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Comment by drewmate | Hacker News Reader

It's just an expression meaning they made a lot of assumptions (eg how much people would pay, how many would pay, and at what point advertisers stopped dropping out.) Obviously they never actually tested these assumptions, presumably because their simple models indicated it would be disastrous for the company.

While there may have been literal napkins involved, my money's on a whiteboard or Excel. ;)

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Let me just tell you, that unlike you, FB and Goog do not make assumptions, especially a lot of assumptions.

You don't have to make a lot of assumptions to realize doing the math is a waste of time. The group of people most likely to pay for services like Facebook are 20-something year olds with some extra money to spend. That's a group advertisers care very much about. If they're gone your customers (the advertisers) aren't going to be happy.

Sure, at this point you could still hire some company to do phone surveys for you trying to figure out how many of you users would be willing to pay and you can make some kind of educated guess as to how that would affect advertising revenue but why bother, really.

While its true that a layperson usually never knows more about the business than the actual person whose doing it (which I assume was your point), most of the failed products from Goog indicate faulty biz assumptions/inaccurate market survey numbers/overly optimistic market response/etc/etc.

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