It looks like Y Combinator funded Scribd, a “YouTube for documents” is close to closing its first round of financing, possibly from Redpoint Ventures. Om says this is done; our sources say it will close next week. The rumored valuation of more than $10 million is very high, although the current trend is for entrepreneurs to take big money when it’s offered.
We’ve been tracking them since early last month when they launched, and Nick Gonzalez recently noted that their growth spiked immediately from launch and hasn’t slowed down much since.
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Again good to see the little guy benefit from the small boost provided. Sets a good example that even smaller financing helps.
They’re now a repository for a lot of copyrighted materials, such as ebooks, articles, pictures/graphics, and various pornographic material.
How are they getting away with this? Is this covered under the same Safe Harbor provisions that Youtube claims protection under?
If one thing, it’s definitely a lot easier to make a text-based copyright detection tool than it is for a video one. Until everyone gets smart and screws up whatever OCR solution Scribd comes up with.
So in reality, is the ability to build a successful company based on making it do illegal things? What resources can I pilfer and repackage to allow for “growth spikes”?
I tell you why Scrubd is really bad… Any hackers can put virus doc, tiny spyware, trojan horse, etc on doc format… It’s easy to get inflected.
You can go to any hacker websites. They have tons of doc viruses.
Here’s reason why is soo bad.
#1 Bad new…
There is tons of virus doc names on net. It can damage half of populated PCs to local schools to small businesses.
#2 bad news…
Plagarism essay uploaded easy. Books, magazine, etc… without premission.
#3 bad news.
Show & Tell… $10 million dollar is too much money…
Lawsuit can happen… Missing docs in HD… Damaging other users PCs.
#4 bad news
Adobe Licenses. For example Viacom sue Youtube copyright problem.
Scrubd doesn’t own PDF. Users have right to get open source Scrubd PDF. If not Adobe is going to attack software infragement…
#5 bad news
Shareholders….
Scribd is one best future IPO pick… It’s good stock price. but… If they enter IPO or get sold. I think Adobe is going to attack — very bad.
I don’t understand #4. How could they be infringing while you give a copywrite example. Seem to be very different.
One more thing… Good luck for Scribd… Cause you are going to need it. You took huge risk competing adobe PDF.
so y combinator paid $10,000 for 10% of scribd, and a few months later, their investment is worth $1 million. if the founders of scribd had scrounged up that 10 grand themselves, they’d be a million bucks richer.
@ Ty… you know… I don’t know much about Adobe company. They have lawyers. They know about copyright, rights produce, licenses, etc…
You see. Scribd uses Flash PDF. Adobe have PDF plug in which you can download website. Adobe owns macromedia. You see that is problem.
It’s like having microsoft copy apple gui.
I’m not sure how Scribd company works… I can see scribd is success product and IPO hot stock pick.
Matthew: Can you loan me 10k dollars?
- Honestly man think before you speak:
- Ycombinator is about the connections you make; not the money they give you.
-RBowles
everything is “om says this” or “om says that”
i think the following exists
removal of E = best success
removal of O = average success
removal of A = worst success
and sometimes Y
In case you guys didn’t know…. Scribd users have upload massive defamatory, proganda, libel, sci-fi, religion, zealots, etc, screenplay text. There is not blockage.
Some countries will banned Scribd. Maybe, some part of Europe, Middle East, Iran, Dubai, Israel, Cuba, China, South Viatnam, and some parts of South America.
Government fear riots, new rebel society, corruption, etc…
Too much risk Scribd.
matthew:
right, would scribd has gotten as much exposure if it wasn’t part of ycombinator? Would they have been able to attract VC?
@ #3. Wow, that’s the most incoherent list I’ve seen in awhile. You seem to take two extreme views. Make up your mind.
Alaska, come on. You make it seem as if it’s all about copyrighted material. Some of the top viewed documents are on dating or seducing a woman. Don’t tell me somebody wrote the book on dating. Sometimes they’re silly pictures. Check out the top ones now, there’s one called “Interesting Urinals”.
Another Y-Bomb? God bless Paul Graham and Y-Combinator for getting so much press from Om, Arrington, and the rest of the Web 2.0 crowd.
Scribd seems like a worthless business. They are hitting Digg? Great! Compelling PDF content? That’s dumb. A real service would take your PDF and put it online.
Take this example of why PDFs are not the future. If you go to a restaurant and click “Menu”, 9 times out of 10, it takes you to a PDF of the physical menu. Most people find this slow and annoying. The smart restaurants (or the ones who hire smart web designers), create actual web pages for this content.
Going to PDF is taking a step backwards and why would I want to share my documents? I have some papers from undergrad, some from my masters, etc. I don’t want to share those. Copyright violations are going to be everywhere in this service.
Way to waste your money Redpoint.
Commenter #3 = Commenter #7 = Commenter #10
Ed… Why don’t you try clone Scribd and travel socialist or communist or union republic or commonwealth countries ?
No, shit… Publishers can go to jail for violating uhm what do you call that stupid thing… yeah…. “Reporters Without Borders”… ??
= Commenter #15
Ed, do you know how I know you are gay? Because you name is Ed.
Just kidding… :p I’m having fun here.
Don’t worry, I know I’m not gay. I’ve applied all the ebooks on dating and seducing women from Scribd. I’m just having a hard time understanding your comments. But, I know it’s not the first time I’ve had trouble with your comments. You should create a document with all of your comments and upload it on Scribd.
Jay, when was the last time you actually liked something that was on TechCrunch?
You probably thought Google was horrible when it first came out.
Your comments make you sound like a jealous 5-year old. You do nothing but try to tear people down to your level (gutter).
Keep up the buffoonery.
Wow! Scribd getting funded? its been only like a couple of months since they actually picked a lot of traffic.
I don’t really find scribd that ‘hot’, they are such niche site for geeks and education mostly. Can’t imagine them getting really popular…
what is the deal with the dipshits who comment on here in crappy, broken, horrible, english? can we screen that crap out somehow?? DAMN it is annoying to try and translate and figure out wtf they are talking about.
maybe it’s time to add diggability to the techcrunch comments so we can bury all the stupid ones.
all those in favor, say “aye”
There’s a huge market for specialty publishing / speciality content. If Scribd can take this one step beyond blogs and satisfy the appetite for deeper content, it could be pretty neat (ignoring the huge concerns around copyright). It’s already pretty neat. Redpoint did an investment on this thesis in Themestream back in Web 1.0 …
@ Jim
You sound really sophisticated. Did you try to counter any of my points? No. Anyone can make ad hominem attacks. That’s easy. I’m happy to eat crow if you can refute my points. Prove me wrong but please grow up.
I heard the premoney valuation was actually $20 million. Wow.
I would never have come up with ideas like YouTube or Scribd, because I’d be so afraid to get sued out of existance by copyright holders. Scribd has a ton of copyright content, none of which is deleted quickly…why should they it drives traffic. Doesn’t anyone respect intellectual property anymore?
fpos, what an fpos. A repository for documents, har har….a freaking highschool intern could do this. Wtf, web 2.0 bubble is clearly evident here. Where is the realtiy here. Oh, we are THE YOUTUBE of documents…yeah, right. I would rather look at funny videos all day long, chick in bikinis, idiots smashing their heads….this has zero traction.
Jay I think you are really missing the big picture here. If scribd was just a pdf glorifying site, then I’d say judging from the launch of scribd, pdf glorifying has just gotten validated. But it did not, because thats not what it is about. What is really happening is that the act of publishing on the web just got easier and more attractive. When blogs came out I’m sure people said, why blogs? you can already host web pages for free even. Well guess what? the barrier to entry just got lowered again and also in a pretty web2.0 viral kind of way.
Kalendae - it’s an app, it’s not a business. You are living in the echo sphere. Since when is popping up on TechCrunch twice considered any sign of validation? Where is the genius technology? Where is the money?
Answer my last question and I shall bow down to thee.
@arn & @pallet jack:
you guys seem to think that scribd would never have attracted vc funding or reached this high valuation without the help of y combinator. what i’m saying is that they could have found the same help from somebody else for a smaller slice of the pie.
Hey, check out Docufarm.
It allows you to view existing online documents: pdf, doc, ppt, ps.
http://www.docufarm.com
i’m sorry to post again, but i get upset every time i hear:
“Y combinator is about the connections you make; not the money they give you.”
this is a vc sales pitch, folks. don’t believe the hype.
why would people put stuff on scribd instead of a pub google-documents page? theyre so sure that they are going to be in business in 3 years and the document will still be there - and they dont want good search?
Carmen,
That’s the same as asking why people chose to upload videos to youtube rather than Google Videos (before the GooTube days).
If this is true, it’s certainly the latest sign of Bubble 2.0. I don’t care if Scribd is “rocking along” - $10+ million in true business value is almost never created in a couple of months and it hasn’t been here.
Scribd might be creating some buzz in the blog world and growth in usage might be impressive, but when it comes to determining whether or not this “company” has become a $10+ million asset in under two months, I think you only need to ask three questions:
1. How much money has been made and what is the business model? I doubt that this has generated any revenue of note. It appears that you can have documents on Scribd printed using a service called Print(fu), and I’m sure Scribd gets a commission on this. It’s a smart way to make some money, but ironically will help lay the groundwork for an infringement lawsuit. I also suspect that the Web 2.0 favorite business model (advertising) is also in the works. The proposition: imagine being able to display advertisting that is relevant to the content within a document! What a brilliant idea.
2. What’s been done to address the significant copyright issues that exist? Scribd obviously knows about them as TechCrunch reported that the law firm that represents YouTube was retained by the company. When I loaded the Scribd homepage just now, an article from Nature magazine was the featured document. It would be interesting to find out if Nature has authorized this, especially since Jared Friedman, apparently one of the creators of Scribd, posted the document. If I remember correctly, one of the facts noted in the Napster lawsuit was that some of the Napster management had “illegal” MP3s on their computers (obstensibly downloaded from the Napster service).
3. Is there anything truly proprietary or defensible about the Scribd technology? Given the limited resources it was built on, the answer is apparently no.
So let’s break down what Scribd is: a fairly simple online document respository where anybody can upload any document (regardless of whether or not the uploader owns the rights to that document) and where that content can be searched for and viewed within a web browser. Revenue is generated by allowing users to print documents they find on the service (apparently regardless of whether the copyright holder has authorized it) and will also be generated through advertising.
What has Scribd accomplished in under two months? It’s launched a service that apparently has nice growth in usage. But let’s be honest: that really isn’t saying much because it’s not incredibly challenging to do when you create a service where protecting the rights of copyright holders is not the priority and content that might otherwise have to be paid for is available for free.
What hasn’t Scribd accomplished? It almost certainly hasn’t developed a viable “business.” I would be amazed if the revenues generated provided any justification for a $10+ million valuation at this stage of the game.
At the end of the day, any investor has to ask himself whether he wants to invest in hype or a real business. While Silicon Valley venture capitalists are typically investing in technology-related businesses only and the risk of investing in companies before a real business model has been validated often creates the greatest upside potential, some perspective can’t hurt. There are a significant number of very solid businesses in numerous industries with proven track records that deliver consistent cashflow and growth which would not be valued at $10+ million. Maybe they don’t have the potential to become the “YouTube of documents” and get acquired by Google (ha!) but I think any sane investor has to question the wisdom of placing a $10+ million valuation on something so young when the true business potential is questionable, the company has little to no defensible technology and is likely to become a legal target. If this is one of the hottest things out there in the Web 2.0 space and is worth $10 million to venture capitalists, I don’t see how it bodes well for Web 2.0.
I don’t get it. Their site claims: Scribd docs have been viewed 6,516,542 times. 6.5m views is hardly worth the valuation they are getting.
@matthew
Obviously we’ll never know if they would have attracted VC funding or gotten this high valuation if they had gone on their own.
But you can’t discount the publicity that this site got from being a ycombinator site. Whether you like it or not, ycombinator carries a lot of mindshare on this blog and others like it. There is some value to that, and it’s more than $0.
$10 million won’t cover the rumored copyright lawsuits that are already in the pipes. $100 million, may be.
@ Drama 2.0 - Thank goodness you exist.
@ arn - Ask enough people in the Valley and outside and they will tell you that a lot of people have negative associations with Y-Combinator. There is a ton of talk of “Y-Bombs”. Pay a bit more attention and you’ll realize that hype isn’t always enough. It got Reddit somewhere but it’s not working for others.
Which ones are the Y-Bombs? List them all please.
Y-Bombs:
1. Kiko - sold on eBay after realizing Google was going to destroy them (founders now run Justin.tv - traffic has slipped significantly and press has died down with no idea of how to make money, sponsors find it delivers little value)
2. TextPayMe - still in beta since 2005? No traction. Site looks like it was built for $500 in Bangalore. Copyright doesn’t even extend till 2007? Is it defunct?
3. ClickFacts - domain belongs to some other company, seems defunct. Again, same issue with copyrights as above.
4. WuFoo - still around, okay traffic, but what’s the revenue model? Who would even buy this? It sounds like a cross between a bad rapper and a new Southeast Asian fusion food.
5. YouOS - still in alpha, copyright still not updated for 2007. I guess Y-Combinator companies don’t need intellectual property since ones like Scribd rip it off blatantly with even the foundres posting copyrighted materials. There can’t be Safe Harbor protections for that kind of foolishness.
6. Flipt - no site, dead. The name is the goal of Y-Combinator.
7. Flagr - traffic below the average suburban mother’s blog. No real value proposition and no revenue model.
8. AudioBeta - strangely enough…. still in beta.
9. Snipshot - mildly useful photo editing tool with low traffic to site. Easy to replicate, on revenue model, no exit opportunities.
So 9 bombs, 1 exit, and 1 potential exit (Inkling). Sounds like a regular VC portfolio to me except this one is way over-hyped and this is last year’s cohort.
Even Borat wouldn’t call this “great success!”
I agree with the posters who are predicting a web 2.0 bubble. I am shocked and amazed at all the VC funding these startups are getting. Can anyone tell me of a 2.0 site that makes a healthy profit? Do investors really think a site running a few ads will make them rich? Even if the site is getting crazy traffic, most people that I know (both IT and non) ignore ads.
Google has encountered issues with advertiser when it comes to click though rate and those who actual purchase something (product/service).
Are companies like Digg, Flickr, Youtube, Facebook and PhotoBucket really making a healthy profit???
Or is everyone expecting to get bought out and take their google/yahoo/ebay check to the bank?
I have been working on a new web service which should be ready by June (Hint it has to do with video, but is not a youtube clone). I am concern which all the money that is being toward around at services which are either crappy, poorly designed or just another clone. What happen to creativity and quality??? OK it looks like I am ranting now. All and all it is going to be hard for those who are working on services which could give a benefit/impact to the web a hard time to get the exposure and opportunity they deserved.
Pallet Jack: I definitely agree with you. YC gets you in the door and some good pub here and other places. It’s really not about the funding–I figure most of these founders have comparable balances to the VC fundage available on their credit cards.
But…
Jay 2.0: You’re right–the YC juice only goes so far. Reddit is the only one of their projects worth mention as a “success”. The rest are bombs or eeking out a meager existence.
This might be a bit of a threadjack, but I believe the problem with YC, or more specifically PG, is that they (he) thinks that developers are capable of running a successful business simply because they can code and have good ideas about what to code. My experience is that assumption is often not the case–I know a lot of top-notch developers with great ideas who haven’t a clue about marketing or business strategy. Heck, Even Larry and Sergey needed a CEO.
Once PG realizes that he needs to start seeking out those entrepeneurs who actually know how to put the YC juice to good use, that list of “Y-bombs” is going to be minimal.
I understand that there is many sites doing the same thing, may be some of them will die sooner or later, but the best one I think is Pytagor.com !!!
I thought the real driver of sites like youtube, digg etc… was the userbase and the content. In my 5 minute viewing of scribd… the content I saw was pictures people put into word documents, email forwards, and an apple instruction manual. Hardly good content. The only way I can see it getting better is if people put illegal content up there - books, ebooks etc… otherwise, what’s the point of scribd?
@ Jason
You’ve hit on another issue. The arrogance that engineers are the only people needed to make a successful business. I’ve started a new blog to address some of these issues. Let me know your thoughts.
I don’t know if that will minimize the list of Y-Bombs because the fundamental problem is that Y-Combinator is churning out products, not businesses. Maybe the suits can fix that, but I doubt Paul Graham will give anyone else much consideration. His essays are quite closed minded.
Surprised to see so much negativity around Scribd’s quick success. Great news for the Scribd team. Good luck guys!
Drama 2.0: ” It would be interesting to find out if Nature has authorized this, especially since Jared Friedman, apparently one of the creators of Scribd, posted the document. If I remember correctly, one of the facts noted in the Napster lawsuit was that some of the Napster management had “illegal” MP3s on their computers (obstensibly downloaded from the Napster service).”
Trip Adler (another creator) also posted content from PNAS, another journal. My guess is that Friedman and Adler might have had permission to download the content through their academic institution (Harvard???) which spends a lot of money to have access to journal content, but that they don’t have permission to redistribute the content on a public website. I’m pretty sure Nature did not authorize the posting of the document (why would they?)
While PNAS allows authors to redistribute content on their own personal websites, and the PNAS article in question is authored by John Adler III, it’s not at all clear that Trip Adler can post it to a public website.
I’m waiting to see what happens, especially given the struggle in the publishing industry over open access and the fact that they have a lot to lose.