Bird is the fastest startup ever to reach a $1B valuation | Hacker News Reader

Bird is the fastest startup ever to reach a $1B valuation

qz.com

50 pointssverige60 comments

Okay, but due to inflation they won't be the last, because $1B is a goalpost that keeps getting easier to hit as time goes on.

Tune in later for "Stock market breaks record -- again!" or "World population breaks record -- again!".

Adjusted for inflation, how does this compare to past startups? It’s easy to discard the result, but it seems silly when you could actually evaluate whether this is a meaningful milestone or not.

Well, without knowing the liquidation preferences it’s impossible to tell what the common stock is actually valued at.

Better to think of it as the price of a call option on equity at an (unknown to us) strike price (the liquidation pref). And then when you pretend that’s the price of common stock and extrapolate out you get a $B, or two.

That’s fair but if I may use some heuristics here if they are able to get investors like Sequoia and Accel the round is almost definitely competitive enough that they can dictate terms and get clean term sheets

Jet.com hit it faster. As did APUS Group and Rong360.

Article is based on a false premise.

Completely right on the false premise. The author forgot about the ICO craze. Multiple crypto startups reached billion dollar valuations in just weeks though ICOs.

I've never heard of bird, is it like the dozens of 'me too' companies that litter the streets with their shitty bikes in China?

The only way I can see money is to round these bikes up, crush them and melt them for the Aluminum.

Pretty much. More likely that Bird turns out to be an ingenious conspiracy of the PRC to sell more Xiaomi devices than an actual business.

Seems like an anti-signal: not great comparisons: Desktop Metal, Essential Products, letgo.

Not exactly setting the world on fire.

I think the death knell will be when Bird and Lime and all of the others announce a subscription fee in order to access the network.

Ninebots was a good investment. This not so much.

I was going to say something similar. I would like to see time to unicorn vs time duration of company.

Not just because of the example companies that didn't do well. I expect a rapid valuation like this is almost guaranteed to be too fast for management to handle or too fast for the investors to actually know whether it is that valuable.

Is that a big deal? If I raise a million dollars to buy a million dollars worth of gold, then my company is worth a million, but it doesn’t feel like I’ve done anything much.

Bird's book value is nowhere near a billion dollars, though. And putting a billion dollars together (to whatever approximation startup valuations can be considered "value") is pretty impressive no matter how you do it -- pile of gold or otherwise.

It’s crazy that a startup bound by logistics is growing this fast.

Hindsight will be painful.

I don't see how a scooter rental like this can be anything but a race to the bottom. I have used competitors' services (though never Bird) and they work just fine. There's no network effect with a fleet of drivers like Uber/Lyft. I'll happily use the app of whichever scooter is cheap and right in front of me.

Not only is there no network effect, but capital cost and cost of market entry is very low. Unless Bird's ultimate goal is to block competitors by lobbying cities or licensing to cities like some bike sharing companies do limiting competition, which is entirely possible.

In many ways, it seems very similar to the taxi industry, which only seems to be as profitable as it is (in addition to safe and reliable) thanks to regulation and a sanctioned geographic monopoly. Somehow I doubt such a monopoly will be granted to a single corporation like Bird, though perhaps there is another path to viability.

What if you don’t already have their app. Then there is friction. I am about 20 feet away from a Bird scooter but under the present circumstances I’m not interested in creating an account, etc.

I'm guessing you're not really in the target market of scooter users then. Getting the app and creating the account (for any of these companies) is very straightforward. You should give it a try, if for no reason then to satisfy your curiosity for a couple bucks.

Well, if (when?) uber/lyft enter the market, you probably already have their apps, so this is a non-issue.

For others, I think if you have competent product people, you'd limit registration to a phone number and offer apple/android pay. With iOS 12, for example, it would be so seamless since it can auto-fill confirmation codes. So all you'd have to do is put in your phone number and you're logged into a new account.

Better yet just make the scooters tap to pay on device.

"It’s crazy that a startup bound by logistics is growing this fast."

I think basically they launched in a city and were able to demonstrate the unit metrics on some level - and os use the 'Uber theory' they can justify to investors multiplying that across 100's of cities as fast as they can. Taking on a lot of cash might make sense as market dominance might create a systematic advantage.

Strong note: this sharing stuff is massive in China, in a way, it's something 'invented there' and investors are on to that.

So just like the US built out some things that Chinese innovators were able to adapt/copy and scale quickly due to the already validated model ... this has a little bit of the inverse going for it. And surpluses are generally a lot higher in North America for everything.

So if the unit economics work, then there's some rationality about the big raise.

I do believe however it may not pan out due to major risks:

> Unit economics over the long haul are not what they want > The recharging model doesn't really take hold > People outside of LA don't really 'get' the scooter thing and cities shut them down due to various regulations and risks > Not a powerful competitive advantage.

Uber will exist I believe in one way or another in 10 years, it's just a matter of how profitable they will be, how big investors win/lose.

Bird ... it's risky for sure, but risk is part of VC.

Will they be able to flip it before the hype dies out?

This is absolutely not true. I buy a billionth or trillionth of various friends' bad ideas for a dollar time and again, producing equal or higher valuations instantly. I've been doing this for more than a decade.

I agree but this is how valuations work. Also there’s a pressure for the investor to invest more to make their cut worth more.

I bet you dont even get liquidation preferences or prefered dividends! Got to get those terms locked in and you could value it for trillions.

Who cares if you get a minimum of 2x on your investment? Just keep calling what you are buying from your friends 'equity' and let them have their big valuations!

Man, it's really interesting to see the tech hype cycle again and again and again. The amazing thing to me is that real companies actually do emerge from this, and usually not the ones everybody is fired up about initially.

It's easy to be cynical (I'm certainly guilty) but this attitude, hubris, and unfettered optimism is what it takes to consistently create disruptive companies.

I suspect that people will develop a cookbook method for taking a given scooter, quickly stripping away the tracking and locking elements, and just using or reselling as a generic scooter.

There will be instructional videos on YouTube -- something like phone rooting how-to videos... or how :CueCat scanners were repurposed to generic scanners.

Craigslist is a ready marketplace for stolen property anyway.

Why would anyone want to buy a scooter from craigslist when you can just walk outside and use the one on the street?

Yeah, see Netflix for an example of this -- they leave their product "lying around" and people are plenty happy to pay for the convenience of getting it legitimately because it's so low friction, because it just works all the time and it's cheap enough.

New xiaomi scooter costs $499 from Amazon. Used ones would be way cheaper.

You steal them form where they are and sell them where they aren't.

See bike share schemes for an example of this happening already.

Negligible impact though. Most people don't have the appetite to engage in criminal activity, even once removed criminal activity. Also this is built into the pricing so we all end up paying for it.

and why some crappy scooters? for 1 billion we should be riding unicorns

What are people's thoughts on how Bird can maintain marketshare compared to something like Uber/Lyft.

Like bike sharing, scooter sharing isn't a marketplace (right?), the only thing stopping competitors is the purchase of scooters, and building an app.

Does Bird have a highly defensible position I'm not understanding?

First mover is a pretty strong advantage.

Especially since it takes scooters so long to get up to speed.

I honestly don't know what they might have other than early mover advantage, but in this case, that could be huge.

I was in a DC suburb last week looking for parking, and found two parking lots across the street from each other. They were both 'smart' parking lots, in that I could pay to park with an app. One of the lots was ParkMobile, which I've used before, and the other was another vendor (I don't remember which) that I hadn't. The latter was the far more convenient spot, but I was in a hurry, and I've used Parkmobile in the past, so I already have a login, payment details saved, etc.

The thought of taking the time to download a new app, go through the registration process, pull out a credit card, type it in, save it, and potentially put my data out there for more risk? It seemed like a lot to do relative to circling the block again, even in traffic.

Ditto for EV charging. Lock-in is the goal vs credit card pay on the spot

Sounds like something that could be solved with integrations into apple pay etc.

I feel like Uber could jump into this business in 2 months and outpace Bird in every market. You could even have drivers pick up scooters for in-trunk charging and drop them off in high demand spots.

They're much better off just buying Bird

They basically crowdsource the charging operations- https://www.theatlantic.com/technology/archive/2018/05/charg...

It is not exactly like the Uber/Lyft model, but you can think of it as the supply side of the equation, and it does create barriers for entry.

There's a very strong correlation to Uber/Lyft in the industry. Both are investing heavily in companies like Bird to capture the last mile of transportation. Acquiring companies like Bird that help with that are opportunities to upsell customers for a few dollars more to get into a car.

Great, a scooter in the rain, cold, wearing a suit/dress, and avoiding traffic and people. Carrying nothing...With crappy tires.

Yep, a unicorn business...

It's not for every climate, sure. However, I ride one to work once a week and it always brings a smile to my face. You can't go 5 minutes in LA without seeing someone on one.

Isn't a common valuation formula "2x revenue", so 1B valuation implies about 500m revenue? I don't see many on that list qualifying.

What much more sane version of reality do you live in?

>Isn't a common valuation formula "2x revenue"

No.

https://www.investopedia.com/terms/e/ev-revenue-multiple.asp

EV/R is typically 2.x I think. Of course it's a very faulty metric, but as a ballpark figure I think it's useful as a 'bubble' indicator.

yeah, why not 1 trillion

SCNR https://i.imgur.com/Y6UTfwG.jpg

This article is wrong, Binance reached a billion dollar valuation in less than 6 months. And they’re profitable.

ICO scam with made up volume..

https://news.bitcoin.com/study-finds-3b-worth-of-faked-crypt...

Please do some research before you post. Where is your evidence that Binance is an "ICO Scam"? Binance is clearly past the ICO stage and has grown into an actual company. https://www.bloomberg.com/news/articles/2018-03-28/crypto-s-...

Binance is one of the most credible cryptocurrency exchanges out there. They are the #1 exchange by traded value. As I stated before, they are profitable, and based on the value of BNB they achieved a $1B valuation in less than 6 months. The article you posted doesn't disprove any of these points. The article barely addresses Binance in the first place. In fact, it actually supports them as Binance makes profit off wash trades.

Furthermore, as others have pointed out, the article is fundamentally wrong as in fact other companies have reached a $1B faster than Bird has.

Cryptocurrencies, albeit experimental, have given us an blazingly fast way to value things. At least a few ideas out there have reached multi-million[0] dollar valuations in a matter of months or less by representing their projects with a coin/token.

[0] I'm sure there are disagreements on how legitimate this is (e.g. manipulated or inflated valuation). If we're talking about "how fast you can inflate your valuation", cryptocurrencies are necessarily part of that conversation, and so far, they are much more direct ways of achieving just that.

ICO's have reached multi-million dollar valuations in a matter of minutes. Caveat emptor.

> multi-million dollar valuations in a matter of minutes

"matter of months or less" covers this.

Technically, yes that statement does cover all smaller increments than "months". But, practically speaking, I think of several days as the lower boundary of that statement rather than minutes.

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