Mind you, I've never used it, but Snapchat has 100 Million monthly uniques.
I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure.
Anecdotally, just a month ago I was walking and because i live in San Francisco I happened across a corner (Howard and New Montgomery) where there were ~20 girls about 13 years old being polled about their tastes, and the questions I heard waiting for my light was "Do you guys like smartphones?" ("yes", duh), "Is your phone more important than your TV?" ("yes", duh), and "What is your favorite app?" and the answer was unanimously Snapchat.
Snapchat is the teenagers answer to the question many millennials have fretted about -- "how will ppl born today deal with having all 18 years of their development online". The answer is: they don't put it online. It's peer-to-peer and temporary by social contract, even if the technology is imperfect.
So far, snapchat has played a savvy game. As an engineer, if they were based in SF, I'd consider working for them. They have tapped into something. Because my 28 year old wife has also been hooked on Snapchat for what seems like a lifetime now. Her most frequent contacts? Both of her 60+ year old parents, numerous cousins and aunts, etc. Her dad uses it to send stupid pictures that you might not expect from a 65 year old white haired CEO-type whose work is about as far away from tech as you can get.
> I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure.
Twitter has been around for almost 10 years now, and while they have been able to monetize somewhat, they haven't been able to turn a profit, and they don't seem to make great progress in that direction.
It's not that they can't make money - it's just that so far, they haven't been able to make enough money to support the valuation.
Twitter had revenues of $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery), I would say that's enough to support a $24b valuation.
$1.4B revenue, with $0.577B loss, so, they spend $2B to bring in $1.4B; Not a good business.
We can't talk about a profit multiplier (Twitter has never had a single profitable quarter), but even if the $1.4B was all profit, a 17 P/E is not easilly supported.
In my opinion, Twitter has been a zombie for a while - there's no way they'll have enough profit to justify a >$10BN valuation, and that's only if they stumble on some revolutionary profit model. If they don't, even $2BN will be lucky.
Although what is likely to happen is that a stock market crisis will harm all companies, those with potential and those without. So Twitter will go down, "as if" for the wrong reasons, and the business model and its execution will not be found guilty (or not guilty).
> $1.4b in 2014 - for a tech company (i.e. low marginal cost of delivery)
You say this, but IIRC even with that revenue, Twitter hasn't been profitable, which is generally necessary for long-term viability. The "low marginal cost of delivery" hasn't materialized, if they can't turn a profit off of $1.4 billion.
MySpace and Orkut both had over 100M users and failed, but it was because of neglect by their corporate owners, not a failure to monetize. AOL made it to about 30M at their peak; they're down to about 2M now.
I agree with the general point of this thread (that once you get to 100M+ users, there will be a way to monetize), but if you're trying to make the stronger point that once a company gets to 100M+ users they're invulnerable, there are ample counterexamples.
Having "100+ million users" is a relatively new concept, period. It shouldn't be surprising that very few, if any, have failed. But that doesn't tell us anything about the future.
Before Enron, how many companies with $100+ billion in revenues went bankrupt?
I can't think of a single company who has reached a critical-mass consumer audience and not been able to monetize. Sure, winds change, MySpaces rise and fall, but it wasn't a monetization failure.
Anecdotally, just a month ago I was walking and because i live in San Francisco I happened across a corner (Howard and New Montgomery) where there were ~20 girls about 13 years old being polled about their tastes, and the questions I heard waiting for my light was "Do you guys like smartphones?" ("yes", duh), "Is your phone more important than your TV?" ("yes", duh), and "What is your favorite app?" and the answer was unanimously Snapchat.
Snapchat is the teenagers answer to the question many millennials have fretted about -- "how will ppl born today deal with having all 18 years of their development online". The answer is: they don't put it online. It's peer-to-peer and temporary by social contract, even if the technology is imperfect.
So far, snapchat has played a savvy game. As an engineer, if they were based in SF, I'd consider working for them. They have tapped into something. Because my 28 year old wife has also been hooked on Snapchat for what seems like a lifetime now. Her most frequent contacts? Both of her 60+ year old parents, numerous cousins and aunts, etc. Her dad uses it to send stupid pictures that you might not expect from a 65 year old white haired CEO-type whose work is about as far away from tech as you can get.