37signals Valuation Tops $100 Billion After Bold VC Investment

Jason fried, writing on the 37signals.com blog:

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!”

Hilarious. I also found this comment from user wensing on news.yc pretty insightful:

Snapchat isn’t being valued on revenues or potential monetization, but rather as a piece of someone else’s (eg Facebook’s) business model.

In the Steve Blank sense I don’t think it’s even right to call Snapchat or any of these “growth looking for a home” things “startup”s. They aren’t actually searching for a business model. Their plan is to grow until they dock with the Deathstar.

(via news.yc)