Quora raises $50M at a $400M valuation with Peter Thiel leading
online.wsj.com
online.wsj.com
Basically it's pointless.
As for Quora, I stand by my original assessment: I don't see this going mainstream. Q&A seems to be something that works well for particular verticals (eg programming aka Stackoverflow) but doesn't seem to be a general purpose or widespread tool. This is in part cultural (eg I believe Q&A is very big in Korea).
I see this more as "bubble thinking" and in this context "bubble" has nothing to do with valuation but more that the people who use and value Quora live inside a bubble. That bubble is the Valley. VCs and Valleywags only know other VCs and Valleywags and all of those people use Quora so they make the mistake of thinking it's far larger than it actually is.
Quora does not have the mainstream breakout appeal that, say, Pinterest or Instagram does and honestly I don't think it ever will (you can quote me on that). Neither does (or will) Stackexchange.
That's not to say either won't exit for 9-10 digits but that's another story entirely.
Quora has done a fantastic job of marketing itself to VCs/Valleywags but I see Q&A much like I do Foursquare and the whole check-in thing. It's a (to borrow a Mark Suster term) FNAC (feature not a company).
IMHO Quora will suffer the same fate every social/curation site does: eternal September. If it ever does grow massively the influx of new people will change the site and those early adopters people like to follow now will move on to the next thing. It's Slashdot, Digg, etc all over again.
this is what's so creepy about the place. why does class need to come into it? class has never been an issue with hn - even in its better days - yet it's become something core to quora.
More problematic, though, was that there was increasingly a lot of "soft spam", answers that were more somebody promoting their tangentially related startup or book than actual answers. I'm not even against relevant self-promotion, but it feels like it's more of a problem at Quora than here; HNers tend to stick to more relevant self-promotion, and there's stricter community policing on popping into a thread with a pile of buzzwords and a link to your webinar that's sort of vaguely related to the thread's topic.
I've thought of Quora as having everybody except experts on it. Here are the first five questions I see on Quora's quantitative finance page:
1. Who (companies or individuals) are some well-respected recruiters in quantitative finance?
2. What metrics do you use to figure out if a commodity is undervalued or overvalued?
3. For a fresh maths/stats PhD, are there any advantages to starting a career in an investment bank instead of a hedge fund?
4. What is the purpose of Financial Engineering?
5. What is the most common topic beginners struggle with when it comes to Computational Finance?
Now here are the first five I see on StackExchange's quantitative finance page:
1. Nelson-Siegel model is not arbitrage-free
2. Autocorrelation and Markov Regime-Switching
3. What are some examples of non-financial risks and contingency plans?
4. Is it ever possible that---because of illiquidity---exercising an out-of-the-money option is better than directly buying the stock?
5. What's the best way to test/validate an interest rate lattice model
Only one of these sites has experts on it. (Full disclosure: I'm a moderator on the Quant SE site. It took a lot of work to get that board up to expert level. I don't see the same kind of effort applied from Quora.)
1. Answers.com, 108mm monthly uniques http://www.quantcast.com/answers.com
2. Yahoo Answers, 20mm monthly uniques http://www.quantcast.com/answers.yahoo.com
And also watch out for Branch.com - it takes Quora model of "Experts Q&A" to "Invite-only Experts talking on a roundtable". Potentially disruptive as it plays on psychology of "exclusiveness" - Evan and Biz stone are betting on it via Obvious Corp.
The front page just has the lowest common denominator problem.
It is not a bubble because I also believe that certain companies (especially in mobile space and "cloud" space) are going to be big winners.
However it is a little frothy, because some companies are getting high valuations but they are still part of old Web (web 2.0 - no mobile, etc.)
So the open question is, how many technical, mostly-science based topics exist that work on the Stack Exchange Q&A engine -- and how large can they become? Many have been tried, some are working; see the statistics at http://stackexchange.com/sites?view=list#traffic
At the very least, Stack Exchange produced Stack Overflow, which is already absolutely enormous, growing like crazy, and well on its way to becoming the Wikipedia of programming. We can't really say that about Quora for any topic, can we? Will Stack Exchange ever recreate that level of success on any other topic? I don't know. I suppose you could plot growth curves of the various sub-sites and estimate how long it'd take for them to reach the size of Stack Overflow.
I might be misreading you, but it seems you don't think a bubble can last for 1000 days. It did in the 90's. I think your kind of attitude leads people who cry 'Bubble!' to say, after 1000 days, 'Um, I guess I was wrong. Damn, being wrong just cost me a 10x return on my investments I wasn't making. I better start investing before I lose even more!'
I literally remember reading a comment from someone in the late 90's 'Not buying a house 3 years ago has cost me 400,000.'
Well, in retrospect, no it didn't, it was just a bubble.
The protection against a bubble isn't waiting until it's a long, well-established bubble: the protection against a bubble is having lots of sales and lots of cash stored away. If you're punished too much after a bubble-pop in your valuation (get priced at a tiny price per earnings) great: you can now buy back your shares and mint money by selling them again when your price to earnings is something reasonable.
on the other hand, if you don't have sales, your price to earnings is infinite. Then it's not the bubble you should be worried about, it's getting customers.
2. Founder ponying up millions of his own cash.
3. Frighteningly Ambitious(TM) problem.
4. Reasonably good traction and product execution.
So it becomes a complain and explain platform like twitter.
5. Investors are hunting for an Instagram-like Facebook spillover win.
Its possible that they launched as a general purpose Q&A site and then they may have switched when it seemed prudent. Or its possible that they may still be trying to be a general purpose Q&A site, but in that case their branding doesnt match their ambition.
I don't know a single person outside the (somewhat incestuous) startup industry that uses Quora. In fact, I do not know a single person outside the tech industry who knows about Quora.
Claims that Quora has achieved good traction are, to be polite, overly generous, but more frankly, bullshit.
Also: they have an interesting strategy of courting mainstream media distribution; there's a "Quora" section on Slate now, for instance. They could keep doing that.
9 figure valuation? No clue. Valley numbers, agreed. Just saying.
This would not mean much in general, but I am willing to bet that most of those Quora investors are also Quora users so they suffer the delusion too.
Sure, Adam D'Angelo and Charlie Cheever didn't actually start Facebook, but they came as close as anyone can be short of actually being Mark Zuckerberg.
I'm just trying to understand how people can come up with valuations like that …. I just don't get it ...
1. your parents or granparents call you to ask how they can invest in this Quora round
2. the mainstream media say we are not in a bubble
In fact, a simple check would do: let them show how much they made last year, projected growth for this year, and we can start talking about anything beyond a $10m valuation.
I just hate this idea that you can create a company without any kind of realistic approach to making money, value it at in millions without any kind of basis and hope some rich (and dumb) buyer bites. It's opportunistic at best and dishonest at worst.
It makes everyone in the milieu look like he's trying to pull this stunt, although there are plenty of honest (and profitable) companies out there not getting millions in investment because they don't try to sell something shiny.
I actually struggle to think of many other b2c companies who are equally as useful and yet also fun to use. It's like Google Search (useful) combined with Tumblr (fun.)
Quora is much better than all its comparable companies (eHow, Mahalo, etc...) in every possible sense: community, technology, founding team, etc. Traffic is very strong, it displays strong social integration tools and has managed grow very impressively.
On a side note, I expect Quora to move into the mainstream with much less friction than Reddit or Askolo. Being more design and experience oriented, Quora has the upper hand here. I hope Quora's team realizes and exceeds this valuation.
How can Quora "go mainstream" and avoid this problem?
Quora goes mainstream when a certain elite, much like the Salons of Paris, gather there. Academics, Business, Cultural, Medical, Scientific and Technology elite all show up.
http://techcrunch.com/2012/04/21/quora-is-raising-at-a-400m-...
And Quora already has numerous Q/A's on the valuation. See, for example,
http://www.quora.com/Valuations/Is-Quora-worth-400-million-d...
along with the Related Questions listed on the right.
We have written an article (still to be published) on these expert Q&A sites. Stack Exchange, Quora, Askolo, Sprouter, Reddit plus more are delving into matching questions with answers.
There is growing trend towards matching experts to inquisitive minds. These platforms are essentially allowing subject matter experts to sell their knowledge to others. Why not?
Maybe the high valuation - Quora and others are commoditizing expert knowledge with the intention of selling this on?