

WSJ Ignores 5 other Square co-founders - philip1209
http://philipithomas.com/2012/10/wall-street-journal-demonstrates-inanity-in-jack-dorsey-article/?

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gsibble
Let's get this straight: Square/Dorsey have an amazing PR machine. We hear
about him like some kind of startup God due to it, not necessarily because he
is so incredible.

To be clear, he's never had an exit and I don't see one for Twitter or Square
anytime soon. There's hundreds of millions (billions?) of dollars of VC cash
sitting in those investments without getting a return.

Meanwhile, Square announced in April it was trying to raise $250m at a $4B
valuation (Source: [http://techcrunch.com/2012/04/25/square-now-
processing-5b-in...](http://techcrunch.com/2012/04/25/square-now-
processing-5b-in-payments-per-year-volume-up-25-percent-since-march/)). They
just finished that raise with $200m at a $3.25B valuation. That's a huge miss
for such a big company. They're also burning cash at an enormous rate (see
<http://i.imgur.com/b1Sm9.png> \- leaked slide).

So just remember that he may be an amazing person, but the PR engine
surrounding him so distorts everything that we hear that at least for me, I've
stopped paying attention entirely.

PS: Don't even get me started on how much the press entirely screwed up the
Starbucks partnership reporting. It's a tiny marketing ploy is all.

PPS: This is mostly just my opinion obviously. I prefer businesses to focus on
creating a viable, long-term business instead of a clever marketing machine
with an unsustainable revenue model.

~~~
pg
This is going in the middlebrow dismissal corpus.

(I don't plan to mention that every time I find a new one, but this is the
most perfect example I've found since I thought of trying to detect them
algorithmically.)

If a 3.25b valuation at Square's age is a huge miss, all but a handful of
companies in history have missed worse.

Do you actually know anything about Square's "PR machine," or are you just
assuming he has one because he's in the press a lot? I don't know myself
whether for example they have an in-house group that does aggressive outbound
PR, or whether they have an outside PR firm, or both, or neither. It's
possible the answer is neither; I get mentioned in the press a lot, and YC has
neither.

~~~
gsibble
Hi pg. Like I said, my evaluation is opinion and yours carries a lot more
weight than mine, so I'd love any insight you have. Maybe I've got something
wrong in my analysis.

Do you feel that Square's raise was successful even though it was a lower
amount at a lower valuation than it anticipated? Maybe not a huge miss, but
that seems like a miss to me. Thoughts?

(PS: I am using the term miss in terms of raise/valuation, not in terms of
company success).

As for PR, having worked hard to get press both with PR and without, I feel
like I have a sense of when it is being used and when it is not. In this case,
Dorsey's coverage seems extraneous, flashy, and sometimes out of nowhere. Why
are there so many articles about him and Square from so many publications
seemingly all the time? Why all this hype around someone that, while immensely
impressive, is still only one of a large number of people doing amazing
things? Why do we not see so many articles on Elon Musk and Space-X from every
magazine on the planet? I can't seem to go a day without seeing a profile of
Dorsey or about Square. Feels to me like a very well calculated PR plan.
Again, I may be wrong and would appreciate your thoughts.

Thanks and sorry for the entrance into the dismissal corpus. Promise to do my
best to stay out of there in the future.

~~~
btyrad
Some companies go public on the stock market and don't even raise 200m of
cash. To raise 200m in VC capital alone is an enormous task. As for PR, people
love public figures and leaders. They want to associate with the individual
strife to the top! It makes for an incredible story about your product/service
and this is what you want to do. You want to strike an emotion with your
users!

~~~
gsibble
Well, a few things about your analysis.

First, raising capital and going public are two entirely different things. One
is generally an exit event and the other is not. One garners returns for your
investors and the other does not. Square is raising operating capital to
continue operations, not selling itself publicly to create returns for
previous investors. I would be much, much more impressed to see Square go
public than raise any amount of money. Or much more impressed with a company
that raised $0 going public.

Big rounds aren't what matters when I say miss. What matters is that Square
was not able to raise at the valuation it wanted and what that signals
regarding their internal finances and the valley's investment community in
general (and even beyond since Square raised from companies outside SV).

And yes, Square/Dorsey seem to strike a great emotional nerve, but that's my
point. That's not by accident. That's very carefully crafted marketing. And to
get as much coverage as they do, they probably spend an enormous amount on
internal or external PR. It's all carefully crafted to tell exactly the story
that Square wants us to hear.

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gsibble
After skimming the WSJ article, I have come to a conclusion. Dorsey is trying
to be so hard to be Steve Jobs, except he forgot he has to make a profit.

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enduser
This phenomenon is referred to as the Matthew Effect.

From Wikipedia:

In the sociology of science, "Matthew effect" was a term coined by Robert K.
Merton to describe how, among other things, eminent scientists will often get
more credit than a comparatively unknown researcher, even if their work is
similar; it also means that credit will usually be given to researchers who
are already famous. For example, a prize will almost always be awarded to the
most senior researcher involved in a project, even if all the work was done by
a graduate student.

<http://en.wikipedia.org/wiki/Matthew_effect_(sociology)>

~~~
confluence
That is a derivative of the "fundamental attribution error"
(<http://en.wikipedia.org/wiki/Fundamental_attribution_error>) and essentially
the entire point of the Republican party (just world fallacy -
<http://en.wikipedia.org/wiki/Just-world_hypothesis>) - protecting the
lucky/well known/founding/accrued notoriety people.

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ilamont
Former journalist here.

The news media tends to avoid complicated stories. Sometimes it's because the
reporters and editors don't understand the story, but oftentimes it's because
of A) space limitations or B) complicated backstories will confuse
readers/audiences. Television news has an especially difficult time overcoming
these factors.

But this is the WSJ. Complicated stories and cofounders/partners hitting rough
patches (or being pushed aside) are the norm. In this instance, there's not
enough data to determine what went wrong. But I find it hard to believe an
experienced WSJ reporter would gloss over/leave out such important details.

~~~
AJ007
Its worth pointing out that there is a vast difference between the following:

-Communicating something in a way that makes it easy to understand.

-Making an attribution error.

-Making numerous errors and omitting crucial, relevant, details.

I'm not sure about the WSJ, but many news organizations have moved toward
"page view journalism" and the quality shows. I have a subscription to the WSJ
but I'm not sure how much longer I will keep it.

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tlb
Co-founders often agree that one guy should be the front man and get thrown
under the PR bus, so the rest can focus on getting stuff done.

Doing an interview with a good photo pretty much kills a day. Multiply by an
article a month, add fan mail and invitations to speak, and many sane people
would prefer to stay in the background.

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MikeKusold
This blog imitates Svbtle's style way too closely. When visiting it, I
believed he was part of the blog network. Imitation is flattery, but IMO this
is a little too much flattery.

~~~
xorbyte
But possibly Svbtle isn't that original? <https://github.com/gravityonmars/wp-
svbtle> (scroll to FAQ)

~~~
Axsuul
Looks like this is probably being used: <https://github.com/NateW/obtvse>

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gallerytungsten
Media articles often get details wrong. While this can happen due to actual
malice, more often the causes are sloppy reporting, rush to complete work on
deadline, multiple edits by editors other than the original author, and
similar reasons having to do with the journalistic process. While these causes
don't excuse errors, they do explain the often incomplete picture media
articles deliver.

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yalogin
I really think its going to be tough for Square once NFC really kicks in. Of
course this won't happen until the iPhone includes it by default but it looks
like they are getting there through passport. We will have to see what happens
to Square at that point. They would be wise to cash out in the next year.

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ceejayoz
> This contains a major oversight – as reported by the Wall Street Journal,
> Visa is an investor in Square. It is not motivated to back the competition.

Sure it is. Microsoft invested in Apple while still competing with them.

~~~
gsibble
That was because they didn't want to be broken up as a monopoly. VISA has no
such worries.

~~~
pgeorgi
The investment might have the purpose of getting an inside view into Square,
and being able to adapt more easily should it take off.

With that reason, it makes sense for Visa to hedge their bets and invest in
all parties of that market. With that they're in, no matter who wins.

~~~
philwelch
Also gives them a discount if they want to acquire, or a payoff if a
competitor wants to acquire.

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adastra
I just don't understand why, as a CEO, it would ever be in your interest or
the company's interest to appear in an article to be taking 100% of the
credit. Wouldn't you want to do all you can to make sure your other team
members get credit for their contributions? In my experience the answer is
absolutely yes. No boost to your personal brand could be worth the possible
backlash, resentment, and hit to morale within your team. After all, these are
likely people that you'll be working with for years. I just don't get it.

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angryasian
What Dorsey isn't the golden boy that the valley and press make him out to be.
blasphemy . Agree, VC's are just looking for a huge exit, with the payments
platform and having someone be their Steve Jobs reincarnate will help.

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s_henry_paulson
Terrible title. Bitter submission.

