2) AngelList isn't giving PH investors/employees $28M cash, or $20M cash, or whatever the figure is reported as. They are very likely giving them mostly stock, stock in a private company with an unknown valuation. Probably only enough cash to cover the taxes (10-20%). The 20M figure is pulled out of thin air based on whatever AL thinks their valuation is. How much stock do you think they'd have to give out to hire 20 people? How much stock are they giving out to acquire a company with 20 employees?

3) People said Google had no hope of ever making money, they were just a search engine and those don't make any money. Sitting on the sidelines and saying every investment is stupid is really easy when 95% of them fail.

2) How does this make it any better? What you're essentially saying here is instead of investors paying themselves cash they're just shuffling shares of stock from one investment vehicle to another... if this is true then in some cases investors are actually increasing their share in AngelList simply by, in your own words ("1x isn't making anybody happy"), making a failed investment. That doesn't seem above board to me.

3) If you're honestly trying to compare late 90's era Google with ProductHunt then I think that proves my point more than anything I can say myself

Anecdote time: I've personally seen a few startups that were failing attempt to sell themselves to the startup I was somewhat senior in. I interviewed and chatted with founders of the startups that were trying to get acquired. My meetings were not interfered with by the VCs or the angels or anybody else. They are far far too busy to care about every minute detail of what goes on at their portfolio companies. Had we ever gone through with one of the acquisitions (which we never did when I was there), my guess is the board would have tried very hard to convince us not to do it, as an acquisition has a much higher chance of going wrong than going well and can be a huge distraction.

Its seems to me that convincing a bunch of people to part with their money for your idea and then relentlessly trying to execute on it (as PH's founder seems to have done) is very meritorious.

Some investments are clearly made to friends, but you aren't convincing any investor to NOT invest in their friends who they think are great, personally. Now if only there was a process to democratise this discovery more....

P.S: I was referring to AngelList in the end there.

For Google, I don't think it was certain at all that they would succeed and there was a real chance they could have failed. Their first business model was selling their search engine to enterprises via hardware boxes, which grew very haltingly.

In fact it wasn't until Google came across Overture's idea of selling advertising tied to web search results that they found the success they now have, and which they appropriated despite Overture's patent because they were so desperate to find a working business model.

Overture(later acquired by Yahoo) sued Google, and Google had to pay in stock worth hundreds of millions in 2004 (tens of billions now had Yahoo kept them).

So how does this relate to ProductHunt? Google had a real product, knew who their users were and put their experience first. ProductHunt has polluted their site with junk and allowed their voting process to be distorted, making it practically useless to anyone who came there to find great products.

See here: http://www.nytimes.com/2004/08/10/business/technology-google...

At the time it sounded perfectly reasonable, though he since took the company in a direction that lead to today. The writing on the wall has been evident since at least a year ago.

>ProductHunt had no hope of ever becoming an actual business with realized monetization, ...

While I largely agree there, I think that Product Hunt could have made itself an otherwise incredibly valuable acquisition target. Had Product Hunt chosen a different path around late 2014, it's very possible it could have met or exceeded that 1B figure.

If I had to give a postmortem, I'd say the primary cause of death was an over-emphasis on the site's existing pattern of serendipitous discovery, compounded by community mismanagement, and attempts to monetize via turning PH into a store and/or referral engine.

The community mismanagement aspect in particular was unfortunate, since Ryan was one of the most voracious and effective community builders I've ever seen. Some of the bad press PH received was perhaps unfair and overblown. The original intent of ruthless product curation seems to have went somewhat awry—resulting in a self-promoting insider network of sorts. Unlike the bad press though, I don't think that it was the result of malicious intent.

Of course, armchair analysis in hindsight is easy. None of us were actually on the ground in his shoes, so there's probably a lot we don't know. At the end of the day, a 20M exit isn't the worst thing in the world.

Even if you don't believe this, unquestionably you have to say it in order to get venture money.

I am grateful to PH and the team lead by Ryan because they helped MyAppConverter raise our profile despite we are not based in SV. I will always remember one day one early user who found us, used our product and put it directly on PH. Soon after that, we got a huge spike in our sign-up and platform usage and gave us global coverage.

So thank you PH, Ryan Hoover & team and best of luck with the next chapter.

I see HN is a combo of PH and very early Digg; with added bonus of better community discussion. What if HN started charging users $20/mo and/or $100 to post. Would it generate meaningful revenue? Would it remain "the same" enough to continue generating that revenue in the future? I don't think so.

That said, I think AL may have some strategery at work. They want to bring early stage companies into their AL network. These often start as just products, so it kind of makes sense, although I don't know if it makes XX million sense

Making it easier for startups to promote themselves is a huge source of value. It's just hard to capture that value, because the newest and most interesting startups don't have any money, and the companies that do have a lot of money aren't new or interesting so no one wants to hear about them.

There's nothing shady or fraudulent. The problem is just that early stage companies in this space are walking a tightrope with basically zero optionality. E.g. normally you want to build a product with ten or twenty different paths to success without having to make any core changes to the technology. This space doesn't really lend itself to that.

There is a huge pot of gold at the end of the journey for anyone who can get there, but it's just really tricky because a lot of the things you'd ideally like to have in a startup just aren't there. (E.g. lots of optionality, low cost of leadgen, costs that substantially decrease over time, etc.)

PH is actually doing pretty well, I think it's too early to say if the PH/AngelList combo will eventually win the space, but I think they have as good a chance as anyone.

sigh. I hope one day people would stop being so cocksure around an industry that has always proven otherwise. I mean, yes, SV does have a slew of absurd valuations based on non-existent business models but doesn't the past success of some of these ventures imply that it can actually work? And all those obvious facts are just "hindsight bias" at work?

It's not a business, it's a social club. So why was $28mm pumped into it?

Edit: Furthermore, PH definitely does have potential to have a large scale revenue stream. Any "destination" site that millions of people visit daily with intent to try/buy new products has major potential.

Where such a rare and valuable resource is being offered, there are certainly paths to monetization available. And since PH is a discovery platform as much as it is a community, advertising doesn't necessarily conflict with the core value proposition if it's done smartly.

Lmk when you create a website with this much traffic. http://www.alexa.com/siteinfo/producthunt.com

2. Traffic isn't fungible. Reddit is one of the most viewed websites in the world (top 10?) and roughly yet makes as much money in a year as Facebook does in an hour.

The investors??

I feel like if you are going to call something almost fraud you have to point to a group of people being actually damaged.

The general tone here can at times feel like an uncritical adoration of the valley ecosystem. I'm glad that some of us react differently.

Just off the top of my head, I ask myself how much revenue TechCrunch pulls in, and what it originally started as - and I can see a path for PH to become a 'real' (as in meaningful, sustainable revenue) company. Just because it isn't full of whizbang tech doesn't mean it can't make plenty of money and be valuable to other properties.

And that's just with 20 seconds of thought put into it. I'm sure there are many other angles as well.

Which makes this PH acquisition even more of a head scratcher.

The not-sexy model of charging businesses for exposure and leads works (see http://www.capterra.com/) but is probably not nearly rich enough to satisfy Product Hunt's VCs.

Really? Hacker News comments are uncritical adoration?

I'd weight the cynicism and perma-contrarianism a tad bit higher.

In fact, I believe the success of a startup is inversely proportional to the amount of hate it gets in HN comments.

Theranos excluded from the sample, of course.

This is a classic perceptual bias. Everyone feels like HN is full of whatever they identify against, because those are the things we notice the most. Since you identify against "the valley ecosystem", HN seems full of uncritical adoration for it. It's a mirror of your own preferences.

There's also the enormous home-team advantage that anything "anti" has in the human brain, which gives rise to all the snark, cynicism, and rage-fests that take over online communities by default.

An exercise I've now decided to undertake is as follows:

Every time I see something that I feel is "uncritical adoration" I will challenge myself to look for evidence for the opposite of that in the same thread. I'll start with HN, but if this works I want to extend that elsewhere.

I stumbled on this because the moderation job involves reading tons of comments I wouldn't otherwise see, and the various descriptions of HN they contain are quite incompatible. But they all fit the pattern described above.

I think there are some very smart comments here about the toxicity of internet communities over time that, unfortunately, seem to be evidenced in this exact conversation.

This whole "meritocracy" thing is an incredibly effective marketing tool to get people from all over the world to move to an overpriced, dilapidating part of the world, with poop in the streets everywhere to sacrifice part of their lives to try to make something that matters.

If you fail at your own hopefully you impress some people who didn't enough you get to work with them.

If you don't you wash out.

The meritocracy its true but you have to either

1. have been born a mega genius

2. been raised in a wealthy well connected family

3. be a sociopath who manipulates everyone around you into doing your bidding

4. fake it til you make it and make the right friends along the way

5. Or struggle and toil until you figure out how to do one of the previous

This game is hard and lots of people don't win.

You can be jealous but don't say the system doesn't work when so many multi billion dollar companies have been created this way.

Survival of the fittest.

I want to create something with a real lifespan that pays forward everything everyone has ever done for me. I want to amplify all that is good and right with tech and the community that dug this loner outcast kid out of a very non tech- friendly area, helped him find something he could love, and gave him hope that he could build something beautiful.

If you want to help, check out what we're working on over at Baqqer[0]. Give me feedback about what you love/hate so we can build a strong community. I'm not interested in selling out, or colluding to drive any one particular message/theme/group. Tech can be better than this, and should strive to that end, and we should all support independent endeavors to make this as fun and fair for everyone.

[0] https://baqqer.com/

"Once you eliminate the impossible..."