

Instagram worth a half billion dollars? Sure, and I'm Mick Jagger - jasondrowley
http://thenextweb.com/insider/2012/03/08/instagram-worth-a-half-billion-sure-and-im-mick-jagger/

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masonhensley
According to Crunchbase[1], they have 12 employees. I applaud their team for
their user and product growth on such a small team, but come on, have they
sold anything? Ever? Let's assume they now have 20 employees, that's $2.5M/
employee.

Do these investors know something that I don't? Is the Fed opening up a
program for app developers that make no money? Because if they are investing
at half a billion dollar valuation, they are looking for an exit north of a
billion dollars. I mean, come on, Pandora generated $75M last quarter and as
of today their market cap is 1.7B[2] and that's after their stock tanked
yesterday.

I wish the best for the instagram team, but a round like this cannot be good
for them, the product or the users in the long run.

[1]- <http://www.crunchbase.com/company/instagram> [2]-
<https://www.google.com/finance?q=NYSE:P>

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MrMan
I am tired to death of this phase of the web economy. I was downvoted in
another thread for characterizing this dance as "charlatanism," but I will
repeat it here. I hope to God I never need to monetize my HN karma because
that would mean I have failed in the actual real economy outside the Peddling
of Startups to...actually who are the end investors in these VC funds?
Facebook and Google employees and maybe some hedge fund managers who think
tech is cool?

Downvote me now to show that you are smarter. To send a message that you will
aggressively monetize your Javascript skills, and naysayers will be pushed
outside the circle of trust.

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moadeel
I feel you my friend. Up vote for you :) When the heck did it become to have a
business that does not make money, does not focus on making money and gets a
valuation to half a billion. When? Is there something that I just don't
understand that the investors do?

I think its simple. People are investing hoping that hype will continue and
the next round will cash them out. With that in mind, when IPO hits, the
people cash these types of business in and everyone loses once they find out
that the company is still trying to find out a business model.

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tzaman
Let's assume they have some kind of master plan that will eventually result in
them being profitable.

The question coming to mind is how exactly are they going to spend $40m. I
mean it's a simple image taking app - not exactly nuclear physics.

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moadeel
wow, I could not agree more with the writer. Some where along the way, the
basic concept of making a profit, and making it fast, and making it within a
certain period has simply been erased in the mirage and conveniently accepted
excuse of "money will come later." Really, why can't money come now, and how
later is later. It seems like, the investors are simply putting money in to
reap cash in the next round and walk out while the last person or entity to
take on the investment burden (public if it goes ipo) will deal with the
massive losses of a business that has yet to figure out it's revenue model.
Unbelievable.

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mgkimsal
Doesn't this sounds like 1998 all over again? I hear all the common refrains
about "this time is different! we're not in a bubble!".

Yes, this time _is_ somewhat different (huge number of people on the net -
entire generation has grown up wired, etc), but the same irrationality about
first movers capturing markets and money coming later that we saw in 1998
seems to be happening again.

~~~
moadeel
Well I was very young in 1998 - I was too interested in getting my maxpages in
top rankings in the maxpage domain :) so i don't know much. But man, this is
just ridiculous. Really, $500 Million! $500 Million! for a photo sharing app
that has a huge list of competitors and easy to knock off?

