My rule of thumb for awhile has been that if you can get one hundred million users (100,000,000) you can sell your company for one billion dollars ($1,000,000,000). It doesn't matter if you have any revenue or not, 100m users = 1b dollars.
Snapchat is at 200m users, but has doubled since August. If you think it's headed for 500m users then 10b is only a 2x premium for an unusually large pool of users in one place.
WhatsApp sold for 18b with 500m users. It was headed for 1b users so 18b is a similar 2x premium.
At first I thought the math didn't work but I guess it does. Users are king. Engaged users are directly convertible to money.
Snapchat is at 200m users, but has doubled since August. If you think it's headed for 500m users then 10b is only a 2x premium for an unusually large pool of users in one place.
WhatsApp sold for 18b with 500m users. It was headed for 1b users so 18b is a similar 2x premium.
At first I thought the math didn't work but I guess it does. Users are king. Engaged users are directly convertible to money.