Snapchat founder turned down 3 BILLION CASH from Facebook
- Thread starter Mook
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Id venture a guess that 80% of apps have ads built in to some degree....and they have no problem building and retaining a userbase...snapchat could have done it from the start or at and point they wanted to. I dont believe it has anything to do with alienating the users. If the users cared about aesthetics, they would have never stuck w/ SC as its already ugly and bland
Is it simple? There is value to simplicity. Google proved that easily and is trying to fuck it up now.
This guy knows what's up.
Having lived in Silicon Valley and been on the board of directors of a SV start up, this the norm for a consumer oriented VC funded company.
Exactly. Natural progression for sure. Look at Youtube. We went from ads in banners, to ad clips every once in a blue moon, to once in a while, to every other video, to 15 second ad clips you could skip, to 15 second ad clips you can't skip and now to 30 second ad clips you can't skip. Fuck it is annoying. But where else are people going to go? No site is as big or has as many users at the moment. Facebook and many other sites/apps were no different.
Google is doing some things that I don't like. A direction I am not happy to be seeing. But I am so integrated into it with my phone and email I am stuck with it. I knew it would happen eventually. Because again, it is the natural progression.
I think the money was close. I bet the number gets higher and more attractive. Maybe 4 billion with options. Who knows. I hope he doesn't ride the thing until it is in ruins.
That's not the reasoning..
for an Angel or VC funded company, the thought process goes a little like this: You're a young startup, trying to figure things out, you don't have much pull with advertisers. No body is knocking on your door to give you ad revenue. But you've got one huge thing going for you, explosive growth in the form of users.
Now, you could expend resources to monitize from the start, but that would be sub optimal.. here's why:
- You have limited resources, expending time and manpower on optimizing for revenue is expensive (not just from a financial perspective)
- You're a nobody at this point, you're going to get off the shelf ad rates that anyone can get.. these are not great rates.
Now let's say you think you're smarter than the status quo in Silicon Valley and go for monetization right away...
You'll probably:
- divert critical resources from continuing the exponential growth you've been generating
- alienate some of your userbase
- and worst of all, whether you want to or not, you'll have established your revenue earning potential
The last one is key... remember you're a young company and you'll likely get crappy revenue numbers, until you figure things out. At an early stage startup, this is a killer. Because, IF YOU HAVE ANY REVENUE the first thing an investor want's to know is what your revenue per user is and all the associated revenue metrics.
obviously at an early stage, that number is going to be low. Investors will have a hard time getting past that, even though they logically know that the number will improve over time. That right there handicaps a start ups valuation by a fuck ton. Coupled with slowing growth (see diverted resources and alienation) and you can understand why consumer oriented startups avoid revenue like the plague until they reach critical mass.
It's the same game plan Facebook, Twitter and countless other start ups have used with great success
Question then, how do you monetize a concept for an api standard? Have an idea for one commercial/enterprise.
Mother fucker jackpot
Adsense is forbidden on Mobile Apps.
There are plenty of other ad networks out there (including Google's AdMob), but the payout is pretty shitty compared to the desktop. It's improving, but still not on par with the desktop.
I'm not sure I fully understand your question..
Are you trying to make money off the concept? or are you looking for way to monetize, once the concept is realized?
If it's the latter, then simply meter usage and charge for it. e.g. 1,000 calls for $10. If it's the former, then pitch the idea to companies that would have interest in such an API and either enter into a licensing deal or sell the intellectual property. Just remember to have them sign an NDA to protect your interests. Keep in mind, that most companies will balk at the idea of an NDA until you first provide some details to peak their interest.
To be fair, Evan is a co-founder, so off the bat he more than likely owned 50% of the company. Snapchat has had three rounds of funding so in all likelihood Evan now owns somewhere between 15-25% of the company.
Snapchat has raised $73 million to date, so that get's returned to the investors right off the bat. There's a chance that some of the investors have a 2x preference, meaning they get double their investment back, right off the top.
So worst case, Evan would have walked away with around $428 million, best case ~$732 million.
Then don't forget taxes, state and federal, those can be a bitch. There have been plenty of entrepreneurs that have delayed the sale of their companies for 6 months, while they moved and established residency in a state without income taxe.. Just as Michael Arrington did prior to selling Techcrunch in his move from Silicon Valley to Seattle.
definitely enough to buy a few islands though....
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