Y’all can probably automate interactions with hundreds of web based services in your sleep, using multiple languages, with unit tests, and a Turing complete ML-based proxy server for high availability.
For the rest of us, Zapier is a little like magic. Granted there are other servothay do the same thing, but none that I’ve found do it as easily and as well as Zapier.
Like the grandparent comment, it's hard for me to imagine that there are enough people in need of this service to justify a $5B valuation
Because developers are relatively expensive.
Because hiring anyone requires identifying someone who can do the job and trusting them to do it well. And even before that, you have to figure out what the job actually is.
Because hiring anyone requires some sort of contract, and that has legal implications that might require approvals etc.
As a developer with the required knowledge and skills, these services offer little value to me, but I'm not their target customer. That knowledge and those skills are the result of decades of study and practice, which is experience that most people don't have, and for all of those people the cost/benefit comparisons are going to look completely different.
Regarding Terraform, installing it, learning HCL, understanding the state management, maintaining a place to run it, and learning how not to screw it up were all headaches I did not want.
I think you're overestimating what people use Zapier for.
...
> You could probably pay someone hundreds of dollars to write software that interacts with web services etc.
The reason is exactly that. They don't want to pay hundreds for a dev to dev for them, and that's just for 'one' integration, with Zapier they can always add whatever they want. They'd rather have the 'cheaper' option (which to be real doesn't always end up being cheaper in the long run, but sometimes does).
The
Your return on investment at the $20.00 per month level is a year or less. So it depends on how long you need it for.
Maybe I spend several hours finding someone online who will do the job for $200, then I spend an hour communicating and clarifying my request, then another hour testing the result. 1 months later I decide I need the automated email to have a different subject line, or include an attachment that wasn’t there before, so I find the developers’ email address and pay him another $100 to make the change - or maybe I don’t because it’s too much trouble.
In the alternate world (in which I live), I simply fire up my browser and create a task in about 15-20 minutes. When I need or want a change, I change it myself.
Less time, less hassle, less risk, and in all likelihood less cost.
Reminds me of why WhatsApp took off. They spent the time to make it work well on early smart phones when that wasn’t easy.
This is because you lack the most overlooked and most difficult to teach skill in investing: empathy. Zapier lets non-programmers, the vast majority of the planet, do things that programmers do. Many programmers have poor empathy and thus make bad salespeople and investors. If you can understand how most of the planet thinks and feels though, you can figure out what is going to work and what isn't.
Twitch.tv is something that amazed me that it became so big. I don't really play video games. Who would spend hours watching people play video games? I couldn't understand this phenomenon because I was limiting my exposure to people only inside my own little bubble of reality. I think one can't be a good investor without constantly developing ones empathy because the appeal of various things is difficult to grasp intuitively without a person who would be the customer in mind.
Personally, I think it's important to spend time with people one has nothing in common with to develop this broader empathy and thus be able to pick up on these trends.
They all (and I assume Zapier is no exception) only allow "no code" integration in only the most basic scenarios.
I don't think it has much to do with empathy, much rather unbounded money printing of late.
Our startup, Dentir, makes you do things dentists do :p
Dentistry _is_ all the complexity and the skill of , like, drilling into your mouth or whatever.
For what it’s worth, I think it’s easier to teach someone to be precise with a drill than it is to teach computer literacy.
Heh. I grew playing games with friends. When I got tired, I'd spend hours just watching them play and having fun hanging out that way. It was no surprise to me they got so big so fast. It really is all about empathy, and I thought this little anecdote would help strengthen your point! :)
Monetizing loneliness is how social media companies grow. twitch just has a strangle hold on a specific community that no one else thought of.
That seems fairly insane.
Ask yourself who would spend hours watching people play sports, and it might not seem so foreign.
Also, please don't tell other people that they lack empathy straight in the face, that's plain rude, and hey,...sounds like lack of empathy :p
Sometimes I think the application of that word is way too broad, especially in business setting.
This may be where some of the mystery over the product among programmers could lie. It doesn't look like it would actually let non-programmers do what programmers do at all.
But, if you think about how professional sports is and could foresee the rise of e-sports...
One of the comments articulated that the focus was on the music, not the DJ’s performance, and often times the DJ was not clearly visible, nor intended to be.
Another commenter pointed out that as an electronic music producer nowadays, the only way to present your music, as you also pointed out, is to DJ in front of a crowd.
Don’t underestimate a good DJ, though.
But, it was also pointed out that not all good producers are good DJs and vice-versa.
It is also worth mentioning that Twitch has become an increasingly popular venue for DJs to livestream during quarantine. Ephemeral live performances to reduce copyright infringement penalties are the norm.
Interesting times.
I doubt that's the reason for the evaluation, that's hardly unique.
Everyone is lacking empathy, that is not limited to the profession. Empathy on most parts comes from your own experience and understanding, and everyones horizon of experience is limited.
> Twitch.tv is something that amazed me that it became so big. I don't really play video games. Who would spend hours watching people play video games?
Which is strange, considering how many people watch sports. And most videogames are nothing else, just more focussed on mental skills than physical skills. But the main selling point of twitch is IMHO not people playing games, but the interaction twitch offers alongside this. Twitch in that regard is more like a sportsbar or a local sportsfield, where everyone meets, talks, interacts while some do stuff on the side.
The more buzzling part for me are youtube-videos of people playing stuff, because those are missing the interacting and it's just like watching a very poor movie with low production-value.
> I think one can't be a good investor without constantly developing ones empathy because the appeal of various things is difficult to grasp intuitively without a person who would be the customer in mind.
Yes, it's a given that you need to understand the thinking and problems of customers if you wanna sell them something well. Just throwing stuff at them might work, but more efficient is to understand what they want and what they need, and then build and sell it specifically to the targeted customers.
Similar like in a game you need to understand the abilities and weaknesses of your enemy to slay them. That's why marketing and reasearch exist.
The average price to sales for S&P used to be between 1.5-2.5 for many decades. However for these newly IPO companies the price to sales ratios are around 10-15.
Similarly the P/E ratio for S&P companies used to be in the 15-25 range to the considered normal .
However with these internet companies, they usually do not turn a profit or if they do, their PE ratios usually lingers in from ~100 to 1000. And the market considers that normal behavior now.
With that said, consider huge successes like Amazon. Huge successes like Amazon have been generating much more profit compared to what they were projected to earn in 2010 [1]. I picked 2010 since 2 things are out of the way: the tech boom and the credit crunch. Moreover, people understood that Amazon was here to stay. Despite that, 10 years later, they make 20 times as much profit. If investors knew that 10 years ago, I'd bet that the price would not have been about 130$ since according to Google Finance, the diluted earnings per share (EPS) is about 42$, which is about 30% of the 2010 stock price.
Mind you, in 2010, investors already put crazy multiples on stocks like Amazon. Yet, their prediction on how much money it would make has been underestimated back then. If the estimates of 2010 were correct, you'd expect Amazon to now have an EPS of like 6.5$ (130/20) since by conservative measures, the P/E ratio is in the 15-25 range.
Correct me if I'm wrong on this, I'm not the sharpest cookie in the jar.
[1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...
[2] https://www.google.com/finance/quote/AMZN:NASDAQ?window=MAX
to sell for capital gains when it is higher in the future. Dividends aren't the only way to generate a profit. And for a lot of high income earners, dividends are very tax inefficient as well.
It's called a bubble.
And in any case, if someone else feels that the stock is worth more, and thus pay more for it, what's the problem?
That's not normal, it's pure stupid. So if you don't think there are people sitting on the sidelines watching idiots bid up shares way, way beyond the replacement value of companies, you're not watching the same thing happen that others are.
Do people even understand what these numbers mean? It means after expenses, assuming no future growth, that's how many years it would take to make back your investment.
Do you know why a P/E ratio of 15 was historically considered high? Because even with modest growth, no one wants to wait 15 years for corporate revenues and acquisition costs to break even. News flash, 15 to 25 years isn't normal.
The average company doesn't even make it 15 to 25 years these days.
Assuming any sort of pricing rationality risks the well-known problem that the markets can remain irrational longer than you can remain solvent. It should never have been possible in a rational market for the recent WSB pump-and-dumps to work, yet many billions changed hands as a result. Not that I have much sympathy for the losers on that one, because it should also never have been possible in a rational market for the short-selling strategy that left them vulnerable to work either. Both groups got away with something dodgy for a while and then some of them lost a lot of money when the house of cards fell.
Whether this disconnection of prices from real value is a healthy way for stock markets to operate as a key element in our financial systems is a separate question, and it's one that a different and probably much smaller group of people care about.
As a footnote, it's probably worth mentioning that some businesses, including tech stocks, don't necessarily follow the traditional models for either growth or dividend payments. So although those P/E ratios might be considered very high by traditional standards, those traditional rules of thumb aren't necessarily useful in these cases, even if we only look realistically at the potential for future profits. A high-growth tech startup might have low earnings in the early days and rely on some big investments for funding instead if it's building a huge user base without yet having a firm strategy for monetization, for example. That doesn't mean it won't have genuine potential to earn a huge amount of money from that huge user base later on if it does find the right monetization strategy.
I think it is fair to say 15-25 is pretty normal. The average P/E on the NYSE has been above 15 for the last 30 years, and most of it's 90 year history.
https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...
An easy reality check is other asset classes like bonds or real estate. If you are doubling your money after inflation in less than 15 years you are either gambling or outsmarting the the market.
What "internet" company has a P/E ratio above 100?
Facebook: 25
Apple: 31
Netflix: 81
Google: 36
You’re off by anywhere from 2-20x on the price to sales multipliers. At one point Snowflake had a market cap of nearly 200x the projected sales of the next twelve months. Before rates started creeping up, most SaaS was trading between 20-40x NTM and up to 60-80x on upside spikes.
I’m semi retired in my late 30s, so it’s gone well. I am so extraordinarily thankful for the experiences and opportunities I’ve had, but recognize when it’s time to close a life chapter.
You: sure
Me: My company is now worth $10B!
Hackernews: wow that's so amazing! One day in going to be rich doing startups too!
$5,000,000,000 is a truly unimaginable amount in both senses of the word unimaginable. I couldn’t tell the difference between a $5B and $7B company, for example.
And it’s especially hard to tell for a service which is, somewhat by nature, invisible.
But my smart, non-programmer friends love Zapier and I imagine many of their customer relationships will be multi-decade. There really are so many odd businesses in the world.
Not sure how accurate that is but at $5b, I imagine zapier as a cruise ship tied up alongside a glittering glass casino.
Investors assigning value have access to other metrics not visible to us - customer numbers, growth numbers, revenue and what the revenue growth looks like, internal product roadmaps and other areas of growth, etc.
IIRC, Microsoft acquired CompareNet for $400m in 1999. Scripts for scrapping prices. Written in Perl.
I always get stuck on the little questions. Like: Does it work? Is idea worth doing? How big is the market?
(I mention CompareNet because I had some contact with one of the founders. It's my IRL example that I never figured out how to play this game.)
https://www.bloomberg.com/news/articles/2021-02-12/warren-bu...