Ask HN: Why is soylent worth $100M dollars?
20 comments
Because interest rates are at a record low and will be there for the foreseeable future. Any startup with even a hint of success is still getting funded.
Soylent has a bigger vision. Here's a recent statement of it by its founder, Rob Rhinehart. Start 5 paragraphs in.
http://robrhinehart.com/?p=1192
http://robrhinehart.com/?p=1192
So, marketing.
Same reason Tesla is valued so highly, even though they're not profitable yet. Expectations.
Also, their product is nutritionally completely. It's not slimfast. I'm sure you've compared the nutritional information, right? Of course you have.
Also, their product is nutritionally completely. It's not slimfast. I'm sure you've compared the nutritional information, right? Of course you have.
Tesla is a bit more than a brand name though, and has some seriously impressive tech behind it which will be worth an awful lot even if the seriously impressive personality behind it can't make it turn a profit.
Soylent by contrast, is a good brand name and a (replicable) recipe, and there's really nothing that revolutionary about maltodextrin-based food substitutes, even if you might need to buy a vitamin pill separately to top some of the others up, or consider eating actual food from time to time, like the overwhelming majority of human beings actually enjoy doing. There is money in such things; Kraft make >$1bn in revenue worldwide from selling Tang, but Kraft are very, very good at selling food.
Soylent by contrast, is a good brand name and a (replicable) recipe, and there's really nothing that revolutionary about maltodextrin-based food substitutes, even if you might need to buy a vitamin pill separately to top some of the others up, or consider eating actual food from time to time, like the overwhelming majority of human beings actually enjoy doing. There is money in such things; Kraft make >$1bn in revenue worldwide from selling Tang, but Kraft are very, very good at selling food.
Of course. But all of the other nutritionally complete meal replacements on the market (and there are quite a few) didn't have a recognizable brand name.
Right, but none of the other ones were marketed to the super elite startup coders who are crushing it so hard that they literally don't have time to eat.
Coders who have a crazy amount of disposable income compared to your typical consumer.
I think its more than that. Its not just because its called "Soylent". Its because Rob genuinely wants to replace food when possible with Soylent, not to get rich (primarily), but because in a lot of cases its a better option versus the food most people would eat (shitty fast food).
Execution + Expectations of probable success = Valuation
Execution + Expectations of probable success = Valuation
It isn't hard to copy:
http://www.joylent.eu/ http://aussiesoylent.com.au/
http://www.joylent.eu/ http://aussiesoylent.com.au/
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Shot in the dark here, but perhaps it's the fact that consumer demand is (and has been) so high. Unsure how many orders they have backlogged at this point, but they took money for each of those orders. For all we know, they could have 30m$ in back orders making that valuation pretty reasonable
I ordered early summer and only got my order a couple weeks ago so I'd estimate backlog to be roughly 6-7 months
One word: Marketing
>they've proven themselves unable to meet customer demand in a timely fashion
Well, that's a good thing, certainly better than the opposite.
>What makes them different from any other meal replacement shake vendor?
IMO, a focus on being a food replacement rather than a meal replacement.
A food replacement needs to have all your nutrition in one product. They don't care about taste.
Slimfast, as you suggested as a comparison, isn't meant as a 2,100 calorie/day food replacement. You'd have to drink ten 11oz cans to get that many calories and that would throw off the entire ratio of fat, carbs, protein, and nutrients per day.
In any case, soylent seems to have the right product/market fit.
Well, that's a good thing, certainly better than the opposite.
>What makes them different from any other meal replacement shake vendor?
IMO, a focus on being a food replacement rather than a meal replacement.
A food replacement needs to have all your nutrition in one product. They don't care about taste.
Slimfast, as you suggested as a comparison, isn't meant as a 2,100 calorie/day food replacement. You'd have to drink ten 11oz cans to get that many calories and that would throw off the entire ratio of fat, carbs, protein, and nutrients per day.
In any case, soylent seems to have the right product/market fit.
> Well, that's a good thing, certainly better than the opposite.
Corollary: Companies that can actually fulfill orders should have low valuations.
Corollary: Companies that can actually fulfill orders should have low valuations.
Valuations have much more to do with social issues (faith in founders, quality of lead investor, size of recent exits) than it does the product.
The product could be terrible, but if all those things are in place, investors could be fighting each other to get a piece of the deal.
You can fix a product in the future, with enough money. You can't fix a founding team, and you can't go back in time to join a deal that you missed out on.
The product could be terrible, but if all those things are in place, investors could be fighting each other to get a piece of the deal.
You can fix a product in the future, with enough money. You can't fix a founding team, and you can't go back in time to join a deal that you missed out on.
Precisely because of this kind of thread. It's the rare meal-replacement shake that gets both detractors and proponents posting and talking about it all over the place. It's getting exposure and hype in channels that slimfast could only dream about. It's a marketer's wet dream.
Just answering "marketing" is a bit glib, but it's a large part of it. Read NutraFit's marketing on e page you linked - it's all about muscle building whey-powder protein. If I don't care to set foot in a gym, that doesn't appeal to me. Soylent identified an underserved market and is catering to them.
Underarmor had a similar revelation - selling what previously amounted to women's underwear, to men - and they've made a killing doing so.
GoPro is yet another example of this at work.
Underarmor had a similar revelation - selling what previously amounted to women's underwear, to men - and they've made a killing doing so.
GoPro is yet another example of this at work.
Current Customers Sales + Potential Customer Demand = Value?
Why is that company valued so highly? What makes them different from any other meal replacement shake vendor?