
The Sudden, Mysterious Exit Of A Quora Cofounder Has Silicon Valley Baffled - steve8918
http://www.sfgate.com/technology/businessinsider/article/The-Sudden-Mysterious-Exit-Of-A-Quora-Cofounder-3912160.php
======
jusben1369
"We decided it was best for Charlie to step away from his day-to-day role at
the company."

Whatever happened it feels like Adam wants to make the point that Charlie was
essentially fired. "We" is a lovely ambiguous term. They royal "We"? I suppose
it's meant to imply that Charlie also agreed. But "Best for Charlie to step
away" is pretty telling. There's a whole slew of options you could use to make
it sound like it was Charlie's idea (although he's probably too young to
'focus on his family'

I always thought Quora should monetize around an RFP type concept. It feels to
me like 80% of users are there for technology recommendations from the horses'
mouth.

~~~
andersbreivik
I don't think it implies Charlie agreed at all, it actually implies the
opposite. That's quite an ugly statement.

I'd personally be very hesitant to partner with Adam after reading this,
considering how this incident played out. Well... who am I kidding, if I had
the opportunity to found the next Quora I'd jump on it, but I'd be watching
for knives the whole time..

~~~
bigiain
"I'd personally be very hesitant to partner with Adam after reading this"

I dunno, there's clearly a risk there based on his apparent behaviour here,
but there's also an obvious opportunity - who'd _not_ want a cofounder who's
not only prepared but also able to dump $400mil into his own B round?

~~~
jc123
I think you mean $40mil since the total was only 50.

------
rdl
The best speculation I've seen is that someone (Yahoo?) is buying Quora, with
onerous earn-out provisions (1/2/3/4?), and letting Charlie leave now would
accelerate his vesting compared to remaining until acquisition and then
leaving, if he didn't want to work for the acquirer.

I've met both Adam and Charlie (and Marc and much of the rest of the Quora
team), and I can't see Adam/Charlie having a falling out over any personal or
professional issues as a likely cause.

The weirdest thing IMO is that Charlie has totally disappeared from online
(FB, Quora, etc.). Either it's to avoid being asked questions, or some kind of
personal issue. Either way, I wish him the best.

~~~
samstave
While I am all Quora'd out -- I really do hope that Yahoo would buy them.

I've said many times on HN that Yahoo needs to start getting REALLY aggressive
in the valley to stay alive; they need to be investing in every startup that
comes along and acquiring many more.

All the brain trust is being gobbled up by google and (even moreso, recently)
facebook.

I personally think that Acquihires are a bad thing (TM) for the state of our
industry... but if Yahoo has any hope in hell, they need to inject some
innovative blood into themselves in a damn hurry.

(with that said, I am not sure that Quora is really all that innovative -
their UX model was only good when they were tiny - but now they have far too
large a signal to noise ratio that is exacerbated by their UX implementation
(hijacking typed text, @s etc etc etc)

~~~
rdl
IMO yahoo needs to exit more bad people than bring in new good people. I
wouldn't sell to them (well, I would, but only for FY money for both me and
everyone on the team, with a 2y earn-out) until it is clear they've liquidated
all the dead wood. (although I'd love to get to be the liquidator-of-dead-
wood... the Romney quote would be appropriate.)

~~~
anon808
who would that 'Fuck You' be directed to, your customers?

~~~
samstave
Nope, all the nay sayers in middle school.

~~~
rdl
Actually the only people I'd "FY" to are landlords in Palo Alto (if I had
$100mm, I'd buy a house in PA for $3-5mm, even if it wasn't a great financial
decision...), and gas stations (Tesla Model S...)

------
dbloom
For what it's worth: this article is syndicated from Business Insider. It
wasn't written by San Francisco Chronicle staff.

Here's the original: [http://www.businessinsider.com/the-sudden-mysterious-
exit-of...](http://www.businessinsider.com/the-sudden-mysterious-exit-of-a-
quora-cofounder-has-silicon-valley-baffled-2012-10)

------
davidtyleryork
Seems like they were going to split directions at one point or another. Sad to
see this happen as I love Quora but unfortunately, investors are in the
business of making money, not building amazing user-friendly webapps.

Is Quora a great service? Absolutely. Is Quora something I would be incredibly
sad to see die? Without a doubt. Is Quora ever going to make enough money to
cover costs? Probably not.

This leaves a sale as the only possible exit. Adam is taking the unsexy role
of being the business guy that drives Quora towards this conclusion. Great
product and engineering minds will quit (especially with the departure of
Charlie). People will cry out about how "the Quora I loved is dead" and new
features will prompt blog posts like this one:
[http://www.bothsidesofthetable.com/2012/09/10/the-misstep-
of...](http://www.bothsidesofthetable.com/2012/09/10/the-misstep-of-quora-and-
the-importance-of-trust-amongst-your-community/) . But Adam has no choice,
either he does this or the company dies and everything that is good about it
is lost.

~~~
yo-mf
That blog post by Mark was 100% on point. There are legitimate growth tactics,
and then there are growth tactics that go over the line. Quora recognized they
crossed the line on that one.

That being said, they will sell, probably by year end or early next year.

~~~
hkmurakami
The question is, who's going to buy a Q&A site with a small user base for
$400MM+?

~~~
samstave
As RDL said, Yahoo is the best likely acquirer and IMO specifically because
they need to hedge against Google and FB grabbing up everything in their path.

------
webjprgm
I just went to Quora.com and see nothing that would convince me to spend more
than 30 sec. there. They need a better home page to engage potential users who
are curious about what that site is. A one sentence blurb about solving all my
problems doesn't make me believe it. I want to see examples so I can see
exactly what kind of problems and how they will be solved. E.g. on Stack
Overflow there is a list of questions and answers that are being asked.

~~~
astrodust
Quora's Expert's Exchange inspired blurring of text to hold content hostage is
anything but encouraging.

It's user contributed content. Stop treating it with such disrespect.

~~~
moe
Amusingly the hipster SV-startup is doing it even worse than the venerable
expert-sexchange (on the latter you can at least scroll down to see the
unblurred content).

And to add insult to injury quora-accounts are _free_ anyway. Why do they
strong-arm users into creating what will ultimately be 99,9% throwaway
accounts?

~~~
edwinnathaniel
They ask your FB account to "confirm" who you are if you want to interact
(view is still free for throwaway email), not just e-mail. Of course the FB
account can be a throwaway as well :).

~~~
samstave
I don't think that was always the case. I joined Quora very early, and I have
never had an account on theFacebook.

I did, however, recently delete my Quora account after I didn't like what they
were doing with privacy (Lack thereof)

I haven't been back, and while I thought there was some good conversations -
the UX at Quora is atrocious. I had a hard time sort wheat from chaff in their
feed, the visual differentiation between textual elements in the feed
emphasized the wrong stuff. Their mobile view, desktop view and native mobile
client view all had separate experiences ad visually didn't match.

There are a lot more things I can say about the UX/UI - but in the end, I am
happy I deleted my account.

------
breck
Eh, it happens. Reminds me of the PG quote: "Practically all start-ups
internally are disasters... and they just hide this from the outside world."

~~~
raverbashing
It's never pretty to know how sausages are made

------
jpdoctor
> _The answer makes one good point, though: D'Angelo did invest his own money
> in Quora, basically buying sole control over the company._

The first clause (investing money) is a much less profound statement than the
second clause (buying sole control).

In order to buy sole control, he set the valuation of the new shares at
something that washed out the "A" round guys. That should be a giant red-
flashing signal to everyone involved.

~~~
campnic
I've recently started trying to understand how these dilution events occur. I
was wondering if you could better explain what happened in this case so I
could further my understanding.

~~~
ChuckMcM
Its fairly straightforward. There is 'money' and there is 'stock'.

Money funds day to day operations, pays salaries, power bills etc.

Stock determines ownership, and in most corporations governance.

Now day to day you spend money and ideally you also get revenue. If the
revenue that comes in for any given month/quarter is more than the money going
out that month/quarter then you are 'operationally cash flow positive' meaning
that other than something like a big lawsuit or a promissory note coming due
or some big financial event you can keep working and the lights on. It doesn't
necessarily mean you can hire anyone or 'grow' or fund a PR campaign.

Then there is stock which represents ownership in the company, there can be
multiple classes of stock which convey different rights, and there can be
corporate bylaws which change how decisions are made while private vs public,
but for the simple case we'll assume that 1 to 1, one share of stock is worth
1/(total-stock) of the company and exerts an equivalent amount of control.
When you make a decision for the company you at the board level you
effectively 'vote your stock' when you vote. If 50.1% of the stock votes one
way that is the way the decision goes.

So lets consider a couple of scenarios:

Lets say the Company is :

    
    
       1,000,000 shares
       Investor A - 10% stock (100,000 shares)
       Investor B - 15% stock (150,000 shares)
       Investor C - 15% stock (150,000 shares)
       Founder A  - 25% stock (250,000 shares)
       Founder B  - 25% stock (250,000 shares)
       (everyone else in the company) - 10% remaining stock.
    

Now the two founders, if they agree they can get their decisions ratified by
the board with one additional investor voting with them. The 'value' of the
company is price-per-share * total shares. So lets say this company was valued
at $10M so each share is 'worth' $10.

Now you need more money (revenues aren't covering it) so you try to sell more
stock which is going to change the numbers around. Lets say you need $10M for
the next 24 months and none of the investors want to invest any more money.
You've got a crisis. But if you are also independently wealthy you can say
"I'll put in the $10M but I'll take 2 million shares." So the 'totals' after
that transaction are 3 million shares in total (up from 1 million) and as a
strict percentage we've got:

    
    
       3,000,000 shares
       Investor A - 3.3% stock (100,000 shares)
       Investor B - 5% stock (150,000 shares)
       Investor C - 5% stock (150,000 shares)
       Founder A  - 8.3% stock (250,000 shares)
       Founder B  - 75% stock (2,250,000 shares)
       (everyone else in the company) - 3.3% remaining stock.
    

Founder B now has 'sole control' because they have enough stock to make any
decision, vote their own stock, and have that decision be ratified.

~~~
mtoddh
So in this scenario, does it also mean that the shares are now worth less too?
As in they are now worth $3/share ($10M/3,000,000) whereas before they were
worth $10?

~~~
andrewcooke
if you re-did the maths with the same guy buying 1,000,000 shares at $10 a
share then they'd still end up with a controlling share in the business (and
the business would indeed be worth $20M since it was worth $10M before and now
has an extra $10M in cash, meaning that shares would still be worth $10 each).

so i'm not sure why the original example needed to place an odd value on the
newly issued shares. as far as i can tell, it just muddies things.

i wrote this on rights issues, which is kind-of related (works through a
similar kind of argument, except this time framed so people keep the same
fractional shares) - <http://acooke.org/cute/EnersisEnd0.html> [edit: just
fixed url] (i'm no expert, i was just interested in that particular case in
the chilean press recently).

in short: you don't need to screw anyone over. it can just be that the person
putting most money in ends up with most of the ownership.

the two key points are: (1) people need to agree on the company's value
before; (2) the company gets the cash (and so its value goes up). of course,
that cash won't sit in the bank - but it's the company's responsibility (and
the investor's hope) that it is spent in a way that increases the value of the
company.

------
dude_abides
_We still have ridiculously high engagement rate for 8% of our users, but that
number hasn't gone up and nothing else we've done has managed to move the
needle to get further users hooked._

This leads me to think: does the needle really have to go up? According to
pg's latest awesome essay on growth, the answer seems to be _yes_. But as the
hacker news site has shown, _no_ can also be a valid answer. pg's goal with
hacker news is to keep a high quality of discussion, and not to grow the site
to more users.

As you bring in more users, you are bound to reduce engagement of existing
users; this is justified if the growth is an order of magnitude higher (eg.
when Facebook went from ivy leagues to colleges to high school to public). But
for a site like Quora, I doubt if growth at the cost of pissing off existing
users is justified at all.

~~~
cube13
But let's be serious about the purpose of HN. It's to give PG and YC a direct
advertising channel to people who care about the startup world. Maintaining a
high level of discussion is just a tool to further that end, especially
because as an advertising vehicle, a site's reputation is hugely important.
Also, HN by itself is not a money-making product. Quora is.

The problem with Quora is that, more than any other social network in
existence, their product is their customers. Quora doesn't have a product
without high quality discussion on their site. The problem is that the steps
required in maintaining that high level of discussion(active moderation, good
community policing, etc.) often directly opposes actively getting more users
because of the Greater Internet Fuckwad Theory. While I'm sure that Quora can
grow their userbase more, I'm pretty sure that they're seeing a dropoff in
total hits. At a certain point, they need to start improving their conversion
rate in order to make more money.

~~~
dude_abides
_HN by itself is not a money-making product. Quora is._

Quora _is_ not a money-making product, it wants to be one. In their present
incarnations, if they just inserted ads (just for argument sake), it is not
clear that Quora would make more money than HN.

You can be a profitable company by just focusing on user engagement, and not
on user growth. Quora's problem is that they raised too much money and now
have to give their investors a return on their investment.

~~~
cube13
I probably should have been a bit more clear about what I meant. I meant that
HN's purpose isn't to directly generate revenue for YC. Quora, on the other
hand, is supposed to be a product that makes money.

------
ericpete
One suspects there's a lot less going on than what everyone would like to
think. (Thanks, ChuckMcM, for the nice post about money and stock.)

Mr Cheever is "something of a product design genius, and lots of people give
him credit for Facebook's best features;" even the now-removed-from-Quora post
says "to him the user came first and growth features would sacrifice that."
That puts him in complete opposition to the guy (Mr D'Angelo, who to his
credit is putting his money where his mouth is) who is paying the bills.

The problem is that almost every Q&A type site has the same issue as Quora:
only a small percentage of its membership is actively engaged. The number
cited by the article is eight per cent, and in my experience, that's about par
for the course. Since revenues (and therefore stock performance) are directly
tied to use, there are two ways to increase revenues, with implications
regarding the user experience for both:

1\. Increase traffic, AKA "make the pie bigger". This means doing the kinds of
things Mr D'Angelo probably championed -- the SEO Solution, playing nice with
Google, low barriers to entry (i.e. Free). This is the tactic taken by most
startups, since they're generally looking at Mountain View and saying "Gee, if
we could just get our hands wet in THAT revenue stream, we'd be rich."

2\. Keep your existing userbase more engaged, AKA "get your customers to eat
more pie". This means doing the kinds of things Mr Cheever championed --
making the experience better, providing more services to them, concentrating
on getting lifelong customers rather than more customers for less time. Most
startups aren't in it for the long haul; they're in it for the big payday.

The NYTimes obit of Arthur Sulzberger pointed out the difference. His family
has always wanted to be in the business of disseminating the news; their
competitors are in the business of selling advertising. Mr Cheever wanted to
take care of users; Mr D'Angelo wants to see a return on his investment. If
there was ever a startup in the position to do the former, it's Quora; I know
my colleagues would dearly love to have enough money to where they wouldn't
have to worry for a while how to keep the lights on.

But as William F. Buckley noted a long time ago, "Idealism is fine, but as it
approaches reality, the costs become prohibitive," and that's when someone
like Mr Cheever moves on to his next venture.

------
001sky
_We all knew one of the commonsense edicts of Hollywood is_ “never invest in
your own movie."*

\-- With the sound of silence, the Market has spoken.

~~~
paulgb
Why is that? Simply because you have all your eggs in one basket? Or is it for
the social proof and connections that comes from having someone else make the
investment?

~~~
astrodust
Having others buy in to your idea validates it. If you can't get investment
for a movie it's probably a sign it's not very good, or the market for it is
exceedingly narrow and might consist entirely of you.

~~~
fusiongyro
I'm reminded of Klaus Kinski, who wanted to make Paganini desperately, but
couldn't convince Werner Herzog it was a good idea. Kinski ultimately made it
himself, and it's supposedly quite bad (I haven't seen it). At least that's
the impression _My Best Fiend_ gives.

Then again, Clerks was famously paid for by a bunch of credit cards. I guess
there's an exception to every rule.

~~~
Evbn
Clerks budget was under $30K, about what a handful of people could pay for any
adventure vacation. More of a labor of love than an investment.

~~~
fusiongyro
True. I'm not even sure he tried to find outside investment.

~~~
cowboyhero
This might be pedantic for this thread, I have to point out that Clerks wasn't
really a "self financed" movie. At least in the sense that the final product
you saw on theaters and on DVD was not paid for by Kevin Smith.

Smith did spend around $30k of his own money on production costs. The bulk of
that was for film stock. (Similarly, Rodriguez spent $8k of his own money on
Mariachi.)

Now, here's the kicker: Neither one of them spent a dime on film prints. They
signed deals and let the studios take care of that. This is significant
because if people talked about Clerks' or El Mariachi's budget in those terms,
the numbers would be in the rane of hundreds of thousands of dollars.

To put it in perspective: Would you say you "self financed" your startup if a
big multinational paid for all the servers and bandwidth from the get go? It's
sorta like that.

Saying it in interviews makes for a better story ("College dropout makes major
movie for $8,000!") but it's not really accurate.

~~~
fusiongyro
I didn't know any of this, so I'm glad you took the time to explain it.
Thanks!

------
kinkora
"The final straw was Matt Cohler joining the Board at the end of August.
Matt's with Benchmark, and his involvement is there for the sole sake of
getting the website turned around, on an upward trajectory, and _in shape to
be sold_ so he could get a return on his investment."

I think the italicized bit is the most interesting part of the comment. It
seems that that Adam wants to sell the site at some point? but to who? Also,
interesting that he is building Quora to flipped it instead of making it into
a valid business.

------
timpeterson
Is Quora really struggling? My posting there is getting more and more
engagement all the time (more importantly, this compete.com profile looks
quite promising: <http://siteanalytics.compete.com/quora.com/>)

Also, how much does running Quora actually cost? If Adam D'Angelo has many
Billions of dollars, I can't see them ever having a financial issue.

~~~
tatsuke95
> _"If Adam D'Angelo has many Billions of dollars, I can't see them ever
> having a financial issue."_

If they're not making money, they have a "financial issue" from day one.

~~~
saraid216
This.

I'm not sure GP understands the difference between company finances and
personal fortune?

~~~
timpeterson
cmon dont be patronizing, point is D'Angelo can float this thing as long as he
wants

------
sethbannon
Looks like Business Insider is sneaking it's way onto the HN frontpage.

------
antonpug
What the hell is Quora?

~~~
droithomme
It's a site that if you go to it you see only a login page allowing either
Facebook or Twitter sign in, with no explanation of what it is or why you
would want to give your Facebook or Twitter passwords to them or what they
might do with them. (Yes, I understand how it really works but I am presenting
how it looks to normal people.)

<http://www.quora.com/>

If you manage to find pages they expose to google to capture searches for
information, you find it is like Yahoo Answers, except the answers are all
blurred unless you agree to sign in and be tracked.

Not surprisingly, this user-hostile abomination of usability has commercially
failed. For some bizarre reason the designer who created this nonsense is
described as a usability design genius in the referenced article when it is
clear from even a moment's glance at the site's usability that its designers
are not fit to design a hole in the ground for tossing refuse.

~~~
kdizza
I was able to get in through the employee page:
<http://www.quora.com/about/team>

~~~
desbest
And that's their home page? What do these people do all day? Blow bubbles for
shits and giggles?

------
volandovengo
I LOVE QUORA.

They have produced a system which is creating some of the best authored
information online. Each time I get their weekly email, I lose about half of
my day because each item in it is so amazing that I have to read it.

Watch Charlie Cheever's interview with TechCrunch recently. I think it's
pretty telling that he was done with the company, it might have been the best
call for him to leave.

[http://techcrunch.com/2011/05/27/quora-we-have-an-
explicit-n...](http://techcrunch.com/2011/05/27/quora-we-have-an-explicit-non-
goal-of-not-selling-the-company/)

------
caycep
Why is this baffling? Founders quit or change all the time.

------
endlessvoid94
I hate sensationalist headlines. This is not "baffling".

------
kgosser
It's just four comments, but they are worth reading on the SF Gate article:

[http://www.sfgate.com/technology/businessinsider/article/The...](http://www.sfgate.com/technology/businessinsider/article/The-
Sudden-Mysterious-Exit-Of-A-Quora-Cofounder-3912160.php)

Pretty good example the bubble we live in here on HN.

