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Comment by cletus | Hacker News Reader

Ok, so this is Startups for Employees 101. The warning signs to get out were here 1.5 years ago [1]. And they are:

1. Nut-bar egomaniac CEO bordering on the delusional; and

2. A business that probably should never take VC money. Producing content (which is what HQ Trivia does at the end of the day) is a notoriously hard business to scale. I can remember years ago when Rovio (remember when Angry Birds was a thing?) took VC money. Huge mistake. HUGE. It is seriously detrimental to your long term viability as a business that generates an income.

So yeah, stay at your own peril.

[1] https://www.thedailybeast.com/ceo-of-hq-the-hottest-app-goin...

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Minor nitpick, but Rovio seems to be doing ok. https://www.bloomberg.com/quote/ROVIO:FH. Their price went down pretty hard after the IPO, but lately they've been trending up. They currently have a market cap of $500M. Would they ever have gotten that far without VC? Their only big raise was $42M, if Wikipedia is to be believed.

The Angry Birds movie made what, like $350 million? It's a phenomenal franchise.

Making money off the stock isn't like, the only way to make money. HQ would kill to be anything close to as significant as Rovio.

I think I get what you're saying, but that was released five years post-VC. So I don't fully understand how VC could be considered to have ruined Rovio if, five years after accepting it, they're dropping movies that return 3x their cost to produce.

I'm an outsider to VC/Startup funding-- what's wrong with a company like this taking VC funding?

I'm not a fan of today's VC model and have never taken it myself, but the best-case scenario for taking VC is when you're having trouble keeping up with demand.

In some cases, this is because you've tapped into a big market and sales are moving faster than you can scale your operations. You need to do the same thing you've been doing, but you need to do more of it quickly.

In other cases, you might have found a way to drastically increase sales, perhaps from building a new line of business that complements your old one.

HQ Trivia needs something that you can't get with more money, and that's a creative way to avoid being a fad. They needed a way to keep people on their app, and they didn't find one.

As you've seen from Instagram's wild success at this (before Facebook's acquisition) and Snapchat's decline, money isn't really a factor. It's mostly luck, honestly.

To play devil's advocate, why not take the money?

Of course it won't work out in the long run, but in the short term it might be fun and it'll employ some people for a few years. When the money runs out everybody can jump ship to other, equally nonviable, startups and do it over again.

There's a bit of a phenomenon in Sydney (possibly elsewhere, I wouldn't know) of companies doing this.

I call them VC-bait or grant-bait. There's a handful of grants you can get for startups here, so they'll get all of those, get some free hosting from Microsoft, put up a landing page etc. If they're lucky they'll get a few tens of thousands from private investors, then fall over a few months later.

I'm not sure if it's intentional or if people are just clueless, but in any case they make a bit of money, pad out the CV a bit and move on. I wouldn't got so far as to say they're defrauding investors

It depends what your goals are. If your goals are to create a source of income (profit) for the foreseeable future then VC money is antithetical to your long term viability. Taking VC money means you're locked into continually delivering on growth.

To be fair, Rus becoming the CEO was tragically unplanned.

Did you read the WSJ article? https://www.wsj.com/articles/the-tech-whiz-behind-vine-and-h...

The reporter basically insinuates that Rus had been aggressively trying to undermine and get employees to turn on Colin for a year and leaves an open question on whether stress resulting from their toxic relationship contributed to him increasing his drug usage.

Basically, it was maybe not a complete accident unrelated to his work.

Media companies can most certainly be massive multi bil companies. There is a reason why telcos are buying up media companies (e.g. ATT buying Time Warner/HBO and Comcast buying NBC) and some of the richest billionaires are media tycoons.

I think HQ is on the right track but I don’t see the current team being the right team to turn it into the next big media play. The future of live TV should be heavily interactive.

The point wasn't that they can't be massive companies; the point was that they are hard to scale. What works to get to one audience, or to build up to one size, doesn't mean you can throw money at it and "just" grow bigger. In fact, you're saying that when you say it's the wrong team to turn HQ into the next big media play.

European here: I haven't even heard of HQ before in my life, or at least I have no recollection of HQ and their game. And I want to believe I am 'close to the Tech sphere' and read the news daily. If HQ wants to be the next massive media company (in my mid these are Warner Bros, YouTube, Netflix, et al), good luck to them. From this article I foresee a slow and painful demise of HQ. You can have the best product of the planet. If the CEO/big boss/leader is a prick, then doom is inevitable. Everybody will hate their jobs/lives and they will hate (ofc) you, the CEO. And everyone with a half-good idea will run off somewhere else.

That hasn't stopped Oracle or Zynga from clinging to life like a highly malignant tumour.

I wish that were true.

> There is a reason why telcos are buying up media companies

The other way to read that is that there's a reason telecoms are buying media companies and not the other way around. Media companies are cheap, and they give ~cable companies competitive advantages (or another gun in a Mexican standoff) through vertical integration.

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