Fred Wilson's Investment Themes for 2010 | Hacker News Reader

Fred Wilson's Investment Themes for 2010

avc.com

60 pointscwan17 comments

Not taking Fred seriously until we hear an explanation from him of how much he knew about Zynga's shady offers business. He has been disturbingly quiet about this.

"Behind every great fortune lies a great crime." - Balzac

Touche. I believe the Facebook tell-all book "The Accidental Billionaires" opens with this quote.

> i've tried hard to stay out of that debate because it is a false debate

> zynga makes almost all of its revenue on virtual goods

> i said in my etsy/san telmo post the other day that more tractors are sold every day in farmville than are sold in the US every year

> that's where the money is in social gaming

> the "scammy ads" thing is total red herring that everyone got excited about but is almost entirely irrelevant

in the comments to that post: http://www.avc.com/a_vc/2010/01/areas-of-interest.html#comme...

Not a fair reply, Zynga today makes >90% of its revenues from virtual goods (and above 80% of that is from Farm-ville) that was not the case when Fred invested when they were makeing >75% of their revenues came from offers.

where do you get this data? it is wrong. nowhere near 80% of zynga's revenues come from farmville. i won't say more than that because it is nobody's business. but it is not even close to 80%.

I apologize http://news.ycombinator.com/item?id=1028422

wow. i appreciate that post you made.

> i said in my etsy/san telmo post the other day that more tractors are sold every day in farmville than are sold in the US every year

The supply of real tractors is limited by a large number of things that cost real money including raw materials, labor, and so on. The supply of virtual tractors is not really limited by anything (marginal cost is pretty much 0), so the cost ought to be 0 or awfully close. Granted, there are costs to 'develop' virtual tractors, but those don't limit the production of them once they've been created.

Virtual tractors in fv only have one supplier. Therefore the pricing will be monopolistic and would not trend to zero.

They ought to be zero were it in any way a sensible market, but it's not. I think people buying that stuff are a bit batty.

> i said in my etsy/san telmo post the other day that more tractors are sold every day in farmville than are sold in the US every year

(1) There are more farmers in farmville than there are in the US. Farming in farmville is all luxury activity, so folks will spend more time on fun activities.

(2) Farmville is a game where tractor buying is part of the game. Farmers buy tractors out of necessity.

Their shady, but perfectly legal business practice is fairly common. Are you going to hold Greylock to the same standard for investing in Facebook who profits from the same means and ubiquitous tooth whitening snake oil ads? Should KPCB and Sequoia be treated as sleaze merchants because Google hosts ads for companies that sell less than honorable products?

I appreciate the journalistic effort at TechCrunch and applaud Zynga for taking a hard line, but no money was embezzled and no one got ripped off.

A lot of people got ripped off. That's the point.

That's a silly standard. Are you also not taking any of Zynga's other investors (Reid Hoffman, Peter Thiel, Brad Feld, KPCB, Andreesen Horowitz, etc.) seriously until they all come clean?

That seems a weird standard. I could see why you might not trust his money or those he ended up investing in.

But this is a discussion of areas he thinks will be big in 2010: how does distrust invalidate his thoughts there?

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As it stands I disagree with part of #6 [I don't know anything about the energy areas so pass on that]. Being in a family of educators and with a family member working in large scale education software: It's a dud arena at the moment. 2010 is unlikely to be the turn around (though I think he is saying it is one he will be watching in 2010 for future investment - on which point I would agree)

i left a comment about that on the post that this thread is linked to. check it out.

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