LOLCats... Yes, you can haz $30m | Hacker News Reader

LOLCats... Yes, you can haz $30m

blogs.wsj.com

52 pointsphunel24 comments

Yes, there's probably a bubble right now.

And this is the kind of investment that will make you look like an idiot if it blows up. But I have to think someone like Brad Feld, whose firm was part of this investment, is pretty confident in the business if he is willing to put his money and his reputation at stake on this.

Funny movies, funny books, and funny tv shows have all proven to be big money makers over a long period of time (but they also bomb often). Why is a business built on funny websites so ridiculous?

It seems that a lot people have a hard time differentiating between an intelligent business and a business that makes intelligent products.

I agree. If The Cheezburger Network is a profitable business that is showing growth, I don't see why everyone is jumping to claim this is a bad investment.

Because there's just no way it's going to be a $100M kind of company. reddit was probably the source of much of their initial traffic. And reddit was worth, what, $10m, in pre-bubble money?

What bubble?

I don't see why everyone's so skeptical of this.

How is this any different than other social sites? Basically what they're doing is crowd sourcing humor and that seems like a better plan than a lot of other startups I've seen.

Give the huge audience potential (who doesn't like a good laugh?) and their proven record of success (3 years) it doesn't seem like a terrible investment to me.

Some of us will never be able to really accept the idea that $30m isn't a metric shitload of money, for anything, let alone a faddish humour website.

Whenever I see these numbers I can't help but think about how much food you can buy for $30m. I know economics is obviously more complex than that, building wealth helps the world etc. but I still find it impossible to get over this. Just being honest.

It's true that lolcats could be viewed as "faddish", but if so, it's a very long-lived and popular fad.

Guess what a long-lived and popular fad is? A gold mine, at least for a while...

Plus it could have long term appeal... like knock-knock jokes.

It's not just one website. It's a collection of humor websites building on a theme that is certainly not a fad: humorous commentary on a photograph. Lolcats may come and go, but the bet (and a good one, I believe), is that their humor staff can keep ahead of the trends. http://cheezburger.com/sites shows their attempt.

I believe this 30m is also going to help them go further into content creation.

Whatever you can buy with $30m, you can buy more of if you can turn the $30m into $1b.

As of right now you can only predict that it's a fad. Some investors predict otherwise. At least investors take risks into account while you seem convinced beyond doubt that it is a fad.

But they're already profitable and have a proven business model (gain attention, sell it to advertisers). I have serious doubts about their ability to make good use of $30MM, but I don't think it's vaporware, either. This could be a case of smart founders taking liquidity in an era of cheap money.

We can't fault founders for building a profitable business and taking cheap money before the growth tails off. But shouldn't there be some evidence of a viable master plan to spend that $30m turning it into a $300 million business for it to be an investible opportunity? I can't help thinking the "ephemeral crap" market is looking highly competitive and that the competition is more sophisticated and addictive.

But shouldn't there be some evidence of a viable master plan to spend that $30m turning it into a $300 million business for it to be an investible opportunity?

To the investors, yes. To the general public, no.

Their business model is steal content with proven attention quality and then publish it with dubious marketing and sell advertisement on this. This is the same business model Ebaumsworld had.

Also I'd be very wary of investing my money on people with such malleable ethics. But I guess with so many new VCs without a clue there's a lot of money to be made.

http://en.wikipedia.org/wiki/EBaums_World

Ah, the classic "Holier than thou" attitude of some technical people. 375 million pageviews a month, between ads and merchandise sales I'd be really surprised if they make anything less than 7 figures a month in revenue. Hate the company if you wish, but investing in them is far from an indicator of a bubble, in my opinion.

http://en.wikipedia.org/wiki/EBaums_World

http://www.linkedin.com/companies/zvue-corporation

http://www.google.com/finance?q=zvue (very likely the same ZVUE)

Check their home page: http://www.zvue.com/

"$15 million cash and $2.5 million in stock" !

"$5.2 million revenue in 2007!" (check the Wikipedia source page for this figure, hilarious)

Edit: I see now you are acangiano...

So why is anyone investing in them? That would only strengthen the bubble observation, with people just desperately throwing money at anything that has ever achieved any success (or simulates something that once had success).

"NOW WITH MORE LOL CATS!"

"THE MILLION DOLLAR HOMEPAGE IS NOW OFFERING FRANCHISES!"

"TRON GUY CELEBRITY APPEARANCES INCORPORATED"

"FAIL BLOG, NOW WITH 40% MORE FAIL!"

Also consider that they sell merchandise: tshirts, calendars, books, etc. There are companies that do nothing but produce the joke a day calendars and crap humor books by the checkout of Barnes & Noble. Many of them have 9 figure revenue numbers and most people wouldn't say they are on the bleeding edge of comedy. My wife bought 4 "Cute Overload" calendars for Xmas gifts so don't discount the revenue potential in physical products.

Oh, we're doing this again? I'll just link to my response to the ICHCB bubble-bobble-heads a couple days ago: http://news.ycombinator.com/item?id=2114899

So here's question for the HN crowd. What if someone advised you to "not look for funding" for your startup because "there is a bubble and when it pops you will be screwed"?

I don't understand the question. If the bubble pops that's a problem for the investors, not the founders.

That was my response too when someone made the statement to me.

The only downside I could think of would be the possibility that additional funding may be more difficult to get after a "pop" (unless you have a profitable business of course). That in turn could mean that growth of a startup would slow without additional capital for marketing and hiring.

I had to double check to make sure it wasn't me who made that comment.

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