This is an excerpt from TechCrunch ( March 5th)
Seven week old Geni raised a $10 million second round of financing last week, led by Charles River Ventures (see our coverage of CRV here), with a post-money valuation of $100 million. George Zachary from CRV is joining the Geni board of directors. This was originally passed to us as a rumor, and Geni founder and CEO David Sacks has confirmed the story.
End Excerpt
David Sacks was a key person at PayPal and I am glad to see he has been able to in seven weeks get $10 million at $100 million. You may like to play around with Geni. Do you think CRV is out of their mind or do you think Geni is the next $1 billion company.
Another intriguing question is could something like Geni have been built in India. By the way Geni which is based in Los Angeles had around 18 people only when it launched.
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It may be because of my ignorance of the US online market, but I really fail to understand whats so great about concepts like Geni. Isnt it something very obvious. Ok it does make sense to develop business ideas around obvious concepts that involve daily consumers, but in cases like these, who will pay for it and how much. And why are investors putting in their money here, sure if they are putting money they must be expecting some good returns and all the financials would have been done but I really cant get where the money is in such plans.
Same is the case with some other domains that investors are investing in these days such as DVD rentals. Agreed it is an idea whose time has come in India but again going by the rate at which such companies are cropping up and the inherent threats to such business I’m forced to think what makes the same VCs invest in such ideas who have to ask 100 useless quetions to better business plans. I mean I see more threats to a plan for a DVD rental firm than some other business models pursued by me and my friends which doesnt find any luck with the VCs because of some very stupid questions.
Things like these are really hurting the faith of young investors in the VC and angel community. The common belief that is building up is that finally the investor is just putting money without any real motive. And this is sad as it is nipping the VC culture in India in the bud.
Wow. Kudos for getting such a valuation to the Geni team and I have to say I absolutely love the interface and the way to “gradually” sign up.
Is this a billion dollar company? Well, considering it would need to earn about $30 million in profits to get that valuation – can it? That means about $50-75 million in revenue, which doesn’t look possible organically. I would say the money’s come more for the team’s potential than the current idea – but looking at the current implementation, I think the team’s capable of a lot of good things!
Geni is definitely a very interesting concept. But I have doubts about its potential.
The positive aspects
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This is a slick application that can attract users and make them stick around for the first 2 weeks, as you catch up with family.
The negative aspects
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1.) Geni applications are relevant for India only 10-15 years down the line. It makes sense in the US where you COMPLETELY grow up in nuclear families with very little contact with your grandparents, cousins etc. However, in India, even though many of us would have grown up in a nuclear family in a city, we had very close relationships with grandparents, cousins and other members of the extended family. So the usefulness of “discovering” your relations is not there
2.) But most importantly at generic level regardless of cultures, Geni does not have the single most important feature of any social networking app –
—– A social networking app has to help you get laid —–
Thats it. If directly (Orkut, Facebook, Myspace) or indirectly (LinkedIn: Better job, more money, better sex potential) this feature is not there, then users wont stick around 1-2 hours a day writing scrap entries, exploring fotos and seeing profiles of friends of your friends.
When I look at the negative aspects, due to the very nature of the application, I don’t see how they can possibly build in the “getting laid” feature without changing the fundamental concept itself.
a product like geni technological wise can surely be developed in india but the business model is not sustainable as most of the information product in US their backbone lay in information existing in offline world, their first issue of work is to act as an aggregator and then come the added content. In india where there is no uniform identity record management system its very hard for such a product to survive. Secondly india already has concept of very well connected families and lot less people face issues in finding relatives. As when you ready to leave delhi airport you come to know about your second or third cousins one should get in touch with after landing in US will full contact numbers and family linkage clearly defined. What i would like to point out is one need to fail pain themselves before they create the product to satisfy their need or for the community.
Geni is a cool product and has a great team behind it. Anyone who can produce a movie like Thank You For Smoking is indeed special. So, while something like Geni could have been built elsewhere, I wonder if the same team would have managed to create a buzz like David Sacks and the Founders Fund investment team.
BTW, there’s a relevant article (http://news.com.com/2100-1025_3-6079271.html) on news.com dated sometime in 2006 that covered a host of “Family 2.0” products.