GIF Site Giphy Is Valued at $600M(wsj.com)
wsj.com
GIF Site Giphy Is Valued at $600M
http://www.wsj.com/articles/gif-site-giphy-is-valued-at-600-million-1477906202?
155 comments
I remember seeing the original post[1] when it was created. Exactly as you say, there wasn't a good service to just host images.
"I got fed up with all the other image hosts out there so I made my own. It doesn't force you to compress your images, and it has neat things like crop, resize, rotate, and compression from 10-100. It's my gift to you. Let's not see anymore imageshack/photobucket around here ;)
I'll be listening if anyone has some suggestions.
EDIT: The server was moved off of shared hosting after about 4 hours of release. It's now on a dedicated server with a 100mb port."
I often think about this post and imgur as an example of how an exceedingly simple utility of the Internet can easily acquiesce, and succumb, to the advertising and marketing forces that be[2].
[1] - https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_t...
[2] - https://www.youtube.com/watch?v=ubg0BQi57xE
"I got fed up with all the other image hosts out there so I made my own. It doesn't force you to compress your images, and it has neat things like crop, resize, rotate, and compression from 10-100. It's my gift to you. Let's not see anymore imageshack/photobucket around here ;)
I'll be listening if anyone has some suggestions.
EDIT: The server was moved off of shared hosting after about 4 hours of release. It's now on a dedicated server with a 100mb port."
I often think about this post and imgur as an example of how an exceedingly simple utility of the Internet can easily acquiesce, and succumb, to the advertising and marketing forces that be[2].
[1] - https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_t...
[2] - https://www.youtube.com/watch?v=ubg0BQi57xE
> exceedingly simple
yet expensive to run.
yet expensive to run.
Yes!
I wonder how it started? Did it had some unobtrusive ads or donation since the beginning?
It would also be interesting to know how much it costs to run imgur.com (at day one and now). I imagine that the bill that came after first month or a quarter would have been so large that no indie dev could let that have it out of his own pocket, I even doubt that ad or donation revenue would have covered that either.
Creating 'a simple image hosting service' is rather easy, but oh boy it's expensive, otherwise there would be gazillion 'simple image hosting services' or imageshack, photobucket and similar wouldn't have become bullshit in the first place.
I wonder how it started? Did it had some unobtrusive ads or donation since the beginning?
It would also be interesting to know how much it costs to run imgur.com (at day one and now). I imagine that the bill that came after first month or a quarter would have been so large that no indie dev could let that have it out of his own pocket, I even doubt that ad or donation revenue would have covered that either.
Creating 'a simple image hosting service' is rather easy, but oh boy it's expensive, otherwise there would be gazillion 'simple image hosting services' or imageshack, photobucket and similar wouldn't have become bullshit in the first place.
At one point we need to realize that there is a working model for that: public infrastructure. Government-managed and funded.
But the invisible hand of the market will work it all out. Who needs stable public infrastructure if you can have a constant cycle of bubble building and popping to keep you on your toes.
Like we had public access on cable? You had limited resources and serious censorship both by the government and local 'community values.' Half the things on imgur or gify wouldn't be allowed on this hypothetical government hosting.
Having the government do everything has been tried in history and its leads to failure (communism). There's a reason that the PC and internet and mobile revolutions happened via capitalism and private business. Or why wikpedia is a foundation or the wayback machine or whatever. I understand Bernie Sanders is popular here and there's a strange 'have the government do everything, duh' mentality popular with millennials now, but historically it doesn't pan out. The government's role should be something that's carefully considered. Its not remotely a fix-all.
Having the government do everything has been tried in history and its leads to failure (communism). There's a reason that the PC and internet and mobile revolutions happened via capitalism and private business. Or why wikpedia is a foundation or the wayback machine or whatever. I understand Bernie Sanders is popular here and there's a strange 'have the government do everything, duh' mentality popular with millennials now, but historically it doesn't pan out. The government's role should be something that's carefully considered. Its not remotely a fix-all.
>Having the government do everything has been tried in history and its leads to failure (communism).
Having the government do some things has been tried in history and in many cases has worked out quite well. The roads, schools and fire department are quite good where I live for example. Though not perfect of course.
I'm not suggesting that this particular service is a good thing for the government to take on. Just want to mention that it's not "all-or-nothing" choice.
Having the government do some things has been tried in history and in many cases has worked out quite well. The roads, schools and fire department are quite good where I live for example. Though not perfect of course.
I'm not suggesting that this particular service is a good thing for the government to take on. Just want to mention that it's not "all-or-nothing" choice.
> There's a reason that the PC and internet and mobile revolutions happened via capitalism and private business.
You realize that Internet was first funded by the government, right?
You realize that Internet was first funded by the government, right?
But Giphy faces challenges in building a business.
It hasn’t figured out a way to bring in revenue, and it
doesn’t own many of the GIFs or have exclusive distribution
partnerships.
..Which also works crappily. I am exposed to giphy through the slackbot interface and it never finds anything relevant.
I really hate it when there's that one coworker that insists on /giphy-ing everything in slack. Usually its a clueless manager who thinks cute little pictures will inspire team morale, but all the results are always random and oftentimes tone-deaf or, in some cases, straight up NSFW. It's very annoying, thank god I can turn off gif display automatically.
Why can't it just be "someone who finds it cute / fun". Why does it always have to be some cynical "MBA who thinks it will inspire team morale"
Because in my anecdotal experience it's always been the overeager manager. I also qualified that statement with "usually", ergo it's not the absolute "always" condition you specify in your unnecessary reply. Either way I find it mad annoying. Emoji reactions are perfectly fine and non-intrusive ways of non-verbally communicating in a slack or IRC environment. GIFs suck. They are possibly one of the worst image formats out there.
Work communications are not a place for fun. They are a place for productivity and focus. If your company's work is not fun by itself (interesting problems, no bs, etc.), that's a problem! Fix that, don't gloss over it with distractions (that thrash people's CPUs).
That sounds miserable. Have you never worked with people whose company you enjoy? It's really a motivating experience.
It's hardly miserable. I mean, I get along with my coworkers just fine in a professional way, but I'm not exactly buddy buddy crushing code sharing gifs like it seems like most startups want you to be. I don't go to work to make friends.
Just do it in the break room/kitchen, not in the workspace, which should be treated with the same respect as a library (if you provide private offices with doors that close, feel free to disregard). Group chat rooms that aren't #random (which I have /part-ed) are an extension of that workplace, and deserve the same respect.
My current workplace offers neither. People shout what I'll describe as "verbal memes" to no one in particular. There is music blaring (dubstep currently), over which I have no control without risking social ostracization. Group chat is used poorly (what do you an all-day all-hands meeting with no agenda?).
My current workplace offers neither. People shout what I'll describe as "verbal memes" to no one in particular. There is music blaring (dubstep currently), over which I have no control without risking social ostracization. Group chat is used poorly (what do you an all-day all-hands meeting with no agenda?).
When I read your first post I thought you were just being uptight, but that does sound completely terrible.
I find background music can help or hinder depending on what I'm trying to do but it needs to be under my control. Out of consideration for others that means headphones.
And I hate open plan offices - don't even get me started. Place I'm working at the moment is awful for noise and overcrowding.
Funny thing is I find it hard to work in a completely silent environment unless I'm on my own - if the atmosphere is crypt-like with other people around I find it quite oppressive.
I find background music can help or hinder depending on what I'm trying to do but it needs to be under my control. Out of consideration for others that means headphones.
And I hate open plan offices - don't even get me started. Place I'm working at the moment is awful for noise and overcrowding.
Funny thing is I find it hard to work in a completely silent environment unless I'm on my own - if the atmosphere is crypt-like with other people around I find it quite oppressive.
I hate open-plan offices with a passion. Especially when I get stuck on a high-traffic corridor.
Strangely, though, I do like spending time in coffee shops.
Maybe companies should just do away with offices altogether (walled, cubicles, and open), and turn the company building into a giant coffee shop with free drinks and pastries, nice decor, etc. Provide some meeting rooms so teams can meet in person, but otherwise just let everyone find a little alcove in the coffee shop to work in.
Strangely, though, I do like spending time in coffee shops.
Maybe companies should just do away with offices altogether (walled, cubicles, and open), and turn the company building into a giant coffee shop with free drinks and pastries, nice decor, etc. Provide some meeting rooms so teams can meet in person, but otherwise just let everyone find a little alcove in the coffee shop to work in.
When I have to work unpaid overtime on the weekends, I get to work at home. I'm so much more productive then.
That sounds awful.
We have work-related chats, which are 95% serious with the occasional joke - same as we'd make at our desks - and we have offtopic and specific-topic rooms (literally, #offtopic and #videogames and #music, etc.)
We have work-related chats, which are 95% serious with the occasional joke - same as we'd make at our desks - and we have offtopic and specific-topic rooms (literally, #offtopic and #videogames and #music, etc.)
It sounds like you are at one end of the spectrum but the solution is not necessarily to go all the way to the other extreme.
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> Have you never worked with people whose company you enjoy?
Are GIFs a necessary component of this?
Are GIFs a necessary component of this?
I have real friends outside of work thank you very much, if you're my coworker please help me by doing a good job so I can go hang out with them.
Whats that have to do with anything? You're going to run out of social pleasantries if you use them all on your coworkers instead of your friends?
If you don't want to enjoy the time your coworkers -- fine. But getting annoyed by people who do is silly.
If you don't want to enjoy the time your coworkers -- fine. But getting annoyed by people who do is silly.
Distractions mean that I need to work longer. I could get the amount of work that I do per day done in six hours. Instead, because of the distractions (including @here gif messages), I work ten hours, and have little time for my friends.
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I have a very strict "only in private chats with coworkers I know well" rule for /giphy. The gifs are often wildly inappropriate.
We call that the "Giphy Russian Roulette"
And it's surprising how many people pay.
Me? I just insert the URL of the image I actually want.
Me? I just insert the URL of the image I actually want.
I flat out refuse to have a giphy trigger in any chat-thing that I administer, and I argue strongly and vehemently against it in any that I'm a member of. My arguments are often backed up by the fact that 90% of the /giphy results are unrelated garbage.
So far, four out of five slacks no longer have giphy integration, and my work Hipchat rooms (on- and off-topic) don't have it either. The other slack rarely uses it, because of the 90%-garbage rule, so I'm content to not harp on it too much.
Stand up against giphy garbage.
So far, four out of five slacks no longer have giphy integration, and my work Hipchat rooms (on- and off-topic) don't have it either. The other slack rarely uses it, because of the 90%-garbage rule, so I'm content to not harp on it too much.
Stand up against giphy garbage.
We use /gif instead of /giphy, which uses RightGif: https://rightgif.com/. Ironically RightGif does have a business model while serving up better gifs 90% of the time.
Pay to get SFW only gifs. :frown: Sure, if you're paying for slack already... but if its "just" a bunch of friends, the idea of shelling out money to make sure that NSFW images don't show up in the wrong window... Yes, I know its a business model, but it disappoints me that that is one of the price differentiators between the plans.
I've switched my team's integration to gif keyboard which has a search and approve workflow so that someone has to say "I want that one" to have something NSFW show up.
I've switched my team's integration to gif keyboard which has a search and approve workflow so that someone has to say "I want that one" to have something NSFW show up.
That's actually what makes it exciting. Giphy's results are so bad that you never know what you're gonna get. I'm surprised Giphy doesn't utilize something like this:
http://tarzain.com/2016-09-22/building-a-deep-learning-power...
http://tarzain.com/2016-09-22/building-a-deep-learning-power...
I'm surprised they don't just pipe the query to google image search and pick any random result from the top 100 google finds. That would be better in 99% of cases I've seen
Oh geez, yes. My team usually reacts with surprise whenever giphy gets one right. That's not the kind of brand association you want.
it's really amazing how bad giphy is.
rightgif works a lot better, but isn't as nicely integrated (not their fault -- 3rd party integrations don't get the same abilities as built-in giphy; come on slack...).
rightgif works a lot better, but isn't as nicely integrated (not their fault -- 3rd party integrations don't get the same abilities as built-in giphy; come on slack...).
The search results are based on user-submitted tags, right? So the quality should be expected to be shaky.
I wish Giphy well, but one random thing about them that's always perplexed me: literally 1/3 of their staff have Director titles [1]
I get that vanity titles are a way to help startups hire good talent, but once you reach a nontrivial team size, this seems rather odd -- who are all these people directing exactly? It would make me very hesitant if interviewing a candidate who worked at Giphy, since their titles appear meaningless.
[1] http://giphy.com/team
I get that vanity titles are a way to help startups hire good talent, but once you reach a nontrivial team size, this seems rather odd -- who are all these people directing exactly? It would make me very hesitant if interviewing a candidate who worked at Giphy, since their titles appear meaningless.
[1] http://giphy.com/team
Case in point, they have seven in the role "Director of Engineering"
Titles are free, so there's not a huge downside. I worked at a mutual fund company which had dozens and dozens of vice presidents. The reason was vendors and institutional customers take you more seriously if your title is "vice president".
The downsides are:
1. Director generally implies a manager of managers. If your title is "Director" and you're actually a team lead, it makes your company look like it doesn't know what it's doing. Specifically, the leadership.
2. If your resume goes from "Director" to "Developer" people are going to wonder what you did. It will cause people to take a second look at your resume in a negative way.
3. So at the end of that job, you've got someone who isn't qualified for a job with that title anywhere else and who will need to actively harm their career to take the jobs they are qualified for.
I'm sure I've forgotten several, but they've built a $600M GIF search engine so what do I know.
1. Director generally implies a manager of managers. If your title is "Director" and you're actually a team lead, it makes your company look like it doesn't know what it's doing. Specifically, the leadership.
2. If your resume goes from "Director" to "Developer" people are going to wonder what you did. It will cause people to take a second look at your resume in a negative way.
3. So at the end of that job, you've got someone who isn't qualified for a job with that title anywhere else and who will need to actively harm their career to take the jobs they are qualified for.
I'm sure I've forgotten several, but they've built a $600M GIF search engine so what do I know.
If they actually are like trying to be a managerial role and 33% are acting like managers (mostly meetings and more meetings for example) that I think would be worry some indeed.
For some organizations, though, Director isn't really a "Director" but more of a rank like "Senior." By this I mean there would be Assistant Director of Blah blah Development that didn't actually direct a group of people, but were was a more senior-ish developer earning the Director part of their name. It is odd, but it wouldn't be the first place I've seen that.
For some organizations, though, Director isn't really a "Director" but more of a rank like "Senior." By this I mean there would be Assistant Director of Blah blah Development that didn't actually direct a group of people, but were was a more senior-ish developer earning the Director part of their name. It is odd, but it wouldn't be the first place I've seen that.
Sure, I mean in finance everyone is a Vice President :) But in a consumer-facing startup like Giphy, I've honestly never seen a company at that size and stage do that. "Director of Engineering" typically has a particular meaning that differs from "Senior Engineer".
AFAIK they host the GIFs themselves, meaning that they are more of a GIF hosting site than a search engine.
This creates two problems: 1. Copyright infringements 2. Hosting costs.
EDIT: I opened their main page and scrolled down a little bit. It downloaded 70MB.
This creates two problems: 1. Copyright infringements 2. Hosting costs.
EDIT: I opened their main page and scrolled down a little bit. It downloaded 70MB.
Not to mention, google image search is already better from indexing giphy + the rest of the internet. Just select "animated" from the type dropdown.
Even Evernote is not profitable yet. Or Snapchat.
Huge company valuations with little to no profitability. Sounds familiar?
Huge company valuations with little to no profitability. Sounds familiar?
Luckily for us, valuation does not and should not have much concern with profitability.
If this was not the case, the only businesses would be the size of lemonade stands. Cardboard ones at that, that can be profitable on their first day.
If this was not the case, the only businesses would be the size of lemonade stands. Cardboard ones at that, that can be profitable on their first day.
Sounds like Twitter a few years back. These companies are on the same track.
Except that with Twitter, you self-identify as so many different things on the basis of the content you contribute. Giphy is nowhere close that.
Selling inventory is only valuable if you can sell the targeting to go with it. It's arguable if Giphy has the former, but it sure as fuck doesn't have the latter.
Selling inventory is only valuable if you can sell the targeting to go with it. It's arguable if Giphy has the former, but it sure as fuck doesn't have the latter.
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Does bing have an API because their gif search capabilities are amazing.
Forgive my ignorance - is a GIF search engine any different from a text search engine? They assign text tags to GIFs (maybe in a clever, machine learning type way?) and then search those, right?
I believe they scrape metadata about the gif, a lot of them come from tumblr which has a lot of tagging associated with the posts.
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Related: The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies
https://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy...
https://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy...
Insane is accurate.
Probably I would look like a noob in the context of SV startup world, but can someone tell me how these insane evaluations are calculated?
Or there is a deal on the way with google/facebook/whatever for their user/gif database and/or search engine? Maybe they have some insane R&D going on that I am not aware of?
When I see startups without any proper business model on how to make money evaluated for insane prices ..ahem twtr ahem.. and burning mountain loads of money - it makes my blood boil.
Or there is a deal on the way with google/facebook/whatever for their user/gif database and/or search engine? Maybe they have some insane R&D going on that I am not aware of?
When I see startups without any proper business model on how to make money evaluated for insane prices ..ahem twtr ahem.. and burning mountain loads of money - it makes my blood boil.
Just to answer the most direct version of your question, the valuation is just based on how much of an equity stake was purchased, and for how much money. So they raised $72MM in exchange for a presumed 12% equity stake in the company, meaning that they company was implicitly valued at $600MM.
As to how the $72MM (and the 12%) is calculated, that's a negotiation between parties, and there is no universally accepted "formula" for calculating this. Private equity and VC companies take risks based on their evaluation of the company prospects. If there were a magic formula, then investing in companies (and finding funding) would not be at all interesting or competitive.
Aside from any any numbers about user adoption, growth rate, or potential advertising angles, the other significant thing that an investor may be looking for is the chances of a downstream acquisition by a player looking to expand its reach. Giphy would be a natural target for large search companies, or social media companies (who might be interested in a closer relationship with an effective content source), or various chat companies (like Slack or Facebook or even Apple).
Whether an acquiring company will be willing to pay enough money for a company like this to be worth the investment, rather than building similar functionality in-house, is part of the judgment of the investors, which they can base on qualitative evaluations of the technical or sales abilities of the employees or the difficulty of the problem space.
As to how the $72MM (and the 12%) is calculated, that's a negotiation between parties, and there is no universally accepted "formula" for calculating this. Private equity and VC companies take risks based on their evaluation of the company prospects. If there were a magic formula, then investing in companies (and finding funding) would not be at all interesting or competitive.
Aside from any any numbers about user adoption, growth rate, or potential advertising angles, the other significant thing that an investor may be looking for is the chances of a downstream acquisition by a player looking to expand its reach. Giphy would be a natural target for large search companies, or social media companies (who might be interested in a closer relationship with an effective content source), or various chat companies (like Slack or Facebook or even Apple).
Whether an acquiring company will be willing to pay enough money for a company like this to be worth the investment, rather than building similar functionality in-house, is part of the judgment of the investors, which they can base on qualitative evaluations of the technical or sales abilities of the employees or the difficulty of the problem space.
Snapchat with higher valuation than Deutsche Bank. Tells you a lot about two different industries at once - but if i had to invest in one i know I'd always choose the latter over the former.
That's what most people would have said about investing in Facebook vs. Lehman Brothers in 2007...
You retrospectively picked the winner (Facebook) of a bunch of companies in the same race. How would you have picked Facebook in 2007?
e.g.
MySpace vs. Lehman Brothers
Bebo vs. Lehman Brothers
Friendster vs. Lehman Brothers etc
MySpace vs. Lehman Brothers
Bebo vs. Lehman Brothers
Friendster vs. Lehman Brothers etc
Ah, the stable world of high finance.
DB is running close to defaulting on its debts.
DB is running close to defaulting on its debts.
> DB is running close to defaulting on its debts.
It's too big to fail though and the tax payers will save it.
It's too big to fail though and the tax payers will save it.
So, this is actually a good example of the stability in high finance?
If you think the market is pricing DB incorrectly, and also the market is pricing Snapchat incorrectly... are these really counterexamples of each other then?
If you think the market is pricing DB incorrectly, and also the market is pricing Snapchat incorrectly... are these really counterexamples of each other then?
Too big to fail doesn't necessarily mean that the investors (equity and debt holders) have anything left at the end.
I was always skeptical but the thing that made me concretely understand why these valuations aren't real is when I learned about liquidation preferences.
At least a 2x liquidation preference is standard for most VC investments (Y Combinator is an exception to this, I think). In simplified form, this means that regardless of what happens, the investors will get 2x of what they invested before anyone else in the company sees a cent. This means that even if giphy fails, the investors will always get a 2x return on their investment unless the company falls so far that it's no longer worth $24 million when it's sold off somehow.
EDIT: After being informed in responses to this, it appears that 1x preferences are now the standard. I apologize for any misinformation.
At least a 2x liquidation preference is standard for most VC investments (Y Combinator is an exception to this, I think). In simplified form, this means that regardless of what happens, the investors will get 2x of what they invested before anyone else in the company sees a cent. This means that even if giphy fails, the investors will always get a 2x return on their investment unless the company falls so far that it's no longer worth $24 million when it's sold off somehow.
EDIT: After being informed in responses to this, it appears that 1x preferences are now the standard. I apologize for any misinformation.
1x is standard, 2x isn't, I doubt Giphy did more then 1x, The majority of snapchat's financing rounds are actually common stock with only the early investors getting preferred stock and 1x liquidation preference
You're correct, and I apologize for the misinformation. I'll add an addendum to my post reflecting this.
There are theoretical paths to expand revenue. Any site like Giphy that can position themselves as the leader in a segment of the web like gif searching/aggregation can claim ad revenue based on current/potential user volume. In addition, Giphy could pursue things like licensing/marketing deals where companies pay to create/distribute gifs for marketing purposes. IIRC they were in talks with the NFL or some other pro sports league about something this.
So companies put together a pitch with current revenue streams, how to grow those, and R&D for new revenue streams, and how to do so while keeping expenses low. Those numbers are usually multiplied by some factor to determine a ballpark.
Exit strategies are also considered. The goal is usually either to get acquired or go public. Marketability of a company once properly positioned, current market climate, and past exits of similar companies are also often considered. For example, Google bought YouTube for $1.65B less than two years after launch while it was still pretty rough around the edges. Gifs are already often used as lightweight, embedded video alternatives on Reddit and blogs, so it's not inconceivable that Giphy tries to make a case for being worth a similar amount if they can position themselves as a new de facto media platform for light clips like YouTube is for full videos.
So companies put together a pitch with current revenue streams, how to grow those, and R&D for new revenue streams, and how to do so while keeping expenses low. Those numbers are usually multiplied by some factor to determine a ballpark.
Exit strategies are also considered. The goal is usually either to get acquired or go public. Marketability of a company once properly positioned, current market climate, and past exits of similar companies are also often considered. For example, Google bought YouTube for $1.65B less than two years after launch while it was still pretty rough around the edges. Gifs are already often used as lightweight, embedded video alternatives on Reddit and blogs, so it's not inconceivable that Giphy tries to make a case for being worth a similar amount if they can position themselves as a new de facto media platform for light clips like YouTube is for full videos.
Any site like Giphy that can position themselves
as the leader in a segment of the web like gif
searching/aggregation
User growth, number of page views, engagement / retention + trajectory, evaluated against similar businesses.
People said the same thing of snapchat, facebook, and twitter early on.
People said the same thing of snapchat, facebook, and twitter early on.
Probably the user base and perhaps some patents they have.
Worth $600,000,000 - "hasn't figured out a way to bring in revenue". Got it.
I'm always baffled by this as well. "Let's make something cool, get money from investors, then figure out how to make money off it!"
In other words, cash in and leave before people find out there actually isn't money in it or cram the service full of advertising and watch the users flock to the next upcoming thing as your service tanks like a flaming dumpster rolling down a San Francisco hill.
In other words, cash in and leave before people find out there actually isn't money in it or cram the service full of advertising and watch the users flock to the next upcoming thing as your service tanks like a flaming dumpster rolling down a San Francisco hill.
Wasn't that Google's business model, they got funding before they figured out how to make money.
What a time to be alive.
Sounds like "acquihire in 2 years for $25M"
Or maybe an IPO in 5 years for $4 billion.
I wanted to see how hard it would be to build a gif search engine, I made https://gifffy.com in a month. My buddies and I used it for our personal slack instead of giphy. It is nice to be able to adjust the search results ourselves.
I am pessimistic on gif search as a business. I am one (not super) talented developer and I made a replacement in a month.
I am pessimistic on gif search as a business. I am one (not super) talented developer and I made a replacement in a month.
Giphy sucks as a business. How anyone could invest in it beyond a seed valuation is absolutely beyond me.
Do you have a blogpost or other info about how you made it? Did you just scrape tumblr, twitter etc and associate the metadata tags with the images? Or did you do any machine learning classification? Either way, you should apply for seed funding. There's clearly a market for gif searching...apparently.
I am an avid reader of `/r/reactiongifs` and `/r/highqualitygifs`.
Classification is done by hand, and the idea anyway is to use feedback (either slack reactions or voting on the site) to figure out what the best tag for an image is.
ML classification is pretty tough when it comes to dank may-mays.
Classification is done by hand, and the idea anyway is to use feedback (either slack reactions or voting on the site) to figure out what the best tag for an image is.
ML classification is pretty tough when it comes to dank may-mays.
Classification is done by hand? So you find a gif you like and then add it to your db and do all the tagging and metadata yourself? Interesting. I feel like a script that scrapes Tumblr for gif posts and their associated tags would be a good approach to start automating things.
"scrapes Tumblr for gif posts"
If your goal is to create something even lewder than giphy, then yes.
If your goal is to create something even lewder than giphy, then yes.
I've found that quality >> quantity, and specifically tumblr is a horrible place to find gifs (bad quality, weird contexts or usage for the gifs).
Fair enough. I'm inclined to believe that's how GIFy does it, because a lot of their gifs have the stuttering, sliced up kind of motion and compression so endemic to tumblr gifs
From the article:
“We believe GIFs are emerging as a format that consumers love and will be really important to advertisers as well,” said Barry Schuler, a partner at Draper Fisher Jurvetson.
OK, for me GIFs are from a bygone era of the web, for example: http://www.11points.com/Web-Tech/11_Best_Old_School_Animated...
This is similar to bell bottom jeans coming into fashion again, and then having a retail store advertise them as an 'Emerging fashion trend' (more like recycling fashion trend)
OK, for me GIFs are from a bygone era of the web, for example: http://www.11points.com/Web-Tech/11_Best_Old_School_Animated...
This is similar to bell bottom jeans coming into fashion again, and then having a retail store advertise them as an 'Emerging fashion trend' (more like recycling fashion trend)
I entirely get what you're saying, but GIF doesn't mean GIF anymore. Many sites and applications are silently presenting MP4 or webm instead of actual gifs, often with the file format gifv.
"gif" has stopped meaning a .gif and now just means a short, looping, animated video.
File it alongside "disk" (solid state disk, save to disk etc), film (to mean movie) and various other weird language evolutions. These things used to grate on me, but then I chose to embrace the cultural history embedded in our language.
I look forward to the year 2060 Buzfeed - "Top 37 words that used to mean something else", "You'll never guess why we call videos 'gifs'" etc etc ;)
"gif" has stopped meaning a .gif and now just means a short, looping, animated video.
File it alongside "disk" (solid state disk, save to disk etc), film (to mean movie) and various other weird language evolutions. These things used to grate on me, but then I chose to embrace the cultural history embedded in our language.
I look forward to the year 2060 Buzfeed - "Top 37 words that used to mean something else", "You'll never guess why we call videos 'gifs'" etc etc ;)
gifv isn't a file format, just an extension for an html document
I meant file extension. My bad.
DIVX.
I wonder if I am once again too negative. But what the hell?
Valuation doesn't mean anything I know. But how can they raise so much money on a product like this? What's the monetization available behind this apart from selling user data.
Valuation doesn't mean anything I know. But how can they raise so much money on a product like this? What's the monetization available behind this apart from selling user data.
I think you're right.
Selling user data itself is not nearly as valuable for Giphy as for other sites. No one stays on Giphy for long, or shares anything interesting about themselves apart from what Giphy can get from cookies. They say 100 million people see Giphy gifs a day, so probably about 10 million actually "use" Giphy. Even with FB's $13.74 valuation per user with better analytics and a validated business model, that only comes to $137M.
On a completely unrelated note: "Giphy, which is pronounced with a hard 'g'..." Thank god they know how to pronounce it unlike these (what I suppose could be called) "people" who pronounce it with a soft g. ;)
Selling user data itself is not nearly as valuable for Giphy as for other sites. No one stays on Giphy for long, or shares anything interesting about themselves apart from what Giphy can get from cookies. They say 100 million people see Giphy gifs a day, so probably about 10 million actually "use" Giphy. Even with FB's $13.74 valuation per user with better analytics and a validated business model, that only comes to $137M.
On a completely unrelated note: "Giphy, which is pronounced with a hard 'g'..." Thank god they know how to pronounce it unlike these (what I suppose could be called) "people" who pronounce it with a soft g. ;)
so-called "people" like the creator of the format? ;)
http://www.bbc.com/news/technology-22620473
http://www.bbc.com/news/technology-22620473
We've heard his opinion and ignored it. Mr. Wilhite can either come around or we'll appoint a new inventor of the gif.
I think what makes Giphy so popular is its integrations with Slack and Facebook. However, the Giphy Slack integration is really awful. Should be renamed to gif roulette or something. RightGIF Slack integration is a lot more accurate. I'm not sure what they are doing differently but the $600MM valuation for a below average search engine is understandably off-putting..
That's insane. Gfycat [1] is based in my hometown (Edmonton, Alberta), and I always thought it was a dumb idea with no potential for monetization. Looks like I'm wrong.
[1]: https://gfycat.com/
[1]: https://gfycat.com/
> potential for monetization
the irony here is thats all they have
but thats enough to pivot to the business of equity sales
the irony here is thats all they have
but thats enough to pivot to the business of equity sales
I am confused as to how they could afford the bandwidth, atleast at the start, to host the animated gifs
I am not sure it would cost all that much with a CDN like cloudflare.
Cloudflare doesn't cache all that much.
If your goal is to minimize bandwidth costs, you can throw together your own agressively caching CDNs on bargain basement hosts, though, and use a more expensive CDN or something like S3 as fallback (DNS with short TTL; it has all kinds of problems, but it's better than bankrupting yourself on high bandwidth until you have sufficient traffic to justify more elaborate cost reduction schemes).
Once you reach sufficient scale: multihomed dedicated servers + peering wherever you have enough traffic. Or negotiated with various CDN providers while letting them know you've done the maths on your own dedicated setup.
If your goal is to minimize bandwidth costs, you can throw together your own agressively caching CDNs on bargain basement hosts, though, and use a more expensive CDN or something like S3 as fallback (DNS with short TTL; it has all kinds of problems, but it's better than bankrupting yourself on high bandwidth until you have sufficient traffic to justify more elaborate cost reduction schemes).
Once you reach sufficient scale: multihomed dedicated servers + peering wherever you have enough traffic. Or negotiated with various CDN providers while letting them know you've done the maths on your own dedicated setup.
Cloudflare will not be happy if use them for image hosting: https://news.ycombinator.com/item?id=12825719
If you overdo it, but for starting out it works.
Giphy was founded in 2013 and raised several million in early 2014, at which point they probably could afford paying a CDN or for their own infrastructure.
Giphy was founded in 2013 and raised several million in early 2014, at which point they probably could afford paying a CDN or for their own infrastructure.
> raised a fresh $72 million round of equity funding from lead investor Draper Fisher Jurvetson, as well as Institutional Venture Partners and China Media Capital
These people all need to have their heads examined.
These people all need to have their heads examined.
Would just like to point out that the article takes a hard stance on one of the most hotly debated internet topics out there:
Giphy, which is pronounced with a hard “g”...
Giphy, which is pronounced with a hard “g”...
After re-reading that sentence twice, I think they were referring to how Giphy (the company) pronounces its name, as opposed to taking a hard stance on how to pronounce GIF. Poorly worded, on first read I was quite surprised too!
Giphy search almost never yields relevant and funny results and I really wish my coworkers would stop using the Slack integration.
I realize valuation numbers like this make headlines and are a quick way to proxy success (or lack of) for a startup.
But private market startup valuations are about as useful as public market stock prices, i.e. not useful without more context and information.
Even if numbers are technically accurate no journalist would ever write 'Apple's stock price 3 years ago was around $700 vs closer to $100 today...so the company must be hurting.'
I'm surprised startup valuations reporting has continued for so long without more disclaimers or information in the articles about what a number really means.
(side note: I'm also surprised movie weekend box office earnings are as big an interest as they seem, so what the heck do I know).
If people are going to leak valuation numbers, is it right to publish this # without knowing or asking a bit more what term sheets look like?
For those who might know, how hard would it be to get more accurate info tracking the common equity value for startups?
But private market startup valuations are about as useful as public market stock prices, i.e. not useful without more context and information.
Even if numbers are technically accurate no journalist would ever write 'Apple's stock price 3 years ago was around $700 vs closer to $100 today...so the company must be hurting.'
I'm surprised startup valuations reporting has continued for so long without more disclaimers or information in the articles about what a number really means.
(side note: I'm also surprised movie weekend box office earnings are as big an interest as they seem, so what the heck do I know).
If people are going to leak valuation numbers, is it right to publish this # without knowing or asking a bit more what term sheets look like?
For those who might know, how hard would it be to get more accurate info tracking the common equity value for startups?
The bane of all work slack channels
$600M isn't a crazy price tag for a media property that wanted all the content and the brand. Plus, giphy has built some pretty deep integrations, I don't expect apple or slack etc will all of a sudden start a giphy competitor. If companies like Snapchat who already use sponsored content from brands are told by those brands to pull that content from the giphy api because they are using the base content on other platforms for the same campaign, seems like it could become a viable business (I retract "become a viable business" and replace it with "have an outcome")
But what's the value of their integrations? Sure they exist, but at best they provide a convenient means of inserting entertainment into typically business related chat - with no further stats gathered on who views via integration, etc.
The value of the integration is the promise of becoming a distribution platform. From there you can figure out services and tools that folks will pay for because it's easier/best to distribute your animated content through the giphy platform to the partners, and, you have the ability provide insights and analysis on what channels are working well, etc (snapchat like this type of content, slack likes this, iMessage likes this/////) - I'm not saying that's easy, or even possible. Simply if I was the CEO of giphy, that's what I'd try to do with the funds. If I did a good job, I presume given a year or two of building out and getting more deeply integrated, I could sell the technology, team and partnerships to a bigger company for $500-$600MM.
That is a LOT of things that have to go right just to sell at the same valuation they just raised money at.
That's exactly why this is so insane.
That's exactly why this is so insane.
Fair point. That sounds like a viable path to acquisition - though I suspect the odds are stacked against it as a path to profitability.
I agree. Therefore "viable business" isn't how I should have phrased it.
What? Why?! I only ever see the giphy URL I didn't even realize there was a website to it I just thought it was a host like aws or something. Who are the idiots who do these valuations?
GIF site Giphy has, along with numerous other of its kin, found its way to my firewall's /etc/hosts blocklist on account of the overuse and abuse of autoplay images on far too many websites.
Until such time as browsers and animation-hosting sites refrain from autoplay defaults, and worse: failure to provide any mechanism for overriding this at the device, user, or application level, that shall be my SOP.
Until such time as browsers and animation-hosting sites refrain from autoplay defaults, and worse: failure to provide any mechanism for overriding this at the device, user, or application level, that shall be my SOP.
20 times more valuable than The Wirecutter?
You know that Schrödinger guy? The one with the cat box? Well, he had a second box. What's in it? Nobody knows! But as long as you don't open it, it could be anything (dutch tulip bulbs, $1 billion flooz, rare beanie babies... the mind simply reels!)
Wirecutter opened up their box and there was revenue and a business plan inside. That's nice I guess but now their box is worthless.
Wirecutter opened up their box and there was revenue and a business plan inside. That's nice I guess but now their box is worthless.
I think that's the problem - so many startup investors are people who accidentally got rich off some impossible or meaningless event that they think magic|luck|mystery is what makes more money.
At least with Beanie Babies, you knew exactly what you were getting. A Beanie Baby couldn't pivot.
At least with Beanie Babies, you knew exactly what you were getting. A Beanie Baby couldn't pivot.
Great comment! This is one of the best descriptions I have read on VC investing and startup valuations.
If true, doesn't it imply VCs hand over millions without knowing details of a company and founders can benefit from delaying going public..Oh, well whaddya know
If true, doesn't it imply VCs hand over millions without knowing details of a company and founders can benefit from delaying going public..Oh, well whaddya know
1B gifs served per day and 100 DAU.
Anyone have a guess at a business model to monetize on that sort of traffic?
Anyone have a guess at a business model to monetize on that sort of traffic?
1 idea, Advertisers can pay to have their branded content be one of the first suggestions in a GIF search
I wonder if putting a final frame advert on the gif would work well. Not to intrusive, matches a common technique for videos so familiar to users.
1k impressions for a dollar with 10% of gifs completing on 1B gifs per day would give $100k. Are those figures wildly out?
Not really a business, just advertising.
1k impressions for a dollar with 10% of gifs completing on 1B gifs per day would give $100k. Are those figures wildly out?
Not really a business, just advertising.
Read the article, advertising:
> Search engines like Alphabet’s Google generate the vast majority of their revenue from advertising. “Almost all the content flowing through Giphy, there’s some branded element to it already,” Mr. Leibsohn said.
> Search engines like Alphabet’s Google generate the vast majority of their revenue from advertising. “Almost all the content flowing through Giphy, there’s some branded element to it already,” Mr. Leibsohn said.
Acquisitionium
Sounds like something Yahoo would have bought circa 2013.
Sounds like something Yahoo would have bought circa 2013.
Freemium.
-1 for posting article behind paywall.
who will give me 600m for lolgifs? I have few stacks of floppies full of them
Besides the value, how these companies avoid copyright problems? It's literally pirate bay but they host themselves.
> “We believe GIFs are emerging as a format that consumers love and will be really important to advertisers as well,” said Barry Schuler, a partner at Draper Fisher Jurvetson.
Do these clowns really believe the shit that comes out of their mouths? Giphy will never make anyone a dime; gotta wonder how they duped people into another seed round.
Do these clowns really believe the shit that comes out of their mouths? Giphy will never make anyone a dime; gotta wonder how they duped people into another seed round.
Who owns the intellectual property though?
The cycle goes like this:
- people want a bullshit-free service to upload images to, so that they can link to them, and there's no option available
- somebody starts such a simple, bullshit-free service
- as time goes by, the service realizes hosting costs money and they can't operate on a loss forever
- they start adding bullshit to try and bring in some revenue
- site turns into the same bloated crap it replaced
- somebody starts a new bullshit-free site, and users migrate
For instance, imgur is at the last stage of this cycle now. If giphy is taking serious investor money, it spells an accelerated period of crappifying the service - investors need to get their return somehow.