Facebook and Google have enriched their early investors in relatively straightforward ways. I mean, Facebook delayed its IPO and took a while to get revenue going, but it was still only about 8 years from "thefacebook.com" to filing for IPO.
Uber has been around for 8 years now and it's asking for billions more from its investors to prop up massive operating losses while it takes longshot bets in heavily competitive spaces.
This is basically a story of investors thinking that the magic bullet for more Google/Facebook-style successes was giving founders unilateral control of the companies, and then saying, "Oh, wait."
It's pretty remarkable how fast Facebook scaled their business. The criticism in the early days, in hindsight, was dramatically overblown.
They did $777m in sales for year six ('09), with $229m in net income.
To put that into amusing perspective, Netflix did $186m in net income for fiscal 2016 - their 18th year in business.
It's more net income (again, just in year six) than all of these following companies combined have produced in their entire histories: Uber, Didi Chuxing, Lyft, Zillow, Pinterest, Yelp, WeWork, Snapchat, Twitter, Groupon, JD.com, Zynga, Spotify, Reddit, GoDaddy, Pandora, Blue Apron, Quora, Shopify, Angie's List (could add a lot more to this list)
I think if you narrowed it down to every tech start-up that took on venture capital at some point in the last ten years, the answer would be a resounding no. It might be positive if you included all tech start-ups over ten years (any of the others that make it ten years pretty much have to be profitable by necessity and there are dramatically more of those than the well-publicized VC backed companies). The red ink pile from the VC companies is epic though, so the others may still not be close to an offset.
I'm not aware of any tech start-ups from the last ten years, that are printing income at an impressive level (something akin to the profit ramp of a Google or Facebook). Airbnb might be a candidate for a large income generator, that segment has good margins if expenses are tightly managed; it was founded in 2008, so it's about to age-off that list.
There certainly may be some young profit machines hiding in China, as a universe unto itself it can be difficult to track all the start-ups there. Jinri Toutiao for example, is at or around $2.5x billion in revenue for 2017, after just four years, a rather extraordinary growth rate for an ad business. As an aggregator, you'd think that would have tremendous margins, but they're raising tons of capital, so I'd guess they're currently spending at a very high level.
This is comparing apples to oranges.
You can't just pick two startups, compare their revenues for a certain year and disregard their industry and operation costs.
Google explicitly gave little power to common shareholders when at IPO, and the shares continue to willfully trade.
I don't understand your point about greed. Do you propose some alternative structure to corporate ownership? Seems beside the point of negotiating over voting rights.
The investors willingly gave away their voting rights in order to get early shares. So really there is nothing wrong except their own greed got the best of them.
Greed means they had a strong desire for something. It has nothing to do with success. It is just that when they fail and ask why, people say their greed was their downfall. In otherwords look within themselves. Their strong desire for something overrode any critical thinking of the other risks involved. And if they succeed they will of course gloat about how great a investor they are.
well the UK/FTSE does not like this sort of dual class listing and one high profile media group (DMG) got kicked from the FTSE collated index over this a couple of years ago.
Lack of discipline is more precise. Greed parses as everything from myopia to selfishness. (Though even then, nobody on the Board is close to suffering actual losses.)
Dear Mr. Kalanick, Mr. Graves and Mr. Camp:
We represent Shervin Pishevar and Steve Russell, individually, jointly and as putative
class representatives on behalf of several hundred Uber employees and other prominent investors
who will suffer billions of dollars in damages (exclusive of penalties and punitive damages) if
you support the covert effort, apparently led by Benchmark, to strip Class B Common stock
holders of their voting rights.
I'm completely confused. Why would those three people, who have supervoting rights, vote to take away their own supervoting rights and side with Benchmark the people who tried to remove Travis in the first place? It seems like the sender and recipients of the letter are on the same side.
Travis did a great job of building Uber, but he's become a massive public liability.
He's getting sued by Google for apparently blatantly stealing billions in IP. Maybe he's innocent, but the optics are bad.
He's going to be the public figure on which we will scorn for all those scandals.
He's tainted pretty badly - rightly or wrongly - and it just will not go away.
He's a little toxic to have around, especially when the company needs to wind up to an IPO - they need the opposite of 'scandals'.
I'm weary that there's really nobody that can ever replace a founder, but hopefully they've found a good CEO.
Travis's dragging out this board fight is just jeopardizing the company. He owns 10%, not 100%.
I don't know if Benchmark are good guys or bad guys in the grand scheme of things, but their position of wanting to Travis to move on is grounded and reasonable I think.
Uber investors are not alone - Facebook and Google investors also have little control.