Bubble 2.0?


I read earlier today that Slide was reassigning some sales staffers and bringing on some new ones in the hope of brokering some big deals (ie $500k +) in the US.

Now, I might be alone here … but mid 2008 to me felt a little like the same period 10 years ago.

Lots of VC floating around, lots of loud entrepreneurs and loads of highly valued companies with flimsy business models. Reading Sarah Lacy’s Once You’re Lucky Twice You’re Good almost confirmed the similaries as it documented companies like Ning, Slide, RockYou etc that seemed to have dreams of billion dollar valuations but really nothing to, you know … sell.

Anyway it appears Slide is heading for the deadpool. Made me wonder, what other companies are there still floating around that would be struggling to keep their heads above water … but whilst the going was good ripped 100’s of millions, if not billions of money, out of the economy.

Slide – Started by Max Levchin … ex PayPal co-founder and generally considered a big Valley player. $58m USD in VC … Valued at its prime at $550m USD! These guys make those slideshows you used to have on your myspace profile 3 years ago. They also made some of those annoying applications that your ‘friends’ on Facebook would spam you with. SO how does it make money? It’s hard to find revenue estimates for this company but it seems to sell itself on flimsy distribution across social networks (social networks that seem to want to rid themselves of this external clutter)

Ning – started by Marc Andreesen. From what I can gather this is a pretty basic piece of kit. At it’s prime it was valued at $560m. It has received $104m USD in funding. Does it make any money? Ning revenue has been estimated by some at less than $1m annually.

RockYou – Sort of like a b-grade Slide. Makes ‘self expression widgets’ (what does that mean?). Worth around $325m USD at its peak. Funders and VC have ploughed $68.5m into this. How will this make money? At it’s peak (nov 2007) it was estimated RockYou was making around $100k a month in revenue.

Linden Lab – these guys made Second Life. If you’re a marketer you’d be familiar with it as your agency would have told you it was awesome and you needed to look at it. Telstra fell for it and wasted a bundle on a pretty sh*tty Second Life experiment. Worth $1.1b USD at its prime. $19m USD in funding has gone through the place.

Spot Runner – was supposed to make TV advertising easy for local advertisers but didn’t really seem to make anything easy for anyone. This was valued at $250m USD at its prime but chewed through $101m USD in funding. They’ve fired almost 200 ppl in the last year. Investor WPP (parent company of my employer) is currently suing them, so did a co-founder (who won $2.2m). They made $9m of revenue in 2008. $9m!!

You have to wonder that if the investors could have their time again whether they would have put those sorts of amounts into these companies. Maybe I don’t get it …

Anyway, 08 was pretty crazy looking back on it considering where we’re at now..

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One response to “Bubble 2.0?

  1. I have an idea where we give away broadband access for free to anyone who wants to look at sponsored branding on their homepage….whilst it will be a bit slower than paid broadband, and the ads will be pretty annoying I think it is guaranteed to attract quality and cashed up AB demographic consumers who will be motivated to buy from the sponsors.

    All I need is a $150M capital injection to get it going, and an operating cash budget of $80M until we become revenue positive. I am absolutely certain the business will be worth billions in 9 months.

    Anyone like to help me out?

    Anyone?

    Beuler?

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