Tyler York's Blog - Latest Comments

Re: Follow through

Nina Pacifico — Tue, 20 Aug 2013 16:20:08 -0000

I can relate. My favorite friends and companies are the ones that do what they say they will. Now how to keep myself accountable in doing that too?

Re: Raising Money After The Second Bubble

Jeffrey — Fri, 17 Aug 2012 19:54:56 -0000

Great post!

Re: Raising Money After The Second Bubble

jonathanjaeger — Fri, 17 Aug 2012 18:18:55 -0000

Perhaps it also depends on the entrepreneur. Someone who is a huge success with multiple exits and can walk into a VC room and get a blank check, maybe they worry about product ONLY rather than revenue. 99% of people don't have this luxury and should also consider the possibility that they'll never see an investor check before breakout growth in revenue or users.

Re: Raising Money After The Second Bubble

nateberkopec — Fri, 17 Aug 2012 17:29:51 -0000

Hm, I think you might need to check your numbers on the "profitability" of Zynga and Groupon. Zynga hasn't had a profitable quarter since they went public. Groupon only just barely did last quarter.

Re: Raising Money After The Second Bubble

Tyler York — Fri, 17 Aug 2012 17:02:51 -0000

Hey, thanks for the comment. Yeah, Facebook's revenue model shouldn't be based on advertising in the long term or they are in trouble. Ads are usually not a solution to the revenue problem, because they typically don't grow once the userbase (or usage) stops growing.

Now, advertising works for Google because people are explicitly *looking for something* when they search. It's likely this could work for Pinterest as well, but unless your social media site/app is interest-based or action-based, it likely can't rely on ads like those two sites can.

Re: Raising Money After The Second Bubble

Tyler York — Fri, 17 Aug 2012 17:00:41 -0000

My hope is that Facebook moves far, far beyond the ad-based revenue model.

Re: Raising Money After The Second Bubble

Seena Zandipour — Fri, 17 Aug 2012 17:00:34 -0000

"This is more an indictment of the expectations that got set before they IPO'd..."

That's right, and those expectations have contributed greatly to inflating the bubble. They morphed the industry mindset to care more about users than revenue.

Is it their fault? No- they're just conducting business. Blame the people for buying into the hype.
Hopefully Tyler's post will bring this misconception to light, and people to their senses.

Re: Raising Money After The Second Bubble

Tyler York — Fri, 17 Aug 2012 17:00:15 -0000

If it's web based, advertising can probably cover hosting costs. It won't cover your cost of living though without significant scale

Re: Raising Money After The Second Bubble

Tyler York — Fri, 17 Aug 2012 16:59:46 -0000

Sure, I see your point here, but I think you missed what my article was directed towards. I was saying that for small, pre-massive-traction startups looking to raise a Series A or B right now, they need to show some semblance of a business model. By proving that they make something people will pay for, they can command a better valuation than just focusing on user growth. Of course, they better figure out the business model before they hit Zynga or Twitter scale! :)

Re: Raising Money After The Second Bubble

Andrey Nikishaev LearnML.Today — Fri, 17 Aug 2012 16:29:39 -0000

users === value and users !== money. If you want to get money from startup/bissnes you must make something. Most services just an one more ad area, and i think this is fail. This is question about why google good and facebook bad.

Re: Raising Money After The Second Bubble

Sebastian Andreatta — Fri, 17 Aug 2012 16:28:50 -0000

Agreed - I recently read a blog post from an LA based VC describing the differences between Northern CA VCs and VC's elsewhere in the US: The local guys ( I'm in Palo Alto) have been focusing on users as their metric, everyone else is looking more aggressively on revenue producing models, and that have a more sustainable business model. Excluding the giants like Andrew Chen notes below, the vast majority of local investments have been a shotgun approach. The overwhelming majority have only one business model : advertising. And as we all know (or should know, that's a finite universe which Google owns the lion's share in the digital portion).

Re: Raising Money After The Second Bubble

Andrew Chen — Fri, 17 Aug 2012 16:19:07 -0000

You know that Facebook and Zynga make billions of dollars a year right? And that they focused on revenue, getting to breakeven/profitability very early in their evolution? Same with Groupon.

It actually seems like they did exactly what you advocate startups do.

This is more an indictment of the expectations that got set before they IPO'd, not how they run their profitable, multi-billion revenue companies.

Re: Raising Money After The Second Bubble

yawnt — Fri, 17 Aug 2012 16:14:47 -0000

interesting article, and i agree .. i'm developing an idea i've had in mind for a while and even though it relies on a big user base and my goal is not to make money out of it, i don't think users === money, so i'm trying to find a way to pay at least for hosting :D

Re: Raising Money After The Second Bubble

Tyler York — Fri, 17 Aug 2012 15:04:19 -0000

Looking forward to your comments (also testing Disqus)