Funding tip for failing startups: when all the domestic investors have cottoned on to the fact that you're full of shit, just go abroad to find someone who's gullible and has a lot of money.
Funding tip for smart startups who recognise that their target demographic is shifting: Find investors in regions where your traction and growth figures peak. Having insight in SE Asia and Indonesia in particular, their familiarity, engagement and loyalty with Path (and Twitter) is incredible and such an announcement shouldn't be a surprise to anyone with knowledge of and interest in SE Asia and Indonesia in particular.
So far, no outside/foreign social networking site have successfully exploit SE Asia even after their explosive growth in that region.
Friendster, dead.
Multiply, dead.
Plurk, soon to be dead (or dead already).
There's a big boom in Asia in general that is a known fact. But when it comes to SE Asia, the profit margin is small in USD unless you're operating under the local currency (i.e.: have your office there, do your business there, etc).
If the HQ is in SF where everybody lives and breathes SF bubble and not in SE Asia or Indonesia, you won't have much insight other than some generic dataset (country X loves to post pictures, for example).
Web-apps that make money tend to be E-commerce sites (http://tiket.com) that have complex affiliates behind it.
Eyeballs type of apps (web, mobile, anything) generate lifestyle business, not Facebook level IPO.
The real winner is the founder who can flip his/her company for multi-million-(usa)-dollars to the highest bidder (typically the conglomerate family).
PS: Oddly enough, SE Asia is where the phone companies peaked and die. Nokia, Blackberry, the pattern is striking!
Such negativity in this thread. Do we all love to hate someone who is working hard on their startup just because they are jerks[1]? Even if the CEO is a jerk, they have a nicely designed product with a seemingly noble goal, with a talented pool of people working behind the scenes, working towards their objectives.
Sure, they have their bad moments (pun intended), being caught uploading users' address books, spamming user's friends with invites and perhaps paying for downloads. No one's perfect and some of us sometimes do try to stretch things a little to see how far we can go. Don't we?
I remember the joy I felt when they released Path 2.0 and I chanced upon it. The cover photos, pulling down the timeline to see more of the cover photo, the smooth springly animation they use for the actions button, the gorgeous sign up screens. Most of these concepts have been utilized in some form in other apps now. These people create good work.
We should be rooting for them, not cursing them.
PS: Just a fan of the work behind it, not friends with anyone involved in the company. Just someone exercising a little bit of common sense and empathy.
PSS: and to those who want to know, just look at their app in the various app stores and you would already know how much they charge for stickers and subscription. No need to predict or guess.
[1] Seem to be a jerk, according to a single interview. And according to https://news.ycombinator.com/item?id=7039043 and write-ups else where, PG seems to be sexist (and racist?). Do we just take things people say as the whole truth, at face value?
I've done business and personally interacted with Dave Morin on several occasions. He's not mean to your face, but he is a little too smug for my tastes. His real problem is he lacks rigor and is not a fundamentally honest person. He glosses over the details and doesn't follow up well. He claims something's going to happen to avoid looking bad, and then it doesn't--or it takes forever. For example, Path has been claiming they were about to raise a $50m round for what, a year now?
Dave is a celebrity CEO. He wants to be a celebrity, and maybe a designer, and being CEO of Path is his means towards that end. The best thing for Path would be to bring in a fully capable COO to run the show. This may require eventually transitioning Dave out of the CEO seat to promote the COO if they are able to turn things around.
In contrast, I've only interacted with PG a couple of times, but I've read some of his articles. I think PG does try to be an honest person, and sometimes that doesn't come out right, especially in sound bite form. PG is definitely smug too, but it's an intellectual-light smugness that he backs up with explanations and evidence. Whereas Dave's is a celebrity smugness that he backs up with false promises that he doesn't take seriously.
> Sure, they have their bad moments (pun intended), being caught uploading users' address books, spamming user's friends with invites and perhaps paying for downloads. No one's perfect and some of us sometimes do try to stretch things a little to see how far we can go. Don't we?
Are you being sarcastic here? I can't tell. Uploading your users' address books to your servers without permission isn't just 'stretching things a little', it's a textbook privacy violation.
I guess I'm part of the small minority who love Path. It's my favorite app, I use it almost every day. I use it strictly with my immediate family - my brothers, sister, their spouses and my parents. I barely have time for Twitter, I don't use Facebook, but I use Path. Their pitch about deeper connections and about being real and authentic rings true to how we use it. I'm quite disappointed to watch them flounder.
I really really want to like this app more -- I love the journaling implications, and the design just makes me smile every time I open it -- but its vision will be its downfall:
1) The "smaller, tighter" social network just diminishes its viral component by design
2) The mobile only approach means I can't type out a longer post or entry about my day
3) Lack of viable monetization options means I can't trust my data long-term with them.
4) Lack of non-people "Paths" -- i.e. I really like to follow certain companies/organizations on Facebook because I can keep up to date with what's going on. For example, I follow a few yoga studios on FB because they're always discussing new classes, teachers, class changes, etc. Say what you want about FB & Twitter, but they know how to craft addicting news feeds that I consume like water.
Because Path is almost certainly in a death spiral, based based on the layoffs and talent exodus. Because their CEO is Dave Morin, who hasn't done himself any favors by sounding like a huge douchebag [1]. Because they're a social media app on the wane, which is as good as a dead social media app.
- Lack of traction as evidenced by dismal ratings on the App Store compared to competitors
- Supposed focus on international markets without clear commitment to establishing a presence there
- HR troubles (as commenter linked to below)
- Indication that money is being spent on paid installs by virtue of placing in the top 100 in Chad and Niger
Indonesia is the 16th highest GDP in the world. 4th most populous. If they can take and hold Indonesia, they might be able to continue into Malaysia, Singapore, Thailand and Vietnam. Owning that much of the growing 3rd world in Asia in 10 years of compounded growth in those countries is worth a lot of money to a lot of really big tech companies. It's an easy thesis when Google and Facebook are willing to pay up for social networks.
Interesting, but this may be a spectacular own goal.
Indonesians probably found Path interesting because it was foreign. They probably didn't care that a company in San Francisco was slurping up their address book. However, a local conglomerate with a dodgy reputation?
The investment news from Bakrie sent a shock across Indonesia. Across Twitter and Path, people are talking as if the group had acquired Path and many have decided to remove Path from their devices...
The Bakrie Group and family has a terrible reputation in the country. As per the Jakarta Post report in February 2013, Bakrie Life has been in a deadlock with its clients regarding a failed investment scheme...
The group’s largest indiscretion in the country, and one that’s causing much of people’s anger towards the family, is the seven year mudflow in Porong, Sidoarjo, East Java. The ecological disaster has been attributed to Lapindo Brantas, a Bakrie-owned company, which conducted a drilling expedition in the area in 2006...
In short: SE Asia is where Social Networking sites die.
Don't get me wrong, I'd love to see people come and try to turn this around (e.g.: make money as a hi-tech company in my home country) but so far the facts have stated otherwise.
The Bakrie group also owns a wireless telecommunication company in Indonesia [1]. Apparently this is a strategic move to increase wireless data usage and number of subscribers [2].
As far as I know, wireless data usage in Indonesia is "unlimited" (with double quotes...). The usage and billing are different if you compare it with the USA Bell/AT&T money-sucking operation.
In Indonesia, $15/month == check e-mail, surf facebook, whatsapp/line/kakaotalk all-you-can-eat buffet.
You don't need to shell $25M to make Path exclusive on your network. Even if you do, the Math just doesn't add up.
Having said that, I do root the deal and really hope both sides can pull it off because I want to see (other) creative ideas to make things like this work in SE Asia.
*Indonesia’s autocratic former President Suharto left office in disgrace, his political empire and the economy in ruin, but 15 years later, his old ruling party hopes nostalgia for his legacy will sweep it back into power.
Polls show the Golkar Party, which Suharto created as the parliamentary rubber stamp for his 32-year hardline rule, is running around second place.
...Aburizal Bakrie, 67, head of Golkar and the party’s presidential candidate next year."
Bakrie is one of the big players in the politic of Indonesia. It makes sense for him to try to control the (maybe 2nd) most used social media platform in Indo. He probably expects to have the same influence as what Obama 2008 digital campaign team had.
Being an investor for Path (and potentially have some say to their roadmap) is not the same with Obama 2008 digital campaign team. I doubt Abu Bakrie can utilize Path (since it's a close/private social network) the way Obama team did with social media back then and most recently.
This is Bakrie VC group, not Bakrie himself. More like his sons/daughters (second generation) using Bakrie's wealth, not him.
This is more like "my cars are better than yours" among the rich in Jakarta. Follow the startup scene there and you'll realize a pattern.
The richest family in Indonesia not too long ago bought kaskus.co.id (one of the most trafficked website in Indonesia) for $60M (rumour) and I'm almost sure the ROI is Mission Impossible (^_^).
It's more "I've got lots of money, gotta spend some somewhere...".
