Predictions holds true: "Facebook is a Ponzi Scheme"

Re:Predictions holds true: "Facebook is a Ponzi Scheme" by vannevar on Thursday May 17, 2012 @02:53PM (#3988461)

I'd have to agree. By that definition, most startups are Ponzi Schemes. If you grow faster than the GDP, you're most likely cannibalizing other businesses. Eventually you'll run out of competitors to cannibalize and your growth rate will flatten to approach the background growth. If your stock price is predicated on the unsustainable growth rate, it will collapse. But that's not a Ponzi Scheme. If Facebook took in revenues from new customers and used them to buy fake click-throughs for existing customers to inflate their ad rates, then THAT would be a Ponzi Scheme.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by jerf on Thursday May 17, 2012 @04:32PM (#3988942)

"If you grow faster than the GDP, you're most likely cannibalizing other businesses."

That sounds an awful lot like zero-sum thinking.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by vannevar on Thursday May 17, 2012 @07:36PM (#3989675)

No, just simple mathematics. It's certainly possible for a company to actually create wealth faster than the average rate, but it's much more likely to be cannibalizing. Were it otherwise, of course, average economic growth would be higher. There is nothing contradictory in saying that most business growth comes from creative destruction (ie, cannibalization) and also that the net sum of business activity produces slow growth.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by ljlolel on Thursday May 17, 2012 @02:54PM (#3988466)

No, you misunderstand.

High growth is not a ponzi scheme. High growth with no value is. Going flat is fine, Google did that.

Losing a lot of traffic because people stop using your worthless site entirely is bad. Groupon will do that.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by mikeryan on Thursday May 17, 2012 @03:07PM (#3988532)

High growth with no value is.

No its not a Ponzi Scheme is a type of fraud where the con man pays out early investors from proceeds from later investors.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by gnaritas on Thursday May 17, 2012 @04:09PM (#3988825)

And also includes the intent to defraud, otherwise insurance would meet your criteria.

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Re:Predictions holds true: "Facebook is a Ponzi Scheme" by jbigelow76 on Thursday May 17, 2012 @03:55PM (#3988760)

I never really get the hate on Groupon from a business model standpoint, I get it from an execution standpoint but not the business model.

I've derived quite a bit of value from Groupon myself, as have several people I know. They failed in execution because it appears they don't value their relationship with vendors as evidenced by not letting them impose limits in the number of coupons sold. Mom and Pop restaurants don't scale like startups and many were left with really bad experiences from being ill equipped to deal with a massive influx of customers in a short time frame, and consequently the customers ended up having a bad experience as well. This wasn't universal but it seems to have been frequent enough to have severely tarnished the brand. If Groupon had been better stewards of their relationships with their merchants instead of sacrificing them in the name of growth I don't think anybody would lump them into the "ponzi scheme" camp. Groupon could have gone about it differently, Bernie Madoff probably could not have.

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