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Comment by rdl | Hacker News Reader

The genius here was Bill Nguyen turning a failing company and a pittance $11mm offer from one failing company (Nokia) into an $80-160mm buyout from a real company (Apple), essentially though hustle alone.

But it's zero-sum genius. I can respect him for being good at playing a specific game, but it's not a game I want to play myself.

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This is how business people get paid the big bucks.

All your startup's engineering work = $11 million

A month of CEO hustling = $149 million

I might be wrong. But, I think the then CEO was actually one of the current YC partners, Geoff Ralston.

Bill Nguyen was on the board I think.

And thus the shakey underpinnings of a marketplace that overvalues certain companies come about.

I struggle to even respect it. He ripped them off; the world would be better off without his "hustle".

"Ripped them off"? These acquirers didn't have the resources and faculty to make their own decisions? You "rip off" helpless people. These aren't helpless people.

He ripped nobody off, he sold a company in the exact way you're supposed to sell a company or for that matter the exact way you sell anything with a limited supply. Heck thats how you sell a house.

Step 1. Find interested parties, Step 2. Get Bids. Step 3. Allow other interested parties to counter.

Thats it there's no scam here. Its not even genius its company selling 101. Everyone involved had the opportunity to do their due diligence. Instagram did the exact same thing turning a $500M Twitter offer into a $1B offer from Facebook.

In my mind what you call "company selling 101" is just a legal, high level form of profiteering.

It's an auction. Profiteering (price gouging) applies to commodities, which already have a market price.

Not even really zero-sum, because selling it to the person valuing it the most (to whom it is most useful) does create value.

But it's not as satisfying as making something that never existed before.

commodities, which already have a market price

Balls. Go to a commodity exchange and you know how you find the price? The last price paid at auction.

Sometimes the negotiation is disguised, using an order book or dealer system.

But sometimes they even explicitly run a call auction.

All Wall Street is is a continuous auction house.

All Supply/Demand is is a continuous auction.

Ripped off? Apple won what was effectively a sealed-bid auction: they paid a lot of money to beat Google (and Nokia, which was probably less of a big deal). They paid a lot of money for a real service to beat off real bids from real competitors, and to do so immediately. The fact they didn't realize how low Nokia and Google's initial offers were is down to Nguyen not being stupid enough to tell them.

If anyone got "ripped off" it was the venture capitalists who later threw $41 million at the "Facebook-killer" being developed by one of the few people in the Valley that had barely used Facebook. But again, they were sophisticated specialists who knew how to evaluate risk and do due diligence, so if they were so mesmerised by Bill's confidence in his ability (and his team's track record) they wanted to take a premature punt that size in an already-crowded space it's their own fault.

Lala was the best music streaming service at the time and I am pretty sure whoever bought it was going to benefit immensely. (I'm pretty sure it's the source for the iTunes match technology.)

I don't know for sure personally, but I don't doubt that.

What he did wasn't wrong. It was just exploiting a hugely inefficient market. I think engineers would rather build stuff and make things more efficient when they see something like that -- salespeople would like to exploit it (and in the process make the market more efficient). It is more an aesthetic choice than anything else.

Sales 101 - the price is whatever someone is willing to pay for it at one point in time ... no more, no less. Selling real estate is exactly the same.

And he almost did it again - if he "exited" at the peak of Color.

When was Color's peak exactly? When they raised money? Because after that, it was mostly failures after failures.

And before that, too. I'm still struggling to see what, if anything, Color did to enhance anybody's life.

Oh, I don't know. I recall a good half an hour of gleeful Schadenfreude in the office when we all tried out Color for the first (and last) time.

I'm not saying that a fleeting moment of entertainment in the lives of a few jaded technology folk was a good return on that investment, mind!

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