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I obviously can't prove any of this since I don't have inside evidence, but my theory (explained below) is supported by a few ideas reported by the news:

1. When ISIS moves into a city they appropriate everything of value. During their initial expansion they built up quite a war chest, but their expansion has stopped for now so they are not adding funds that way. 2. ISIS makes most of its money by taxing civilians. The oil bombings are targeting the small piece of pie, not the big piece.

Here's my theory: ISIS ran into a classic problem seen by several startup companies. They saw initial success and had fast growth. They wanted to keep growing so they recruited heavily. To recruit a lot of soldiers they promised generous pay and benefits and even offered to support the families of soldiers so dads could go fight. Their burn rate was astronomical, but was okay because they were staying ahead of it through growth. But the growth ended up being unsustainable, because competition arrived and contained them. They kept it up for a long time because they had a lot of funding, but their burn rate finally caught up to them since they haven't been able to keep growing as before. Leadership did not/have not made the transition from wild startup CEOs that give pitch talks and sell to investors into the sensible, sustainable CEOs that manage a company in a saturated market with an eye toward creating a mature company. Remaining in the mode of a wild growth startup company is not an option for these guys. There is no viable strategy for a terrorist group that says "we'll grow like crazy and then sell out to Apple/Facebook/Google/Microsoft while we are popular and they'll handle the maturity stages. Terrorists have to make the maturity transition themselves because they can't be bought out.




According to this (http://ig.ft.com/sites/2015/isis-oil/) Financial Times article, oil is ISIS' single greatest source of revenue. It is supposed to bring in 1.1 million dollars a day.

A funny thing about the oil transports is that until not so long ago they were sort of a public secret. Because it was Turkey, USA's NATO ally, where most of those transports were going to, but Turkey was of course denying that.


I bet it's almost all this [1]. it was like $100+ a barrel back in 2014. It's a tough time to be in the oil business.

http://www.cnbc.com/2016/01/19/oil-prices-fall-further-on-gl...


So, ISIS earns 1/5th the daily revenue of than Clash of Clans, or about the same revenue as ~250 McDonalds stores?

http://www.gamesindustry.biz/articles/2014-02-11-clash-of-cl...


As a sanity check: ISIS soldiers earn between $400 and $1,200 a month, plus a $50 stipend for their wives and $25 for each child, according to the Congressional Research Service.

Call it ~1,000 / month or ~30$ a day. Let's assume 1/3 of that 1 million / day goes to fighters and the rest is overhead. ~= 10,000 fighters which is a significant force and importantly it's replaceable with new recruits.

PS: Though that could significantly understate things if the average is closer to say 500$ per month and / or overhead is lower and paid with other income sources.


Those numbers seem far too high. ISIS pays soldiers more than China and Russia do?


This may be a question of direct vs. indirect pay. China and Russia both provide food / shelter / equipment which ISIS may skimp on. Also, ISIS is in a major war relative to there size so hazard pay is an issue.

Anyway poking around the web it looks like they are somewhere between 7,000 and 35,000 fighters which seems to be in the right ballpark for 1Million / day revenue.

PS: And of course graft is a major issue.


Small note, 1/5th of the daily revenue for Supercell as a whole, not for Clash of Clans alone (although that is likely the lion's share).

This doesn't change the overall thrust of your point. Just noting for accuracy only.


Perhaps they could grow to the point where they can make an alliance with the US (we would do it for strategic reasons, like in the case of Saudi Arabia). There would be a re-branding into the "Free Syrian Republic" or some such, and the buy out would be complete. Assad out of power, oil controlled by the US. It's what we wanted back when we gave ISIS (then known as the "Free Syrian Army") their initial startup capital and weaponry.


Watch out for signs that ISIS is hiring a PR firm (which is what Saudi Arabia did) to convince us that they're the good guys, and whomever they're fighting are the badder guys.

http://www.prwatch.org/books/tsigfy10.html


It's already been done that for Al Nusrah, though not by Saudi but Muslim Brotherhood and Turkey.

Al Nusrah is the new hip and modern wing of Al Qaida. They are now so moderate and progressive that only stone women using Fair Trade stones.


The FSA and ISIS are two different entities. Both still exist. The third major player is Al Nusra Front, which falls under Al Qaeda. FSA and Al Nusra are fighting ISIS, the Syrian government, and Hezbollah.

In a very interesting interview conducted by Al Jazeera a few months back, the head of Al Nusra Front stated that ISIS and the Syrian government/Hezbollah never really fought each other.


I am sure that at least some area some local commander of either Al Nusra or FSA have joined Isis, for various reasons, like being besieged by Assad's forces, running out of munition, etc.

This is also the messy part of civil war to survive alliances are fleeting. And so it is totally believable that some weapons given by the West to support FSA ended up in Isis hand willingly.


> when we gave ISIS (then known as the "Free Syrian Army")

There are several sides to the Syrian Civil War. The Free Syrian Army is different from ISIS


This makes so much sense that I am afraid it will happen. It's not like the US hasn't gotten in bed with unpopular countries before, and what the government really wants is for the major geopolitical power in the Middle East to be allied with us so we can secure cheap energy.


> they can make an alliance with the US

It's hard to make an alliance with someone who already funded you.


there's not that much oil to control in Syria


"ISIS ran into a classic problem seen by several startup companies"

Bro culture?


Also, yes. But considering that women are marginalized in several of the competing companies as well (Saudi Arabia, Iran, etc.) I don't think it's a differentiating factor.


When you have a hammer all problems are nails. ISIS isn't a startup company, and the analogy to one fails beyond the initial thought.

>There is no viable strategy for a terrorist group that says "we'll grow like crazy and then sell out to Apple/Facebook/Google/Microsoft

What ?


That's harsh pinkrooftop. I'm not a startup employee or founder, and I read HN because I find the non-startup related submissions interesting. I was deployed at the end of 2012-2013 and my boss called ISIS as a big threat even as it was developing (although he may have just gotten lucky). I wasn't trying to force this into a startup picture, I just saw a lot of parallels between ISIS and a lot of "unicorns" that look awesome and then deflate once reality takes hold and it turns out their business plan is unsustainable. And a lot of startups have an exit strategy to get bought out by a larger tech company. The point I was trying to make is that they can't keep acting like their growth will continue forever and they just realized that they don't have the money to pretend like it will.

If you want to pick apart my comparison, use specific details rather than complaining that the "analogy fails" without offering any support. Sure, startup companies don't kidnap and murder innocent civilians, but I think its a fair comparison when talking about financials and paying employees.


It just doesn't seem worthwhile to fit ISIS into a startup model. It's a terroristic cult focused on Sharia Law. So the business model would be conquer and impose Islamic law, and start a world wide Islamic Caliphate to serve God by means of ushering in the apocalypse, thru innovative disruption of basic human rights? The only similarities to a startup are that they need leadership and money to achieve their goals. Which is what I said before, the analogy fails after the initial idea.


> ISIS isn't a startup company

Why do you say that?

I think that's exactly what it is. It's a shitty business though. It's business is war and conquest and rape and pillage and destruction. But in the end it has a budget, it has a start date, it has employees, it has a stated plan, it recruits, etc... What else do you want in an organization to make it a company?

If it looks like a duck and sounds like a duck...

https://news.vice.com/article/a-leaked-budget-may-finally-sh...

http://www.npr.org/2015/12/10/459249994/leaked-budget-docume...


Using money and budgeting expenditure doesn't alone make something a startup company. Or a company. Paul Graham says a startup is simply a company designed to grow fast. ISIS is trying to grow but are they a company? When do they issue an IPO? What benefit does analyzing ISIS as a startup provide, judging if they are more innovative than other terrorists groups? Can they literally capture enough market share? It's a silly concept, would make a good SNL skit


It was an analogy, not a definition. Your entire rebuttal so far has leaned far more on a definitional objection than any of the comparisons made.


Next step: IPO.


Or being bought out by one of the big player, US or Russia.


If they get bought by Al-Queda in Iraq, would that make it an AQIhire?


Less a startup than a Ponzi scheme.


same diff, in most cases


Your second point. That Isis makes much of its money by taxation. Got any source on that? Taxing the local people sounds like a sure way to lose support. As far as I understand Sunni locals support Isis as their militia.


This is the classic Civ IV problem; you add too many cities too fast and your economy can't keep up.




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