

Everpix, Snapchat, and The Startup Lie - tpsc
http://subimage.com/blog/2013/11/07/everpix-snapchat-and-the-startup-lie

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mathattack
_When small start-ups I’ve spoken with do make money, they often find it
difficult to recruit additional investment because most venture capitalists —
and often the entrepreneurs they finance — are not interested in building
viable long-term businesses. Rather, they’re interested in pumping up enough
hype and valuation to find a quick exit through an acquisition at an eye-
popping premium._

This highlights the difference between VC and bootstrapped firms. The VC
expects 30-50% annualized returns. To get that you need hypergrowth. If you
want modest growth, avoid the VCs. But they exist because there is a need for
people to fund moonshots. They would rather have one business succeed with a
20x exit and have 4 fail, then have 5 firms exit at 2x.

Where I differ from the OP is I don't see this as a morality play. I see
"getting an exit" as a way to redeploy risk capital. Once the business is
stable, ownership should transfer from risk investors to more traditional one.
Or to more traditional companies.

To get to Everpix - could they have succeeded if they just bootstrapped and
focused more on Marketing earlier on? I don't know. I wish their founders
well.

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pearjuice
[https://news.ycombinator.com/item?id=6694674](https://news.ycombinator.com/item?id=6694674)

Duplicate.

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meritt
I'd love to see a post-mortem explaining how they possibly could have a
$35k/mo AWS bill for a platform that only serviced 55k users.

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phea
Seriously, they should have went with dedicated boxes on something like
Softlayer comme Dropbox. Unlike CPU-cycles, storage needs are relatively
predictable as people usually don't remove photos after uploading them.

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semerda
Softlayer - yikes! Was with them once and never again. AWS is far more
flexible and cheaper (based on my experience). Not to mention the full suite
of services available under the 1 umbrella from AWS where Softlater just
cannot compete.

