The best way to think about the value of Instagram is not to think about $1 billion or $30/user, it’s this: 1%
The best way to think about the value of Instagram is not to think about $1 billion or $30/user, it’s this: 1%
The value of Instagram is tied up in Facebook being valued at an unprecedented $100 billion valuation. To use the case that Paul Graham makes for YC: do you believe that Instragram adds an incremental value of 1% to Facebook?
So before you as an entrepreneur start naively making the case that your startup is worth $30 a user like Instagram, or that a top-down view of the photo market is x so that means your video startup is worth y, consider the logic of the buyer.
There is no market more strategically valuable to Facebook than mobile, and there is almost no product more valuable than photos for them. But also, they have incredible buying power at $100b that virtually no one but Apple has. It was a very unique situation where a $100b company made a 1% bet.
Some absolutely top shelf advice for entrepreneurs from the CEO at 42Floors (YC’12). I’ve always tried to treat getting an investor as both a financing event and a *hiring* event. Especially for an A round you are hiring a board member, an additional team member with a lot of hard and soft influence on the future of your business. What process would you use to evaluate adding a senior executive to the team? Try using that. Every time I have forgotten that (every fucking time) I got screwed. (via 42Floors)
Just say no to testing red vs blue -
The problem with A/B testing is not the testing, it’s the inputs. If you are an early stage company and you need 2x returns you need to be swinging big.
I personally found this hilarious, tested these 2 ads for the sake of curiosity 15k impressions each:
- Nice picture of actual in-game content
- Green call to action button w/ “free”, “free online racing”
- Trust symbol (EA = reputable, Need For Speed = huge reputable franchise)VS
- Some shit ad I made in 5 mins in Microsoft Paint.
Results? 0.049% CTR vs. 0.137 CTR in favor of the shit ad in Microsoft Paint. I also tested speed lines vs. no speed lines behind the car and speed lines won LOL. So what does this prove? Every idea that you have is worth testing, no matter how crappy you think it is.
(Source: blog.ads.pof.com)
A startup might be small, even tiny, but the experience of running a small business has very little comparison to a startup.
A small business is an understandable, sustainable, repeatable company looking for ways to optimize, improve, and grow.
A startup is more like an unstable particle, a set of questions and theories of answers. It is a temporary state, a search for a repeatable, massively scalable, profitable business.
You don’t have to know what you are when you start. There are plenty of products that start with no idea of their future path. Twitter started that way.
But you should know before you build a team, because there are different people, with different motivations that help build a startup. And they often aren’t actually very good at being small (or big) business team members.
You can tell a company is more than hype when the spammers start making real money. They only care about cash, not the hot thing on Techcrunch, and they are clearly on to Pinterest’s amazing engagement. There is an opportunity in Pinterest today for both legitimate startups and sleazy folks like Steve just like there was in Google SEO, Digg, and Facebook virality.
While Pinterest needs to crack down on spammers, what about the legitimate opportunities this signals for startups? Who is really going to focus on Pinterest and capitalize the most? I believe the people that will have sustained success are those that don’t approach Pinterest as something to be exploited, but build it into the natural flows of using their product. The kind of all in bet where you almost have to use Pinterest when you use your product.
I know a dozen startups that are “focusing on Pinterest as a channel.” But that’s right after they tell me about the four other channels they are focusing on. That’s not focus, that’s treating it as another input into the system, not the engine of the system itself.
As an example, back in early 2008 there was the first panel discussion on social games at GDC (actually I think it was the first panel anywhere on social games). The space already had a lot of buzz, with Zynga’s Poker and SGN’s Warbook accumulating millions of users. Up on the stage were Mark Pincus of Zynga, TJ Murphy of Social Gaming Network, and me.
What I remember the most was that every time I asked questions about opportunities, Mark had total conviction and focus. Virtual goods or advertising? TJ (and later Shervin) talked about a balance of both - Mark called bullshit, “its all about virtual goods.” MySpace and mobile? “it’s all about Facebook.” He smelled something good and he was going to be single minded about it until something proved him wrong.
I don’t think boiling down to one priority is always the right thing to do. But if you have found some real traction at last, remember to stop looking for it elsewhere! Pinterest clearly represents that opportunity for someone, I wonder who.
Loving the new Paper app, so I made this. :)
I’ve used a LOT of sketchpad apps and this is easily the most well considered one. Start by sketching in pencil and then going over in marker. So many subtle things that they got right in the way the lines draw and how it feels. Very subtle, but these guys are good.
