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.
> 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.
> 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.
> 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
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?
> ..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.
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.
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.
When I first saw the Interview (Mike Arrington did the Interview at Tech Crunch Disrupt), I was really disappointed with their answer to something like "So When is Android Version scheduled?", CEO went on saying how great iPhone is.
This was 2 years back. How can you not be working on Android version by then?
I disagree for social apps that rely heavily on the network effect. Cutting out a major mobile platform doesn't just cut your userbase by half, but it also significantly reduces the utility for the other half too.
If you're making an app where it's value heavily stems on how many of your friends use it, then only working on one platform is a great way to "never quite get there".
Even more, considering Android takes up about 80% of the market share. Focusing on iOS first is a well known strategy, but if you gain any traction - Android release should be out quickly. There is no excuse to ignore that big amount of market share.
I agree with that. Because of the network effects of social apps, it's not really 2x for launching on another large platform - we got about 10x results from launching Dasher on Android. We probably waited too long to do it.
Apropos of nothing relevant to the actual content of the page, the sand effect easter egg on the logo was really cool. One of the more lifelike effects I've seen.
I also thought it was very cool - extracted the source from the minified JS if anybody is interested in taking a look how it works: https://jsfiddle.net/powers/cy5fhLnk/
What was the business model for this? Get a lot of users and get bought like Instagram? $40m for $4m seems like a great return for something that doesn't have revenue.
Yeah, wasn't implying that - basically, if the investors have a controlling stake, it's a pretty okay return for something that seemingly had no business model besides "maybe sell ads/filters?".
If the investors didn't have a controlling stake, then the founders would be pretty damn rich.
Anything that can accumulate attention can be easily monetized. The hard part is accumulating attention. Wondering about business models is exceedingly tired.
Can you please tell me how to convert attention into money? Genuine question, since it seems like the business model of a lot of B2C startups out there.
i consider membership, subscription, pro features, in app purchases and premium features to be almost equal. Same for ads and sponsorships. In other words: that leaves you with ads, premium featues or selling the data. Which can be quite hard to sell, depending on your audience (I consider Twitter a good example).
Their thing seems to have been that they recorded (video or image I guess) the subject as well as the publisher at the same time, recording with both cameras. Nice idea.
You took one with the front facing camera, then one with the back facing camera (or vice versa but not at the same time). AFAIK (haven't used it in the past year+) you couldn't shoot both at the same time.
Doing a little digging, there is a handler attached to the mousemove event on the canvas element. There is a credit here: Thanks to Giovanni Difeterici (http://www.gdifeterici.com/)
... but it's minified and I can't hunt down the source.
I wonder how much it costs to keep this type of thing running? There's really no one out there stepping up to take it on?
Edit: after reading the shutdown notice, it was a little vague about what's happening. It says the iOS app will convert to a camera app. Does that mean they are gonna try to retain connections to all the existing users and roll out out some new concept?
I understood it in a way that they will convert the app so that it will still have the "front+back" functionality, but only save the images to your camera roll. Basically an offline frontback.
It's a cute feature but hardly something that you could build a company around. Like Yo.
In a case like this, do they ever transfer the service over to someone who might be interested in having a go at it (without any money exchanging hands)? Always seems like people would rather shut something down than hand it over which is unfortunate.
A 'cute feature' does become a company once enough people are using it. In a parallel universe you could have said the same about a shutdown notice of Twitter or Snapchat.
A lot of people still do say the same about Snapchat. It just goes to show that it is really really hard to predict which ideas will catch on and which won't.
Twitter is foundational communications. The first time I saw Snapchat's ephemeral messaging I thought it was brilliant and a huge and important differentiator in messaging.
There's some sort of selfie-ish value in Frontback but otherwise looks fadish and tiring.
I'm an active user of this app. I really enjoy scrolling through app feed and discover people around the world by not just their selfies but also a proper image context attached with it. I'm in love with the idea of this app. Really sad to see they are shutting down the service :'(
This was my question too.. I wish deadpool sites would keep something up there about what they did in their "So long and thanks for all the fish" statements
Honestly, Snapchat felt more like a feature till they brought in stories. That interaction has been a game changer for them. In fact it's unique from the entire plethora of networks around. Especially when centered around an event or a country (their UFC mega stories are incredible).
Barely one month to be able to download your stored photos - that seems ... Short. Especially for a service that was not used often enough. I don't clearly have any details but keeping an AWS account up for another 3-6 moths seems ... Not unreasonable.
I understand it's a crushing time for the founders, but one of the things I seem to see on HN is the more respectably you wind down your startup, the more respect (and future deal flow) you seem to get.
Jeebus dude, why exactly you need 3-6 months to get your photos from a service you didn't use often enough? AWS cost real money. How long of a warning do you need to exit a service? A year?
the exact period of time was not my concern - the perception of calm and orderly shutdown is. What matters is how the founders are seen to handle that last few moments. Doing nothing would be bad. Doing this is fine and decent. Even better would be to say "hey it did not work, but even so our last act is to <maintain high perceived value coz we are the good guys>." It might be download your contacts, it might be grab your dogs' friends circle. Whatever - if it was important enough for users to give it to you for safekeeping that should be treated with kid gloves.
This is sadly one of the more high profile moments a start up has - Handle it well, the founders will be seen as a safe pair of hands, do the equivalent of dropping the casket into the ground and walking off, maybe not so much.
It's not great that this is a metric, it's not great that more VCs will see how they shutdown than saw how they started up - but this is just another startup. The founders have 30+ year careers ahead. Good for them for making something, good for them for trying, and good for trying to land it at all. Many just told up tents and steal away.
We as a community are trying to learn the dos and donts of startup life cycles - seems to me this is one of the more high profile and often ignored donts.
dunno the s3 isn't really that expensive, if they fold to micro instances for delivering the photos in a reduced service mode they could probably extend the service life
otoh it's hard to justify this kind of investment in a folding company, also I don't think people who can't download photo in a month magically can given three months.
anyway if those photo were important to the owner and him used an internet startup as his sole backup well, shame on him :D
If you want that sort of guarantee, it's a bad idea to use a free service without an obvious alternative business model (it's probably reasonable to use Gmail, even though you don't pay for it directly).
I haven't used the app, but it's likely that they're stored to your Camera Roll anyways, as Instagram does? In that case, they'd be backed up with the rest of your iPhone.
I've never heard of them. Almost all of the "xxx is shutting down" threads on HN is always the first time I'm finding out about the company. Only exception was Homejoy but if I hadn't watched the startup lesson videos I would've had no idea what it was about.
The app took two photos simultaneously, one with the front camera and one with the back. It allowed you to show a combination of where you are and what you are doing in the same instant.
