The Learning Company acquisition by Mattel was one of the worst deals ever. There was strong evidence at the time that the financials for The Learning Company were overstated.
And yet Kevin O'Leary's various opinions on business and political matters are, for some reason, widely reported even to this day.
One correction. It's not $8B per year, it's $8.4B in the last quarter--which is over $32B annualized, especially considering the last quarter's revenue grew over 20% from the same time last year. GCP's profit margins are low (for now) but positive. [1]
Moreover, per its filings, Google had almost $65B of contracted backlog representing customer commitments for future purchases (over multiple years), primarily related to Google Cloud. That is not to say those can't ever be unwound or delayed, but it's a pretty meaningful amount, even to a company the size of Google. [2]
There's a great book by CS professor Steven Skiena about the automated betting system he built (using early 90s-era technology!) to place bets on jai alai.
I'm not defending all of Getty's business practices, obviously. But my understanding of what Getty is selling is both convenience and a degree of legal protection for media buyers. If you buy an image from them, they will, in writing, guarantee you that it is legally permissible to use, provided you follow the terms of the agreement.
Representations and Warranties. Getty Images makes the following representations and warranties:
Warranty of Non-Infringement. For all licensed content (excluding content marked “access only”), Getty Images warrants that your use of such content in accordance with this agreement and in the form delivered by Getty Images (that is, excluding any modifications, overlays or refocusing done by you) will not infringe on any copyrights or moral rights of the content owner/creator.
Additional Warranties for Certain Content.
RF: For licensed royalty-free content (excluding content marked “editorial” or “intended for editorial”), Getty Images warrants that your use of such content in accordance with this agreement and in the form delivered by Getty Images (that is, excluding any modifications, overlays or refocusing done by you) will not infringe on any trademark or other intellectual property right, and will not violate any right of privacy or right of publicity.
RM/RR: For licensed rights-managed and rights-ready content where Getty Images specifically notifies you that a model and/or property release has been obtained, Getty Images warrants that your use of such content in accordance with this agreement and in the form delivered by Getty Images (that is, excluding any modifications, overlays or refocusing done by you) will not, where a property release has been obtained, infringe on any trademark or other intellectual property right and/or will not, where a model release has been obtained, violate any right of privacy or right of publicity.
it gets sticky when you sell your product of work based on a public domain image. maybe the original image that is available in the public domain is dirty, scratches, faded, or any other thing that happens with old images. if they paid to have it restored and are selling the restored image, then that image is not part of the public domain. it's a big bit of spin on this being a possible misunderstanding of what they are doing.
however, with all of the other stories about the original photographer getting served notices of infringement when they have their image on their own site or socials and similar type of just unchecked automation, then yeah, it's hard to be able to give any benefit of the doubt
then something else can be done to it that does grant them copyright on the work product. similar to modifying the mouse to extend/grant new copyrights
> But my understanding of what Getty is selling is both convenience and a degree of legal protection for media buyers.
I don't know if this is still the case (given Spotify/Amazon Music etc) but with regards to convenience:
I remember reading a few years ago that it was almost impossible to find the holder of music copyright for a large portion of the existing catalogue of published music.
This was due to a combination of:
- no central database of ownership
- a LOT of music is produced by small labels
- music copyright ownership tends to change hands for various reasons
I can see how in this domain (and therefore similar domains), having a quick and easy way to say "I need X and I need to know no one is going to sue me for using it" has got to be a service that large corporations are willing to pay for.
I seriously doubt this is true. Solving this problem is basically why BMI and ASCAP exist.
Where it gets tricky is that with a piece of music, there are at least 3 or 4 different elements that are separately copy written.
You have the basic tune, the specific arrangement, the physical layout and content of the sheet music, the basic copyright of a particular recording, and finally (and most relevant to your example), what are called the synch rights, which are the rights to use a song as a synchronized part of a larger work, like a movie or commercial.
It's probably both - finding the holders for a lot of music is impossible, but by using BMI or ASCAP you may be able to shift the responsibility to do so to them in their role as PROs.
Not an area I keep up on, but this is interesting regarding how things worked in 2016 and possible recommended changes. https://www.copyright.gov/policy/pro-licensing.pdf Note that it's about Performing Rights Organizations not about Professionals. Of particular interest is the discussion of 100% licensing vs fractional licensing.
These both appear to be American businesses serving American users. 95% of the worlds population don't live there. Both copyright laws and rights holders vary significantly around the world. This is far from a solved issue.
I remember both of these, especially BroadVision which was the biggest most overpriced piece of shit we ever worked with. We used to call it FraudVision
Obviously not the same level of detail, but there's a dataset from the Federal Highway Administration that has basic data (at least what's available publicly) on many bridges and their condition.
Interesting piece. But speaking as someone who was formerly a very junior VC through the dot-com era, there most certainly can be a negative spiral.
The public and private markets aren't as distinct as they might appear to be. A VC buying shares in a private company at valuation X must believe that a sale is possible at a big multiple of X, and soon. Some VC will be the last investor before the company goes public or is acquired. And that last private investor has to sell to another buyer, either a strategic acquirer with cash (or highly-valued stock) or an investor making a purchase in an IPO. And if those exits don't look as rosy as they used to (seen the share price movements of publicly-traded tech stocks lately?), the whole thing runs in reverse.
Worse, if the companies needing financing aren't cash-flow positive or profitable (and few are), existing investors' stakes will be diluted as prices drop. Investors might want to slow the pace of investments to reserve cash to fund the needs of their existing companies, rather than take bets on additional companies needing cash.
Also, while speed is good for startups, "time diversification" used to be considered a good thing for VC investors, who really are playing a portfolio game. The worst-performing funds from the dot-com era were those raised and invested in 2000, just before the peak of the bubble. Of course, at the time, no one knew it was the peak.
Almost no one working in VC now would remember it, but there was a short recession in the early 90s that greatly affected the VC industry. The fund I worked for had been founded in the mid-80s, and reading the old investor letters was fascinating. Admittedly early stage tech was a far smaller industry back then (the dollars thrown around now make the deals I worked on in the dot-com era look positively quaint), but so were the burn rates.
One other thing that happened in the dot-com era, which is also happening today, is that many new companies would spend fresh funds raised from VCs and even from IPOs to buy products and services from each other, spending money aggressively to deliver such products and services, and generating revenue growth that would look impressive in the short run... but ultimately would prove unsustainable. Such growth can last only as long as there is an ongoing supply of fresh capital!
At the extreme, some companies in the dot-com era engaged in dubious "round-trip revenues" behavior, e.g., agreeing to buy a certain dollar amount of another company's products/services only if the other company agreed to do the same, with neither company actually needing to do so for ordinary business purposes. I don't know if this is happening today too, nor to what extent.
Theoretically, who cares. If you can convince people to buy your product - even if only to scratch each other's backs - that's better than all the other people who can't / don't have the network.
> while speed is good for startups, "time diversification" used to be considered a good thing for VC investors, who really are playing a portfolio game
To expand on this, as the article notes, the old game might have been (stylised) ten Series A investments, three of those raise a B and one raises a C. Today, all ten raise a B and then three months later a C. Valuations (perception of risk) go up (down). But has actual risk been reduced?
The Information‘s “The End of Venture Capital As We Know It” [1] argues that yes, software start-ups have become less risky over the past decade. I agree with this in part. (Cautiously. I make more money when Silicon Valley valuations go up, so of course I’d like that argument. It also sounds like “this time is different.”) Even if true, we may have overshot the mark. In a way, those mis-placed follow-on bets on doomed unicorns are VC’s analogy to leverage—it’s amplifying a single company’s effects on the portfolio.
Objectively, software bets are less risky than 20 years ago. There are more well understood business models, more ways to reach customers, fewer technical risks (putting a consumer website meant dropping 7 figures on hardware and hoping you had the right team to make things work), and a better understanding of what a defensible business looks like.
On the flip side a reduction in risk is no guarantee of success, there are new risks related to having ~100 copy cat companies - or having your business replicated by a mega-cap. Lower risk means lower barrier to entry.
I'm not sure what stage of company we're talking about here.
I'd argue that for ALL companies, in any industry, working capital--measured on the balance sheet--is a critical data point. That is, you may be booking revenue but not collecting cash from your customers (in an extreme case, the "revenue" may be fictitious, if the software doesn't work and the customer refuses to pay). And while you might have $x of cash on the balance sheet, you could also have a huge and looming payables balance because you're waiting to pay your bills until you're N days past due.
Also, revenue is just what you can actually book per the accounting standards, which has lots of specific tests for software companies. For most SaaS companies, a key number is also deferred revenue, a balance sheet item that records the difference between the cash you've collected (say, up-front for 12 months) and the remaining performance obligation to deliver software over the period. Or, if you have a big service component as part of your offering, a number to watch is the amount of revenue you've booked but not yet billed.
As an investor, I'd also be curious about the future obligations of the company that will consume cash, such as big leases, debt, and other liabilities (eg, legal judgements against the company).
Investors are free to ignore whatever information they'd like, I suppose. And a tiny two-person company probably has a very simple set of financial statements, if any. But those two founders have the ambition to build a big and successful company, I'd argue that understanding how to read financial statements with some mild degree of fluency just isn't that hard and is a very useful skill.
And yet Kevin O'Leary's various opinions on business and political matters are, for some reason, widely reported even to this day.
https://www.nationalobserver.com/2016/01/26/news/real-and-sh...