Quora's $50 million | Hacker News Reader

Quora's $50 million

dcurt.is

87 pointskreutz57 comments

It seems pretty obvious why they raised so much -- I don't get the confusion. They're settling in for the long haul. Remember: these dudes are already rich from their Facebook days. They wouldn't even be doing this if they didn't truly want to.

They raised $50 million so they can keep going on this project until it's solved, which may take 5+ years. The financial resources issue has been solved. It's what most anyone who's truly dedicated would like to be able to do. They just happen to be in the position to do it.

I don't think anyone is confused why a team raised money. I think every startup out there is going to take as much as they can for as long as they can.

The confusion is what the VC's saw in Quora which would warrant giving them so much (at such a high valuation).

"I think every startup out there is going to take as much as they can for as long as they can"

No, many startups take calculated risks that they can increase their valuation before needing to raise again, or get profitable before they need to, in hopes of avoiding selling large stakes in the company.

Quora is creating a giant collection of well-indexed, compelling bits of content in a format that Google finds delicious. They're already in the top 1000 sites and have been rising steadily. And they're doing it in a way that users are doing most of the work.

The obvious comparison is Wikipedia. Whether or not they'll get to that level I can't say, but it's not crazy to suggest that they will, and if they do they'll be worth a lot more than $500m. And even if they don't, they'll have a lot of users, a lot of pageviews, a smart staff, and a solid technology platform. Odds are good they'll find something to do.

I agree with the Wikipedia comparison. I'm seeing many of those Google searches that have Wikipedia pages as the first result now with Quora gaining ground fast.

There are two things that Quora is doing that aren't novel, but they are doing them really, really well:

1. Building an amazing topic taxonomy. A big hierarchy of topics that interest people.

2. PeopleRank. Who is an expert on which topic? Have they linked their Twitter/Facebook?

Quora have some amazing data.

If that's what they're creating, they're not worth $500 million. Let's do the math: Let's say 5 million uniques a month, X 10 pageviews per user(that's asking a lot too) = 50 million pageviews a month. Let's say $10 CPM (that's asking a lot too).

That's $500,000 a month or $6 million a year at best. Great for a 1-2 person team. Not great for a startup asking for $500 million valuation. The pageview business model depends on huge huge mass. Not curated, premium Q&A. Hence why Yahoo Answers get a ton of traffic: because of a bunch of bullshit questions being asked every minute. Quora is the anti-thesis of that.

I think your math is a little off. When the Huffington Post was acquired (for $315m), their traffic was 15m daily page views. Assuming Alexa's not too far wrong, Quora's traffic is about 20% of the Huffington Post's at the time of acquisition, so figure ~90m pageviews/month already.

But really, they're just getting started. Quora has been open to the general public for less than two years. I expect their traffic will be much more of the kind Wikipedia gets than the Huffington Post does: long tail, evergreen content that gets a ton of free traffic from search engines. For that, and for the browsing that they so wisely encourage, you don't need lots of bullshit questions. You need lots of good ones that will turn up in search results, plus plenty of answers they find satisfying.

And there's plenty of room to grow. Wikipedia gets 100x the traffic Quora does now. I don't think Quora will ever be that big, but the $500m valuation isn't obviously insane.

out of curiosity, what is the data backing the "in the top 1000 sites" assumption?

I can see alexa reports that for example, but I am still trying to understand what smart people use for traffic estimations.

If I'm manipulating the statistics in my head properly, even with a skewed sample, Alexa stats should converge on the truth as you go higher in the ranking, because the distribution of web site accesses is very skewed towards the top websites, which should have the effect of limiting the error as you get closer to #1. If Alexa says a site is well within the top 1000 (as opposed to just on the border, and Alexa shows them at 771), I'd accept that as strong evidence.

All free web usage data is terrible. (And probably all the paid stuff too; it's a hard problem.) But I trust Alexa for order-of-magnitude relative position for consumer web properties. That's mainly because I had access to the internal stats for a couple of sites like that for years and the Alexa stats weren't egregiously wrong along that axis.

Raising more money means giving away more equity. If you think your company is going to get a higher valuation later, it makes sense to raise a smaller amount now and then raise again later when you get more $$$ per % of equity.

Which is what - beating out Yahoo Answers and Answers.com? Facebook Questions?

Well StackExchange, but moreover beating out Wikipedia and Google seems to be more in line with their long game.

(e.g. "I ended up going to Quora, because I was even more passionate about the vision and the role. I had a chance to help build what could become the platform for all human knowledge, which I thought could be a revolution of the same magnitude as Google" http://www.quora.com/Instagram/Did-anyone-decline-an-offer-t...)

I don't see how they can center that vision around a question/answer format. To me it seems limited. On a separate note, and given a recent HN discussion about some of the constraints Stack Exchange puts on free flow of discussion, I see an angle Quora can explore.

discussion is only tolerated on Stack Exchange insofar as it allows us to get better questions, and better answers to questions. Just that amount, and no more.

(note: I do not disagree that the Q&A format may not be appropriate or even correct for all topics. Particularly and perhaps most of all those with no remotely verifiably "correct" answer possible.)

Quora's Q&A format is a lot more permissive than the SE one though. You're allowed to have questions that don't have correct answers, and are asking much more general questions - discussion is more accepted.

Surveys and polls are the only question-types banned on Quora that I can recall.

An everyman's Wolfram Alpha?

It seemed to me that the fundraising is mostly to make a bunch of noise. When your company is growing by leaps and bounds, and the only limiting factor is that you're cash-strapped, a round of this size makes sense - not with the numbers/usage Quora currently has. Most of the reasoning that Adam mentions seem rather frail. Doing a funding round just to post a better-than-you valuation isn't what they should be focused on at the moment.

Ummm, no. D'Angelo put $20 mil in his own company so it's just $30mil, unless I read wrong. That $30mil is nothing, Thiel is making over $2 Billion on FB so this is just some crumbs as a thank you and "just in case."

"With only around 20-30k daily active users, it certainly wasn't money raised based on user adoption".

I wish people would stop throwing AppData figures out as if they're fact, they're not. Dustin Curtis has no clue as to how many daily active users Quora has (no one does), but rather how many daily active users who so happen to have connected their Facebook account.

It's not a good indicator of success, and Facebook (and in turn AppData) has proven to be incredibly inaccurate as of late in regards to user numbers.

The bigger thing is not what fraction of Quora users use facebook logins, but how much of Quora's traffic is from search results by non-logged-in users (who may be new to the site).

I think Quora would be fine with 20-30k active users with accounts, creating questions/answers/comments. They've rolled out features (Credits, and requiring Credits to promote questions) which imply having a large number of people asking poor questions and giving poor answers is something they're actively trying to avoid.

Yet, if someone like Keith Rabois or Harj Taggar answers something within his field of expertise on Quora, it gets great search placement, AND often ends up syndicated to Forbes, etc.

"Quora as a replacement for blogging, by high value individuals" is the thing to look out for, not huge daily active user counts. With great content, search traffic will follow, and then there will be some way to monetize.

Not every social network has to be peer to peer. If I got to watch a community of great physics experts (Quora actually has some very strong engineering expertise in mech/nuclear, surprisingly) interact, and then pay to ask specific questions, I'd be quite happy. Either pay cash, or pay with answering IT, banking, war zone, etc. questions asked by those physics experts.

"With great content, search traffic will follow, and then there will be some way to monetize."

I went through the first dot.com bubble - and I heard a lot of sentences like that. Not saying that Quora isn't valuable, or that it isn't possible to monetize, but the whole build-traffic-and-we'll-figure-it-out-later gives me 'Nam flashbacks.

I used to do a lot at Quora - but the more I thought about it, the more I figured that not getting paid for giving up my knowledge was a bad idea. I find it most useful for discussions/information on start-ups.

All being said, they have a lot of talented people working there and a lot of great data - someone will buy them if they can't figure out how to make it work financially.

It's interesting that you mention traffic from search results. I do a lot of queries, on a lot of topics, some of which Quora could probably give me an answer to, and I have never, ever, seen a Quora question appear in Google's results. Until I checked, I actually thought Google didn't index them (it does, but I only see it when I put "Quora" in the query, which kind of defeats the purpose).

Could be due to a lot of things (location, Google bubbling me, etc) but frankly, if that's what they rely on, I feel they have a long way to go. They are very far behind Wikipedia or Stack Overflow, for that purpose (even if those aren't their most direct competitors).

I agree. I've added the source and dulled the sentence. Definitely a mistake.

Thank you, this cannot be said enough. About AppData, ComScore, Compete, or any other public traffic estimator.

I love AppData to pieces, it's fantastically useful and I hit it pretty much every day--but it doesn't actually even match Facebook's data sometimes and Facebook logins are only one of Quora's supported login types, so one could extrapolate that there are at least that many users but in no way could you say that's even close to the topline (you might guess it's 2/3 of it, but it'd still be a SWAG).

Yes. I actively use Quora without Facebook account connection.

Curtis seems to be an envious person based on his blog entries I've followed through HN. That completely unnecessary snide remark was very petty.

Quora is the epitome of Silicon Valley group think. You think the site's big if you live in the valley. Leave and no one's heard of it.

This is bubblicious.

Anyway if anyone from Quora is reading this: your site has become a terrible experience for those with a small screen because the top quarter is dominated by your floating top bar.

That's precisely the point. Silicon Valley is saturated by a bazillion products, so the audience here is extremely discerning. Most people will try most things, but to gain critical mass like that within Silicon Valley is very, very difficult.

Empirically, there's a very good chance that a product with critical mass here will tend to spread like wild fire to the rest of the world (and I suspect Peter Thiel has much better data on that than you do). Since the purpose of investment is to buy low and sell high (and the purpose of early stage investment is to buy very low and sell very high), putting money into Quora is as good an early bet as one could hope for.

I disagree tho that doesn't mean Quora won't be successful. It's just not realistic to think SV is representative of most populations. It's a very tech-heavy population which is not necessarily what the masses are looking for. Quora could be a dominant Q&A site for tech issues... and perhaps that's worth the big money (I just doubt it).

I both agree and disagree.

Anecdote for: when I joined Quora, almost everyone there was from the Valley, which got a bit annoying sometimes, as the default assumption was that you were in California. Eg I asked "What's the best way for a British graduate to break into China's tech industry?" I had 2 or 3 answers on the lines of "don't, stay in Silicon Valley for now". I've never been to SV.

Anecdote against: that seems to have died down now, and there's tons of smart people from all over. It's probably one of the best forums I've found for discussing startups in China; Andy Mok, Paul Delinger, Kaiser Kuo, heck even Da Shan are on there.

quora has about 650k questions in total, most of which are unanswered and in general ignored. my estimate of answered questions puts it at 80-90k.

as for user-base, the churn rate is huge with the majority of users following 2-3 topics before leaving the site forever. there is subset of users who generate all the content and value of the site.

lets look at some numbers:

Yishan Wong: Answers 1457, Question 760 Jeff Hammerbacher: Questions 1092, Answers 1041 Jan Mixon: Questions 802, Answers 4101 Michael Wolfe: Questions 9, Answers 1088 Mark-Hughes-1: Answers 1294, Questions 48

power-laws ahoy.

it's good source of info on startups and the tech scene, which makes it more like a popular discussion forum than a social network. I don't see this growing to millions of active users unless it tries to take on Yahoo! Answers.

i believe the quora team acknowledges this, and with the introduction of boards they're trying to redefine the site to be some kind of textual pinterest.

this sounded quite pessimistic, it's actually the site i visit the most and i hope they continue to grow without comprising on the quality.

Always remember that most of the content on sites involving "user participation" are heavily influenced by a small minority of people (Digg, Reddit, etc) I assume the same holds for Quora.

re user engagement the "threshold" for submitting a funny picture or pun anonymously is much lower than writing a well-written answer in your full name.

I found it interesting that Peter Thiel invested his own personal money into it.

Does that mean the Founders Fund wasn't interested?

Is it common for a VC (especially a prominent one) to invest their personal money into startups, as oppose to their fund's money?

Thiel isn't beholden to time cycles that the funds are. So I wouldn't read into it that Founder's wasn't interested.

This might help: http://www.danshapiro.com/blog/2010/08/vc-insanity-economics...

Why I feel these questions are so Quora-like?

Take FB out and Thiel has a horrible investment record. In case people missed, he has a horrible investment record. A coin toss would be better than his choices, let alone low cost index funds. http://www.bloomberg.com/news/2011-01-12/clarium-hedge-fund-...

Yes, but you shouldn't take facebook out.

The whole point of investing like this is that a home-run can offset a large number of failures / also rans.

The Wright brothers have a horrible record of making things fly if you removed the flights made at Kitty Hawk.

Yes and no. I think he just gave a $500K check from his own funds so others will not see a cut of that, just losses from his other investments. But yeah, he made money for himself gambling /investing /a combo or whatever. However, not even his FB lottery win can get his record out of the hole.

He is connected, famous and rich so he can afford to and can pick the early stage companies to through a bit of money at, hoping a few strike. But, there's a difference between billion dollar sized funds and angel ones.

Perhaps I'm confusing Quora with another site, but isn't this the one that throws up a sort of registration wall when you follow a link there? Doesn't happen now when I try, but I'm sure it has in the recent past.

Millions of dollars are being sunk into this site? Why?

Quora is amazing. I don't know if they'll disrupt Google or Wikipedia but the quality of the content there is light years ahead of any similar site. You post a legal question and get a bunch of lawyers competing to give you the best answer. Post a question about the early days of Facebook and get 12 early employees all competing to give you the best answer. You post a question about the cops and get amazing answers like this from police officers:

http://www.quora.com/Crime/What-should-you-do-if-someone-put...

Join the site and poke around a bit if you still don't understand. It's like HN. Why is HN so awesome? Because the caliber of people posting here is off-the-charts relative to every similar site. Same with Quora.

It's better than HN. I like HN, but after using it for a few years I noticed something wrong with the comments here that I couldn't quite articulate. Then I saw Quora, which showed me just how good a discussion community could be.

I've only stumbled across Quora a few times and don't really know many people who would even have heard of it, but what you've described sounds like AskScience on Reddit. Though their design isn't as nice.

Interesting about the gun to your head anecdotes is that they'll only ever be told by people who survived these kinds of encounters.

Quora explains using AWS for "everything" here: http://www.quora.com/What-stack-does-Quora-run-on-EC2, but they don't say how many of what. Their traffic is a secret too, despite what the article tries to assume of AppData, but I'm curious why it is believed that running application servers and their databases/cache is economical. Does Quora really see a huge flux in activity and inactivity?

I would not be so quick to judge the valuation. We have only one side of the story, and that side, the reporters, has proven to only care about their own page views. The founder putting $20M of his own money is a strong indication that the team believes there is real value in Quora. Until we get statistics from the team, we should hold out on most comments regarding the valuation.

"20-30k daily active users."

That seems rather...low for a $400 million valuation.

This number is based on users logging in through FB connect only. From the Techcrunch story:

"According to AppData, 20K daily active users and 180K monthly active users log into Quora through Facebook Connect — Bear in mind that this is a small fraction of its total number of users, which Cheever and D’Angelo famously never reveal."

Yes, it does seem kind of low when you look at the activity compared to other sites like Stack Exchange sites. However, something I've noticed is the higher percentage of well known people answering questions on Quora. I could see them making a play for increased participation among well connected or high expertise individuals and focusing more on the quality of content rather than quantity. It would certainly be an interesting avenue to exploit should they choose to.

Not necessarily if you're using the same metrics as Pinterest's valuation..

It's fair for a blogger to raise questions and not provide answers. But I'd be very interested to hear dcurtis's personal opinion on this. Why did they raise so much money?

Is it possible they raised this to ensure they didn't die in the event of a bubble?

Funding is cyclic, going through ups (now, unquestionably) and downs (2008/09 for instance). I'm nothing of an expert, but the alternative approach of raising funding to last not-that-many months to develop further and likely not yet 'be there' seems unwise.

Possible? It's a certainty:

"We intend to use some of this funding as a cushion in case of macroeconomic changes. More than half our series A funds from two years ago are actually still in our bank account today. We could have waited longer to raise this round, but we wanted to extend our runway."

Where is the money to be made?

I thought ENCOM was worth more than 50M.

Reply on news.ycombinator.com