Everpix, Snapchat, and The Startup Lie | Hacker News Reader

Everpix, Snapchat, and The Startup Lie

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23 pointstpsc7 comments

When small start-ups I’ve spoken with do make money, they often find it difficult to recruit additional investment because most venture capitalists — and often the entrepreneurs they finance — are not interested in building viable long-term businesses. Rather, they’re interested in pumping up enough hype and valuation to find a quick exit through an acquisition at an eye-popping premium.

This highlights the difference between VC and bootstrapped firms. The VC expects 30-50% annualized returns. To get that you need hypergrowth. If you want modest growth, avoid the VCs. But they exist because there is a need for people to fund moonshots. They would rather have one business succeed with a 20x exit and have 4 fail, then have 5 firms exit at 2x.

Where I differ from the OP is I don't see this as a morality play. I see "getting an exit" as a way to redeploy risk capital. Once the business is stable, ownership should transfer from risk investors to more traditional one. Or to more traditional companies.

To get to Everpix - could they have succeeded if they just bootstrapped and focused more on Marketing earlier on? I don't know. I wish their founders well.

https://news.ycombinator.com/item?id=6694674

Duplicate.

I'd love to see a post-mortem explaining how they possibly could have a $35k/mo AWS bill for a platform that only serviced 55k users.

Seriously, they should have went with dedicated boxes on something like Softlayer comme Dropbox. Unlike CPU-cycles, storage needs are relatively predictable as people usually don't remove photos after uploading them.

Softlayer - yikes! Was with them once and never again. AWS is far more flexible and cheaper (based on my experience). Not to mention the full suite of services available under the 1 umbrella from AWS where Softlater just cannot compete.

Good question. I've seen a lot of people claiming AWS was the wrong choice from the start, but IMO at the stage Everpix was at, the flexibility of AWS would still have been a reasonable and viable choice.

But $35k for only 55k users just doesn't add up in the absolute sense, AWS or not.

While this would be interesting as a matter of engineering curiosity, Everpix's AWS bill was not close to the #1 hurdle between them and profitability. It seems like low hanging fruit, but you'd be optimizing away something small relative to, say, their employee costs or per user revenue.

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