Sebastian flies a Plone over Delores Park
I think there’s something messed up about the startup culture in the USA. The belief is that you have to work 6-7 days a week and spend all your mental cycles on your company. Nothing but pledging your soul to your startup yields success, right?
Not in my experience.
We work a 4-day week at …
$50 million sounded good on paper, but it was believed that only a small amount was in cash, the rest was in Facebook stock. It was Facebook stock which was just valued at $6.5 billion thanks to the DST investment. Some felt that it was overpriced, and as such, not a great deal for FriendFeed.
Boy were they wrong.
Looking at Facebook’s just-released S-1, Alyson Shontell of Business Insider noticed that in August 2009 (the month of the FriendFeed deal), Facebook issued just over 11 million shares of Class B common stock to ten individuals and one entity — this is most definitely the FriendFeed team, their individuals investors, and probably their lead VC firm, Benchmark Capital.
Today, leading up to their IPO, Facebook is worth just shy of $100 billion. Those FriendFeed shares are now worth around $330 million as a result. In other words, their August 2009 acquisition has shot up just about 7x in value since that time.
Certainly, some of the players have since sold off those shares in subsequent Facebook raises or on the secondary markets and have done well as a result. But those that didn’t have been rewarded very handsomely.
A 10x exit on paper magically turned into a 70x exit. And counting, by the way…
Now I’ll use this opportunity to once again link to the first post I ever wrote for TechCrunch in April 2009, four months before the deal: You Will Be Using FriendFeed In The Future — But It May Be Called Facebook
Netflix CEO Reed Hastings first apologizes for a lack of communication, and then gives his thoughts about the recent price changes and separation of DVDs and streaming (which is still the right move, as Hastings reiterates).
The wording is good. Amazingly, it doesn’t sound like the total bullshit you usually read in such posts. But here’s my favorite part:
For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business.
When I read this, I have one larger thought than Hastings: Microsoft.
Why is legacy Windows and all its baggage a part of Windows 8? Because of Hastings last sentence above.
Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.
Also great: Hastings is on Microsoft’s board. There is still hope.