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How To Build a $30M Startup Without Spending Any of Your Money 120

Posted by Soulskill from the take-two-they're-small dept.
SpicyBrownMustard writes "Forbes has an article that follows up on the news/hype/buzz/hysteria surrounding the acquisitions of Summly and Wavii by Yahoo and Google, respectively. It's a rather comical write up with a rather sad ring of truth to it, especially that we now know that Summly was little more than a collection of existing technologies built by others. The article says, 'Stress that you have celebrity relationships, and that your app was built by a team that has several hundred successful apps in Google Play and IOS App Store. It doesn’t matter that those aren’t your team members, it is still true.' Summarization technologies are the 'big new thing' apparently. Don't miss out — make your summarization app today and hop onboard that gravy train!"
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How To Build a $30M Startup Without Spending Any of Your Money More

How To Build a $30M Startup Without Spending Any of Your Money

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  • A Black Eye for Female CEOs (Score:3, Interesting)

    by Anonymous Coward on Wednesday April 24, 2013 @07:24AM (#43535243)

    So far, the hype around Yahoo's new CEO has been just that. So far, she's made a teenager a millionaire, turned the website and mail monochrome, and now this.

    • Re:A Black Eye for Female CEOs (Score:4, Insightful)

      by fuzzyfuzzyfungus ( 1223518 ) on Wednesday April 24, 2013 @07:35AM (#43535329) Journal

      So far, the hype around Yahoo's new CEO has been just that. So far, she's made a teenager a millionaire, turned the website and mail monochrome, and now this.

      As much as I'm unimpressed by her tenure so far is "CEO brought in by floundering corporation with dysfunctional management manages dysfunctionally, flounders, N=1" really useful data on "Female CEOs"?

      • Comment removed based on user account deletion

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Yahoo seems to have done something with this purchase that they haven't been able to do in a long time: get some positive press. They couldn't have bought this kind of press coverage for the millions they've spent on this kid.

      Gender has nothing to do with it. In this case it was age.

      • Re: (Score:2, Insightful)

        by hjf ( 703092 )

        the woman decided that ALL of her teleworkers should come in and work in the office EFFECTIVE IMMEDIATELY, after she had to work from home after pregnancy. what a crazy bitch!

        • Re:A Black Eye for Female CEOs (Score:4, Informative)

          by ShanghaiBill ( 739463 ) * on Wednesday April 24, 2013 @10:45AM (#43537155)

          the woman decided that ALL of her teleworkers should come in and work in the office EFFECTIVE IMMEDIATELY,

          No she didn't. The telecommuting is being phased out slowly, and employees have until June to transition to full time office work.

          after she had to work from home after pregnancy.

          Telecommuting and maternity leave are two different issues.

      • Re:A Black Eye for Female CEOs (Score:4, Informative)

        by Cigarra ( 652458 ) on Wednesday April 24, 2013 @09:17AM (#43536241)

        Yahoo seems to have done something with this purchase that they haven't been able to do in a long time: get some positive press. They couldn't have bought this kind of press coverage for the millions they've spent on this kid.

        Gender has nothing to do with it. In this case it was age.

        Exactly. And that's the whole point so many people seem to be missing here: we nerds KNOW this "acquihire" was bogus and stupid, but the mainstream media and the 99% of non-geek population saw all the headlines about Yahoo! buying some hip startup (from a 17 year old genius no less!), said to themselves "that's cool" and MOVED ON to other issues.

        IOW, Yahoo! bought "coolness" for 30 millions. I say it was a good deal.

        • Re:A Black Eye for Female CEOs (Score:5, Interesting)

          by VortexCortex ( 1117377 ) <VortexCortex AT ... trograde DOT com> on Wednesday April 24, 2013 @09:38AM (#43536463)

          Exactly. And that's the whole point so many people seem to be missing here: we nerds KNOW this "acquihire" was bogus and stupid, but the mainstream media and the 99% of non-geek population saw all the headlines about Yahoo! buying some hip startup (from a 17 year old genius no less!), said to themselves "that's cool" and MOVED ON to other issues.

          IOW, Yahoo! bought "coolness" for 30 millions. I say it was a good deal.

          Yahoo rented mild "coolness" for all of 3days or so at most in the main demographics before they, as you put it, "MOVED ON to other issues". Anyone with half a brain realized it was a dumb move. I say it was a crappy deal; Bottomless coffers be damned. Even my non-tech savvy mom said, "They paid how many millions for live-bookmarks like in Firefox? It's making the news because it's stupid, right? If I had stock there I'd sell it before they mess up big." -- While she was somewhat wrong, it does some crappy summarizing thing too (but folks who publish RSS feeds do usually provide a quick headline / summary in the titles), she was mostly right, IMO. She said it reminded her of when she got rid of AOL and then they became AOL-Warner Cable (she meant time-warner), since she doesn't use yahoo mail anymore.

          All the anecdotal evidence I've come by points to their "coolness" was equivalent to tripping over nothing like a klutz then saying, "I meant to do that", except it cost $30 million to do so.

        • Back in 1994 i recall an internal demo on British Telecoms intranet that had document summarizing capabilities.

    • Re:A Black Eye for Female CEOs (Score:5, Insightful)

      by rasmusbr ( 2186518 ) on Wednesday April 24, 2013 @07:53AM (#43535481)

      Your post reminded me of this: http://xkcd.com/385/ [xkcd.com]

    • ...and the male Yahoo! CEOs have had a good run?

  • What Forbes didn't mention... (Score:5, Interesting)

    by Fluffeh ( 1273756 ) on Wednesday April 24, 2013 @07:26AM (#43535253)

    For every summarisation site that is sold for even a relatively decent amount, there are probably thousands that never made it past the initial bandwidth hit that the server fell over with.

    Also, the article itself is really full of things that aren't likely to happen. Read it for a giggle or a smirk, but beyond that, it's not a formally laid out plan to make buckets of cash - and forbes smashes loads of advertising on the site (once you even get to the article that is) that is annoying.

    If you ask me, Forbes is the only real one making the real kerduckets here with a wishy-washy story that displays more ads than I have fingers and toes...

    • Re: (Score:2)

      by mwvdlee ( 775178 )

      Forbes isn't REALLY handing out a plan for getting rich quick? I...am...shocked!

    • Re:What Forbes didn't mention... (Score:5, Interesting)

      by Xest ( 935314 ) on Wednesday April 24, 2013 @07:37AM (#43535345)

      Summly seems to have been the biggest "boy genius" swindle of the 21st century so far.

      Basically, his Dad is a director at the investment arm of one of the biggest banks in the world. He got a number of well known names (Steven Fry, Ashton Kutcher, the Murdochs) to invest in the app and use their popularity (or in Murdoch's case, media wing) to publicise it.

      The company itself wasn't run by the kid, it was run by a silicon valley veteran who again, his dad got on board. The complicated development (the article processing etc.) was done by a 3rd party, and the Android version was being developed by a 3rd party also. Internally, there was not much left to do apart from the iOS front end for the outsourced back end, and given that he had another veteran silicon valley dev working as a developer there (and I believe more developers on top) I'm not entirely sure whether the kid himself actually even wrote a single line of code.

      His mother is a lawyer, who I understand works for, or has done some work for Yahoo too prior to the acquisition. That probably helped things along too.

      So you're right, I'd say these things aren't likely to happen for most people. Unless your dad just happens to be a director at a major investment bank and just happens to know some of the most wealthy people around who also just happen to have strong media platforms to hype your product from that is.

      • Re:What Forbes didn't mention... (Score:5, Insightful)

        by tgd ( 2822 ) on Wednesday April 24, 2013 @07:48AM (#43535435)

        So you're right, I'd say these things aren't likely to happen for most people. Unless your dad just happens to be a director at a major investment bank and just happens to know some of the most wealthy people around who also just happen to have strong media platforms to hype your product from that is.

        Business has always worked that way. Why do you think CEOs get paid so much? Connections, leverage, wealth, politics -- once you're bigger than a small local company, those are the real differentiators, and behind virtually every "successful" startup is a similar story. Names and details may change, but the plot is the same.

        And that's not new -- it was just as true 50, 100, 200, and 2000 years ago. Wealthy Babylonian merchants got so for the same reasons, as did ancient Greek, Roman, Chinese, etc ... you name it, that's how it has always worked.

        • Re:What Forbes didn't mention... (Score:5, Interesting)

          by Xest ( 935314 ) on Wednesday April 24, 2013 @08:00AM (#43535535)

          Sure, this is why ability to network is more important in succeeding in the business world than any ability to produce anything useful. But hopefully we can at least stop pretending the Summly story is something it wasn't and recognise it for what it was - a kid born with a silver spoon, and no particular stand out talent, having his career set up for him very publicly by his already wealthy father.

        • Putting a cap on market capitalization of Yahoo would have prevented such scams

      • Your post sounds exactly like what some faceless prole to incompetent to even manage to be born correctly would write...

        After all, totally scientific statistics, complete with numbers and intimidating diagrams, will easily demonstrate how rare and exceptional the talent for entering the world through the correct uterus is. Where most people are already making irresponsible choices even before they've grown a brain stem, this kid was already achieving at or above the 99th percentile as a blastocyst!

      • Re: (Score:3, Insightful)

        by FuzzNugget ( 2840687 )
        So, as usual, your skills are worth precisely dick. It's about whoever's vagina you were lucky enough to pop out of.

        • Re: (Score:2)

          by kye4u ( 2686257 )

          So, as usual, your skills are worth precisely dick. It's about whoever's vagina you were lucky enough to pop out of.

          Warren Buffet refers to it as the "Ovarian Lottery"

      • Re: (Score:1)

        by Anonymous Coward

        The quickest way to financial wealth - be born to rich parents

      • tl;dr version - money attracts money. Who knew?

        • Re: (Score:2)

          by asylumx ( 881307 )
          That's what I was going to say. If you have money, it's really easy to make more money. You can invest and get your tax rates halved compared to normal income. You can afford accountants who can do fun things with your money to keep the gov't from getting their hands on it. You can take risks with your money since you don't risk your livelihood, just your money. Most people need their money in order to survive, but once you have that covered you can start doing all these different things to make your m

          • The rich get richer, that's just how it is.

            Only if you don't believe in the redistribution of wealth. Progressive taxes are there for a reason, and that reason is to force rich people to contribute back into the society that made them rich. Astonishingly, relying on their charity doesn't work, whatever libertarian cheerleaders like to think.

            I know socialism's unfashionable, but it's not impossible to achieve. And no, it doesn't have to involve a violent revolution. After WW2, Britain became pretty socialist (for a while) because we wanted to ma

    • Well in any case it's too late to start building a solution now. Inventions (and I'm using that term in a very broad sense) tend to be invented by multiple people and companies within months of one another. If you start now and have something working six months from now it will be too late.

      The same thing goes for other obvious ideas such as for example a Bitcoin market that actually performs well or an in-store e-payment system that works well. Some other startup is already 10+ months ahead of you on those.

      • Re: (Score:2)

        by Quirkz ( 1206400 )

        You could try making a summarisation service or a Bitcoin market or an in-store payment service that's so awesome it'll take the market by storm even against large established competitors. But then it has to be super awesome and perfect.

        Yeah, just like FaceBook!

        (I'm going for funny here, just in case there's any doubt.)

        • Well, social networks are a different sort of beast because the networks are not the product. They people on them are the product. If for whatever reason popular people chose to spend their time on social network X then the ordinary, less popular people will flock to that social network too.

  • I read the article and all of the steps. I'm pretty sure I can make a go of it. I just have one question. What's summarization technology?

    • I read the article and all of the steps. I'm pretty sure I can make a go of it. I just have one question. What's summarization technology?

      It's an algorithm for taking a readable piece of text that challenges your attention span, excising chunks of it with the same care and attention to meaning that spambots bring to the task of composing text, and then spitting it onto your smartphone; because 'Mobile' is where the sweet, sweet, VC sugar is.

      Not that I'm a skeptic of this fine and worthy invention or anything.

      • So wait, from your description alone, it sounds like reading /. on mobile is the same as a summarization technology. The summarization is just done by "editors" (god I'm trying not to laugh) "editing" (must... keep... straight... face...) articles already submitted as summaries of pre-existing articles posted elsewhere on other sites. So if I repackaged an RSS feed of m.(/.).org and "mobilized" it so it works even "better" on twitter, I could be bought out for a gaba-za-billion dollahs? Must find fake so
        • Bill Gates was the classic example of "right time, right place". IBM had absolutely no clue (along with everyone else) that there was going to be a vast market for PCs, or else they wouldn't have let some college drop-out get near their products, regardless of who his parents had dinner with.
  • It doesn’t matter that those aren’t your team members Yes it does misrepresentation is usually considered to be fraud!

    • There are ways around it. Fire them an email once asking a really simple question that can be answered in three words. If you get the to reply, BAM they helped you with your app - even if you already had that bit done. There are many ways around such fraud mate - just be choosey with your words. "You collaborated with them..." for example, rather than "He wrote the entire app..." Court-case avoided - and the same outcome.

    • If you say it in the right business-speak it isn't fraud... I.e., "Our organization leverages the talents of a world-wide network of contributors whose software is installed on millions of devices daily!" == "We use open source software." I'm sure you can come up with more.

  • Comment removed based on user account deletion

    • convince slashdot that as a waning influence on technology and the internet thats rationed off its core competencies to other players like microsoft, you'll need your own slashdot icon for stories from now on.

      Audiences love a good trainwreck, usually more than they love a well-maintained and tediously reliable train.

  • Bullshitter makes lots of money off suckers (Score:4, Funny)

    by TWiTfan ( 2887093 ) on Wednesday April 24, 2013 @07:40AM (#43535381)

    Film at eleven!!

  • Misses the point (Score:3)

    by hsmith ( 818216 ) on Wednesday April 24, 2013 @07:46AM (#43535429)
    Even if it is a hodgepodge of tech - the simple fact is Yahoo! Itself would have never been able to figure it out, how to build it. That's the problem, large companies can't innovate (let's just assume that Summry is an innovation to keep the discussion simple). So, even though we find it simple to build in theory, Yahoo couldn't pull it off internally. That, that is what to take from this.

    • Arguably it misses the point in a slightly different way: it is alleged [businessinsider.com] that the 'summly' acquisition was more or less a sideshow to the purchase, from SRI International(who built the actual summarization technology, and also a little toy called 'Siri' among a variety of other projects, some quite interesting and high powered), of some of the related technology and patents.

      Still not something that Yahoo could develop internally(hence the buying of it); but SRI isn't exactly a lean and hungry startup, just a

    • That's the problem, large companies can't innovate

      This is true. But there is a VERY simple solution to this problem: fire your HR staff. All of them.

      Nobody in the 21st century needs HR staff. All of the "work" they do can be covered by managers actually doing their jobs, in the same way managers in small firms do, and by utilizing one of many tech solutions for any admin (or just scrap a lot of the admin, it's mostly work for work's sake. HR staff had to be appearing to do something, after all).

      With

  • "My skills are worthless. I will be much more financially successful by abandoning my ethics, falsifying relationships for the purposes of shmoozing, siphoning the hard work of others and deceptively whoring my ill-gotten 'products' for the ultimate payout to live in luxury for the rest of my life without having to lift a finger. I got mine, fuck the rest of you suckers!"

    Oh, and it *way* helps if you've won the genetic lottery and are born into connections as well.

    • Re: (Score:2)

      by h4rr4r ( 612664 )

      That is exactly how it has always been.
      Why does that surprise you?
      This is why some people don't believe the hard work will make you wealthy lie.

  • Wow, 20 million. And I can't raise even 0.18% of that for my project. :-(

    http://slashdot.org/journal/373333 [slashdot.org]

    Mod me down, I deserve it.

    • In fact, a lot of money is simply dreamt into existence nowadays. This is how it works:

      • Be a bank or collaborate with one
      • Loan an astronomical sum. The bank will just type the astronomical number into their computer and *POOF*, the money exists.
      • It is really so simple? Yes, but a central bank has to do the same, 'cause they have the right to do so. So the bank loans from the central bank, but that is just an annoying detail.
      • Use this made-up nothing to buy a company, or, preferably, an entire sector (like chil
  • It really takes the cake when I see things like this. "was little more than a collection of existing technologies built by others." don't we all build off of others?

  • Say what you will about Summly, but Wavii is not just a hodgepodge of existing tech. They spent three years building their own natural language processing technology, and their team probably has a better understanding of machine learning than most of Google's engineers. It's not hard to see why Google would be interested.

  • in the business world, there is value in pulling together existing technologies and providing a useful service. no one is claiming the kid is an Einstein. just that he created something useful. something that yahoo may have been trying to do themselves for awhile.

    anyways, even if you just chalk the sale up to $30M of advertising/branding publicity, there's value in that too. Message: "we are expanding, adding new tech, getting cutting edge, we are a hip cool place to work or to pitch your start up tech"

    • Re: (Score:2)

      by xombo ( 628858 )

      I suspect there was some short-term value in the publicity. At best, they got an install base.

  • "If I have seen further it is by standing on ye sholders of Giants."
  • American chicks can't themselves around all that
  • Just the title suggests there is another high-tech bubble inflating around smartphones apps...

  • Any URL that starts forbes.com/sites/ is an unedited blog by some bozo - it's not journalistic content produced by Forbes. It can be any old shit, and usually is.

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