though probably won't sway things too much either way.
(Not that the media is always wrong, sometimes they're probably right, i.e. clinkle)
I wonder if these leaks are planned? I first became aware
of Snapchat when Zuck offered a Zillion dollars for it.
I thought it was a great idea, but the patent didn't seem
bullet proof? The value is free texts--right? Personally,
I see a future where you have two poor people with second hand smart phones and want to communicate for free. Great--they will use apps like SC, but not necessarily SC? I do see a tech bubble, and these leaks just might be free advertising? The amount of
money throw around seems crazy. The icing on the cake was
when Google bought Nest. I remember the CEO of Honeywell commenting on the Nest buyout. He said something
like, 'They could have bought Honeywell and still have a lot
of money left over'. (Honeywell is everywhere. Their products are in every building I have ever worked in--they
are huge and diversified.) The CEO of Honeywell had a weird
grin on his face when being interviewed--like he was just shocked at the amount of money spent. Anyways, I think we
are being played? I think these leaks are planned.
"I think we are being played? I think these leaks are planned."
Are you suggesting that all this stuff about North Korea was a misdirect, and the real purpose of the Sony hack was to vaguely improve the reputation of Snapchat's CEO? Or perhaps that Snapchat had advanced knowledge of the hack and Evan Spiegel intentionally emailed the head of Sony at the strategically appropriate time?
You're confusing WhatsApp with snapchat, two totally different apps that have little in common aside from using the internet.
WhatsApp is free text and group-chat done right. Snapchat is ephemeral pics and recently they've added text and and video (also self deleting). It's possible that Google could've bought Honeywell but not at the price they paid for Nest ($3 Bil) but it would've been pointless, google isn't interested in getting into the low-grade thermostat market, they want to be part of the "collecting info about you from devices you put in your home" market, so even though nest's first product was a thermostat, that's just incidental in Google's overall plans for the company.
Is that really true about Honeywell? Last I checked, Honeywell was a Fortune 100 with a $70B+ market cap. Nest's 3B acquisition is really nothing compared to that...
How does the owner of a company that people use for swapping naked/drunk/silly photos expect to change the world? Snapchat could disappear over night and it wouldn't have much of an impact on anyone other than the people working there.
Wow, is all PR speak from SV companies so absolutely vacuous?
This guy sounded much more intelligent in his private memos. This crap sounds like a teenager's diary. So many "feels" and "hurts" and "angrys"...really seems like he's writing to a bunch of young teens.
I don't know how people work at companies like this. Between this and Marissa Mayer's children's book reading at an all employee meeting, I'd get fired twice for laughing out loud and calling the CEO of the company a blabbering idiot.
Anyone care to unravel the mystery of teen mystery PR speak?
"Social" apps are driven by a small number of trend driven, high sociability, sexually active females in the range of 16ish to 25ish.
If you get them, everybody else will flow to your "service" (other girls will follow the trendsetters--guys will follow the girls). It is no accident that SnapChat got popular from sending naked selfies.
It's not PR speak, it's their generation. I'm only a few years older and can't even relate to it. My peers have even noticed this in our younger male siblings - they're only ~3 years younger, but they would constantly get into emotional fights with their good friends (lasting several days), cry all the time, and generally are a lot more sensitive and emotional. We don't understand it at all.
Not to go to far off on this strange tangent, but, What? you don't know anyone younger than you? How'd you manage that? Did you have someone vet people before they introduce you, and if their birthday falls after yours you wouldn't speak to them?
As more anecdotal evidence: I'm probably 5 years younger than you and my friends are split, some are like 16 year old girls when it comes to "did he/didn't he" and the rest of us don't have therapists telling us how to think.
re the letter: that last line is killer "We're going to change the world because this is not the one we want to live in."
Really? your sexting app is going to change the world for the better? that kinda grandiosity is what makes talking to these people so aggravating.
I place a lot of value on Spiegel's view of the market. As the CEO of one of the "hottest" startups in the past couple of years, I think he has access to a lot of people and information that most of us don't. I'm a believer in semi-strong market efficiency to be sure.
If he is turning down valuation money, he is also explicitly acknowledging that the fundamentals of the company simply don't justify the leverage of taking on additional investments.
He uses startup era Facebook to inform many of his decisions. Monetization is where Snapchat is finally breaking from Facebook's precedent, allowing the user to opt into ads disguised as high-quality content, and adding a money-sending service by partnering with square. Personally, I find this strategy a lot more effective than Facebook's attempts: jamming ads down users' throats, auto-play videos, breaking messenger off of the main Facebook app, selling robot clicks and false engagement, etc.
Should be interesting to see how Spiegel is planning to ride out the readjustment that he is predicting.
I also found that quite interesting. It's quite similar to my own view ... let's see, an October 12 variant:
Twitter, and much of the rest of the Web 2.0 / dot com firms mostly are solving the problem of "where can we invest all of this free money the Federal Reserve is pumping out while real financial returns are so low. The fact that much of the business model supported by these ventures is effectively advertising, and that a lion's share of the advertising is itself FIRE (Finance, Insurance, Real Estate) sector -- also bolstered by easy money / liquidity / QE2, or electronics goods, dittos, makes me think that this is all one hell of a massive bubble. At some time it's going to pop, and it's going to be all kinds of ugly -- the dot-com bust will look like salad days in comparison.
I'd be interested to hear how you're betting on the bubble. Are you shorting stocks? Buying puts? Some kind of real estate ETF? Are you actively betting or just sideline speculating? Not trying be passive aggressive - I've just been trying to come up with a good strategy myself to bet on an imminent bubble.
Also, could you provide more detail on how QE money is ending up in VC pockets? I was under the impression that most of the large-scale-asset purchase money is simply sitting in bank reserves - check out the 2nd graph showing how much of QE has actually made it into circulation [0]. I'm not sure exactly how the "free money" of the Fed is ending up in Twitter's coffers.
I'm taking a longer-term view and investing in personal capital on the basis of that.
Money in bank reserves doesn't, of and by itself, provide revenue growth. Banks put the money someplace else.
Some of that goes back into Government paper. Some into offshore tax havens (the avoided tax is an immediate gains). Some 10-20% of all finanicial wealth is there -- $21 - 30 trillion as of this past July:
Other funds end up in various investment operations -- some are HFT, some are speculating in commodities or other real assets (stories of Goldman's operations in this area are interesting), some ends up chasing tech opportunities -- it's one of the few economic sectors offering much promise. Though I suspect a lot of it's overrated.
Most present "investment opportunities" strike me as quite ephemeral, though the volatility may allow for gains for the extremely astute. Or lucky.
Though this seems obvious in retrospect, this is an interesting insight:
VC dollars are being spent on user acquisition despite unknown LTV of users ...
I think some of the tech "bubble" is being driven by speculation in what customer lifetime value could be. There would need to be some pretty devastating event for investors to no longer believe that having millions of users doesn't have potential for a lot of value. It would have to be a fairly counter intuitive epiphany.
There would need to be some pretty devastating event for investors to no longer believe that having millions of users doesn't have potential for a lot of value.
Myspace. Yahoo. AOL. Next, Twitter? You can get lots of users by giving stuff away. That doesn't always result in company value. Especially when it starts out free and is followed by heavy-handed attempts to "monetize" the users.
There doesn't have to be any material change, “devastating event,” or even an underlying reason for people to change their views. Reflexivity theory contends that user acquisition costs and other prices are just as influenced by the perception of other people's thinking as anything else. Since participants in the market usually have a distorted view of reality, prices are pretty much indeterminate and unpredictable.
I'd wager that that'd only hold if all (or a lot) of your Snapchat contacts did the same. I think people often overestimate people's unwillingness to use multiple apps while underestimating their unwillingness to switch to a different version of the same app.
See that's a seperate app that exists on one platform, while FB Messenger is cross platform and already used by most people, so adding one feature (while anathema to the way companies are doing this atm, opting to make each feature an app) would instantly overtake a lot of the value of snapchat.
I think it takes a lot of courage to say "No, you can value us at $800 million instead of a billion." There are reasons to do that, but it means some money is being left on the table either via dilution or lower capital raise.
There's a secondary question (can someone answer?) of is it tax advantageous to do this? Does it benefit the first a lot to issue options at a cheaper price?
That's what they were discussing in the emails regarding 409(a)... from what I understand, the taxable-benefit value of options is determined by the IRS's fair market valuation of the company. So the same options contract becomes more valuable (and more taxable) as the company becomes plausibly more valuable. Spiegel's response indicates that he's unconcerned by this, though, so maybe options aren't a huge part of their compensation package.
IRS requires paying taxes as restricted stock vests (or up front if you so-elect) based on the fair market value of the stock. Or, if options, based on the intrinsic + time-value of the option. So maintaining a low common stock valuation becomes a crucial exercise if you want to actually be able to issue any meaningful number of shares to your employees.
You can value investor preferred shares at a significant markup to your common stock by giving a non-participating liquidation preference. So you can raise $50m at $800m and not completely wreck the next round of options. It's called the "Thin Common" strategy. The idea is I sold X shares for $50mm, but since they also got a $50mm preference as part of the deal, the common share value is still no-where near $50mm / X.
What Spiegel is saying, which is spot-on, is that having revenue will encourage a Section 409a valuation based on discounted cash-flow for common stock which will be minuscule compared to the investor value on preferred shares. 409a is about gaining a safe-harbor where your valuation is presumed reasonable and harder for the IRS to contest.
This allows them to keep moving shares into employees hands at a reasonable rate, or if options, then issuing them without an impossibly high strike price. The problem Mitch is pointing out is the Facebook offer also plays into the 409a to some extent. If someone offers you $3 billion cash, it's hard to claim you are worth less than $3 billion.
If you are issuing restricted stock, or RSUs, you have to price them at fair market value, and either the employee PAYS you that money, or the value of the shares is taxable income as they vest.
If your valuation is too high, any modest stock grant (remember they are only 30 employees) requires someone to pay ~40% of that amount in cash as taxes. So it becomes quickly impossible to give a meaningful number of shares -- the tax consequence is just too immense.
For example, lets say they issue 1% of their shares to their 30 employees next year. They have a 409a valuation based on $0 revenue, 13 months of runway, and a plan to hopefully possibly achieve $20mm of revenue in the next 12 months. Their accountant says that equals $200mm common stock value, so they owe taxes on $2mm of income. Not so bad. But if the IRS comes back and says, wait just a minute, those shares were worth $3 billion at the time, you owe us $15mm in taxes and another $30mm in penalties....
Anyone who STARTED at Snapchat early on would have received shares at PAR value, and if they were restricted, would have done an 83(b) election to pay tax up-front at the current value, instead of paying tax at the market value as they vested over time.
If anyone at Snapchat has significant vesting shares and did NOT do the 83(b) election to pay tax at an early-days valuation, they are now totally fucked, because every month they vest more shares, they owe millions of dollars to the IRS and they have no liquidity with which to pay the tax man.
The system is stupidly broken. The way I would do it is that freshly minted common stock should transfer tax-free until a subsequent transfer or sale (not including transfers through probate). Then the full value should be taxed at short or long-term capital gain. There's absolutely no reason to tax, or even attempt to value, the initial issuance of unregistered and non-transferable securities of a private company. Simply wait till they are first sold, or otherwise encumbered, and collect taxes from the market value at that time. Registered stock could remain under the current rules.
In a sense, even declining an offer from Facebook cuts off new hires from obtaining reasonably priced shares, thwarting Snapchat's ability to hire and retain the best talent. It's an interesting "damned if you don't" scenario.
An alternate way to handle it would be to pass a law saying the IRS must accept payment in-kind for taxes on in-kind payments. I.e., the IRS can make up whatever valuation they want but you have the option to pay them in snapchat shares.
"You owe $15 million in taxes on those Snapchat shares that just vested."
"You say we're worth $3 billion? Fine, here, have some shares!"
"Oh, oh, what? No revenue? Yeah, your shares are worth shit!"
"So what about the tax bill?"
"Yeah, pay up in cash, or as they say in Monopoly..."
1. His views on the general tech market are somewhat banal (though impressive for someone who was only 23 at the time). It is your standard zerohedge analysis that fed is printing money and it is causing a tech bubble. Can anyone track and connect the dots from fed bond buying to increase in Facebook share price? I don’t think anyone knows.
2. His comments on facebook are much more fascinating though. One thing I did not understand is where all the mobile money on facebook is coming from. Looks like it is from app installs (don’t think FB breaks it out) which in turn is created by VC funding bubble. The VC's fund because they see mobile on Facebook is taking off. Close the loop, classic bubble. So the whole scheme is likely to end pretty badly for facebook (sounds plausible). PG talked about the dot com bubble and the impact of VC funded ad buying that led to increasing market cap for yahoo until it burst
“By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "Eureka!" I was shouting "Sell!"”
Edit: I should have guessed, people are more interested in supplying ready made narratives from the past five years for point 1 (which is not that interesting) than point 2. SMH. Some cool narratives are being provided which I heard almost verbatim at various points in the past five years that “explained” how --
1. We will have world wide inflation of epic proportions (reality: world is fighting deflation all over)
2. ECB is doing a great job compared to the fed continuing with QE2 in 2011 (reality: recession in Europe vs the US)
3. Gold will soar through the roof (reality: slump)
4. Oil prices will rise forerver (until they collapsed)
5. House prices in China will go to sky (until they stopped doing)
6. Apple was up 100% in late 2012 (until it collapsed by half six months later)
Etc etc. I would have thought some humility would have set in the “FED is printing, things are inflated to sky crowd”. Nope, just doubling down. Always stay with the narrative explain something else until we get it right ☺. At least I admit I don't know how things work :-).
Consider, there are $20 Trillion dollars of SWF’s in the world investing all over. What is the impact of these as opposed to QE?
> Can anyone track and connect the dots from fed bond buying to increase in Facebook share price?
Sure. Government bonds are defined as risk-free, for better or worse. Regulatory and capital requirements ensure healthy demand for risk-free securities, aside from any "natural" demand for government bonds.
The Fed has pushed down the yields on USG bonds to miniscule levels. Firms which used to rely on a healthy yield for such bonds now have to find that yield elsewhere. The entire point, depending on who you ask, of the Fed's activities is to push investors into riskier securities.
Institutional investors forced into searching for yield bid up Facebooks and Amazons. Simultaneously, you have the more adventurous being pushed into various forms of VC investing. Some investors are desperate for yield, like underwater pension funds, and they won't get it from USG bonds. Think about the recent news regarding pension funds getting into bed with hedge funds. Other investors are sitting on huge cash balances and simply want to put them to work. There is a lot more money sloshing around the system compared to 7 years ago, some of it merely implied by gigantic reserve balances with the Fed, and is there really any question that the run-up in asset prices over the last 5 years is an effect?
> One thing I did not understand is where all the mobile money on facebook is coming from. Looks like it is from app installs (don’t think FB breaks it out) which in turn is created by VC funding bubble.
In July re/code put the App Install Ads at $400-$800m in revenue per quarter. I'd guess it's on the upper-end of that spectrum and is out-pacing other revenue lines. It's not unusual for a top tier game to pay up to $3-5 for a US install.
This is why Twitter is so keen (desperate?) to replicate what FB is doing.
It's not unusual for a top tier game to pay up to $3-5 for a US install.
Yikes, that is much higher than I expected. I'm not really in that particular space, so I guess I shouldn't be surprised. I'm assuming these games are like the new and "improved" Dungeon Keeper that have ludicrous amounts of in-app purchases, so they expect to make back that $3-5 quickly.
I agree quite a bit with him on point 1. Yield starved investors gobbling up more risk to get higher returns in a zero-interest rate policy environment. Also, low risk free rates mean lower costs of capital across the board and I feel that many companies that shouldn't be able to are able to raise more money since investors are yield starved. Also if you're running a DCF analysis on a company, lower risk free rates mean lower discount rates, meaning higher valuations on lower cash flows. Across the markets multiples have been expanding.
On that note, a lot of his commentary seems to be smartly focused on being able to defend valuation outside of the VC universe on a solid EV/sales or EV/cash flow multiple basis. Choosing to go for a lower valuation in the near term makes it easier to argue about revenue growth in the future leading to valuation multiple expansion, possibly making investors more prone to accept price growth.
Most of the apps buying installs are from game companies that have massive revenues (Supercell, King, etc.). It's not the same as the 90s. There might be an app bubble, but it's not a VC driven one.
My gut feeling is the valley has turned sour on fb far ahead of the facts.
These app (especially gaming) companies are profitably running ads on fb. Many of which have spend hundreds of millions on advertising, primarily through fb (by a long shot over Google).
Other genres of apps are starting to migrate to the gaming strategies of acquiring users and increasing retention with ads.
CPMs on fb are rising, not falling.
Brands haven't successfully migrated to mobile advertising as a whole, and when they do I think fb will be the primary choice.
I don't think VC funded negative value ad campaigns are a notable portion of fb revenues.
I would love to be proven wrong on any of these assertions.
Yes. Supercell was $464mm profit on $892mm revenue. The other big IAP game factories are probably similar. Zynga was doing some crazy profits too before they started sinking everything into acquisition
Revenue generation pays for ad spending which generates more revenue. The only thing that stops this cycle is people stop playing and making in-app purchases.
Is it? If they have a large publisher network, they can cross-promote within their apps. The only reason to pay a high rate for an install ad is to gain access to the audience you don't have.
The difference between Facebook today and Yahoo during the dotcom bubble and the investment feedback loop is that Facebook's revenue is already a lot larger than what startups spend on advertising and user acquisition.
A similar argument was made against Bitcoin, that the value was derived from VC investment. When I calculated the figure it turned out that if the total of all VC investment into Bitcoin went towards purchasing coins, it would only have made up 4% of market cap.
You could do a similar calculation with Facebook and user acquisition pricing, although seeing Facebook is at $12B p.a while Yahoo was at hundreds of millions while VC investment is about the same in both periods leads to a conclusion that Facebook is drawing in a lot of new revenue from old ad industry.
>"Can anyone track and connect the dots from fed bond buying to increase in Facebook share price? I don’t think anyone knows."
It's only a "banal" conclusion because it's so blindingly obvious.
Fed drives interest rates down via QE. When bond yields decrease, investors migrate to equities, especially high growth tech stocks.
I've predicted since last year that we are in the midst of a QE-induced asset bubble that will probably pop in early 2017, leading to a 20% pull back. That Spiegel agrees is somewhat vindicating.
2017 is about as soon as the CBs can start returning to some semblance of pre-crash normality. The ECB could, for example, start a QE program soon. That's kind of shocking, even if one understands why.
> Can anyone track and connect the dots from fed bond buying to increase in Facebook share price? I don’t think anyone knows.
Are you willing to bet? :)
Bonds aren't too profitable right now (I hope I don't have to explain why!). Investors therefore seek the next best thing. That's stocks. Facebook has stocks.
What do you think about his view of the market? Anyway he kind of surprised me with his attitude towards building large company. Seems like he has vision to turn Snapchat into the platform(buzzword alert). Anyway his opinion is very mature.
> [Snapchat] is valuable because it has fundamentally changed the nature of digital communication in <2 years and will continue to do so for the life of the Company (may it be long and prosperous).
They are not a "Japanese company." Sony is a massive corporation in the US. Any company that wants to do business in the US needs to setup US-registered entities. There is no question of jurisdiction here.
I thought his comments about available capital (specifically) to social communication companies was interesting.
There was so much homogeneity in tech in '99/'01. So many companies doing very similar things.
I guess I'm wondering: Are we (the tech market) sufficiently diversified in what our companies do? Enough to see segments of the industry pop but not the entirety?
I think, his summary is somewhat realistic. But that also applies to his own company.
My base line: Valuation of (consumer) software products is still hard. And given the current monetary politics, it is even harder to tell what a reasonable valuation looks like. It is a gamble, as usual. But at least he has a business and is propably doing his best to keep it, along with the souls in it. Good luck.
Actually, this comment is stupid and more broadly indicative of why we have today's current tech bubble: not a second of thought about profit. Revenue is the goal, no consideration to the underlying business model. God forbid one of these companies try to make money.
Ugh. This is thinly-veiled native advertising for the persona of a 24-year-old executive, presumably as insurance for him against possible business issues (read: building up his personal reputation to prepare for Snapchat headwinds). Anyone who can't see that is delusional. I almost wonder if he paid to have "I'd rather not burn another $100mm of OPM [other peoples' money] before we find out whether or not we have a business" leaked so he can present himself as frugal, should the chips go down in the next year or two, and people accuse him of being the opposite.
If that email is "very impressive", then I'm Jesus H. Christ. Any lepers need cured?
First, he's a bad writer. He'd barely get a C in a freshman English class, and that's with grade inflation. He doesn't know where to place commas or how to use punctuation. (That doesn't make his business emails unusual for the genre, but it rules out calling him "impressive".) Second, the only thing that is impressive or unusual (for that age) about his communication style is that, yes, he has an above-average level of confidence, and most 23-year-olds from middle-class backgrounds are still scared of their bosses, not talking about a business like they run the place. But who wouldn't have that confidence, after having so much handed to him?
This isn't damaging like his frat-boy communications but it's not really interesting. Sure, he knows some things about the business that he's the CEO of, but if he were 30 or 40 and wrote that email, people would be underwhelmed at his mediocrity, expecting better.
This bizarre age-curving is irritating because (a) what should really matter is where people are, and where they're headed, not whether they're 24 or 67 or 38+√(-163), and (b) because so much early success in the Valley is manufactured and delivered via connections rather than merit. (Silicon Valley's ageism is an expression of its classism.) Given that a 40-year-old CEO who wrote an email like that would (and rightfully) be considered somewhat off-the-ball, we should apply the same standard to Mr. Spiegel.
I was curious to see how you'd react to this, since Spiegel's success has been such a thorn in your side. So let's see, you opened with conspiracy theory nutjob (so maybe the real purpose of the Sony hack was to leak Spiegel's private email and bolster his personal brand??), and segued nicely into grammar nazi pedant (as if anybody, anywhere called the email impressive due to its punctuation).
> First, he's a bad writer. He'd barely get a C in a freshman English class
> Any lepers need cured?
And you probably spent as more time writing your comment than Spiegel did writing his email.
> Given that a 40-year-old CEO who wrote an email like that would (and rightfully) be considered somewhat off-the-ball
No. Maybe all the 40-year-old CEOs who privately email you write exceptionally well, but that hasn't been my experience at all.
I was curious to see how you'd react to this, since Spiegel's success has been such a thorn in your side.
I don't care about him, personally. He's boring. I care about frat boys being funded at the expense of people with actual ideas. I care about a generation of technologists that has been sold out because a bunch of smooth-operator, manipulative invaders have come in and outcompeted true technologists for funding and coverage, and the VCs have let it happen. If they were worth their millions per year, they simply wouldn't. If they could actually spot talent sufficiently well to justify their obscene salaries, they wouldn't be funding frat boys. I react strongly because this nonsense is very bad for the world.
If Evan Spiegel wasn't part of something that's setting technology back by decades, I wouldn't give a rat's ass about him or his billions either way.
So let's see, you opened with conspiracy theory nutjob
No, you misunderstand. Obviously, he didn't intend for the Sony hack to happen. My contention is that, after the hack happened, he got quickly to work on figuring out how to use it best to bolster his reputation.
An effective sociopath doesn't expect to control the world, because that's impossible, but only to exploit events as they come for maximal personal benefit. Clearly, Spiegel had nothing to do with the Sony hack. I'm arguing that his PR apparatus engaged shortly afterward.
Given that Snapchat Beliebers (employees?) have come out of the woodwork to downvote me into oblivion, it's not that far fetched. His PR team (which may include the whole company) clearly managed to find my posts on a Wednesday afternoon. This means that they respond quickly to events large and small... and what I say on Hacker News is clearly less newsworthy than the Sony hack.
And you probably spent as more time writing your comment than Spiegel did writing his email.
I see what you're trying to say, and it doesn't work. Emails to investors, because your employees' livelihoods depend on them, deserve more time than Hacker News posts. Writing them quickly, when not well, isn't something to be bragged about. Granted, he's probably going for neoteny to some extent, and I'm sure he uses uptalk when interacting with investors, but even still... he should learn to communicate clearly and professionally.
No, you misunderstand. Obviously, he didn't intend for the Sony hack to happen. My contention is that, after the hack happened, he got quickly to work on figuring out how to use it best to bolster his reputation.
I agree with the above poster (I too was interested to see your thoughts), but this is really weak. Between believing that 1.) Evan Spiegal is a sociopath who drafted not only a grammatically correct email from Mitch Lasky but also a grammatically incorrect email from himself in a fake convo, and took advantage of his connection with the Sony CEO to "leak" this report vs. 2.) This was just business as usual and the result of an already very public Sony hack, I'd choose the one that didn't take me 90+ words to explain.
I'm going to call Occam's Razor here. Other than that the rest of your post has little to do with the content of the email. If Einstein had presented the theory general relativity to me, I'd be rightly less concerned with the fact he could use a semicolon.
> Between believing that 1.) Evan Spiegal is a sociopath who drafted not only a grammatically correct email from Mitch Lasky but also a grammatically incorrect email from himself in a fake convo, and took advantage of his connection with the Sony CEO to "leak" this report vs. 2.) This was just business as usual and the result of an already very public Sony hack, I'd choose the one that didn't take me 90+ words to explain.
No horse in this race, but I assume parent is actually implying a third possibility, where the email exchange is real but cherry-picked by parties friendly to Spiegel.
No horse in this race, but I assume parent is actually implying a third possibility, where the email exchange is real but cherry-picked by parties friendly to Spiegel.
Right. Or, it's "real" insofar as it actually happened. His stated interest in building a quality business and being careful with "OPM" is obviously not genuine, but the conversation actually happened and, at the time, he would not have known that the Sony leak would happen in the future. He didn't write that particular email with the intention of it being leaked.
After the leak, Spiegel needed to lend credibility to the idea that he's not some careless frat boy and he (or, just as likely, his PR team) decided to focus attention on a particular email. Since the email itself was poorly crafted, an influential third party was paid off (bought social proof) to say that it was "very impressive" for his age.
So, first of all, let me say that I once wrote a system to spot fake reviews, so I know the statistical signature. You get a lot more out of the timing than the content (especially if it's just up- or down-votes). Fake reviews or votes tend to come in "bursts" over a couple of hours. For example, if a comment that is rapidly getting upvotes suddenly ends up at -4 (or lower) and multiple unrelated posts are getting downvoted at the same time ("stalker downvoting") that's a sign of it.
These are most likely "meat-puppets" rather than sock-puppets. The difference is that sock-puppets are one person making multiple accounts (which I'm sure Hacker News defends against) and meat puppets are when it's separate people (e.g. a whole office). Many startups engage in meat puppetry (e.g. "everyone in the office, vote on this story") around articles that pertain to them.
One notable example is on Glassdoor pertaining to the company Knewton. First of all, negative reviews of Knewton get killed pretty quickly because they get user-flagged (presumably, by Knewton people) into oblivion. But you can see statistical evidence of meat-puppetry in the dates of reviews. A company that had previous been getting about 1 review every 80 days suddenly gets 6 (!) five-star reviews, with no nuance and nothing negative to say, within 96 hours (Feb. 7-11, 2014). The odds of that happening by chance are about 80 billion to 1 against. Before Knewton aggressively policed Glassdoor, the average review was lower (around 2.5-3.0 if I recall correctly). Now it's 4.4, due to this work. It doesn't take much for a company like Knewton to completely break Glassdoor if it's willing to sink that low.
When you learn the signals you can spot this stuff pretty easily. Just the fact of something being downvoted doesn't necessarily tell you anything (it could just be a shitty comment). It's when you see sudden trend changes, and spill-over effects to other comments, and when the topic pertains to a specific company, that there's likely a PR effort going on. Of course, these are all statistical inferences with non-zero error probabilities attached, and I have no way of proving (nor do I really care, because it's not worth my attention) whether the "downvote squad" came from Snapchat or from some other cluster of fanboys.
I've had a lot of comments get downvoted and, 99% of the time, the downvotes are genuine and come from disinterested users without an agenda (they just don't like the comment and, to be fair, some of my HN comments are better than others). When a comment that is quickly getting upvotes suddenly dives, and a bunch of your related comments dive as well, and when there's an obvious motive because the comment pertains to one company or founder, it's likely that the votes are correlated... but not that interesting, because (a) it can't really be proven, and (b) downvotes on a message board don't really matter. Truth be told, this statistical wonkery is probably only interesting to me.
Since you've made an issue of this: I downvoted your comments on this thread. I don't like Snapchat and find its CEO kind of skeezy. But there are worse things you can be than kind of skeezy.
For what is worth, I downvoted your first comment, and I'm not an employee of SnapChat - in fact, I don't even know what SnapChat is exactly. The reason why I downvoted you is already explained by the commenters who responded to you.
I suspect other people were interested in your reaction to this article, and like me, they thought it was pretty poor and downvoted you - nothing to do with Snapchat employees.
Apart from that, if you think Evan Spiegel cherry picked an email nicely written that leaked from the Sony hack, nobody or nothing would prevent you to look for all emails from him that leaked and cherry pick the ones that make him look like an asshole; in fact it would do more to prove your point and while being more time efficient than constantly monitoring the karma of the comment to find evidence of a fake review - which I doubt, since the comment hasn't been flag-killed - and write super long replies like you just did.
For what it's worth. Fake accounts cannot down vote. I don't even have the ability to down vote. You need karma for that. People down-voted you because your comments are off the mark. It's absurd to think you're blaming anyone but yourself for that.
I can't downvote you, but I would if I could. Not because I work for Snapchat, or because Spiegel needs defending. I'd downvote you because because your comments here are petty and baseless, and sound a little delusional.
You know what else makes a comment dive rapidly in votes? A bad comment on a popular thread that's spiking in traffic.
It's amazing to me that you're so single-minded about how no one other than a snapchat employee could possibly disagree with your comment. This bleeds through your original comment as well: "How could someone possibly find value in anything this frat boy has to say? BI must have been paid to post this". Reasonable people out here in the real world realize that, however much we disagree with a given person, not everyone who disagrees with us is a puppet of said person.
because you're asking: I downvoted your org comment after you claimed the sony hack was a pr stunt, or seemed to be saying that anyway, after that I stopped voting bec it the whole thing seemed to have devolved into a pissing contest.
I care about frat boys being funded at the expense of people with actual ideas. I care about a generation of technologists that has been sold out because a bunch of smooth-operator, manipulative invaders have come in and outcompeted true technologists for funding and coverage, and the VCs have let it happen. If they were worth their millions per year, they simply wouldn't. If they could actually spot talent sufficiently well to justify their obscene salaries, they wouldn't be funding frat boys. I react strongly because this nonsense is very bad for the world.
As much as I wanted to believe in this vision, I've realized that the sole purpose of a so called Venture Capital Company is to provide an investment upon which they expect a large return. This usually entails all manner of searching and sifting (YC, etc.) to find the best potential status signallers, which can then be presented to Wall St banks who put on the finishing PR touches before a big IPO for the ignorant masses.
We are both technologists at heart Michael. That's why we have to leave SV behind. A long time ago, during Shockley and Wozniak's era, it was about science and technology. That has changed, and it will won't return for a long time.
Today, progress in science and technology is in the dilapidated workshops, the ignored academic labs, and the rare R&D corner of a dying company. It's not in SV.
I've always taken an evolutionary perspective to life, but it wasn't until I spent a few years in the "workforce" that I truly understood man's depravity. Your writing was therapy for me, but also a resounding validation of my evolutionary perspective on humanity's behavior.
It is the rare individual that manages to understand his biological impulses and how deeply they affect his behavior, and attempts to transcend it. The vicious lifelong status hierarchy battles, the ruthless mate seeking, the negative sum destructive competition. It's the law of the land.
You and I, and others like us, will forever be outcasts. I consider myself a curious traveler, put into the body of a primate so that I may truly empathize with their struggle. But I can never be one of them, because I see the futility of it all. I see that the only purpose of our species is to transcend our limits through deeper understanding of our universe, and to build more powerful tools and technologies which serve us in achieving this end.
Alas, it was not meant to be Michael. See us for what we are, and let go of the hatred for our collective failures. Instead, live life in the footsteps of those great travellers who came before us [1]. Take heart, for we are not alone [2].
As much as I wanted to believe in this vision, I've realized that the sole purpose of a so called Venture Capital Company is to provide an investment upon which they expect a large return.
I don't believe that to be at odds with what we want to see. I think that the VCs would see better profits if they went back to Real Technology. As an asset class, VC has been underperforming for more than a decade, and the funding of Spiegels and Duplans is the reason why.
The problem is that some of the investors care more about becoming celebrities and "virality" than the laborious process of building real technology companies and getting rich slowly.
Venture capital isn't more broken or evil than any other industry. What happens in any organization or ecosystem is that, over time, the influential players end up being the ones who are good at playing the politics, not the ones who are good at their jobs or ethically sound. The ones who get to the top are those who value nothing other than personal advancement, because caring about anything else would slow down their political ascent.
In the case of VC, there are a lot of good investors, even now. I wouldn't be surprised if the good ones outnumber the bad ones. The problem is that the ones who become most influential are the ones who seek risk for its own sake, focus on "virality" rather than lasting value creation, and engage in collusion that hurts the ecosystem immensely (and that would be illegal on any public equity market).
> The problem is that some of the investors care more about becoming celebrities and "virality" than the laborious process of building real technology companies and getting rich slowly.
Investors care about making a return on their investment, plain and simple, so they invest in companies that resemble other successful companies. Silicon Valley investors saw the success of Facebook and Twitter and they want to replicate that success.
Not only that, but social network companies look like good investments because they're relatively inexpensive to build, and signs of their eventual success or failure show up at an extremely early stage.
The problem isn't that VCs are evil or stupid or fame-hungry or conspiratorial. The "problem" is that social media companies still look like good investments. You could accuse VCs of being uninspired and unoriginal, trying to repeat their last big success over and over, but that's how it works. And as long as college kids are building the social media apps that get initial traction with other college kids, they're going to get funded.
Complaining won't do anything. As long as social media looks like a good investment (i.e., until it deflates or until something better comes along), VCs will continue to milk it. Once it becomes a bad investment, they'll all go chasing the ball to wherever its headed next.
I agree, it's unfortunate that the money isn't being funneled into something more innovative or meaningful. Rap music annotations and disappearing photos and a website that helps you rent out your spare bedroom are being heralded as some of our greatest tech success stories. Frankly, that's pathetic.
1) No one cares about email grammar and punctuation because the marginal payoff of proofreading it is nil
2) The fact that this got published in BI may or may not be "paid advertising", but this was leaked as part of the Sony hack. Are you seriously claiming there is any chance that whole thing was masterminded by Spiegel as part of some elaborate long game defense of his reputation?
I don't think an internal email is representative of a person's writing skills. Take it for what it was meant to be, stream of consciousness communication to one other person. Something that he obviously spent more time on is below. I don't see a single run on sentence in that link.
Let me be blunt; (to preface, this is entirely a comment on my own shortfallings and not a disagreement with your statement) I didn't have such a painful read of it as you seem to imply. Would you have examples of similar responses which are considered of much higher quality? (I assume the PG essays, but they are a different beast.) I'd be very interested in using this as a vector to learn from someone else's mistakes, given that I find myself unable to notice them on my own.
He doesn't know where to use commas and how to make his sentences flow. Too many of them are unnecessarily run-ons. (Long sentences are sometimes exactly what you want, but there's an art to it.) He has some fragments and, while sentence fragments are sometimes great, he doesn't have the subtlety to use them properly. (Most people don't; in that case, stick to full sentences.) He screws up on punctuation all over the place and uses abbreviations like "am" for "morning". This is fine if you're texting, but he's not. There's a general lack of clarity and professionalism in his writing. He doesn't respect others in the conversation enough to give them his full attention. Get him to talk about himself, and he'll go on and on and run over any obstacle (proper grammar, good taste) but expect him to express a thought clearly and it won't happen.
Although I agree with you that this was not a well-written email at all, I've personally found it to be quite common for people in Spiegel's position to write surprisingly badly for business communication. My first boss out of college, for instance, was a multi-millionaire whose general writing style was full of run-ons and countless "fuck"s. It stood out to me quite a bit, but it was obvious that when writing really mattered he was capable of producing perfect grammar, as if it were out of a textbook.
I don't like Spiegel either, but I wouldn't take this as truly representative of his writing ability.
I think this phenomenon occurs due to a combination of (1) there's a point in the chain of power after which it's more cost efficient to just get the email written and sent than to worry about its composition; and (2) when you're at the top you don't have nearly as many people whom you must impress.
Obviously he didn't write the emails with the intention of them being leaked in this way, since it would have been impossible to predict the Sony attack (unless he caused it, which is extremely unlikely because I don't see him mustering the technical skill). All that said, I'm sure that, after the leak occurred, he had his team look into ways to make it maximally advantageous to his career and reputation.
I did some open-mic stand-up (not very successfully) in my early 20s. I wasn't good back then; maybe I'd be better these days, but I have a million other things to do.
The one joke of mine (I think? It may have been independently discovered, though) that has seen some dissemination is "I stopped doing that years ago" (as in, said after someone describes something really creepy, offensive, or off-the-wall). The joke may have been ruined by Evan Spiegel using it after reading a certain controversial Rolling Stone article, though.
