Eons, a social networking site for old people has raised $22M in a second round of financing (they raised $10 million on the first round!). Who invested? Charles River Ventures in addition to Sequoia. It just makes no sense to me.
First if this firm has raised $32M it implies that the pre-money valuation was at least that, but more likely something higher like $40+. No way! Any entrepreneur with a social network and no innovative advertising strategy should immediately sell at price like that (IMO). Looking at the site I was not impressed. They own a search engine called Cranky.com that is specific to the 50+ demographic. Still, I could make the same thing with Swicki and it would be better because it would be ’community powered.’
However, my real issue is that Eons is a depreciating asset. Think lifespan.
First, I don’t mean to sound morbid, but users over 50 years old have a significantly shorter customer lifecycle than do 20 year olds on Facebook. Once over 70, when the eyes start to go and it’s not so easy to type on a keyboard, when search terms like ’dating’ are no longer common vernacular – who will keep using the site?
Finally, it seems these VCs are forgetting that that while Eons is capturing the current 50+ demographic, they are capturing a unique segment with no previous exposure to social networking. What does this mean? It means that once this generation is past 70, Eons will expect the next wave of those turning 50 to join. The problem is they will not, because potential users already have relationships with Friendster, Myspace and Facebook. What normal person is going to turn 50 and say ’Hey now that I’m old now, I should use an old person’s social network.’ I think not.
Maybe I am totally wrong. Am I? If you disagree with my interpretations, please speak up!