2008SEP081350
"... Because I don't get how a pretty simple piece of software technology made from the scratch in a few months by just three programmers can be valued at $15M. ..."
Pretty annoying hey?
Bunch of "smart-arse" 20yo's building something that users want, launching a product in a competitive market that gathers lots of users in a strategic area that a few Internet giants would take notice of. The reason companies like google purchase these startups if mostly for strategic reasons. It could be for the technology or pieces of it. It could be to block other competitors or even to hire the engineers themselves. This is the nature of technology startups: Create cool hacks between your friends, make a demo that others might want. Release it and itterate. The bit from release to exit is the hard part and I'll leave it to the reader to fill in the gaps how. Hint start here: paulgraham.com/notnot.html
"... I mean, it is not anything particularly revolutionary or novel. They have no revenue, no significant user base. Google could probably replicate this technology with its army of programmers in a few weeks ..."
The other reason companies like google purchase Startups is they can literally turn out products, gain significant markets before big companies can. So while google has the engineers they are constrained even with their 20% time to get a product to market with lots of users. This out-sourcing development trend is something Startups can exploit post the IPO drought caused by Sarbanes-Oxley regulations.
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2008SEP081350
"... Because I don't get how a pretty simple piece of software technology made from the scratch in a few months by just three programmers can be valued at $15M. ..."
Pretty annoying hey?
Bunch of "smart-arse" 20yo's building something that users want, launching a product in a competitive market that gathers lots of users in a strategic area that a few Internet giants would take notice of. The reason companies like google purchase these startups if mostly for strategic reasons. It could be for the technology or pieces of it. It could be to block other competitors or even to hire the engineers themselves. This is the nature of technology startups: Create cool hacks between your friends, make a demo that others might want. Release it and itterate. The bit from release to exit is the hard part and I'll leave it to the reader to fill in the gaps how. Hint start here: paulgraham.com/notnot.html
"... I mean, it is not anything particularly revolutionary or novel. They have no revenue, no significant user base. Google could probably replicate this technology with its army of programmers in a few weeks ..."
The other reason companies like google purchase Startups is they can literally turn out products, gain significant markets before big companies can. So while google has the engineers they are constrained even with their 20% time to get a product to market with lots of users. This out-sourcing development trend is something Startups can exploit post the IPO drought caused by Sarbanes-Oxley regulations.
next >>>