Broadsight a Trillion Dollar Company - here's how.....

This morning I read about Twitter taking $100m and being thus valued at $1bn, a classic case of a small investment implying a valuation that would not occur if a full buyout or IPO was made (actually, this one is not too bad compared to Facebook) so I Twittered:

If I buy 0.000000000001% of Broadsight for 1p our valuation will be £1trillion #itssillytovaluebizonsmallstakes

Turns out that Jason Fried from 37 signals had much the same idea, but he followed it up with a masterful post that takes a pop at the whole "valuation of non revenue producing give it away for free" business:

In order to increase the value of the company, 37signals has decided to stop generating revenues. “When it comes to valuation, making money is a real obstacle. Our profitability has been a real drag on our valuation,” said Mr. Fried. “Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money. That way, the sky’s the limit!”

He notes that:

37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.00

Its a brilliant satire (who said Americans don't understand Irony?*), especially as its so true. I urge you to go and read it right now.

The naivete of the tech blogging and commentating classes was also made clear yesterday with the news of Dopplr's sale - the coverage on many of the blogs (see here) was shockingly naive (you want to cull your RSS reader inflow - use this as a way to judge), as were many of the commentators. If this is the best that Citizen Tech Journalism can do when something apart from pimping is required, its pretty p*ss poor. Kudos to TechCrunch Europe's Mike Butcher for actually doing something more incisive.

*Re Americans not understanding Irony as a stereotype - this post on TechCrunch and many of the comments make it why it exists