
Secret Shuts Down - ilamont
http://techcrunch.com/2015/04/29/psst/
======
nostrademons
This shutdown - and some of the comments here that indicate how nasty Secret
had become before it died - is quite interesting in light of the conversation
surrounding Google's Real Names Only policy.

Secret cofounders David Byttow and Chris Bader-Wechseler were both veterans of
Google+. Byttow, in particular, I recall being quite well-respected as someone
who got shit done, quietly and efficiently, by the rest of the G+ team. I
didn't know him personally, but I had a few professional dealings with him
where I found him to be a straight-shooter that was remarkably effective and
helpful. When I heard of the product concept for Secret, my first thought was
"Woah, somebody's finally decided to take the other side of the stupid Real
Names policy and build a social network that's completely anonymous."

Apparently that doesn't work either, and when you do that, people hate you
just as much.

My take-away from this is that social software is remarkably hard, and that
whatever you do, people will hate you. The social sites that survive - like
Reddit, Flickr, and Facebook - are those that very carefully balance
everyone's competing desires, making just enough changes to keep everyone
slightly disgruntled but not enough to leave the site. The ones that die -
like Secret, G+, LiveJournal - are the ones that either do nothing to moderate
or that introduce heavy-handed blanket policies. (4chan, as always, remains
inexplicable; somehow it is still going strong despite being a cesspool. Maybe
that's the whole point of it, though, to be the Internet's honey pot of bad
behavior.)

~~~
maxerickson
4chan isn't a cesspool though, that's just an image they project to push away
people who would respond to such pushing (approximately, the olds).

(There are certainly parts of it that are risky clicks though)

~~~
derefr
I would phrase it as, "the default/most-well-known subforums of any forum will
be garbage once the site reaches critical mass, being diluted by new members
too quickly to keep their character. A proliferation of smaller subforums with
their own effective communities will displace the sense that the site has any
worthwhile/coherent community taken as a whole." Applies equally to 4chan and
Reddit.

~~~
bostonvaulter2
One name for this is Eternal September:
[http://en.wikipedia.org/wiki/Eternal_September](http://en.wikipedia.org/wiki/Eternal_September)

------
nlh
This has been a fascinating story to watch unfold (and experience as a user.)

When Secret came out, the addiction bug bit me hard too -- it was _extremely_
compelling. I posted. My friends posted. Everyone was checking Secret
obsessively. People were "communicating" with their exes (or so they thought),
people were guessing who was posting what. It was fun. It was interesting. It
pulled some emotional heartstrings (I had a few interactions with "friends"
who I was pretty certain I would never have spoken with in real life - i.e.
bad breakups, etc.)

Then it took a nasty turn. There was gossip, there were attacks. They didn't
get too bad, but the tone changed.

Then they released the Android app. More users signed up. It started to take
on a high school feeling ("omg my crush winked at me"). It got more popular.

Then, at least in SF, it started being almost entirely about gay sexual
fantasies. Friends in my circle started using it less, so it got less
interesting to me. Eventually I stopped using it when nobody I knew was
posting.

After that, I stopped following. They did some massive redesign which seemed
terrible, and I didn't really pay attention after that.

In the end, it was a niche fad that had particular appeal if you were a tech
person in SF. All the gossip - as taboo as it was - was interesting and
compelling (I admit it!). It was a fun, exciting, interesting fad, but it
succumbed to the sort of thing fads usually succumb to -- time.

The problem with these sorts of things - flash in the pan community-specific
fads - is that they're _incredibly_ hard to sustain, and even harder to
monetize as a business. I certainly understand the instinct of VCs to throw
money at a hot app experiencing meteoric growth (and I doubly understand the
response of the founders to take both the investment and the secondary $), but
it was a longshot to start with.

Frankly, I admire them for giving it a shot, recognizing the reality, and
returning the leftover capital. Well and rationally played all around, me
thinks.

~~~
timr
_" When Secret came out, the addiction bug bit me hard too -- it was
_extremely_ compelling....Then it took a nasty turn. There was gossip, there
were attacks. They didn't get too bad, but the tone changed."_

And all of that, from what I recall, in the course of maybe three months. It
wasn't hard to predict the decline -- the Greater Internet Fuckwad Theory has
been around since what, 2004?

Maybe the investors who dump money into this kind of flash-in-the-pan stuff
ought to wait a few minutes before signing the term sheets. But, oh
yeah...because we're in a white-hot investment market, the Fear of Missing Out
(aka Fear of the Greater Fool) doesn't let you stop to think.

~~~
jusben1369
It seems to me that VC's take heat for investing too early, too late, too much
and too little. Being too conservative or too risky. They're an easy punching
bag.

~~~
timr
I don't ordinarily care what VC's do with their money (i.e. mostly lose it),
but it's disingenuous to suggest that there aren't clear trends: it's very
difficult to raise a series A, but if you're the hype-driven flavor-of-the-
moment, you can close a round with little to no diligence, few metrics and
none of the proof traditionally required of a series A investment. We're still
seeing money get shoved at companies who had a moment in the sun on
ProductHunt or Reddit, with zero validation of the underlying business
prospects (or even much in the way of critical thinking).

So yeah, VC's do take heat for investing too early, too late, too much and too
little. It isn't a contradiction -- it's what people do when they act as a
herd.

~~~
nostrademons
Because the best validation is people using your product. Or technically, the
best validation is people _paying_ for your product, but if they're doing that
in amounts great enough for a VC to notice then you don't need to raise VC.

The herd behavior comes from everyone having more-or-less the same metrics for
what constitutes success: people using your product. If that metric isn't
evident, you fall back on the fundraising strategy for people who don't have
traction: try lots of VCs and hope that one buys into your vision enough to
invest. If the next better metric - lots of revenue - is evident, then it's
too late and chances are that someone else has already invested, or they don't
need investment.

~~~
timr
Ehhh. Traction is a necessary, but insufficient condition for getting a series
A. There's a "hotness" component here that's contributing to the overreaction.

You can't explain things like (for example) Meerkat raising a big round and
cratering _the very next week_ without considering the importance of hype.
Meerkat and Color and Secret are walking out the door with big checks while
lots of other entrepreneurs with great metrics are waiting for their fifteenth
meeting...because they're not in the tech gossip rags.

Say what they will in public, I'll bet you that Meerkat's investors are
wishing they'd sat on _that_ term sheet for a couple of days.

------
rdl
It seems kind of crazy to me that people talk about startups and try to apply
completely the same model for everything to:

1) A social app like this, which is essentially hype-based and self
reinforcing. Success seems entirely down to virality and adoption, followed by
monetization.

2) Some very vertical market focused SAAS offering which can be developed with
minimal outside capital, own a niche, and where capital can then be applied to
expand to other verticals, accelerate the sales process, etc. (Say, a
scheduling application for vets)

3) A capital intensive project in a well understood field (IAAS, hardware, lab
stuff, etc.)

4) Entirely new technology deployment (not discovery, which tends to be hugeco
or lab, but first commercialization)

Clearly there are some commonalities, but there are a lot of areas like
employee vesting periods, how you recruit, etc. which probably should be
different in these different kinds of companies, but tend to be the same.

~~~
DaniFong
Spot on. A lot of what's very challenging for today's web startups, like
hiring, is easy for startups in cleantech, since there's so few funded
startups. Conversely, it feels an order of magnitude more challenging to raise
the money in clean tech...

------
sharkweek
For the curious, pulled their deal history from PitchBook:

Secret raised their B last July at a post valuation just over 130M
([http://i.imgur.com/jNXw5PZ.png](http://i.imgur.com/jNXw5PZ.png)). They had
some major investors backing them up, and then the hype train just... stopped.

I remember so many people being so high on it when it launched, with several
friends all raving about how fun/addicting it was, then just _poof_ it
disappeared from conversation.

Hearing that the founders got some cash off the table (article from last
summer - [http://www.businessinsider.com/secret-founders-
pocket-6-mill...](http://www.businessinsider.com/secret-founders-
pocket-6-million-in-25-million-fundraise-2014-7)). While I always thought that
seems like a _good_ thing, I can't help but let my mind wander a bit as I know
if I were given a nice chunk of change like that so early, it might be kind of
hard to keep focus.

~~~
downandout
_>[http://i.imgur.com/jNXw5PZ.png](http://i.imgur.com/jNXw5PZ.png) _

Here was the intended use of the $25M: _" The funding will be used to
implement two new features, a Facebook login and the ability to follow posts
on a certain topic"_. This is what is wrong with Silicon Valley today. An
afternoon project for a single developer gets $25M from investors. Please,
someone give me just $10M....I've already implemented Facebook login for my
apps.

~~~
GCA10
That's hilarious! In Web 1.0, people raised $7 million to buy a domain name.
Needing $12.5 million to implement a Facebook login ($25/2 projects) is even
more ridiculous.

~~~
smt88
Box paid 7 figures for the Box.com domain name, so I wouldn't say that raising
money to buy domains is dead yet.

~~~
billmalarky
Box bought box.com roughly 6 years after they launched, they were already
wildly successful (as box.net).

~~~
blumkvist
Has box had a profitable quarter yet?

~~~
anonbanker
has Amazon?

~~~
smt88
Amazon's first profitable quarter was in 2001:
[http://news.cnet.com/2100-1017-819688.html](http://news.cnet.com/2100-1017-819688.html)

------
minimaxir
Here's the official Medium post by the cofounder, in which there is
confirmation that they are returning the money to investors:
[https://medium.com/secret-den/sunset-bc18450478d5](https://medium.com/secret-
den/sunset-bc18450478d5)

The post also includes the phrase "incredible journey" verbatim.

~~~
narsil
Was that a reference to this tumblr:
[http://ourincrediblejourney.tumblr.com/](http://ourincrediblejourney.tumblr.com/)
Pretty appropriate.

~~~
teraflop
Technically, the curator of that Tumblr account created it to criticize
acquihires, not shutdowns in general. From the "What is an incredible
journey?" page:

> Companies go broke all the time. It’s unfortunate and it may mean a service
> you love will close. But some things just don’t work out. [...] This is what
> is galling. A company that can afford to pay millions for some new staff but
> not for what those staff built. The people who used the service, and
> invested their belief and time in uploading photos, or forming friendships,
> or logging data, are left to find new virtual homes while their former hosts
> enjoy a nice (if possibly delayed) payday.

\--
[http://ourincrediblejourney.tumblr.com/post/89180616013/what...](http://ourincrediblejourney.tumblr.com/post/89180616013/what-
is-an-incredible-journey)

Although admittedly, from an end-user's perspective, the effects are the same
no matter the reason for the shutdown.

------
austenallred
I thought secret was a really, really cool idea. I downloaded the app and
played with it for a few days. After the hype died down, the app was almost
100% about sexual fantasies, coming out of the closet, and having been
beaten/molested as a child.

I can't be sure, but it seemed to me that the "upvote/like" mechanism boosting
posts to the top (with no validity required) turned Secret into an enormous,
"Who can say the most absurd clickbait thing" contest. It got tiring, and I
deleted the app.

Having talked with a few other people about Secret, they said the same thing.

~~~
dguaraglia
This was exactly my experience, even before the hype died down. 99% of the
posts were from my gay friends (and friends of friends) talking about some
sexual fantasy or sexual encounter.

It was simply not compelling content, so about two weeks in I deleted it.

I wonder if there was something in the marketing or the initial group of
people that created some zeitgeist that eventually killed the idea? I'd be
interested to know if they actively made some effort to try and get out of
that rut.

------
danso
I would've never understood the appeal of these anonymous apps over something
like Reddit (in which you can be as anonymous as you'd like) if I hadn't had a
job on campus, where YikYak is well-frequented, and a far better source of
breaking trivial news (i.e. what is all that yelling outside about?) than
anything else...using YikYak periodically has made me realize again how easy
it is to underestimate the appeal of less friction...including the friction of
having to deal with users and their user histories. On the other hand, it's a
shitshow when some topic like Greeks vs. non-Greeks or Middle East politics
comes up...and having no way to filter the noise, either by user or by topic,
ends up killing the enjoyment of the app. Yikyak is interesting because of its
popularity on campus...but anywhere else, and it's not something I'm compelled
to check at all. I imagine the same thing happened with Secret after it
stopped being the gossip platform for Silicon Valley people

~~~
denzil_correa
> I would've never understood the appeal of these anonymous apps over
> something like Reddit

Recently, we did some analysis (sensitivity, type, potential audience and
linguistic characterists) on the content posted on anonymous social media like
Whisper [0]. Most of the posts were about Confessions, Relationships, Meetup
and QnA/Advice.

[0] [http://socialnetworks.mpi-
sws.org/papers/anonymity_shades.pd...](http://socialnetworks.mpi-
sws.org/papers/anonymity_shades.pdf)

~~~
rjaco31
I'm not sure I understood your point. You have all of this on reddit.

~~~
denzil_correa
In Reddit, you are pseudonymous - users do convert pseudonymity to anonymity
by the usage of throwaway accounts. In case of anonymous media apps, the
concept of anonymity is embedded. For example, on reddit - there can be ONLY
one "Barack_Obama" on Whisper there could be thousands of them because there
is no unique username. In addition, you could view profile of a pseudo-
identity on Reddit. On anonymous social media, there is no profile
information.

The key difference between anonymous vs non-anonymous (or pseudonymous) media
is lack of unique identities and/or profile information.

------
gsibble
I've never been more addicted to an app than when Secret first came out. It
was all the rage in SF. I had to force myself to delete it after a few weeks
in order to get back to productivity. I completely understand the hype.
Personally, I feel this is a story about poor execution. They changed the
nature of the app so significantly over time that it lost its appeal and never
expanded successfully beyond the bay area. Shame.....it was so much fun and
they are such a talented team.

~~~
smt88
> _never expanded successfully beyond the bay area_

This seems to be something of a meme.

The Bay Area is a truly unique and bizarre place. People are incredibly busy
and tech-savvy, and they're willing to spend way more on minor conveniences
than people elsewhere.

It seems like lots of companies raise on their explosive growth in and around
the SV community. It may extend to people with similar demographics in other
cities, but it's still a niche.

I'm also thinking of all those gourmet snack-delivery companies, laundry-
delivery, etc. Those might make a few million in revenue some day, but they're
never going to have high margins or universal appeal.

------
beat
From my very limited perspective from outside Silicon Valley, Secret looked
almost like an exercise in Silly Valley self-parody - like an elaborate joke
that went too far. Did it implode? Yeah, sure. Did it ever make sense in the
first place? Not really.

pg says that great ideas often look like bad ideas. But I think it's also true
that bad ideas often look like great ideas.

~~~
bgun
And that it's often hard to tell that a great idea has been poorly executed
until it's too late.

------
chx
Can we not link to TC please and use [https://medium.com/secret-den/sunset-
bc18450478d5](https://medium.com/secret-den/sunset-bc18450478d5) the official
link?

------
maceo
I've used Secret several times a week since they launched. Although the most
recent redesign was panned from every corner, I found it to be the best
anonymous messaging UI, by far. The friendly branding and overall feel of the
design put it way ahead of its competitors, IMO. I discovered that their
branding was actually outsourced to these guys:
[https://dribbble.com/shots/1854215-The-Secret-s-
Out](https://dribbble.com/shots/1854215-The-Secret-s-Out)

I would love to see their series A and B pitch decks -- how were they able to
convince investors to hand over so much cash with no serious monetization
strategy and nothing more than a temporary download spike? Add that to the
fact that they were able to take 6m off the table. I can't see any rational
investor thinking Secret for Business was actually going to bring in revenue?
Props to Mr Byttow for raising the money, building out a great product, and
returning the capital when he ran out of options... Can't wait to read the
post-mortem.

------
softbuilder
I hit a speedbump pretty fast when they wanted me to give up my address book.
Yik Yak never asked for that. Yik Yak is still on my phone. Both are kind of
crappy ideas, but if there was a clear winner it was the people that just let
me use the damn app.

------
abalone
"Secret will hand its remaining cash back to investors"

Minus the $6M the founders took off the table?

If they keep it.. if ever there were a case for blacklisting founders, this is
it.

It is definitely NOT cool to pull a move like that. You want to cash out early
a little because you've been boostrapping, ok, but if you then bail on the
company and shut it down within a year, then you start to look like a fraud
who knew the company was in trouble and took advantage of investors.

~~~
zaidf
1\. What do you mean "if they take it..."? It is _their_ money. They gave away
personal equity that was at the time worth $6M for the cash.

2\. It is ridiculous to assume they pulled any move. Startups are a high risk
gamble and the VCs who put money in them know it better than anyone else does.
So they didn't pull a move on anyone.

3\. Let's say a company raises $1M on a $3M valuation. Then in one year the
valuation goes up to $300M. Would you be calling for blacklisting of those
investors? Because by your logic, they should know the company was going to be
so successful and should have given the founders a better deal.

~~~
smt88
I agree that there isn't necessarily anything unethical about this. The
investors knew what they were doing.

However, founders who would pocket $6M from a not-even-close-to-profitable
company are probably not good founders, or they don't believe in the company.
Either way, their behavior doesn't inspire confidence.

~~~
tdaltonc
I think that you are totally wrong about these founders in particular and what
taking money off of the table revels about founders generally.

Most founders are extremely protective of their startup. It's their baby, and
their livelihood. They'll do anything to keep it alive. Most "poor"(<$5M in
the bank) would prefer a 'safe' acquisition to gambling on being a world
changer. A good accusation can change a persons life forever $10M verses
$100M? Who cares? Either way it's a lifetime worth of fuck-you-money. But
investors what entrepreneurs to "go big." So if an investor finds a company
and team that they think has a chance of making it they will give the founders
fuck-you-money. It says, "ok, your safe, nothing can hurt you. Now take the
chance of building a company that can change the world!"

When you see a founder take a big chunk of cash from an early round, you
shouldn't think, "they don't believe in what they're doing." You should think,
"These investors (who know these founders a lot better then I do) think that
they are so awesome, and have such a high chance of doing something
transformative, they are basically giving them enough money that they will
never have to worry about money again."

~~~
vonklaus
Well, maybe getting an early payout caused them to lose the hustle. They
turned the engine off, handed the keys back to the investors and walked. It
would have been harder to shut down the company if they saw 0 upside, and all
their sweat equity evaporated.

~~~
zaidf
You seem to suggest that shutting the company down was _definitively_ a worse
outcome for investors vs. keeping it going. It isn't that black and white. For
example, if they kept the company going and spent the remaining millions and
still failed(most common outcome), it is a worse outcome than shutting it down
now and returning the millions.

~~~
vonklaus
To clarify, the outcome of any company is unknowable, as is the future of
everything. When you take a look at the guys from airbnb trying to make rent
selling cereal and renting out an air mattress, that's the hustle. I am just
suggesting that, hypothtically, if these guys were that hungry they would do
anything to save the company. I saw Byttow's interview with Kevin Rose, he
seemed passionate and intelligent, I don't want to discont their work. I just
think that there are some people that won't (or financially can't) quit until
the repo guys carry out their office. The people with that drive have a high
correlation with success.

~~~
girvo
They also have a high correlation with failure, burn-out and destroyed lives.

------
joshstrange
While I have heard of Secret the majority of my friends who are still in
college haven't and it's all about Yik Yak on campus right now.

~~~
r0naa
Same here. I am curious as to what caused Secret to disappear so suddenly. I
am not a power user of social networks but something that really struck me was
the really poor UI of Secret relatively to the crystal clear interface of
YikYak.

~~~
cahoodle
Yep agreed, same confusion here. TechCrunch seems to cite the slow response to
Cyberbullying criticism as one of the reasons for Secret's downfall, but
doesn't YikYak have the same problem, if not worse with college students??
What gives?

------
CPLX
Paging Michael O. Church to this discussion.

------
jgrahamc
_We curated one of the most amazingly talented teams..._

Curated! #help

------
fredfoobar42
Good, and good riddance. Anyone who invested in Secret is a fucking moron. You
can't monetize anonymous messaging, and no established company would buy
technology they could build in an afternoon hackathon for the cost of a couple
cases of Red Bull. If you need proof, 4chan's run at a loss for over a decade.
Any investor in a VC fund that invested in Secret should sue their fund for
mismanagement of money.

~~~
denzil_correa
> You can't monetize anonymous messaging

I have always been curious about this part. What are the reasons you think one
can not monetize anonymous messaging?

~~~
notahacker
You can slap ads on anything. But the chance of slapping enough ads on a
service to earn a multiple of a £130M valuation is pretty slim at the best of
times, and when it's part of a trend of new "social" apps whose distinguishing
feature is that they _don 't_ have network effects or targeting...

VCs backing startups whose primary hope of a major return is to get enough
eyeballs to make Facebook nervous enough to buy them deserve to take losses
more than most.

~~~
denzil_correa
> it's part of a trend of new "social" apps whose distinguishing feature is
> that they don't have network effects or targeting...

May I indulge in a bit more? In these anonymous social apps, it is made
explicitly clear that you are _anonymous_ but _traceable_. It means that the
service can identify your unique mobile device identity as it wishes to. You
are ONLY anonymous in the eyes of the users of the app; in terms of the
service provider there is NO difference.

------
AndrewKemendo
35 Million boggles my mind for what amounts to very simple technology. I'm a
dinosaur though and compare everything to hardware start-up costs.

------
elmyraduff
I remember last year Techcrunch was publishing story over story about Secret,
mostly as uninteresting as 'Secret app has an update and now it remembers
where you left off'. And there was always someone commenting on the article
'Techcrunch stop trying to make Secret happen, it is not gonna happen.'

That artificial media boost brought users and huge expectations, but users did
not stick.

------
nedwin
This is going to be used as a case study of why not to let founders take cash
off the table in early rounds for years to come.

~~~
dguaraglia
To be honest, the investors knew what they were signing at the time. If they
didn't do their due diligence to figure out how the application was going to
make any money, they deserve what they had coming for them. That's the kind of
shitty "let's throw money out the window, in case we hit one successful
startup" attitude that'll get us in a bubble.

------
hkmurakami
"It rode the hype to massive funding, which allowed the two founders, David
Byttow and Bader-Wechseler to each take $3 million off the table. They
essentially traded stock for cash, putting money in their pockets though the
business wasn’t earning any."

Wow. I guess their round was oversubscribed so they were able to sell this to
the vcs. This is the first case where I heard of where a startup failed
recently after founders took significant money off the table. I wonder if vcs
will be able to use this as an argument to combat founders wanting to do the
same in the future.

I have mixed feelings about the whole affair but I have to hand it to the
founders. That was really smart of them to take life changing money when they
could.

~~~
carrotleads
VC's offer this deal only when they are desperate to have an entry.

So yeah some VC's may use this argument but if the startup isn't desperate its
the VC who will have to make the concession.

------
gtremper
I just opened secret for the first time in months(years?), and the first post
was a very explicit dick pic... Seems like an appropriate send off.

------
rajatrocks
I still think there's a lot of room to do something interesting with social
and mobile on the spectrum of Real Identity (Facebook) <\-----> "Complete"
Anonymity (Whisper).

Yik Yak and After School have taken a small step to the left by focusing on
specific geographic areas (schools) and that has worked well - a community
centered around a shared context/life experience. Secret also took a step to
the left with the "Friend" and "Friend of a Friend" concept - one which was
ultimately unsuccessful, I think because it threatened to pierce the veil of
anonymity, so many people didn't feel safe posting their real "scandalous"
content.

And of course with all of the anonymous apps you have the problem of bad
behavior. So far we've seen community solutions to this (flagging, downvoting,
karma - like here, Reddit, Yik Yak) and company solutions (moderating with 100
people in the Philippines, like Secret and Whisper -
[http://www.wired.com/2014/10/content-
moderation/](http://www.wired.com/2014/10/content-moderation/)). It would be
interesting to think if there might be others.

So the current "anonymish" apps have started from the right (anonymous by
default) and either stayed there or moved to the left a bit. One of the things
I've been thinking about recently is what would happen if you started from the
left (Real Identity/FB) and moved to the right? Would the outcome be any
better? I'm actually going to try it out and see with a new mobile app I've
been working on -
[http://www.IAmOffTheClock.com](http://www.IAmOffTheClock.com)

And as for them taking money off the table in their funding round - good for
them. They weighed their offers and took one that eliminated their risk while
giving the company enough cash to grow and still giving them a chance for a
big payday. If Secret had hit it big, that would have been a very expensive
$3M they took off the table. Investors wanted more stock, founders wanted some
small amount of liquidity, and at the time everybody was happy, everyone
believed, the graphs were all up and to the right, and nobody had a perfect
crystal ball.

------
xutopia
I stopped using it when they changed the app design to what it currently is. I
loved it when it was a picture app.

------
onewaystreet
It's hard to build a business on negativity when that negativity is directed
at your own users. People like gossip but not when it's about them.

------
robbiet480
I hope that Ping [0], a side project by the Secret team that has nothing to do
with Secret itself, is going to stick around in some capacity. I loved the
little knowledge bits that it sent me randomly. I just checked the app and
other than a couple weather notifications, the last curated content was pushed
to me 2 weeks ago :(

[0]: [http://iamping.com/](http://iamping.com/)

------
Yadi
I've a question! Maybe totally unrelated, but isn't it always a bad sign when
founders sell their shares before even reaching 1 year?

Doesn't that put a red flag on how the investors should look into it? Or it's
just the hype & hockey stick presentations that doesn't matter to some
investors?

------
hiby007
Well in the last few months activities in the app was similar to omegle.

People posting nude photos and stuff.

I think the curation of content was a huge challenge for them., and also not
to mention the new app design was not at all intuitive with lots and lots of
bugs.

But having said that, I had lot of hope in this app.

------
xnull6guest
Can we speculate as to the timing of this with the DoD marriage with VC firms
and investment groups in Silicon Valley, or is that too conspiratorial?

------
diebir
So, what can one develop using this beside "hello, world?"

Can I build a cross platform GUI application? Is there a servlet container?
How about an IDE?

------
olivierkaisin
The founder pretends that the investors have put money on the table to build a
great team and a great product. If the problem resides in the product, I think
pivoting is the least they can do in respect of their investors.

Giving back the money is ridiculous, especially when they pretend to be guided
by the motto "Innovation requires failure".

~~~
pbiggar
In the article, it says they made this decision after much discussion with the
board. The board is the investors, so the investors are probably OK with this.

It's likely the investors were investing in "the next big social network".
When it became clear that this wasn't going to be successful, they were faced
with the choice of get 80% of their money back, or to "invest" (as it were)
that money in the remaining team.

Maybe the remaining team had an idea, but the investor didnt want to invest in
that idea. Or maybe the team was tired and didn't want to continue, and the
investor would prefer their money back then try to force the team to continue.

------
tuna
I wonder how long it will take to leak their data, spec those associated with
facebook logins.Not surprised that they failed, it had plenty negative and
offending posts and no cats/burgers/porn.

------
nichochar
I've only ever heard bad things of that team.

Arrogant, mean, shameless...

I'm happy to see that this happens, when they cloned yik yak it was one of the
most pathetic moves I have ever witnessed in the silicon valley

------
adamzerner
Can someone explain to me why people return money to investors?

Legal reasons? Altruistic reasons? Selfish reasons (maybe that keeping it
would hurt their reputation and make them feel guilty)?

~~~
quizotic
One reason is when the investors own > 50%, control the board, and decide to
recoup 10 cents on their dollar.

But I've known entrepreneurs who made the decision independently, feeling it
was the right thing to do.

And it is the right thing to do if the company has no other prospects or the
team is falling apart.

But even so, returning the balance just keeps some salt from the wound. It
doesn't make anybody happy.

~~~
adamzerner
> And it is the right thing to do if the company has no other prospects or the
> team is falling apart.

Why do you say that? If for moral/altruistic reasons, that doesn't make sense
to me - if you have $x million, do you really think the best place to donate
it would be to VCs? I don't know anyone who donates to VCs, so I assume the
answer is no. (sorry if I come off as harsh, I don't mean to - I just don't
know how else to put it)

~~~
lsc
_you_ don't have $x million. The company you founded, and no longer wholly own
has $x million. It's a rather different thing.

I mean, unless you are talking about the money for the personal shares the
founders sold, the money, as it was said, that they "took off the table" \- if
that's the case, then I'm completely with you (but I didn't see any indication
that they were giving that money back.)

~~~
adamzerner
I was under the impression that someone had _decided_ to give the money back
to the investors. That they had a choice, presumably, to do what they want
with it. Is that not true? To what extent were they restricted?

~~~
lsc
that depends on who controls the company, something that usually has to do
with ownership percentages, something that wasn't revealed in the article.

The thing is, though, even when you control the majority of the company you do
have some legal and ethical obligations to the minority shareholders.

~~~
adamzerner
I see. Well, my point applies to any situation where someone does have the
freedom to do what they want with (a large chunk of) money, and chooses to
give that money to a VC, rather than, say donating it to an effective charity.
Am I the only one who sees something wrong with that?

~~~
lsc
that seems like an astonishingly unlikely situation.

~~~
adamzerner
Maybe. It's just that I hear of stories that talk about founders giving money
back to the investors as if it were admirable. Admirable implies that a
decision was made. But maybe I'm just misinterpreting.

~~~
lsc
_removed regrettable bit_ \- but he or she is right about the options;
ethically and legally, they could have continued to try to make it work, or
they could shut down the company, sell the assets and distribute the proceeds
to the creditors and then the owners of the company (the investors)

Really, one could ethically do either one of those things; it's just that
depending on the situation and your perspective, well, probably one or the
other is the better choice.

Now you seem to be arguing that the choice between continuing to run a company
or not is not one that has an 'admirable' option. And maybe from you point of
view, it doesn't really matter.

There's a stadium down the way from my house. when the football player makes a
home run or whatever, well, personally, I don't see how that matters; I don't
care, and I'm mildly pissed that I'm going to have to pay for the bonds to
build the eyesore. But even so? I don't go to football forms and tell people
that the large man getting the ball in the hole or whatever isn't an admirable
achievement. It's the game those people want to play, and that's fine.

I personally find business really interesting, really in a similar way to the
football fan. Most of this stuff doesn't really matter. Some of it does, but
even that stuff doesn't matter as much as people say it does.

To me? the decision to give the money back to the founders, rather than
shitting the money away when you know you have been beaten, is admirable
because investors seem to select for overconfidence; quitting before you've
spent every cent implies that you were able to project that overconfidence to
the investors, but that you were able to remain a rational person.

I mean, it's not world peace, sure, but it implies some attributes which
within the context of the business game are pretty important.

~~~
ovechtrick
I guess I just clicked the wrong button. Not really sure how that makes me an
ass. Thanks though.

[http://blog.ycombinator.com/new-hacker-news-
guideline](http://blog.ycombinator.com/new-hacker-news-guideline)

~~~
lsc
I meant no real insult. I was having a shallow conversation with a troll, I
was repeating something someone else said, and misjudged the tone.

You want me to delete/edit my previous post? there, I did; I'm not sure if
that's more appropriate or less.

You make a good point with the guidelines; I'm far too cynical and negative to
participate in these sorts of discussions with this sort of a community.

------
mherdeg
What were some of the key contributions from Secret to wider culture?

Was it — Julie Ann Horvath's decision to disclose big cultural problems at the
company GitHub?

Was there anything else?

------
dhruvbird
Secret is probably a very successful social experiment.

------
shadytrees
feelings.blackfriday is still up though

------
kra34
How much do Unicorn horns fetch on the black market?

~~~
xrange
Pound for pound, about the same as black swan foie gras.

------
notastartup
I certainly don't think this is the end. Was writing a comment but decided I
will post it on my blog [https://blog.scrape.it/secret-shutting-down-isnt-the-
end](https://blog.scrape.it/secret-shutting-down-isnt-the-end)

------
bifrost
nooooooooooooo

------
suyash
I knew day one the idea and execution was going to fail.

~~~
prezjordan
You could say this about every single startup, and you'd be right 99.9% of the
time. The other 0.1% you'd find a way to make yourself right.

It's a really, really silly thing to say.

