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You see on Twitter how Elon has taken the exclusive Blue Check and now made it unexclusive such that NOT having a blue check is
You see on Twitter how Elon has taken the exclusive Blue Check and now made it unexclusive such that NOT having a blue check is now cool. It reminds you of a Dr. Suess book. Thus, you think about starting a new Twitter competitor where when the app starts the most popular people will pay to have a yellow star next to their name. You'll then let anyone get a yellow star and charge the most popular people to remove the star from their profile. You'll continue to change whether or not having the star is cool or not to make money. You'll call the new Social Media website Sneetches. To start Sneetches, you'll need to invest $4 billion today. You'll make $100 million per year the next 2 years starting a year from today. You'll then make $1 billion per year for 3 years starting 3 years from today. You then believe you'll make $50 million per year starting at time 5 which will grow by 2% per year forever. If your discount rate is 10%, what is the NPV and should you start Sneetches?
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