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What's Up with Start Ups

2013-05-24 · Hank · watch on YouTube · Internet & YouTube · news analysis

Hank argues that tech platforms are valued not for revenue but for the users' time they capture, a weird and worrying model; he prefers businesses that treat users as people they need, as he says Vlogbrothers does.

What is said

00:00:00 — Theory: platform valuations buy users' time; Twitter, Tumblr and Instagram numbers; big tech bidding; platform vs what is built (concrete analogy)

  • ★★★ Hank's theory: a social media platform's valuation has nothing to do with the money it can make; buyers are purchasing users' lives, i.e. us. — 00:00:00
  • ★★ Hank says Twitter is said to be worth ten billion dollars, which makes little sense to him because 'it doesn't do anything'. — 00:00:00 · Twitter
  • ★★ Hank says most industries value a company by assets, liabilities, profit and revenue; the basic starting point is ten times profit or three times revenue. — 00:00:00
  • ★★★ Hank says Tumblr made $15 million last year and sold for $1.1 billion, about 75 times revenue, with no profit; Instagram sold for a billion having never made money. — 00:00:00 · Tumblr
  • ★★ In the description Hank says he is getting sick of a system that values content aggregators over creators and presumes owning users' free time will make lots of money. — 00:00:00
  • ★★★ Hank says buyers are not paying for revenue or even potential revenue: what is valued is the user who spends time on the site; he spends time, not money, on Facebook, Instagram and Tumblr. — 00:00:42 · Facebook, Tumblr
  • ★★★ Hank finds big tech's bidding war for his time weird and worrying, not because people shouldn't spend time online, but because savvy companies see value in being 'the lens' on his world. — 00:01:03 · Google
  • ★★★ Hank says it is weird that we value platforms far more than the things built on them, like prizing concrete while ignoring what is built with it. — 00:01:33

00:02:02 — Preference for businesses built on real value; Nerdfighteria team is hiring a graphic designer

  • ★★ Hank prefers businesses built on real money and creations that do things for people; real relationships and fun work well enough for Nerdfighteria. — 00:02:02 · Nerdfighteria
  • ★★ Hank says they are hiring: amazing graphic designers (e.g. motion graphics) who want to join a team 'changing the world' should apply via the link in the description. — 00:02:02

00:02:31 — Viewers are the brothers' only asset: no pre-rolls on Vlogbrothers; sustainable business treats users as people; sign-off

  • ★★★ Hank says he and John know their only asset is the viewers; without them there would be no Sanditon, DFTBA Records, Crash Course, SciShow or even 2D Glasses. — 00:02:31 · John Green, DFTBA Records, Crash Course, SciShow > «our only asset is you»
  • ★★ Hank says that is why Vlogbrothers has no pre-roll ads and why hard work making new things never gets old: they feel deeply indebted to viewers. — 00:02:31 · Vlogbrothers, online advertising
  • ★★★ Hank thinks an interesting, sustainable business comes from treating users as people you need, not as hours to be monetized. (hedged) — 00:02:31

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