Really? Can you show me any statistical data for that? Or just anecdotal stuff? Because trust me, there's probably 10x as much anecdotal evidence for companies with large amounts of funding that HAVE had success. Just looking around me at the company-produced products I'm currently using : Apple, Google, Microsoft, IKEA, Black & Decker, Walmart...

You're probably dealing with a lot of confirmation bias.

If not, you're probably going to pull statistical data regarding the dot com bust. Failed companies during the dot com bust were a lot different than Snapchat. They had no users and were funded by clueless empty suits who thought that business success was the combination of a half-assed idea you thought up during dinner and waaay too many code monkeys working on your terrible idea with a forced deadline.

That's not what Snapchat is. Large amounts of funding from very respected investors with high success rates of investment in companies with a lot of users ... show high correlation with success.

Snapchat has a shit ton of users, runs pretty lean cost-wise (low amt of employees, small offices, efficient database/server management, etc.) as any tech company worth a shit these days will run (compared to dot coom bust, that is), continuously rolls out updates and features, and has a lot of funding. All of these very important factors when discussing a company's success.

For every example of a company that has failed with 1. had a shit ton of users, 2. didn't blow it's money on stupid shit like Aeron chairs and way too many employees (as companies during the dot com bust did), 3. has rapid development, and 4. has a lot of funding, there are 1000 companies that has succeeded like that. That's because those things are pretty good determinants of success.

User data is the current currency in Silicon Valley.

When you can't charge users for GET requests and everyone in the nation is too reluctant to spend a penny on iOS apps, the only real source of income for companies that focus on web/mobile markets is advertisement. So you work on optimizing ROI for advertisement. One way of doing such is optimizing user data analysis. Know your users' demands better -- their location, their demographic, their interests -- advertise stuff they're more likely to click on, get paid more by ad agencies. In order to analyze user data, you need, 1. "analyze" : accurate and thorough aggregation algorithms (I'm speculating that this is why Google bought Deep Mind and Zuckerberg/Thiel invested in Vicarious), and 2. "user data" : shit tons of raw data regarding your users.

And companies with a lot of users have a lot of user data. Even if Snapchat advertises ephemerality, they're really storing all of those pics on their database after they're deleted client-side (why else would servers even exist, there's no reason, technically, something like Snapchat couldn't work in pure P2P if you're really getting rid of the user data). Not to mention the metadata regarding your phone number and your friends list. While the first bit of advertisement optimization -- "analyze" -- may seem like it's not good enough at analyzing pictures and social graphs (your friends and your friends' friends and your friends' friends' friends, and your friends' friends' friends that happen to be in your friends and also your friends' friends, etc.) just yet, 1. this is why AI is becoming so popular, and 2. this is the risk the VC is taking by investing in Snapchat. Obviously every sound investment takes some risk, or else it'd be so objectively obvious that everyone would make the investment and you wouldn't get a high ROI.

The risk here is saying "user data in the form of pictures and social graphs, and whatever something like Snapchat can reasonably evolve into if we keep it surviving" is valuable.

What you're saying when you say "large amounts of funding have historically shown little correlation with success", you're talking about clueless, unexperienced investors saying that "my vague business idea when paired with hundreds of programmers and really expensive Aeron chairs is valuable".

Not only is the former much more believable, given the high success of companies that, 1. initially seemed like useless toys to short-sighted people on the Internet, but had a SHIT TON of users and a very fast development cycle and 2. gone from no-revenue to some-revenue YEARS after initial success, this is also a prediction being made by motherfucking Andressen-Horowitz.

So, no, I'd say cases like Snapchat have HIGH correlation with success. Sorry you don't have anyone to sext.