Quora raises $50M at a $400M valuation with Peter Thiel leading

http://online.wsj.com/article/SB10001424052702303505504577404510443769988.html?mod=wsj_nview_latest

by kahseng • 14 years ago

69 61 14 years ago

online.wsj.com

mikeryan2• 14 years ago

Can anyone explain why Quora would garner such a high valuation? I have a hard time believing its revenue based so is it seen as an acquisition target?

suking• 14 years ago

hype based

pclark3• 14 years ago

the founding team of Quora were on the founding team of Facebook = extraordinarily strong leadership team.

mikeryan2• 14 years ago

I'm not buying that. I can understand that driving an inflated seed or A round, but at this point I would expect to see something more fundamental in the valuation.

brown9-2• 14 years ago

But the original question is, where are they leading Quora to?

gamache• 14 years ago

They're 40% Instagram, relatively speaking.

staunch• 14 years ago

1. Very well connected founders.

2. Founder ponying up millions of his own cash.

3. Frighteningly Ambitious(TM) problem.

4. Reasonably good traction and product execution.

larrys• 14 years ago

Having #1 and #2 are good for attracting the proverbial greater fools to take it off your hands. Also add #5 - use and/or answers by people the main stream public has heard of. Some more of those, particularly celebrities, politicians, entertainers saying sh*t, could have this become so mainstream that their answers will be quoted on the Nightly News.

So it becomes a complain and explain platform like twitter.

kjhughes3• 14 years ago

I like staunch's answers, plus

5. Investors are hunting for an Instagram-like Facebook spillover win.

Androsynth2• 14 years ago

How is 'Q&A site for venture capitalists' a frighteningly ambitious problem?

potatolicious• 14 years ago

I simply do not see #4 happening. Hell, at this rate I'm willing to bet that StackExchange, itself a rather niche site (or network of sites) has higher activity than Quora.

I don't know a single person outside the (somewhat incestuous) startup industry that uses Quora. In fact, I do not know a single person outside the tech industry who knows about Quora.

Claims that Quora has achieved good traction are, to be polite, overly generous, but more frankly, bullshit.

misiti3780• 14 years ago

where did you get (2) from ?

mslate• 14 years ago

What is the Frighteningly Ambitious(TM) problem?

hristov2• 14 years ago

Because people using Quora think very highly of themselves, and when you have all these people that all think very highly of themselves and each other concentrated in a single place, then they all think this is a very special and valuable place indeed.

This would not mean much in general, but I am willing to bet that most of those Quora investors are also Quora users so they suffer the delusion too.

pw• 14 years ago

Oh, Quora the product hardly matters. This is just a simple case of proven founders being able to raise whatever money they want.

Sure, Adam D'Angelo and Charlie Cheever didn't actually start Facebook, but they came as close as anyone can be short of actually being Mark Zuckerberg.

sparknlaunch12• 14 years ago

We really like Quora. It has an active community, made up of a wide range of experts giving really great answers. The Quora valuation sounds high but the wealth of knowledge, number of users and available intelligence must be of value to some investors.

We have written an article (still to be published) on these expert Q&A sites. Stack Exchange, Quora, Askolo, Sprouter, Reddit plus more are delving into matching questions with answers.

There is growing trend towards matching experts to inquisitive minds. These platforms are essentially allowing subject matter experts to sell their knowledge to others. Why not?

Maybe the high valuation - Quora and others are commoditizing expert knowledge with the intention of selling this on?

dguaraglia2• 14 years ago

Wow, can we spell "bubble" yet? This is definitely a 100% bubble-based valuation. Don't get me wrong, I don't think Quora is a completely worthless company, but unless they have some incredibly magic sauce they haven't showed us yet, I can't possibly see how they'll get that much revenue ever.

In fact, a simple check would do: let them show how much they made last year, projected growth for this year, and we can start talking about anything beyond a $10m valuation.

pclark3• 14 years ago

Or Quora ignores dguaraglia's requests, continues their success (however you - or they - wish to measure it) as a private company and watches Hacker News whip itself into a frenzy about the financing climate?

dguaraglia2• 14 years ago

Although that's the most likely answer, it's also the stupid thing to do. And by 'stupid' I mean it in the "because of things like this, all of us will get fucked in the long term, even the short-term winners" sense.

I just hate this idea that you can create a company without any kind of realistic approach to making money, value it at in millions without any kind of basis and hope some rich (and dumb) buyer bites. It's opportunistic at best and dishonest at worst.

It makes everyone in the milieu look like he's trying to pull this stunt, although there are plenty of honest (and profitable) companies out there not getting millions in investment because they don't try to sell something shiny.

jordhy• 14 years ago

I been an advocate of conservative valuations but, in this case, I highly agree with the number proposed.

Quora is much better than all its comparable companies (eHow, Mahalo, etc...) in every possible sense: community, technology, founding team, etc. Traffic is very strong, it displays strong social integration tools and has managed grow very impressively.

On a side note, I expect Quora to move into the mainstream with much less friction than Reddit or Askolo. Being more design and experience oriented, Quora has the upper hand here. I hope Quora's team realizes and exceeds this valuation.

citricsquid• 14 years ago

Aren't quora and "mainstream" at odds though? Quora is about quality questions, the majority of mainstream people that would use a Q&A site are the sort of people that use(d) Yahoo Answers, the sort of questions that you want to exist for long enough to get a reply but once they have been replied they hold absolutely no value to anyone.

How can Quora "go mainstream" and avoid this problem?

noahc4• 14 years ago

The simple answer is that you redefine mainstream. Mainstream doesn't mean that everyone uses it like Facebook, but instead that "everyone" uses it just like "everyone" uses shopify or github.

Quora goes mainstream when a certain elite, much like the Salons of Paris, gather there. Academics, Business, Cultural, Medical, Scientific and Technology elite all show up.

hristov2• 14 years ago

I do not think Quora is better than eHow. I have learned many valuable things on eHow, such as how to poach an egg. I have learned a lot of more complex and interesting things on reddit AMA's, such as how various businesses actually work. I have yet to learn anything on Quora. Every post I have read on Quora, aside from being long and pompous, qualified and generalized everything so thoroughly that it completely failed to impart any information.

earbitscom• 14 years ago

Clearly you did not read the answer detailing nearly every instrument in a plane cockpit, or "What are the most mind-blowing facts?" In fact, clearly you have not used Quora.

yurisagalov• 14 years ago

Ugh, paywalls/loginwalls.

flyt• 14 years ago

yea, that really killed Facebook in the early days.

fourstar• 14 years ago

I'm not sure if that's the point he was making. It's that making it socially acceptable to do, is annoying. At least that's what I think he meant.

blackysky• 14 years ago

Ok I know the word bubble is overuse but I think we are in a bubble. I know the market choose « the right price » for any project. We have seen this movie before:The housing market. Money was “easy” to get for almost anyone without checking those fundamentals. The main idea was simple prices cannot go down. Now back here, the idea is simple someone somewhere is going to pay $400M or more in a near future.... what's the plan B put ads again? Paid questions?

I'm just trying to understand how people can come up with valuations like that …. I just don't get it ...

SuperChihuahua• 14 years ago

I think it has to do with probabilities - many small loses and one big win (Facebook) - and you have a profit

Drbble2• 14 years ago

But many small losses and zero big wins...

nikcub• 14 years ago

we will really be in a bubble when:

1. your parents or granparents call you to ask how they can invest in this Quora round

2. the mainstream media say we are not in a bubble

cletus• 14 years ago

Firstly, is there any chance we can have a story without someone using the word "bubble"? This is not evidence of a bubble. More to the point, it's a boring prediction because it doesn't add anything. Some years from now we may well be in a bubble and the person who happens to be right that day will say "See? I said we were in a bubble" and the previous 1000 days of being wrong will be summarily ignored.

Basically it's pointless.

As for Quora, I stand by my original assessment: I don't see this going mainstream. Q&A seems to be something that works well for particular verticals (eg programming aka Stackoverflow) but doesn't seem to be a general purpose or widespread tool. This is in part cultural (eg I believe Q&A is very big in Korea).

I see this more as "bubble thinking" and in this context "bubble" has nothing to do with valuation but more that the people who use and value Quora live inside a bubble. That bubble is the Valley. VCs and Valleywags only know other VCs and Valleywags and all of those people use Quora so they make the mistake of thinking it's far larger than it actually is.

Quora does not have the mainstream breakout appeal that, say, Pinterest or Instagram does and honestly I don't think it ever will (you can quote me on that). Neither does (or will) Stackexchange.

That's not to say either won't exit for 9-10 digits but that's another story entirely.

Quora has done a fantastic job of marketing itself to VCs/Valleywags but I see Q&A much like I do Foursquare and the whole check-in thing. It's a (to borrow a Mark Suster term) FNAC (feature not a company).

IMHO Quora will suffer the same fate every social/curation site does: eternal September. If it ever does grow massively the influx of new people will change the site and those early adopters people like to follow now will move on to the next thing. It's Slashdot, Digg, etc all over again.

noahc4• 14 years ago

I view quora as a highend QA website that connects me to experts. I have access to people with deep understandsings of technology, business, science, lingustics and culuture all while being "peer reviewed". I dont think the lower class and noneducated will flock to it, but it would be invaluable to anyone in the knowledge economy.

andrewcooke2• 14 years ago

> I dont think the lower class and noneducated

this is what's so creepy about the place. why does class need to come into it? class has never been an issue with hn - even in its better days - yet it's become something core to quora.

psyklic• 14 years ago

I see a lot of potential for the "lower class and noneducated" in the Q&A space. Questions about relationships and social issues often cannot be answered by merely browsing websites. Everyone views their own situation as being unique. People love giving advice on these issues, even if the right answers aren't black and white.

chrisaycock• 14 years ago

> I view quora as a highend QA website that connects me to experts.

I've thought of Quora as having everybody except experts on it. Here are the first five questions I see on Quora's quantitative finance page:

1. Who (companies or individuals) are some well-respected recruiters in quantitative finance?

2. What metrics do you use to figure out if a commodity is undervalued or overvalued?

3. For a fresh maths/stats PhD, are there any advantages to starting a career in an investment bank instead of a hedge fund?

4. What is the purpose of Financial Engineering?

5. What is the most common topic beginners struggle with when it comes to Computational Finance?

Now here are the first five I see on StackExchange's quantitative finance page:

1. Nelson-Siegel model is not arbitrage-free

2. Autocorrelation and Markov Regime-Switching

3. What are some examples of non-financial risks and contingency plans?

4. Is it ever possible that---because of illiquidity---exercising an out-of-the-money option is better than directly buying the stock?

5. What's the best way to test/validate an interest rate lattice model

Only one of these sites has experts on it. (Full disclosure: I'm a moderator on the Quant SE site. It took a lot of work to get that board up to expert level. I don't see the same kind of effort applied from Quora.)

http://www.quora.com/Quantitative-Finance

http://quant.stackexchange.com

chintan• 14 years ago

I disagree about Q&A being restricted to verticals, Here are 2 counter examples:

1. Answers.com, 108mm monthly uniques http://www.quantcast.com/answers.com

2. Yahoo Answers, 20mm monthly uniques http://www.quantcast.com/answers.yahoo.com

And also watch out for Branch.com - it takes Quora model of "Experts Q&A" to "Invite-only Experts talking on a roundtable". Potentially disruptive as it plays on psychology of "exclusiveness" - Evan and Biz stone are betting on it via Obvious Corp.

3pt141592• 14 years ago

If Quora got the adoption that Yahoo answers did, it would end up with answers like Yahoo answers has and similarly talented engineers. The only way Facebook holds onto their talent is that the idiots typically don't make friends with the rest of us. Even reddit looks childish these days.

tlogan• 14 years ago

Very good assessment.

It is not a bubble because I also believe that certain companies (especially in mobile space and "cloud" space) are going to be big winners.

However it is a little frothy, because some companies are getting high valuations but they are still part of old Web (web 2.0 - no mobile, etc.)

ojbyrne• 14 years ago

I love the FNAC acronym, if only because FNAC is an actual company, not a feature.

http://en.wikipedia.org/wiki/Fnac

codinghorror• 14 years ago

I may be (read: am) biased, but I don't think there is (currently) any finer system in the world for technical, more-or-less-science-based Q&A than Stack Exchange.

So the open question is, how many technical, mostly-science based topics exist that work on the Stack Exchange Q&A engine -- and how large can they become? Many have been tried, some are working; see the statistics at http://stackexchange.com/sites?view=list#traffic

At the very least, Stack Exchange produced Stack Overflow, which is already absolutely enormous, growing like crazy, and well on its way to becoming the Wikipedia of programming. We can't really say that about Quora for any topic, can we? Will Stack Exchange ever recreate that level of success on any other topic? I don't know. I suppose you could plot growth curves of the various sub-sites and estimate how long it'd take for them to reach the size of Stack Overflow.

its_so_on• 14 years ago

>Some years from now we may well be in a bubble and (...) the previous 1000 days of being wrong will be summarily ignored.

I might be misreading you, but it seems you don't think a bubble can last for 1000 days. It did in the 90's. I think your kind of attitude leads people who cry 'Bubble!' to say, after 1000 days, 'Um, I guess I was wrong. Damn, being wrong just cost me a 10x return on my investments I wasn't making. I better start investing before I lose even more!'

I literally remember reading a comment from someone in the late 90's 'Not buying a house 3 years ago has cost me 400,000.'

Well, in retrospect, no it didn't, it was just a bubble.

The protection against a bubble isn't waiting until it's a long, well-established bubble: the protection against a bubble is having lots of sales and lots of cash stored away. If you're punished too much after a bubble-pop in your valuation (get priced at a tiny price per earnings) great: you can now buy back your shares and mint money by selling them again when your price to earnings is something reasonable.

on the other hand, if you don't have sales, your price to earnings is infinite. Then it's not the bubble you should be worried about, it's getting customers.

AznHisoka• 14 years ago

People can talk about elite team, synergetic community, excellent quality content, usability, etc but it all comes down 95% to one thing: SEO.

pclark3• 14 years ago

Quora is just damn useful.

I actually struggle to think of many other b2c companies who are equally as useful and yet also fun to use. It's like Google Search (useful) combined with Tumblr (fun.)

kjhughes3• 14 years ago

Techcrunch broke the evaluation story 3 weeks ago:

http://techcrunch.com/2012/04/21/quora-is-raising-at-a-400m-...

And Quora already has numerous Q/A's on the valuation. See, for example,

http://www.quora.com/Valuations/Is-Quora-worth-400-million-d...

along with the Related Questions listed on the right.

mkramlich• 14 years ago

$400M... let me guess: no revenue at all? but it was started by a couple of Mark's dorm pals from college! not a bubble, not a bubble, not a bubble, not a bubble....

cpeterso• 14 years ago

How does Quora make money?

Quora raises $50M at a $400M valuation with Peter Thiel leading

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