The Summly deal makes no sense
philosophically.com
philosophically.com
Right now, somewhere in the world, a child is being born into an uberly rich family. That child will grow up to inherit millions for absolutely no work. He'll live the good life full of yachts and private jets.
Right now, somewhere in the world, there is a party happening full of gorgeous wealthy people who need not lift a finger to attain the luxuries that they have. Their success is only a matter of genetics and luck.
Right now, somewhere in the world, is an investment banker who is making literally millions after clicking a few buttons and making a few phone calls to a few friends. He knows the right people and is in the right place, and that's all that matters.
Right now, somewhere in the world, is a 20-some year old guy who is worth billions because of a website he started. He was born into a family that sent him to the right high school. He then went on to one of the best universities in the country, built his website, moved, met the right people, and raised $500+ million in funding. He and likely generations down the line are set for life.
Right now, somewhere in the world, is a 17yr old teenager who started a company with some money from his parents, built a product, with help from friends and family, and got acquired for $30 million.
There's always someone becoming richer than you for much less work, every second of the day. Look past that and just keep working. I get down about how unfair that is from time to time, but there's nothing you can really do about it, other than focus on your work.
Edit: Others are asking where in the article is jealousy mentioned. It isn't, but I took the entire post as one rooted in envy and bitterness. There certainly wouldn't be any of this type of reaction had the guy been a 40-year old who finally got acquired after years of failed attempts. If anything, I'm sure people would be applauding him and the whole affair.
It's also just kind of how people are. You can't reasonably expect a large corporation -- which is just a big group of people who are all trying to make decisions and getting in each other's way -- to be able to make logical choices when they're subject to every large stakeholder's whim and every bit of incompetence that happens everywhere along the line.
Is it happening in a capitalist setting here? Yes. But it happens in all settings all over the world, so to suggest it's unique to this system ignores the actual nature of the issue (which is the Human Condition).
The downsizing and outsourcing is driven by incentives to remove cost from the balance sheet. If there's no incentive to do so wisely, if there's no disincentive against doing so poorly, people will inevitably make bad 'outsourcing' deals, just to have made them. Quality might take a hit, direct billings might skyrocket, products might have to be scrapped, etc. But if you don't fix the incentives, it will happen over and over.
Similarly, if you incentivize a person to make deals, if they have a stronger incentive to make deals than to make good deals (e.g. if they have no effective disincentive against making bad deals) bad deals will get made.
But:
1- Is the traction convertible to any Yahoo properties?
2- Are the 1 million "downloads" legitimate interested users? Do any of them still use the app?
3- Did the "traction" come from paying firms to get them to the top of app store(s)?
I assume Yahoo knows more about this stuff than I do, and I'm not a Yahoo shareholder. Still, I didn't get the impression that the article was just complaining about rich teenagers.
For $30 million, even an order of magnitude less, I think a lot of us could put together a team good enough to implement the Summly app. That's what's being questioned by the blog post.
Technical parity is a bad way to price a company, i.e. the value of Summly cannot be approximated by what it would take to replicate the technology in-house.
It does not, however, mean shareholders can't/shouldn't complain about throwing money away, though.
$30 million could be spent on building daycare for all Yahoo mums and dads who can no longer work from home.
The one thing that I have learned about corruption is that at least small instances of it occur everywhere, even if its not "the norm." Wherever there is way to make money, people might very well be doing it.
And yes you are right although I tried to imply that shareholders were the ones being screwed - this is obviously unfair to shareholders, whether the transaction is corrupt or not.
Or, when the bizdev team is told to spend a billion dollars this year, (1) is is easier for them to like in extra money into each deal than to find more smaller deal, and (2) they don't get bonuses for only spending 500million and saying there is nothing else worth buying.
I think the OP sentiment and many comments here are mostly classic HN resentment of success.
The fact that your comment has received the most upvotes indicates that people generally agree with your sentiment that nobody should be bitter or jealous. Yet nobody is suggesting any bitterness or jealousy... So who exactly is this directed at? Hey HN... I think you're "projecting." :)
It's worth talking about. It's worth criticizing. It may not be worth obsessing over, but it is worth some portion of our attention.
Fairness is a fictional manmade concept. That we expect some sort of fairness in life is solely due to our social contract. It's not fair to me that someone steals my car and thus we have systems in place to address that. However, nothing in our laws, norms, ethics, or philosophy says that people must get everything they deserve and no more or no less. Hence the concept of fairness does not apply to kids of billionaires or friends of politically connected.
Because other peoples' concepts of fairness certainly do consider the ultra-rich.
While many might feel that kids of rich people have an unfair advantage, we haven't as a collective decided to do anything to put that to an end. We have made it a bit easier for non-rich kids to get some of the benefits that rich kids get like daily meals, access to education etc. but the gap is far too wide to bridge for everyone.
You can certainly try to design a social structure where nobody is rich or nobody gets preferential treatment but those haven't worked well so far for numerous other reasons. In a capitalistic, democratic/republic society, we haven't legislated the unfairness of being born rich, mostly because most of us don't think it is unfair enough to be illegal. In fact, most of us would think it is fair when looking at it from the parents' point of view. If you work hard and make a lot of money, why shouldn't your kids have it better than you did?
What I was trying to say to the parent was that fairness is not a concrete standard, especially when it comes to things many of us can disagree on.
So not entirely manmade.
I don't see this.
Fairness is about mathematical expectation. Fairness means people have equal opportunity (often within a restricted domain, or ignoring certain starting conditions). There is [nearly?] always going to be a locus in which fairness is asserted outside which it is no longer the case.
* The race is fair because both runners run the same distance. Ah but the ground is uneven.
* The race is fair because the ground and distance is even. Ah but one runner is poor and hasn't eaten for days and so is weak.
* The race is fair as the runners have been nourished equally, the distance and going are controlled. Ah, but this runner's family have a genetic disposition that enables them to run faster without tiring ... et cetera.
If mankind didn't exist a situation could still be fair or unfair for a creature - a combat test for leadership is unfair because this creature had a greater opportunity for nourishment and so grew stronger than the others. That of course doesn't mean it's the wrong test, just that each creature able to take the test doesn't have equal opportunity to achieve through their own efforts.
>It's not fair to me that someone steals my car //
Everyone had opportunity to steal a car, including you, that's fair!
I don't equate fairness and just deserts [ie justice]. For example two people can compete in a fair competition but the least deserving - the one who made the least effort or the one whose lifestyle is least noble - can win; the competition was still fair though.
It's laughable that a programmer would worry about how unfair the industry is on the top end. Do you get how lucky we are compared even to other engineers? To say nothing of service workers who work much harder for much less.
Now, let's suppose you make $15k/yr. (By the way, how's that for your estimate of a European salary? See why I said I hate generalizations?) This site says you're in the top 13% richest people in the world. Immediately, a ton of questions arises: OK, top 13% - what of it? Was it practical to take everyone in the world into consideration? Why and how should this (unverified) information change your feelings about your well-being? Is the current wealth distribution, as represented by the chart, really not OK? Will the knowledge about being in the top 13% help you pay your bills? Should you, now knowing that you are ahead of 87% of population, start to think about redistribution of your wealth and transferring it to those behind you? Should you not be pissed off by those guys higher than you? What if you'd find yourself in the lower 50%? Should you get depressed, or get to work, reaching the 50% mark and then stopping, or what? I could go on and on, but the point I'm trying to make here is that all those questions can be answered in a dozen or so ways, exact number depending on your will to participate in rhetoric battles, and that's why I just can't figure out how this chart can be of any use. There's probably some statistical value in it to me, but almost none practical value. I hope you now see what I was trying to say in the GP comment.
Lastly, and moving from the comparison chart itself to the idea that it's used to be backing up here: I dislike cheap attempts to make people participate in some charity out of induced guilt, and I dislike portraying of being wealthy (whatever that means) as a kind of being unclean with money and obliged to share as a tool of said shame/guilt feeling inducing. I don't think charity should work this way and I think this instills the wrong views of the basic principles of economical and social responsibility in the readers and just exploits the guilt feeling.
TL;DR: Do you need money? You should probably stop contemplating 'global salary comparison charts' of questionable real world value, and instead get your statistics straight and start working on your skills/paycheck/whatever keeps you wealthy. Do you want to participate in the charities? Stop getting anxious and building guilt inside you for no reason, get informed (really, get your statistics straight already) and get involved.
with that said, I do consider myself tremendously lucky, but when looking at such lists there are more dimensions to consider than just salary number.
The tool is buggy though: after ~$1M/year it does not change results.
I think that's far from truthful.
The fairest time would be before [mass] land ownership, when anyone could stay with their tribal group or, should they choose, set off on their own and find land a-plenty to hunt/develop/farm as they see fit.
Hard times, sure; but that sort of situation seems most fair to me.
Right now, somewhere in the world, a child is being born in a farm house with a dirt floor. That child will grow up to die in a civil war before age 14.
Right now, somewhere in the world, there are people waiting in line to get food from a charity.
Right now, somewhere in the world, someone is suffering from a disease because they can't afford the cure.
Right now, somewhere in the world, a man goes to work carrying bricks for 10 hours a day to feed his 3 children.
Right now, somewhere in the world, a woman rides her bike to work in polluted air at 6am, to a factory job where she will work 12 hours a day putting together tablets that all the "unlucky people who have to work" trying to be dot com millionaires will buy one day on a whim and then discard less than 6 months later. And this is good, because she has a job.
The real interesting thing is these people generally don't complain much, not nearly as much as we do.
My life was very different from my Mom's. My Dad was a police officer and, though we weren't wealthy, I never went without. But, I got to grow up in a household where two things were valued - hard work and education. Consequently, I'd spend summers working in my Grandma and Grandpa's business - I had my first job (with an actual hourly wage) when I was 8 years old and worked every single summer and during Easter break.
Grandma never complained because she got herself in that mess and by golly, she'd get herself out. That sense of resilience carried through the generations and now, finally, my generation has the benefits of a middle class upbringing, combined with the work ethic that only comes from having been very poor one generation ago.
I think that it's wonderful you're concerned with people who are less fortunate and I respect what you wrote. However, poverty is a great motivator and frankly, I'd rather hire someone who knows hunger than someone who went to prep schools and fancy Universities with billion dollar endowments...
I regret upvoting you prior to finishing your post.
This is bullshit. Of course we can do something about it. We're members of a society, and if we collectively think something is bullshit, we can do something about it.
I'm tired of people looking at these absurd inequities and shrugging and putting their head down and hoping maybe they'll get lucky too. In the meanwhile, these people at the top are ensuring that only people like them can continue to succeed.
Let's tax everyone who didn't earn their wealth. Let's put an end to dumb gambles that only reward people born at the top.
I'm saying is maybe increase high end income taxes, maybe look into the viability of higher capital gains taxes, maybe find and create some kind of disincentive for companies to be bailing out VCs.
Find some way to even the playing field. I'm sorry, but you don't need to have come from Stanford to be smart enough to work at Yahoo! or Google or etc.
> I'm sorry, but you don't need to have come from Stanford to be smart enough to work at Yahoo! or Google or etc
It's like every other human relationship, the more you have to offer the higher your standards can be. Google can afford to hire only top CS people (or accomplished non-traditional ones) because they're Google. Yahoo!... I don't think that's going to work out so well. The market will take care of it soon enough.
>It's like every other human relationship, the more you have to offer the higher your standards can be.
It's more complicated than that. Since the prestige of your alma mater is largely divorced from the quality of the teaching therein, it's also an expression of class discrimination.
I have this burning suspicion - borne out by my own anecdotal experience - that the most important thing distinguishing the median Harvard undergraduate from the median Good State School undergraduate is a capacity to absorb the tuition fees.
Setting up a system that rewards having been born to rich parents is ultimately detrimental, in my opinion. It's just a lot easier to check whether you came from Stanford than to determine if you're smart.
Not true. Even near the upper end, the price tag is not insanely high compared to top state schools --
Harvard policy states that families with annual incomes below $60,000 pay only a student contribution of a few thousand dollars, and families with annual incomes between $60,000 and $180,000 pay the student contribution plus a family contribution averaging 10 percent of annual income.
This assumes that a more reputable school necessarily represents a higher quality of education, which isn't necessarily true.
After all those million-a-year investment bankers did just that.
It's just plain to me that we're getting fucked by those much further up the chain and being admonished for having the gall to find it unpleasant.
Ah, so you are saying this kid should have his not $30M but $29M taken away from him, because you perceive he didn't earn it. That's quite diferent!
As awesome as it is for the guy, this doesn't change the fact that a Summly got paid so much for a 2 employees and a founder. I mean the app hardly had traction and $30 million can you get you a nice army of talented mobile developers with signing bonus'. $30M really isn't justified in this case.
Congrats to the summly team, but it's also really sad how desperate and pathetic Yahoo is.
I took it as looking objectively at the deal, something that no mainstream press coverage of the Summly aquisition I've seen does.
With the traditional bigCo job market in the tank there is a push right now to get young people interested in entrepreneurship so stories like these make excellent narrative supporting that.
So you hear stuff like "bootstrap your company!" , "Be your own boss!" , "Be a risk taker!" and this message is being pushed to everyone, including those on the lower rungs of society.
I know a few people who bootstrapped reasonably successful businesses and have been asked to give talks on how anybody can do it and how they started with no investment and nothing more than $50 in their bank account etc.
Problem is that most of these guys had backgrounds that allowed for risk taking. They had families who were not necessarily uber wealthy but were quite happy to subsidise them for often over a year for things like living expenses and keeping their car on the road. The narratives often don't mention these sorts of factors.
Yahoo may be clueless here, but we really can't say that until we see if they get $30M in value out of the deal or not. So really all we can say is that we cannot see how they came up with that valuation. Then watch what they do to see where it goes looking for insights into their thinking.
[1] I recognize that "loser" is relative to the job they were asked to do, as opposed to the individual. At the time I was much less forgiving of people who weren't in jobs they fit (or didn't fit) with.
[2] I am still incredulous but I don't get angry and jealous over it any more.
Can the shareholders do anything about this? It seems incredibly stupid.
True, the world is unfair and it will remain so. But much of its unfairness is not a result of cruel nature, but as a result of our political actions. And I won't even go into what actions we should take to adress the issues you've raised, only to say that we should, and must act to change society, and that there's quite a lot we can do. We are not sheep.
I thought the kid was just lucky until I was in a meeting with him. His thought process basically ran circles around everyone else in the room, some twice his age. I realized then, that there are kids, KIDS!, much smarter than I'll ever hope to be in my life.
Sometimes you have to meet these people to believe they exist.
I would put far more emphasis on execution. Lots of founders with "vision" can spin great stories to investors but can't execute quickly enough, or are unable to deviate from their original vision when the market or other evidence suggests they should.
So yeah, some people are just sharp by nature - just like some people are cute, strong etc (not saying others can't develop, but it does give the "naturals" an advantage)
How many of the people in that room could say the same? What communities (or anything else) had they built? If they had built something, did they do it on their own as opposed to being someone brought in after the company was already successful? The kid probably ran circles around everyone because he was an expert (on this subject) among managers / developers / designers and anyone else who could probably do anything but run a successful community / e-commerce site.
I think about this sort of thing as a web developer. How many web developers who build client sites have actually built a successful site? How many designers really know how to design something which can sell? If you haven't done it, then you probably have no clue. But if you have been there, then you probably wouldn't be working for someone else either.
Long earn-outs could be one factor. Giving engineers $1mm with 1/2/3/4 4-year earn-outs would even be on the low side. Doing the same with a founder would obviously be worth less (especially at Yahoo!, given how founders historically leave after acquisition)
SRI is presumably getting a big chunk for a new license. Maybe even a domain-exclusive license. That alone could be $0-100mm.
If it's equity, it is a lot better for Yahoo!
It's possible the founders and key employees have a weird incentive structure -- if they continue with the product and get 50mm users, they'd get a payout of an extra $10mm vs. otherwise, for instance. That kind of thing could add to the reported deal figure without adding much risk to Yahoo!. (I'm sure I could get a "if you turn Yahoo! into a $60b/yr business in the next 3 years, you can have an extra $100mm" on any deal.)
I'm not Marissa Mayer's biggest fan, but I don't think she's in the same vein as the previous leadership at Yahoo!, so presuming that they're throwing money away irrationally isn't the first thing I'd do.
Bob Porter: [nods] Uh-huh.
Peter Gibbons: Wow.
Let's ignore the hurt feelings that our employees will have about making a 17 year-old a millionaire.
The price tag for this company aside, am I the only one that detects a hint of jealousy in some of the comments that seem to imply "but he's too young to be a millionaire!"?
It would be interesting to read any sort of explanation, not that we'll get one.
But this acquisition is eerily reminiscent of about.me's and is getting a similar level of scorn from us.
Big, dead, web 1.0 company purchases virtually worthless startup for no apparent reason. Site is like almost any HN weekend project that pops up here on Mondays. Confused!
You do realize, Yahoo remains one of the most-visited sites on the Internet? It drives an enormous amount of traffic.
By our standards, Yahoo may not be an exciting or innovative company. But it's in no way dead.
You make a valid point about Yahoo being able to produce similar results in house but the software alone doesn't get you a client base, publicity (certainly not the same level of publicity the Summify purchase has received) and the 3 guys they have hired.
So what if he's only 17? If he has good ideas about how to take Yahoo's mobile news presence forward then the problem should disappear. Of course if he's a poor developer then other employees have the right to be frustrated but it should only be based on his competency and not what he is worth.
I've no special insight at Yahoo (had a couple friends work there) but for any sufficiently large company with employees as talented as Yahoo (YUI, YQL, etc) this has surely happened. So... to have your idea/prototype/demo shot down, then later $30m spent on essentially what you'd offered the company for free... that's gotta be frustrating.
Again, pure speculation that this had happened, but I'd be surprised if no one internal to Yahoo had floated/demos something like this before. They certainly could have bought some of the hype (stephen fry, etc) during a rebrand. But... instead, they buy from outside vs using and promoting internally.
Once more - just speculation, but that's were I would suspect frustration would come from.
Bingo.
in fairness the culture there prob prevented people from even feeling this innovative and self motivated.
I've worked in a couple of large orgs where i've told management about great little cheap ideas that just get ummed and ahhed and then forgotten (despite in 2 instances using my own free time to make a prototype).
There used to be an incredible mix of talent at yahoo, and they squandered a lot of that.
What's also interesting is that no one (yet? - maybe I missed it?) seemed to mention the Yahoo 'kiss of death' - how many acquisitions have they done that end up never seeing the light of day, or get shut down? Brickhouse seemed like it might be successful, but culturally that didn't seem to work out too well over time.
That makes it very easy to make calls that in retrospect might seem extremely stupid. Even more so, many of the engineers who get shot down for truly bad ideas will still insist they are good.
Getting the balance right for what you spend time on is very hard.
(That said, I did work at Yahoo until 2005, and at least "my little corner" of Yahoo did feel very bureaucratic and not very conducive to innovation even then)
That has led to 2 different internal products and I'm presently working on something to replace a piece of commercial software that they paid almost $1 million for and doesn't work/has serious limitations. However I did it out of band because I found it interesting. I guess it comes down to put up or shut up.
Often when you come up with an idea, then go to try and do it you realise its 100x times harder than you thought
A major viewpoint that separates me from "when I was a kid" was the realization that the continuum of everything (talent, intellect, potential for evil, charisma, etc) exists. One judges the world by the people around oneself, but those are not limits of human capability, those are the friends one keeps. That realization took a long time to sink in.
Good on this guy. Nice play :)
1: "right" in the sense of a situation like this occurring, not in the sense of moral or intellectual superiority
Kid: Go for it dude, and good luck.
Yahoo: WTF?? Why not just build your own version of this?
C'mon, this can't be the first time you've noticed that "innovation" has been overused to the point of meaninglessness in tech. "Disruption" doubly so. Don't harp on this kid, he is no less innovative than 95+% of "innovation" I've heard about in the last year.
That having been said, it is a bit rich for Vibhu Norby to be concerned about the hurt feelings of employees by making a 17 year old a millionaire. That is an incredibly, incredibly, incredibly, narrow area of the social consequences of wealth to focus on. I have a hard time taking such a myopic point at face value.
"Summly is backed by several investors, including Horizons Ventures, Ashton Kutcher, Betaworks, Brian Chesky, Hosain Rahman, Joanna Shields, Josh Kushner, Mark Pincus, Matt Mullenweg, Stephen Fry, Troy Carter, Yoko Ono and many more."
Not exactly a teen-programmer-in-mother's-basement story...
Thank you
The founder might be brilliant and I could be wrong about this whole relationship building with investors to try and get attraction nonsense.
They've been making tonnes of Marissa Mayer waves. They're the New York Jets of technology.
The jealousy on display in the post and subsequent comments is, I think, glaringly obvious to anyone who would take a second to compare it to almost any other startup acquisition where the founder isn't a 17 year old.
At least, that's what's going through my head.
EDIT:
If the assumption that the Summly codebase doesn't actually contain anything worth $30 million is true, then this purchase is all about branding. It's about fooling Wall Street into thinking Yahoo is revitalized and focused on new technology and talent.
When IMHO, in reality, any sane investor should see this purchase as evidence that Yahoo is acting irrationally and I'd pull every dollar I had out of it.
I don't think nearly as many people here are jealous as they are aghast.
While I think $15m would have been fine and generous, it doesn't shock me that someone important in Yahoo! got it stuck into their head that Summly was hitting on something that would "change the way people use news", a particularly neat fit if their intention is still to be the new homepage of the internet.
The only explanation I see, is that what Yahoo actually really bought is the great licensing deal (flat fee? exclusivity?).
This article and other state that key technology is licensed from SRI.
$30m is a lot for what I assume is an application of SRI's technology. Still seems to me like Yahoo! is a place where engineers are handed the purse strings, a la 2005 era.
Was she? Her career essentially started at Google, her rise arguably being one of right place/right time.
For all of the talk about Mayer, I have literally never heard about anything actually interesting that she has done. Instead it's her 90 hour work weeks, n-shades of blue, and abrasive attitudes with others. She sounds like management through and through.
Exactly! :) Assuming the above is meant in a positive way, you might not have said/thought that if it wasn't for this, and other, stories recently involving Yahoo and their acquisitions.
1) Free positive publicity--publicity that doesn't constantly remind people how Yahoo! is circling the train; 2) The recruiting hook of "yeah, we're not stodgy anymore, we paid some kid $30 million!" which will fly with some people; 3) A new engineer who obviously has both technical and business skills; 4) A subliminal "don't forget, there's more of you turning 18 every day" to the rest of the organization.
If Yahoo wants to increase their recruiting power, start rewarding - publicly - internal teams that innovate. Start a $50m innovation fund, and reward internal teams for demonstrating initiative, problem solving, innovative solutions, bold new idea, etc.
That's true of most of these acquisitions. There are a lot of qualified people doing crazy things, but the smartest people aren't always the ones who win. That fact is immaterial here until we find out what other things they got (maybe the kid brings along investors who may buy more yahoo stock ?)
I do agree, in general, that as a public company Yahoo has to explain to shareholders why they made the acquisition.
At first it seems that whether or not this deal makes sense to you depends on whether or not you're a shareholder of Yahoo or a shareholder of Summly. But keep in mind that if Yahoo didn't make a similar deal with ViaWeb a decade ago there may not be a YC or any of the companies they helped start.
"Yahoo" buys "17 wiz kid" "mobile app and company", is good advertising around the world, yahoo is now a company who buys the "latest" technology, they hired a wiz kid - they have him on board he will do crazy technology experiments - "you have no idea what he could come up with next!", and they have his technology that a company as big as yahoo would play $30m for.
It tells potential users and more importantly investors and current shareholders it is now company who buys stuff because its investing and changing for the better and maybe people should change their views about yahoo etc etc.
note: I have not used the app, still don't care about yahoo.
(I, as someone who is comparable in age to D'Aloisio, would never try this kind of shit, especially to someone affiliated with a major news organization; nor can I think of any of my peers who would. I honestly don't understand why people have such outrageous notions about how young people act, and have such permissive views about they ought to act. It doesn't matter how old he is, this sort of behavior is absurd.)
Your level of maturity is an asset which not everyone has at your age. The reason people are more permissive of poor behavior from young people is that they are still learning the ways of the world. Hopefully D'Aloisio learnt from this experience.
He just sold a company at the age of 17 to a huge corporation for a truck load of money. Unless he's got loans up to his ears I reckon he must be a lot smarter at business than I am.
Most certainly I will laugh at my naive 30year old self. But that doesn't mean I'm not allowed to reflect about maturity levels of teenagers.
> He just sold a company at the age of 17 to a huge corporation for a truck load of money. Unless he's got loans up to his ears I reckon he must be a lot smarter at business than I am.
Well, I don't want to come off as a too negative but word is that his parents' money helped at least a little with generating Buzz. Now nothing against that - he used every possibility he had. But don't call yourself bad at business when you don't have that kind of resource available to you. With the right connections you can sell a bunch of photo filters for $1 billion nowadays. And without you have to work off your ass to become ramen profitable.
Can you actually sign any of these papers if you're a minor ?
Welcome back to the stock market being at all time highs again, with Yahoo's stock now back to the highest levels since the crash (nearly five years).
In other words, it's not repeatable. This is nothing new. It happens all the time.
Counting on luck, of course, is not a reliable business plan. Whether these folks deserved all the money they got or not is really a moot point - your best shot at success remains to put yourself in a position where you deserve it. You may still not achieve it, or you may grossly overachieve it, but still the best way to go overall.
The moral of this story? Invest in the opposite of what Forbes says will go do.
Worth $30m of my money? Probably not. Worth $30m of Yahoo's money? Maybe, they're not likely to have decided to spend that much on an acquihire without board approval really are they. Unless they Zuckerberg'd it and thought it was better to seek forgiveness.
[1]: http://www.forbes.com/sites/parmyolson/2011/12/13/teenage-pr... [2]: http://techcrunch.com/2011/07/15/trimit-summarizes-emails-bl... [3]: http://gigaom.com/2011/12/13/meet-the-internets-newest-boy-g...
Annnd that's about the only way this makes sense to em.
Yeah I guess that is a bit of a non-sequitur, but you can't pay to get coverage on the BBC news page (AFAICT) so it sort of works.
Kudos to the kids for actually making a product people wanted to use, and at least one person wanted to buy.
SRI is a world leader at this technology, it already spun off Siri to Apple, and they've got patents on key technologies in this system, so a $50 M valuation is about right.
I know another guy from New York who sold a company of the same size for $30 M or so and when I wargame scenarios around companies developing this kind of stuff I'd expect an exit between 20 M and 80 M.
The reason why this deserves a reply is that the OP’s post does not really contain any facts rather, it contains assumptions (either the OP’s assumptions or others).
For instance:
“Yahoo screens the employees, and tells the founder that 2 of them passed” “Summly says dang, only 2 out of 5 passed?”
“In addition, only two of Summly’s employees will go to Yahoo with D’Aloisio”
Moreover, the OP calls out Yahoo for acquiring Summly for $30M and citing that,
“Summly says no, $50m is our minimum. We need to pay back our generous investors”
Likewise, the OP concludes with:
“The craziest thing is that there are a lot of really qualified, CS-beefy teams doing really amazing things in the mobile news/discovery space these days - and that would definitely take a $30m acquisition offer or less. I don't really understand why they picked this one”
However, what we do know is that Yahoo acquired Summly (which is shutting down although, some of it will be incorporated into Yahoo)[3] and regardless if you agree with it or not, they acquired them for a price which is suitable to Yahoo and Summly's investors/team.
Either way, I wish Nick D’Aloisio and the rest of the Summly team all the best and congratulations on your exit to Yahoo.
[1] http://allthingsd.com/20130325/yahoo-paid-30-million-in-cash...
[2] http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...
[3] http://ycorpblog.com/2013/03/25/yahoo-to-acquire-summly/
I do agree that many other development teams would have jumped at an acquisition offer of a lot less money but they were either unknown to Yahoo or deemed not suitable for Yahoo.
Edit: and if Marissa does get a lot of faith from investors, which she will if one of her first moves is a victory against google, then her reputation will undoubtedly rise. And how much is the reputation of a CEO worth at a multi billion dollar company? I think a lot more than $30M. Just look at Apple's recent stock movement.
Summly is much better than that as far as technology is concerned.
Yahoo got a better deal.
Plus, it's not all that common for senior management to face any sort of punishment for acquisitions that go bad.
Yahoo Executive: "Don't Make Me think"
Summly: Ok. 30 mil
Yahoo Executive: OK.
What baffles me most though, is that Yahoo would conduct a CS type interview to the employees, failing some of them in the process (if that bit is true). I have over 16 years of real hard world experience and I would never dream of passing a CS type exam. Is that really a gauge of excellence?
I'm personally of the opinion that a little bit of diversity (more designer-type front end devs without academic background) would do good for Google's (or Yahoo's) internal culture, but if they have decided that they only want CS people, it totally makes sense to interview acquihires too.
No-one that I've seen quoted?
Maybe it was $30M in stock?
Summly is a product, and as such, has been purchased for more than it cost to "manufacture", as you laid out.
$30M is bargain shopping; lest we forget "Draw Something" was bought for $180 million, or "Instagram" was purchased for a whopping $1 billion.
Imagine you are a young superstar who with some justification believes you have the world at your feet.
A bloated, cadaverous company that your dad tells you was cool when you were in preschool wants to buy you and tether your career to them.
How much would it take to convince you to do that?
That doesn't necessarily mean the other three failed the interviews - maybe they don't want to work for Yahoo.
Maybe those partners wouldn't have wanted to collaborate with Yahoo, but now they'd consider it for 30M.
https://www.linkedin.com/groupItem?view=&gid=131222&...
And here
http://www.quora.com/What-are-some-good-open-source-text-sum...
The best candidate is MEAD
Seems like a good deal to me
...and then the dump truck full of money pulled into his drive way.
Bad for Yahoo.
Isn't it just Flipboard with a slightly different UI
You're making a huge effort towards mobile, with no apparent success.
You see a small team that built a great product, that fits mobile nicely and that has a huge user base. BTW, You have a lot of money.
A 17yr old boy did something that lots of highly skilled engineers, managers, designer couldn't do, and that you pay a lot of money.
If you have the chance to acquire a great product with a huge user base, wouldn't you do it (being a company like Yahoo)?
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That's the same as the Instagram deal. Huge companies are not succeeding in mobile, but they need to do this right and create a mobile presence. If it costs "only" 30m, it's a great deal if you ask me.
Well, that might be stretching. As Comments elsewhere have pointed out, in a large corporation the very same idea might have been done and shot down internally. There might be a few people at Yahoo going, "Wait. WTF! That's what we showed them last year! And it was better!"