Rob Cyran and Reynolds Holding discuss why the photo messaging service's whopping $10 billion valuation has a lot more to do with dreams than economics.
Today we're chatting about snapped at the photo messaging service that -- to venture capital firm Kleiner Perkins is taking. A tiny slice of this company for some twenty million dollars. Do a little fancy extrapolation of that comes out to a valuation of him. Billion dollars ten billion dollars crops -- in this company must be making money hand over fist and making anything not a candidate any revenue and had no revenue it's kind of point. If you can think about it extrapolate it ten billion dollar valuation from a twenty doing twenty million dollar investment is kind recently it's it's it's. -- in -- kind of saying. Right well let's just -- huge big dream. And on this course that's what's happening it's happening a lot in the they're selling the dream and it's it's it's very easy doing a growing very quickly if people say well you know look at all the other social networks and of grown so fast and like FaceBook you know once -- passed the hundred million mark and suddenly it was worth a lot of money because advertisers blocked it. But let's step back for seconds what what is snapped -- what does it is not -- this is what at all it's used by teens are mean he's often. You send pictures or other sorts of images to other people and then they disappear afternoon you know several seconds. You know you can see why teens can't handle that because you know my parents can't quite trying to they're doing their music you know Pickens and actually class not to cause our -- Better purposes do we have any idea how it they're thinking about making money off of this is gonna. Going to be advertising is it just what I mean advertising age you'd suspect that you you know that'll give people water. Think it's it's -- -- is when you -- growing very fast at noon and two start worrying about revenue than ever inserts their hold on the Harry immigrant and you and people start sharpening the pencils and think perhaps not alien but if all they're selling is you know hundred million users and growing as fast and people -- people in pencil and all sorts of things thing tonight. Maybe they can charge users a dollar per month or something or maybe you know. That give more ads than FaceBook are all about possibilities some of those about egos too you know I mean if you have somebody that's a small stake evaluation goes up. Good things can happen right people are taking you seriously there's -- of silicon metal take seriously because you know if you think about it. Having a one billion dollar company in Silicon Valley isn't that much anymore so if you write that got it starts congress that he got a ten billion dollar valuation and engineers perhaps they well in other companies -- -- -- and perhaps -- -- -- -- -- there. And vendors are taking it seriously. He can induce other people start saying what's the -- thing perhaps that's it download it. And the other thing it does it. Anchors possibilities that people when you start having talks with other companies for instance if they went to face -- this you know we're we're up ten billions it has more than ten billion if you -- bias you know. And it's creating kind of decide which can be actually you know this. Interest and will be following that story in the meantime stay -- For more breaking news tomorrow.