AngelList acquires Product Hunt
techcrunch.com
techcrunch.com
But I also realize this was because they raised tons of money and was under heavy pressure to get traction at any cost.
So I think this can be a good news, now that they can just let go and focus on the startup community instead of artificially trying to grow
This is the inevitable fate of all communities. I've seen it happen so many times and I've seen so many discussions about it over and over again that I've begun to consolidate my thoughts and relevant links about it on this URL: http://visakanv.com/blog/communities
> So I think this can be a good news, now that they can just let go and focus on the startup community instead of artificially trying to grow
I hope so too, but realistically I don't think any community that gets diluted can get un-diluted. Reddit, Quora, HN, whatever the place – one you drive away the quality, it seldom comes back. PH will just have a new set of pressures on them now. I wish them the best, just as I wish any community founder / maintainer the best, because a high-quality community is one of the most precious things on this Earth. Alas... it never lasts.
And there just went an hour of my time :-) Good collection of posts.
I say this coming from my own experience growing a community of hardware hackers who have even less of an inclination to chat since they aren't always in front of a computer.
These things then feed off of themselves – in a sociopolitical 'guardian' type community (/r/atheism, /r/childfree, etc etc) it ends up becoming highly caustic towards the outgroup with everyone competing for in-group status points, while in a 'trader' type community (/r/entrepreneur, /r/marketing), you end up getting flooded by shysters and self-promoters.
The moderates shake their heads and leave, and you're left with the inmates running the asylum.
Only wrinkle I'd propose: The "moderates", or any of the characters you define, aren't fixed, and personal circumstance often colors which role one plays at any given time.
Continuing the reddit example. You could limit contribution by three routes:
1) Limiting the number of posts. For example, 3 posts per week, max.
2) Limiting the visibility of posts. The more you post, the less an upvote counts. Effective Upvote Value = 1 / (posts this week)
3) Limiting the visibility of posts based on post quality. The more you post in a week and the lower your per-post average karma, the less an upvote counts. Effective Upvote Value = (per-post average karma) / (posts this week)
Just a thought.
You probably weren't around for it, but HN experimented with something like this where each commenter's running average point tally for the last X posts or Y time was visible on their profile and indirectly visible on each of their comments. Their name (comment?) would appear in a different (darker?) shade the higher their running average.
I personally liked it, but it was rolled back after a couple of months. I think people became afraid to make replies that wouldn't accumulate up votes, and I know I wouldn't reply to threads if someone commented a day later because "it wasn't worth it."
Also there are communities around conventionally caustic topics (eg. Lambda: The Ultimate for programming language design, Penny Arcade for games) that manage to survive for a decade+ with no loss of quality because of moderation policies. For example, L:tU has an "avoiding ungrounded discussion" policy - every thread must be centered around discussion of a published academic paper, which first of all keeps the focus on people who actually do work, and second of all discourages everyone without the background to read and understand academic papers.
Something Awful has used this to great effect to keep trolls in line. I wonder what % of their membership revenue comes from banned users purchasing new accounts.
Neither of these is anything close to a subreddit or forum which is the "community" to which the thread is generally referring.
Pretty sure we've reached peak-discussion. Future online communities will be based primarily on activity.
Very little challenge of ideas takes place - either from within communities or from outside. The whole thing has become a Wittgensteinian language game where people compete to praise or denounce the latest political trend in the most caustic or verbose way. It's tiresome and offputting to people unwilling to subjugate their entire online persona to their identity.
Based on its usage in these last two comments, I think I must not understand what the phrase "Growth Hacker" means. I thought it was someone who was critically focused on increasing the numerator and decreasing the denominator in various SaaS KPIs. You don't seem to be using it that way. Is this a new job title in the Bay Area? Or, more generally: would you define this phrase for me?
Which isn't to say that can't be successful. With a piece of shit MVP coded by the winning bidder, some slick design, a good sales pitch and a ton of luck you might just get enough money to pay a real programmer enough to develop something that can actually get some serious investor cash which you can use to rewrite it yet again to get a real product that can scale.
I understand there can be things like server cost and development etc. and if you want to do it quickly you need to build faster. But it just seems so unnecessary to me.
If you think of it as funding to try and expand the site and topics and community into something much larger it makes considerably more sense.
Because even though there are 300,000 - 500,000 new consumer products launched in the U.S. each year, 99% are generic commodities like a new kind of 2% milk or whatever. The number of new products that are actually interesting is very small, which means that there is a very high cost of discovering and reaching out to enough of these product makers to make the site viable.
C.f. why I shut down my previous startup: https://www.fwdeveryone.com/t/-Gk8HmiRSZ-mrUxE0rH3SQ/deadpoo...
It's definitely possible to do something successful in this space, but not as a bootstrapped startup. The AngelList acquisition makes perfect sense, because they can share the cost of leadgen while creating the opportunity to meet a wide range of founders' needs. There is a big opportunity here if someone is able to come in and execute a rollup and IPO, but those are extremely tricky to pull off.
and from your letter:
The typical budget of a new specialty food product is 30k - 100k per year total, and almost all of that is allocated for manufacturing/distribution/development/salaries, so the marketing budget at these companies is basically zero.
You've got some unstated/hidden assumptions that I am trying to illuminate.
Why do you believe the actually selling and distribution method of a new product doesn't fall into the list of "critical things founders need to know how to do to have a successful business" and instead can be outsourced?
You built a "selling" product for founders who don't know how "to sell" in the first place, I don't think there should be surprise that it failed. Just my .02
The issue with the food space is that most new products start out at their local farmers market, then get into Whole Foods, and then maybe attend the Fancy Food Show. And that's it for a long time. Trying to displace any of those channels is basically impossible. Building an additional channel is possible, but in addition to needing an exceedingly good cost/benefit ratio, you also need a very large source of targeted inexpensive leads.
Once you have categories called 'Slack', 'Amazon' and 'Netflix' as maybe half the current top products do, you've sort of given up your claim to being primarily focused on helping startups.
I stopped going back after I realized it was a homogeneous group (read: white dudes connected to VCs) patting each other on the back for releasing half-baked MVPs. I was really turned-off by that.
That said, I think it's slowly changing for the better (rigging allegations aside) since I last took a look a year or so ago. I received a small amount of traction after submitting a stupid iMessage sticker pack I built. I was still pretty salty when I submitted it, but was curious to see if the exclusivity had loosened up a little bit. It had!
As someone who occasionally builds silly apps it's cool to share them with a community of makers, but I don't think PH fits the bill anymore. Maybe the acquisition will allow them to re-focus?
It's not about race. It's about class. The "connected" part is what matters, not the "white dude" part.
Your average 99%er white dude does not get funded in Silicon Valley. He gets asked where he "summers" and then walks out confused.
What matters in Silicon Valley is being wealthy and having attended the right school. Being connected matters more than anything.
The only thing that makes it somewhat meritocratic is that real success is undeniable and even unconnected people can find ways to succeed without help.
Regardless, I was calling it as I saw it at the time. Checking out the comment section of a few posts on PH's front page today, it looks like my evaluation still stands. Though my classification may be hyper-specific, my main point is it's a microcosm (stereotype?) of the echo chamber.
I don't know what it takes to get into the Silicon Valley upper class, but hard, quality work isn't it.
My best guess is that you have to be great at kissing ass. SV hates jerks, but loves hypocrites.
It's not about what you are, it's about how you come across (in a very primitive, superficial way).
People pay a premium for doing business with other people that they like. It's perfectly logical - we all want our daily interactions to be pleasant ones, and would much rather work with people we like than people we find distasteful.
It's completely counter-productive to frame this as everyone else just being superficial ass-kissing hypocrites.
Stop being racist. What does being white have to do with any of it?
No, that is not racism, but "many people" think that way because they have been wrongly taught to believe that any mention of race is racism, which is incorrect.
And birracerveza is one of those "many people" who really need to educate themselves by reading up on the topic of racism, starting with "Mentioning Race Doesn't Make You a Racist [1]", and continuing on to wikipedia [2] to learn what racism really is.
Hint: Ask yourself if Cbeck527 systematically oppressed anyone by "stopping going" or "bringing race into the mix"?
[1] https://www.psychologytoday.com/blog/sex-dawn/201001/mention...
Now, "growth hackers" ended up believing that being popular on product hunt will get you customers. No - it will not. People who are reading and following Product Hunt are VC - and that is why acquisition by AngelList is an excellent move.
> True users vote for USEFUL and/or LOVELY products for themselves, growth hackers try their best to drive users vote for specific products.
I can't see that's good or evil, growth hacking may hurt the community, or may bring a lot of users and traffic in a short period.
And I think every community has possibility to become a place for growth hackers if it needs to attract more users and grow bigger.
Just like every corner has possibility to become a place for advertisements. If I don't like it, I just ignore it. And that also makes opportunity for competitors or products like ad-block to stand out.
Anyway I love PH and really feel sad for the acquisition.
Well, I've never heard the term "growth hacker" used unironically outside of startups (honestly even SV specifically) so I don't think that's likely.
And AngelList needs to recoup their millions somehow. How often is a product acquired and all the investment-round cruft and garbage suddenly disappeared? Doesn't it usually just get worse?
Then I ended up building a React Native app that pulled their API, which was featured and gave me access. I had so much fun doing that and thought it was great that I was accepted into the community due to building something.
I can't stress enough how selective I was with the invites I received. I still have one, since I never found the right person to share it with.
Unfortunately, it looks like it doesn't matter. In the past few months, I've noticed a steady decline in the quality of discussion. Lots of comments based on misguided interpretations that could have been avoided if the commenter had bothered to click on the product's link and thoroughly read the landing page. There's way too much noise and it's a shame.
From one of my sites to visit daily they dropped to a group of sites I visit once every 2-3 weeks.
The decisions made few months ago were terrible. Take a product that works, adjust it to widen the public but make the experience more shallow - typical for so many startups lately. Chase for the money and trying to rush things and bump metrics is terrible lately in startups/products I liked.
Every time I tried to use their web site, I would encounter a comedy of errors, and trying to work around each problem would reveal yet another. I wrote several detailed bug reports to their support email address, and nobody ever bothered to reply, let alone fix the bugs. Do they even have any full time web developers working there any more? If they do, they must be asleep at the wheel. All I ever got from the experience was a bunch of parasitic spam email. Not one person who ever contacted me through AngelList had anything to offer that they weren't trying to shill by spamming every other random AngelList user.
When AngelList had their email privacy scandal [1], other people also complained that their support was non-existent [2].
So I described my earlier bad experience and lack of support from AngelList on that HN thread [3] [4], and although dave@angel.co responded to a few other messages and solicited people contact him with further questions and concerns, he has never replied to any of my messages [5].
Dave's lack of interest in replying to both the detailed bug report emails I sent to his support address and also the messages I posted to HN, not to mention the facts of AngelList's privacy violation email scandal itself, just reinforces my impression that the lights are on, but nobody's home.
My point still stands: Old unmaintained web sites running on auto-pilot that collect sensitive private information from their users (and automatically forge first-person email pretending to be from their users in order to virally promote themselves) are a dangerous security threat, which should be shut down for the safety of the internet.
[1] https://news.ycombinator.com/item?id=11326011
[2] https://news.ycombinator.com/item?id=11330160
[3] https://news.ycombinator.com/item?id=11326557
This is my biggest problem with AngelList, along with their crappy hackathons. I open my mail and they mailed me to connect to some candidates and also cced them. Then you have to reply to them when they ask stupid questions. And it randomly chooses which companies to pick. And most of the time they connect only the new users to employers just to get more and more users on their websites.
A year ago, I wrote a rant asking about this, among other claims that that Product Hunt is elitist (https://medium.com/@minimaxir/the-questions-on-transparency-... ) To my knowledge, there were no significant improvements in response since then in PH rules.
I bring this up now because the AngelList vertical integration now makes perfect sense: since AL is now promoting investment syndicates, there is now even more benefit from investor collusion and lack of disclosure!
In the long run, of course, you can't get people to use a product they aren't interested in using. So hopefully there's some eventual 'fairness'.
The delightful irony: the things that drive people away from some product or community are typically the very features that were introduced (or showed up) to extract value from them. See: https://meaningness.com/metablog/geeks-mops-sociopaths
There are a lot of difficulties in running a community and I'm sure they considered different options but couldn't move forward because they were under too much pressure.
They deserve congrats for today.
Congrats on playing the VC system, I guess.
On the launch day my site received literally five visits (in the first hours, probably a few more later). It was dead from the start and didn't get a real chance to be seen by the community. Lesson for everyone: under no circumstances have your product submitted to PH by a non-mod account.
I'm actually not angry at PH. They have their rules which are obviously working. The "elitist" model is working (to some degree at least). My fault was that I didn't follow the guides which mention what I learned. And I think they should give a warning when submitting a product by an account like mine, because there's no practical chance such product will be visible.
Their comment section doesnt work. It feels like stumbling into North Korea or Stepford, Connecticut along with some Idol worship. I dont know if ive been anywhere moderated that strictly, with such low insight dense comments.
That must be the difference (or I was blocked by some filter). I didn't try to make a social-media call-for-action, because I didn't want to trigger voting-ring protections.
EDIT. As for the filters... PH doesn't allow comments which include "ps aux" or "curl" strings. I learned this by studying HTTP responses using Developer Tools, because the error was not signalled in PH's UI :).
Any decent comment system should accept that kind of comment without choking on it.
This "Mathew effect" is the case with a lot of things – book deals and record deals, for instance. Unknown artists occasionally do get their big breaks by being in the right place at the right time. But if you're managing one (even if it's yourself), it makes sense to improve your odds by being systematic, and yes, basically cosying up to the gatekeepers whoever they are.
I don't have a PH account myself though and never go to that website, it was pretty bad in terms of design/UX.
I'd go so far as to say that all niche markets have non-disclosed "syndicates" of sorts. Life and wealth seminars, professional conferences, information products people, church leaders, podcasts - all promote other people/products/things similar to themselves who also promote them.
It seem more important to understand this and to take it into consideration when looking at something like AngelList or PH. Advocating that these organizations work against the grain of how all niche markets work seems unlikely to be effective.
I think this might be human nature. My wife told me about the group behavior of a Facebook group she belongs to (women's fitness Facebook group), and how over time some of the women become mini-celebrities – everytime they post anything, they get all the Likes and comments. Human networks just seem to naturally coalesce this way, with power law distributions.
That's just good ol boy bullshit. After I read about that, it became dead to me.
HN has super voters. There's also a trait that your account can be tagged with which makes content that you share less likely to get to the front page (all votes on your content count as some percentage of a "real" vote). That attribute is usually added to non-insiders whose content often makes it to the front page.
I don't think they do it out of malice. They are design decisions in service of amplifying/dampening some desirable/undesirable effect. It doesn't make the creators evil, it just means that they have goals, metrics or influences other than the purity of their voting mechanisms. Community sites are super fucking hard and the people who have built successful ones have my respect.
I've noticed for a while now that I'll only receive a fraction of total points for a submission, perhaps 50-60% of the submission's displayed upvotes.
About a year ago, someone submitted us to PH after I had submitted our site to Show HN. We ended up as the second highest product of the day. I didn't even know we'd been submitted until my co-founder mentioned it (him thinking I had actually been the one behind it). Ultimately we got around 3k to 4k visitors from PH over a space of 3 or 4 days.
So while there may be examples of it being fixed that doesn't mean there isn't significant numbers of startups - with no inside connections - getting a bit limelight from it.
They apparently emailed all their paying customers. What a "big surprise."
I suspect a large portion of Reddit accounts are sockpuppet[2] accounts, alongside Product Hunt.
It's the Law of Manipulatable Numbers where if you put a number next to somebody's name online, then the person sometimes (not often) tries to manipulate the number.
[1]: https://en.wikipedia.org/wiki/Sybil_attack
[2]: https://en.wikipedia.org/wiki/Sockpuppet_(Internet)
Also noteworthy:
http://www.dailydot.com/layer8/trump-clinton-debate-online-p...
What Ryan and Product Hunt did was incredible. So many people wanted to create an alternative to Hacker News and Reddit for product people. Everyone else failed but they figured it out. That's awesome.
Product Hunt personally helped me in my goal of becoming a independent app maker by showcasing my app https://www.producthunt.com/posts/focus. As of tomorrow I'm full-time indie (YES!) and I proudly display my Product Hunt badge on my app's page https://heyfocus.com/. I didn't have any connections there—I just made a product people liked.
And AngelList seems like a great fit. It looks like they're building a crowd-funding platform, and Product Hunt as a marketing/discovery engine makes perfect sense. In that context, Product Hunt is worth a bit of money.
This seems like a great outcome. Congrats!
Did they? Maybe I don't understand how to use it but after I registered I couldn't comment on _anything_ at all. It seemed I was locked out of anything mildly interesting until I am invited?
I guess Product Hunt just isn't for me but I couldn't figure out how to do anything on that site.
Your post is an example of what frustrates me about Product Hunt (and, at times, HN) - people crowbaring in a reference to their startup/project/idea and throwing in a few links in a very transparent bid to get referral traffic from a popular message board service. On Product Hunt in particular it starts to sound like an echo chamber of people shouting startup names at each other. Worse, it seems like the Product Hunt is the goal rather than the tool - much like TechCrunch back in the day, everyone's success metric is attention from peers rather than customers.
In this case I included a link because I think it strengthens the argument. Product Hunt was built to help people like me—and it did. Here's the proof!
And I think my post confirms what you're saying—I was able to use Product Hunt as a tool to help reach my goal. I know this isn't always the case, which is why I wanted to give my experience.
Until it is a platform that offers universal opportunity to everybody who builds something, then it is really no more than a pot luck draw that is too reliant on timing, marketing shine, and debasing yourself in front of 'influencers' in the hope that they will give you their royal blessing.
I've self posted, and had other post to PH in the past, with dismal results. Once I had a product of mine 'hunted' on there by a total stranger, which was cool, but I couldn't add anything to the conversation because I was never added as a 'maker' despite several requests via the site and Twitter. I missed that magical 24 hour window and the product listing sank like a stone never to be heard of again (because of their 'no posting repeats' rule).
Don't even get me started on the humiliating experience of having to beg around for an invite in the early days just so I could participate in discussions.
If people overdo it, we ask them to stop (and in extreme cases ban them), so feel free to email hn@ycombinator.com if someone is overdoing it.
Well put. That's the kind we want to encourage, and if someone goes beyond that and overdoes it, it's not hard to take care of.
Is there some way to search comments for regex? Just for my curiosity.
Not publicly that I know of. Might make a good API project.
https://www.amazon.com/Willpower-Instinct-Self-Control-Works...
The site is successful, and provides real value to the apps being hunted and the users that discover the apps - but the acquisition price is in acquihire territory.
$20MM is enough to get investors ($7MM invested) off your back and let the acquisition go forward and there is plenty of opportunity for back-end deals where key players have an earn out not represented by the acquisition price.
I'll go out on a limb and suggest it's 40-60X revenue, and even that may be too low (anyone from ProductHunt reading, please correct me, but I doubt it).
0. https://techcrunch.com/2016/05/19/product-hunt-is-ready-to-r...
The sale price to me is baffling, even if it was stock. You're not buying revenue, you're not buying valuable technology IP, and you're sure as hell not buying a world-class team that innovated and built some rocketship product.
So how do you explain it? Maybe the fact that it was bought by one of their investors is a start..
There's also some obvious alignment between the two companies so maybe it was a much larger multiple than I would have expected. The team absolutely managed to build a product that has captured the attention (in many cases daily attention) of the type of people that AngelList wants.
In what way? It has taken investment so it needs to eventually make money. How is going to monetise? Also, there is a limited audience for it so it's growth potential isn't great. Even as someone involved in tech and interested in startups I don't get much use out of it as most of the products aren't interesting or useful.
[1] https://www.crunchbase.com/organization/product-hunt#/entity
Interesting to see the trend chart. At least PH kept their numbers over the past two years.
1: https://www.crunchbase.com/organization/product-hunt#/entity
Please explain why.
I tried to use Product Hunt as a daily driver for product and startup discovery several times but I could never stick with it, found it quite boring. There is so much media out there telling me about new products or startups every day, for what do I need Product Hunt?
We are worth 200M, you are worth 20M, we issue new stocks worth 20M, we buy you for those 20M, now we are worth 220M. It costs us legal fees.
Integrating PH to AL could give strong signal to investors, which is especially a big win for investors from syndicates, who may not be as active in their research than bigger investors. Signal processing from PH launches can be automated and give intel to AL investors. PH can be here basically to feed startups for AL users to invest in.
I think an other great addition here would be Betalist. Startups on PH are probably already past seed funding, Betalist would allow AngelList to have a good stream of seeding stage startups, which would allow AL to become a startup pipeline.
ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal.
I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meeting), seemingly funnels most of that money into things that simply make promoting other startups more effective, but don't create value or revenue, and then gets bought by another startup who shares multiple investors for (supposedly) something around their ridiculous valuation.
I guess it's probably not outright fraud, but somehow we ended up in a scenario where we have investors shelling out (in some cases paying themselves!!) a (rumored) total of ~28 million dollars for a community website with no real revenue, no actual product, not even any technology that they could theoretically pivot on... it's just a glorified phpBB theme with a relatively small community of fans who just happen to all be in on the take as well. And I'm sure all investors involved get to mark it as a "win" on the books and pad their stats.
Next time Silicon Valley tries to portray itself as a meritocracy I guess we can just point to this...
The general tone here can at times feel like an uncritical adoration of the valley ecosystem. I'm glad that some of us react differently.
Just off the top of my head, I ask myself how much revenue TechCrunch pulls in, and what it originally started as - and I can see a path for PH to become a 'real' (as in meaningful, sustainable revenue) company. Just because it isn't full of whizbang tech doesn't mean it can't make plenty of money and be valuable to other properties.
And that's just with 20 seconds of thought put into it. I'm sure there are many other angles as well.
The not-sexy model of charging businesses for exposure and leads works (see http://www.capterra.com/) but is probably not nearly rich enough to satisfy Product Hunt's VCs.
Which makes this PH acquisition even more of a head scratcher.
Really? Hacker News comments are uncritical adoration?
I'd weight the cynicism and perma-contrarianism a tad bit higher.
In fact, I believe the success of a startup is inversely proportional to the amount of hate it gets in HN comments.
Theranos excluded from the sample, of course.
This is a classic perceptual bias. Everyone feels like HN is full of whatever they identify against, because those are the things we notice the most. Since you identify against "the valley ecosystem", HN seems full of uncritical adoration for it. It's a mirror of your own preferences.
There's also the enormous home-team advantage that anything "anti" has in the human brain, which gives rise to all the snark, cynicism, and rage-fests that take over online communities by default.
An exercise I've now decided to undertake is as follows:
Every time I see something that I feel is "uncritical adoration" I will challenge myself to look for evidence for the opposite of that in the same thread. I'll start with HN, but if this works I want to extend that elsewhere.
I stumbled on this because the moderation job involves reading tons of comments I wouldn't otherwise see, and the various descriptions of HN they contain are quite incompatible. But they all fit the pattern described above.
I think there are some very smart comments here about the toxicity of internet communities over time that, unfortunately, seem to be evidenced in this exact conversation.
Lmk when you create a website with this much traffic. http://www.alexa.com/siteinfo/producthunt.com
2. Traffic isn't fungible. Reddit is one of the most viewed websites in the world (top 10?) and roughly yet makes as much money in a year as Facebook does in an hour.
Making it easier for startups to promote themselves is a huge source of value. It's just hard to capture that value, because the newest and most interesting startups don't have any money, and the companies that do have a lot of money aren't new or interesting so no one wants to hear about them.
There's nothing shady or fraudulent. The problem is just that early stage companies in this space are walking a tightrope with basically zero optionality. E.g. normally you want to build a product with ten or twenty different paths to success without having to make any core changes to the technology. This space doesn't really lend itself to that.
There is a huge pot of gold at the end of the journey for anyone who can get there, but it's just really tricky because a lot of the things you'd ideally like to have in a startup just aren't there. (E.g. lots of optionality, low cost of leadgen, costs that substantially decrease over time, etc.)
PH is actually doing pretty well, I think it's too early to say if the PH/AngelList combo will eventually win the space, but I think they have as good a chance as anyone.
At the time it sounded perfectly reasonable, though he since took the company in a direction that lead to today. The writing on the wall has been evident since at least a year ago.
>ProductHunt had no hope of ever becoming an actual business with realized monetization, ...
While I largely agree there, I think that Product Hunt could have made itself an otherwise incredibly valuable acquisition target. Had Product Hunt chosen a different path around late 2014, it's very possible it could have met or exceeded that 1B figure.
If I had to give a postmortem, I'd say the primary cause of death was an over-emphasis on the site's existing pattern of serendipitous discovery, compounded by community mismanagement, and attempts to monetize via turning PH into a store and/or referral engine.
The community mismanagement aspect in particular was unfortunate, since Ryan was one of the most voracious and effective community builders I've ever seen. Some of the bad press PH received was perhaps unfair and overblown. The original intent of ruthless product curation seems to have went somewhat awry—resulting in a self-promoting insider network of sorts. Unlike the bad press though, I don't think that it was the result of malicious intent.
Of course, armchair analysis in hindsight is easy. None of us were actually on the ground in his shoes, so there's probably a lot we don't know. At the end of the day, a 20M exit isn't the worst thing in the world.
Even if you don't believe this, unquestionably you have to say it in order to get venture money.
I am grateful to PH and the team lead by Ryan because they helped MyAppConverter raise our profile despite we are not based in SV. I will always remember one day one early user who found us, used our product and put it directly on PH. Soon after that, we got a huge spike in our sign-up and platform usage and gave us global coverage.
So thank you PH, Ryan Hoover & team and best of luck with the next chapter.
I see HN is a combo of PH and very early Digg; with added bonus of better community discussion. What if HN started charging users $20/mo and/or $100 to post. Would it generate meaningful revenue? Would it remain "the same" enough to continue generating that revenue in the future? I don't think so.
That said, I think AL may have some strategery at work. They want to bring early stage companies into their AL network. These often start as just products, so it kind of makes sense, although I don't know if it makes XX million sense
2) AngelList isn't giving PH investors/employees $28M cash, or $20M cash, or whatever the figure is reported as. They are very likely giving them mostly stock, stock in a private company with an unknown valuation. Probably only enough cash to cover the taxes (10-20%). The 20M figure is pulled out of thin air based on whatever AL thinks their valuation is. How much stock do you think they'd have to give out to hire 20 people? How much stock are they giving out to acquire a company with 20 employees?
3) People said Google had no hope of ever making money, they were just a search engine and those don't make any money. Sitting on the sidelines and saying every investment is stupid is really easy when 95% of them fail.
2) How does this make it any better? What you're essentially saying here is instead of investors paying themselves cash they're just shuffling shares of stock from one investment vehicle to another... if this is true then in some cases investors are actually increasing their share in AngelList simply by, in your own words ("1x isn't making anybody happy"), making a failed investment. That doesn't seem above board to me.
3) If you're honestly trying to compare late 90's era Google with ProductHunt then I think that proves my point more than anything I can say myself
Anecdote time: I've personally seen a few startups that were failing attempt to sell themselves to the startup I was somewhat senior in. I interviewed and chatted with founders of the startups that were trying to get acquired. My meetings were not interfered with by the VCs or the angels or anybody else. They are far far too busy to care about every minute detail of what goes on at their portfolio companies. Had we ever gone through with one of the acquisitions (which we never did when I was there), my guess is the board would have tried very hard to convince us not to do it, as an acquisition has a much higher chance of going wrong than going well and can be a huge distraction.
Its seems to me that convincing a bunch of people to part with their money for your idea and then relentlessly trying to execute on it (as PH's founder seems to have done) is very meritorious.
Some investments are clearly made to friends, but you aren't convincing any investor to NOT invest in their friends who they think are great, personally. Now if only there was a process to democratise this discovery more....
P.S: I was referring to AngelList in the end there.
For Google, I don't think it was certain at all that they would succeed and there was a real chance they could have failed. Their first business model was selling their search engine to enterprises via hardware boxes, which grew very haltingly.
In fact it wasn't until Google came across Overture's idea of selling advertising tied to web search results that they found the success they now have, and which they appropriated despite Overture's patent because they were so desperate to find a working business model.
Overture(later acquired by Yahoo) sued Google, and Google had to pay in stock worth hundreds of millions in 2004 (tens of billions now had Yahoo kept them).
So how does this relate to ProductHunt? Google had a real product, knew who their users were and put their experience first. ProductHunt has polluted their site with junk and allowed their voting process to be distorted, making it practically useless to anyone who came there to find great products.
See here: http://www.nytimes.com/2004/08/10/business/technology-google...
The investors??
I feel like if you are going to call something almost fraud you have to point to a group of people being actually damaged.
sigh. I hope one day people would stop being so cocksure around an industry that has always proven otherwise. I mean, yes, SV does have a slew of absurd valuations based on non-existent business models but doesn't the past success of some of these ventures imply that it can actually work? And all those obvious facts are just "hindsight bias" at work?
It's not a business, it's a social club. So why was $28mm pumped into it?
"Once you eliminate the impossible..."
I want to create something with a real lifespan that pays forward everything everyone has ever done for me. I want to amplify all that is good and right with tech and the community that dug this loner outcast kid out of a very non tech- friendly area, helped him find something he could love, and gave him hope that he could build something beautiful.
If you want to help, check out what we're working on over at Baqqer[0]. Give me feedback about what you love/hate so we can build a strong community. I'm not interested in selling out, or colluding to drive any one particular message/theme/group. Tech can be better than this, and should strive to that end, and we should all support independent endeavors to make this as fun and fair for everyone.
Edit: Furthermore, PH definitely does have potential to have a large scale revenue stream. Any "destination" site that millions of people visit daily with intent to try/buy new products has major potential.
Where such a rare and valuable resource is being offered, there are certainly paths to monetization available. And since PH is a discovery platform as much as it is a community, advertising doesn't necessarily conflict with the core value proposition if it's done smartly.
This whole "meritocracy" thing is an incredibly effective marketing tool to get people from all over the world to move to an overpriced, dilapidating part of the world, with poop in the streets everywhere to sacrifice part of their lives to try to make something that matters.
If you fail at your own hopefully you impress some people who didn't enough you get to work with them.
If you don't you wash out.
The meritocracy its true but you have to either
1. have been born a mega genius
2. been raised in a wealthy well connected family
3. be a sociopath who manipulates everyone around you into doing your bidding
4. fake it til you make it and make the right friends along the way
5. Or struggle and toil until you figure out how to do one of the previous
This game is hard and lots of people don't win.
You can be jealous but don't say the system doesn't work when so many multi billion dollar companies have been created this way.
Survival of the fittest.
Also seems to fit everyone's incentives nicely. a16z & seed investors get their money back, so they at least don't have to take a loss. Ryan Hoover gets F-U money, assuming AngelList doesn't tank. Employees get enough for the down payment on a house, also assuming AngelList doesn't tank before they can liquidate. AngelList acquires a pre-made team with a proven track record for not much more equity than they would spend on the open market. Pretty typical SV acquihire.
Additionally, why would the VCs prefer cash to shares in AngelList? VCs are in the business of putting money into rising companies, I'd assume they'd much rather have shares in AL than having to return a pittance of cash to their LPs.
I'd also make a large wager that none of the founders of PH have "FU" money as a result of this deal. AL putting their scarce cash into the pockets of founders is a very very stupid way for them to invest their money. You'd much rather structure the deal to give the founders AL stock so they have an incentive to work hard for you instead of just waiting out the deal and pocketing your cash. Remember that AL has all the leverage here, they can structure the deal however they want.
I certainly can't speak for a16z in this particular case, but in other talent acquisitions the VCs usually prefer cash to shares in the acquirer. If they wanted shares in the acquirer, they would've invested directly in their funding rounds. Among other problems with taking shares, it opens them up to potential conflicts of interest (particularly relevant for a16z + AngelList), and it leads to having large positions in companies of which they don't have board seats or any significant visibility.
Ryan Hoover gets "FU" paper money in the form of AngelList shares; he has to wait for AngelList to have its own liquidity event before he gets to realize any of those gains. Still, if his own startup is foundering, that's probably a better bet than going down with the ship.
That is a fair point about conflicts, that makes sense. Still though if the cash isn't there, it isn't there. I cannot grasp a startup giving up $12M in cash in this environment unless they are absolutely rolling in dough. Doing an equity deal instead of cash is the equivalent of raising $12M at your current valuation (or whatever made up valuation you give yourself in the acquisition negotiations), which seems like a great deal.
Yes, I have no doubt in this deal the founders have "FU" paper money, but I know for a fact most shops and landlords don't accept that as payment :)
i hear the system is totally gamed though.
One has a decidedly more edgy sound, while the other could not be more bland and boring.
This is a saving face bailout from one of their own investors and a particularly embarrassing one at that given his statements of "I wouldn't consider anything under $100mm" and the pedigree of his investors.
They raised a shit ton of money and built nothing. No real technology, no significant additions to their platform, no development of community. And now the result is an all-stock acquihire from AL, which will amount of a purchase of their users and a one year rental of the same engineers and team that failed to build anything worthwhile.
Raising money at a $22m val from A16Z and selling for less than that - all stock no less - is a failure, and we need to stop lauding it as if it's somehow notable or impressive to take money and waste it.
Good for them, let them have their moment.
A large fundraise that doesn't have a very specific purpose or product milestone attached to it is a time bomb, and in many cases (Secret, YikYak, etc.) a bear hug that they can't possibly escape.
If you want to make the argument that Ryan didn't necessarily know how much runway he needed to build the vision he had, fine, but again, I don't think that excuses him from the consequences of that decision.
Anyone cares to explain that one?
The basics of it are those with wealth can afford to spend weeks/months away from the place they call "home". They can also afford to drop their work commitments, or otherwise force those around them to conform to their wishes.
With that in mind, wealthy people from New York are known to "summer" in the Hamptons. Well off retirees will also migrate from Florida to New York / Maine depending on the season, which is akin to "summering". I'm not from the west coast so I'm not sure where people from the bay area go to "summer" -- I would assume Napa Valley.
By asking someone where they "summer" you are asking about their socioeconomic status.
The parent was then taking that a step further and insinuating that a VC might casually ask about this and lose interest in the person unless they come from wealth.
Pretty sure the twice in one week thing is just randomness doing its usual. The intention behind HN moderation is to keep it pretty steady.
I believe that SV, with all its flaws, is as close to meritocracy as it gets (after professional sports?) and was really just wondering what "summers" meant.
He also detached my comment in which I responded directly to a statement that somebody made, but not the statement itself which. Both my comment and the statement were about the same exact thing.
Original statement - https://news.ycombinator.com/item?id=13064089
My response - https://news.ycombinator.com/item?id=13064489
So, how about we be a bit more careful about snipping threads, and you be a bit more careful about following https://news.ycombinator.com/newsguidelines.html and https://news.ycombinator.com/newswelcome.html?
Edit: I see that we've had to warn you several times before. If you don't want to be banned, you need to change your ways on HN. I'm not going to ban you in this case because the proximate cause was something we did. But the pattern is something you need to work on.
Bros funding Bros, and then bro acquiring bro when the first-bro has blown through 7.1M. Its the Silicon Valley version of nepotism. Its all play money, but is only available if you are in the circle.
Now that you have an exit to your name, next stop, VC partner. And then ask all the startups pitching, what's unique about you?
Yo!
But even if you were right on the facts, this kind of rant makes for a bad HN comment. A good HN comment is one that contributes to thoughtful, curious discussion. Stimulating rage among those who already agree with you is the opposite of that. Since such comments routinely get upvoted, they're a particularly bad risk to this site.
We detached this comment from https://news.ycombinator.com/item?id=13080432 and marked it off-topic.
Detaching an on-topic comment for taking the wrong tone doesn't feel like fair discussion.
This is a matter not of tone but of content, and the toxic effects of such content. If only we could rely on well-reasoned user responses to neutralize those effects. But internet forums don't work that way, nor large groups of humans in general. For HN to have civil, substantive discussion, moderation is sadly necessary.
Detaching comments, with an explanation of why, has proven to be one of the best moderation techniques we've tried. The sort of rant we're talking about isn't primarily about the topic at hand—it's primarily about state-changing the conversation to something agitated and ragey. Because that counteracts the purpose of this site, such posts forfeit their right to an ordinary position on the page.
Those who want to read such comments still can, but you literally have to go lower to do so. That seems fitting to me, and a reasonable balance of concerns.
Regardless, I see what you mean with the state-changing here. It uses this topic as fodder to rekindle an ongoing internet fight. Something to be avoided. Fair enough.
Perhaps if you do this frequently enough your moderation tools can append the parent link + explanation to the comment body and save yourself some work - but then I guess that'd technically be editing user comments : )
I don't understand what detached means in this context. I am still seeing the comment in the main thread. Is this because of a setting I have?
'Experiment' with no conceivable way of monetization gets 'investment' for some behind-the-scenes, non-investment reasons. Bros funding Bros, and then bro acquiring bro when the first-bro has blown through 7.1M. Its the Silicon Valley version of nepotism. Its all play money, but is only available if you are in the circle. Now that you have an exit to your name, next stop, VC partner. And then ask all the startups pitching, what's unique about you? Yo! reply
dang 40 minutes ago [-]
Much of this ("for some behind-the-scenes, non-investment reasons") you've simply made up for rhetorical reasons. But even if you were right on the facts, this kind of rant makes for a bad HN comment. A good HN comment is one that contributes to thoughtful, curious discussion. Stimulating rage among those who already agree with you is the opposite of that. Since such comments routinely get upvoted, they're a particularly bad risk to this site. We detached this comment from https://news.ycombinator.com/item?id=13080432 and marked it off-topic.
Dang, this is a post full of brevity - yes - nevertheless very right. He could have tried to paraphrase it - but this would make it even more exclusive to somebody never involved in the industry before.
Ryan may be "in the circle" now, but it's not like he had a rich VC uncle. It's not nepotism; he had no connections when he started out. Product Hunt didn't succeed because he's "in the circle", he's "in the circle" because Product Hunt succeeded.
Ryan is one of the nicest, most genuine person I've met, and he worked hard to get where he is. He built a great team and a product that people love. My company is where it is in large part to PH, and I'm thankful they exist.
(More: https://medium.com/@rrhoover/from-rejection-to-product-hunt-...)
Nice guy? Fuck you, go home and play with your kids. You lose that excuse when you raise a Series A.
Please don't get nasty, as in your last paragraph, when commenting here. It literally adds nothing except bile, and we need less of that.
Edit: your several comments in this thread smack of a vendetta. Schadenfreude is human, but I think it's fair to ask people not to go hog wild with it.
They did very little with an extreme amount of advantages handed to them vis-a-vis A16Z's involvement. It's not intellectually honest to praise them for being able to raise money while simultaneous consider them immune from criticism for failing to do anything notable with that investment.
I staunchly disagree with the general ethos of accepting failure as if the mere effort of trying is somehow notable. Ryan may have made the best decision that was presented to him at the time, but that doesn't invalidate the fact that a whole host of poor preceding decisions placed him into that bind in the first place.
I also find myself extremely skeptical that you'd take the time to so vociferously defend the "tone" of this conversation had PH not been a YC company. Given that a large part of this acquisition looks and smells like a life preserver thrown by one of their existing investors, it makes me cringe even further at PH's inability to harness that emotional capital into anything more substantial and at the amount of which people will ignore the reality to defend their own biased interests.
I don't care about what you're arguing for or against, or who owns it. What I care about is trying to stave off the toxicity that poisons this community. It really is that simple, as you'd realize if you looked into how much effort we put into doing that all day, every day. There is no energy left for anything else.
Dark insinuations ("I also find myself extremely skeptical") are sure fun, but from my very weary point of view, a little pompous and a lot tedious. I wish I could share with you how this stuff feels on the 10,000th iteration.
Also, just because you prefer to read fluff replies of support and cheerleading and just because you are tired of people calling out editorial and financial conflict, it doesn't make the point of the replies you find bothersome moot. But it's your igloo and not mine; by virtue of me being here I am ultimately a guest at the discretion of you, and thus am bound by your rules in order to stay. I can also appreciate that your specific role can feel like shoveling shit against the tide, and that it's a thankless, rote task that can be at times extremely unpleasant. So, fair enough.
You've imagined this. Nobody wants that, certainly not us. The day that HN shows signs of it becoming a top risk, we'll adapt accordingly.
Meanwhile, the risk that I'm talking about (and that you've been worsening) is the one that keeps us up at night. So yes, please follow the rules when commenting here from now on.
No discredit to Ryan, but this isn't necessarily true. Prior to Product Hunt he hustled his way into the circle by interviewing individuals connected in the VC community:
http://ryanhoover.me/post/69599262875/product-hunt-began-as-...
Ash Bhoopathy, entrepreneur-in-action at Sequoia Capital.
partner at Union Square Ventures, Andrew Weissman:
Talton Figgins, product support lead, Disqus:
get a free copy of the upcoming book, Hooked, by habit-design researcher and blogger, Nir Eyal, in collaboration with myself
Sequioa, USV, Disqus, Nir Eyal...most people on HN can't even get any of these people to open an email from them, much less get a response about an app idea.
The issue isn't brevity, but the toxicity that I described in my comment. I'm not sure I can describe it any better than that.
No, but you're reading this thread inaccurately, in my view, if you think the rage and snark side is in the minority, let alone so weak that it needs additional protecting.
I appreciate that you're concerned about the integrity of the discourse—we share that—but you don't seem to consider the costs of what I just called the rage and snark side. Those are considerable, and probably the largest risk to this community.
If people start getting rah-rah and kumbaya about everything, I don't think we'll have trouble adapting how we manage this site. The goal is the same either way—substantive discussion. But we humans deceive ourselves into believing that the merely bilious is substantive, when it's not.
...just because you don't want to hear it, doesn't mean it does not accurately describe a situation. And the OP was not overly mean - just very concise in describing a typical SV situation.
...I don't have any stakes in convincing you, nevertheless I considered it an overreaction worthwhile to react myself
We detached this comment from https://news.ycombinator.com/item?id=13082451 and marked it off-topic.
Does anyone else feel uncomfortable when SF tech workers, in this case a CEO of an acquired startup, talk about homelessness in this way? Trivializing a very real problem to nothing more than a 'headache' or 'distraction' from the greater goal of, I guess, funding more startups?
I recognize it as a tone-deaf thing to say, probably from someone who's never actually experienced real homelessness. But I also recognize that there's no malice in the statement. Language isn't a universal thing, and different words mean different things to different people. I wouldn't pick a fight over it.
People unintentionally trivialize others all the time without meaning to; I'm sure I've done it myself in the past week. The challenge (I think) is to be sensitive to it but also to not be too self-righteous about it.
We detached this subthread from https://news.ycombinator.com/item?id=13082125 and marked it off-topic.