Buffett Warns Of Bubble In Social-Networking IPOs

Buffett Warns Of Bubble In Social-Networking IPOs

By Daya Baran at March 28, 2011 on Webguild

Warren Buffett, one of the world’s greatest investors, said investors should be wary of valuations in social networking websites as they prepare to sell shares to the public.

“Most of them will be overpriced… It’s extremely difficult to value social- networking-site companies… Some will be huge winners, which will make up for the rest”, said Buffett, speaking at a conference in New Delhi, India.

In January 2011, Facebook, was valued at $50 billion based on private stock purchase by Goldman Sachs. Since then the company is being valued at $80 billion based on shares trades on private-share sales site Sharepost. Twitter, is another such company with an astronomical valuation. Groupon, the daily deal site, has held talks about an initial public offering (IPO) that would value it at as much as $25 billion, two people familiar with the matter said earlier this month.

Bubbles happen when investors pay more for an asset than it is fundamentally worth. Eventually, the over paying becomes unsustainable and the bubble pops. It is a greater fool’s theory. This is what happened in the last dot com bubble and this is what’s happening with housing. Now it is starting to happen in social networking. Twitter founders Evan Williams and Jack Dorsey have already sold hundreds of millions worth of shares in the company to investors. They no longer work at the company either – they know at some point the piped piper will knocking on the door and they are getting out while the party is still hot.

Buffet is warning about just that – eventually the investors in these adventures (I prefer adventures) will want to see a return. In Twitter’s case it can only do this by going public and selling its shares to public – reinforcing the greater fools theory. When it does so, public investors will be on the hook while Twitter founders and venture capitalist investors will be long gone.

Here is a comparison of valuations of some adventures between the last dot com bubble and the current social networking bubble that Buffet is alluding to. In 1999, 24 adventures had a valuation of $71 billion by comparison in 2011, 5 adventures have a valuation exceeding $71 billion. The NYTimes also has a piece on the bubble in social networking that is worth reading.

ModelURL will get your attention with style

Top Notch Model Networking Site Launches With Style

Los Angeles, CA – FOR IMMEDIATE RELEASE

The modeling industry just became more exciting with the official launch of ModelURL, an online network specially designed to connect aspiring & professional models, photographers and other creative artists. Presenting this high-paced industry what it needs, ModelURL introduces a fresh, interactive and innovative Web 2.0 site that focuses on the best user experience for its members, connecting them to resources that will benefit them.

The unveiling of ModelURL gives its competitors something to look out for. Shifting beyond the traditional Web 1.0 social media sites, ModelURL combines a sleek and professional design with a superb easy-to-navigate system for members. They can now efficiently manage their identity online and build relationships with people in the modeling world.

“Older model sites may help you make friends like in the Myspace/Web 1.0 era, but our site is positioned in a way to help you get what you really need in this tough industry: reputation, brand awareness, and strong connections,” says Son Le, ModelURL founder and CEO.

ModelURL recognizes the unique needs of both aspiring and professional models and the often-overlooked talents of their photographers, stylists, make-up artists and more. By allowing members to attribute the work of others on their portfolio with a “credit” and vice versa, ModelURL creates and reinforces an inherent reputation system of trust and portfolio quality. Anyone can then search this system.

Similar to Facebook and LinkedIn, members can efficiently manage their online identity by synching their social accounts into one place by importing existing model profiles and even linking their Twitter account.

“Being a professional model and now stylist, I have been a member of many other primitive modeling sites but have found them to be inefficient and ineffective. Our goal is to create a site that's not only comparable to other major successful networking sites such as Twitter and Facebook, but also make it more resourceful and navigable for a community of people that helps each other,” says Lyndzi Trang, ModelURL’s Co-founder and Community Manager.

Only a small fraction of many exclusive features have been implemented on ModelURL. One notable feature is ModelURL’s directory of modeling agencies around the world. Members can now search for agencies and get in contact with them. Other highlighted features that set the modeling networking site apart from the competition include designating yourself with multiple creative trades under one account and import existing profiles from other sites. Reminiscent of Google’s limited release plans, only pillars of the modeling industry have been invited to join the site who are then given only 10 invitations to invite friends.

For additional information on ModelURL or to request an invitation to join, contact Hong Vo or visit http://www.ModelURL.com.

About ModelURL LLC:

ModelURL is the creation of Son Le, a former Yahoo engineer and serial entrepreneur who sold three of his companies, one that was acquired by Brad Greenspan, founder of MySpace. Other partners of ModelURL include Lyndzi Trang, former model and forensic accountant, Los Angeles celebrity and fashion stylist. Kennard Lilly, Los Angeles based creative interaction designer and co-founder of Dope Creative. Hong Vo, online search engine marketing guru from Inc. 500’s award-winning company, Wpromote.

Collaborating on all of their strengths, they make up the ultimate team for the emerging, model networking site.

Media Contact:

Hong Vo

ModelURL

720.341.4160

hong@modelurl.com

http://modelurl.com

###

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Secret To Wooing Investors

The Secret To Wooing Investors
Steven Berglas, Ph.D., 01.07.09, 01:30 PM EST Source: Forbes

A healthy dose of ingratiation can be as important as a great business plan.

Institutions may be tip-toeing back into the equity markets, but as far as entrepreneurs are concerned, lenders are hunkered down and investors have fled the scene. Only the safest, no-brainer ideas--if those--are attracting new money.

What does this Head Coach know about raising money? Only this one critical, if somewhat unsettling, fact: Financiers (venture capitalists, angel investors, commercial bankers and the like) are more likely to get behind a young company headed by an entrepreneur whose personality appeals to them than one run by someone with whom they don't connect.

While a spiffy M.B.A. can still carry the day in corporate America, entrepreneurs must rely on a host of intangibles to get their dreams funded--and that means doing something that goes against their grain: They must be learn how to be ingratiating.

Now, you might assume that because entrepreneurs have a penchant for breaking rules and thinking about the world in unconventional ways they should have little trouble fudging some of the more superficial aspects of their characters. Wrong.

Comment On This Story
Ingratiation is no cakewalk for entrepreneurs because they are so solidly wedded to their convictions. Indeed, the desire to prove them out runs as deep as the need for air and water.

Moreover, entrepreneurs' drive to prove they are smarter than everyone (particularly the critics they cannot forgive or forget) makes compromising their values and convictions seem not only wholly disingenuous but also threatening to their senses of self. Sometimes, that "I can do the job" confidence is so intense that investors run the other way.

I'm here to help entrepreneurs smooth those edges a bit while not feeling like they've compromised their values. What's worse, after all: a little harmless schmoozing, or not getting what you came for?

Ingratiation--the deliberate effort to create a good impression with others--gets a bad rap; far too many people confuse it with pandering, sucking-up, even conning. There is nothing deceitful about ingratiation--it is merely strategic self-presentation designed to veil (not deny) personality traits that might chafe or offend. In short: Don't sweat it.

How, exactly, to ingratiate yourself with investors (or anyone else in business, for that matter)? Having a winning demeanor is nice, but there's more to it than that. Here are four basic principles to keep in mind.

1. Enthusiasm over narcissism. Express yourself through your passion for your business. Talk about your dreams for changing the world and making money, not about how smart you think you are. (This isn't easy for ego-suffused entrepreneurs.) If a venture capitalist wanted to buy a brain, he'd go shopping at the appropriate university. Also, not all brainiacs make good leaders--and that's what professional investors are looking for.

2. Demonstrate that you are coachable. Nobody likes a pushover, but being able to take direction, or at least a suggestion or two, goes a long way. Don't be afraid to tell investors that you need their help and are hungry to learn. Remember: Investors have egos, too. They don't want to be mere moneybags--they want to be heard. They are also smart enough to know that entrepreneurs abhor structure and bureaucracy, so assuring them that you are open to a bit of direction will set you apart.

3. Project equanimity. Spouting state-of-the-art management techniques isn't nearly as impressive as demonstrating a high "emotional IQ"--specifically, the ability to think calmly and temper your emotions during crunchtime. Young, growing companies deal with plenty of turmoil--investors want to know that you won't cave under the pressure.

4. Let them know you will put the business first. Running your own business may well be your way of filling some psychological void, even cleansing yourself of failures past. Whatever you do, don't let investors in on all that. Make sure they know that you will always put what's right for the business ahead of your own emotional needs. The moment you come off as high-maintenance is the moment investors stow away their checkbooks.

Dr. Steven Berglas spent 25 years on the faculty of Harvard Medical School's Department of Psychiatry. Today, he coaches entrepreneurs, executives and other high-achievers. Direct questions or comments to: drb@berglas.com.

BuddyPress For All

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Where are Mashup Sites Going?

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Its simple, Mashup sites will all soon disappear. The recent ID wars going on between Google Friend Connect, MyspaceID and Facebook are only the beginning and this will allow all sites to become mashups. Pete Cashmore and I had tea when he was in the states and we discussed how this idea of mashups will soon become integrated with more niche services such as locality based services, etc.

SocialURL will soon be transformed and we will turn this site into a social search portal. This was one original intent of the site and not a dating portal or another social network.

Channel 3 exclusive interview with Rubicon Project

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