141–150 of 269 posts
What I don't get, economically speaking, is how we can both be in a bubble and in a barely recovering economy. In other words, how do these angels and VCs still have that much money to invest in such companies?
They need investment opportunites and investing in real estate probably isn't popular. Hence angel funds have tons of money to throw around.
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I personally think that the fed now has no choice but to pump money at zero (to effectively negative) interest forever. There's a number of reasons for this: demographics, peak oil, the massively deflationary effect of certain technologies, etc. The west really looks a lot like Japan, which has pumped cheap money since their economy went through a similar cycle of stock bubble, real estate bubble, and crash. So expec…
The question is what happens if/when inflation gets out of hand. Raising rates causes deflationary collapse, mass unemployment, and default on government debt. Keeping them low risks crippling inflation which could lead to social instability even in the US. What's a Fed Chairman to do? Deflationary collapse is the only path back to a sustainable model, but it's extremely painful in the short term and so nearly unthin…
Alternating cycles of inflationary bubble economies followed by deflationary collapse. Basically think 1995-2001 in .com or 2002-2008 in real estate, over and over again, forever. Inflation, deflation, inflation, deflation...
Beneath this alternating bubble-bust economy will be an underlying trend that I've heard called in-deflation: deflation in the value of everything you own, inflation in the value of everything you use.
Food, energy, and fuel in particular have nowhere to go but up for the reasons I mentioned at the top. Things like owning a car and driving it everyday are about to get orders of magnitude more expensive.
From a social point of view, the bubbles will serve a kind of bread-and-circuses role. Everyone will get to think they're going to get rich in the Next Hot Thing.
Make no mistake, a big factor in the creation / encouragement of recent bubbles has been super easy monetary policy that provides cheap and easy credit. In '00 we had a market crash after a dramatic run up of stocks in general and tech in specific. In 1998-1999 rates were low and credit was easily available [1]. As we led up to the millennium changeover ("Y2K") unprecedented amounts of short term capital were made av…
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Perhaps we're seeing the start of something new.. B2C = Business to consumer B2B = Business to business B2A = Business to acquisition?
Building to flip is hardly a new trend.
Edit: I'd like to clarify that the business model I'm suggesting feels different somehow. Yes people have built companies to flip before, but their valuation was still based on what they do as a company.
If what I am suggesting is true, Color's valuation is based on potential shares in the company that it's being flipped to. These VCs are essentially investing in Facebook, pre-IPO (set for 2012) without going through Goldman's special purpose vehicle, and without dealing with the SEC's 500 shareholder regulations.
If true, that would make this Color investment a very clever hack.
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I disagree. I think the reason you see those kind of posts is that those kind of applications are low-hanging fruit. The development of Yet Another File-Sharing App or Social Media Service can be accomplished by anyone with a "Learn Rails In 21 Days" book and a credit card. Companies that are also getting tons of funding right now are biotechnology and solar energy startups, but I have never seen anything along the l…
More to the point, people lack any domain experience. Don't get me wrong: it's cool to be an awesome hacker... but if you don't know about anything outside of hacking.. chances are some neck-beard somewhere has already solved all of the problems of which you are aware.
I'm saving that quote for later use.
Seems like they're attacking the chicken-egg problem in the easiest way, to me, the domain name and big dollar shine on everything make them look more credible and established. And they have enough runway to focus on product for the first few years while growing the userbase without having to monetize immediately.
Could still flop a million ways, of course. It just seems like going all-in could actually be a viable way to attack emerging social networky markets.
Hmph. If nothing else, posts like this are terribly offensive to the entrepreneurs that dedicate their lives to products like Color. Did anyone consider that maybe Sequoia, who have invested in companies that make up over 10% of the NASDAQ know what they are doing? Companies like Color, AdKeeper and Flipboard have "crazy" valuations based on the founders having ridiculous resumes. They have all created billions of do…
So its a little like sympathetic magic - if we get guys who were close to that other success, maybe some of the halo is still stuck to them and voila! investment rationalization.
Some of us have seen dozens of sure-fire new companies, staffed with experienced professionals, fall on their faces. Younger, perhaps naieve investors still have some lessons to learn.
Admittedly, the article pointed to 6 indicators of a bubble which are probably not quite right; then defended only 1 of them, and waved their hands about the others. That is what I found a little offensive, but to my logical sensibility and not as an entrepreneur. Entrepreneurs have to weather a lot more than link-bait, and need to grow a much thicker skin.
I don't know about the rest of the world, but we sure are in a bubble here at Hacker News. There seems to be a real disconnect between what people want to build/invest in and what people in the real world actually need and want to pay for. Just as sample of what I've witnessed in the past few years: Ask HN: How do you like my file sharing app? Ask HN: How do you like my social app for niche ? Ask HN: How do you like…
Which is why you never engage in business ventures based on what customers claim they need/want. How many companies expressed a need that would make Twitter or Facebook happen? Yet these services are nowadays a crucial part of many companies marketing efforts simply because a bunch of business people had a vision or scratched their own itches.