41,000,006 reasons why I think we're in a bubble • Hacker News Board

Re: 41,000,006 reasons why I think we're in a bubble

#171

Post by mindcrime » Thu, Mar 24, 2011, 3:36 PM UTC

cma wrote: post #124

edw519 wrote: post #30

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…

Who would take pleasure in reading Hacker News if it became about almost any of that customer stuff? All that stuff could be getting submitted and just not upvoted, because it is boring.

All that stuff could be getting submitted and just not upvoted, because it is boring.

It's not boring if you want to become very wealthy. For reference, see jasonlbaptiste's "How to become a millionaire in 3 years?" post:

http://jasonlbaptiste.com/startups/how-to-become-a-millionai...

These bits in particular:

Charge for something- Building a consumer property dependent upon advertising has easily made many millionaires, but it isn’t the surest path. It takes a lot of time and scale, which due to cashflow issues will require large outside investment probably before you are a millionaire. Build something that you can charge for. That’s how business has worked for thousands of years prior to the 1990s.

Make Sure You’re Robbing A Bank- When Willie Sutton was asked why he robbed banks, he said because that’s where the money is (Thanks to edw519 for this phrase). Make sure whatever you’re going after is where the money actually is ie- a customer that will pay you. Consumer markets are tough, especially with web based products. People expect everything to be free. Businesses are usually your best bet.

If you buy into that, then reading about customers (and business customers in particular) is VERY interesting.

Re: 41,000,006 reasons why I think we're in a bubble

#172

Post by beeeph » Thu, Mar 24, 2011, 3:43 PM UTC

When a tech bubble pops, how does it affect a funded startup compared to a bootstrapped startup? I'm relatively new to the startup world, but as I understand it, startups that need funding are generally the only one's negatively affected when the bubble pops since funding becomes more scarce. If so, wouldn't that benefit the bootstrappers?

Re: 41,000,006 reasons why I think we're in a bubble

#173

Post by bhousel » Thu, Mar 24, 2011, 3:48 PM UTC

klochner wrote: post #169

bhousel wrote: post #80

Earlier quoted context omitted.

What is far more likely is for Color to try to get themselves acquired by Facebook. If this is their real company strategy, the $41M investment actually makes sense.

That's pure bubble talk - "we don't have to generate profit to justify the investment, we'll just get acquired by someone else" SOMEONE has to generate a profit based on the technology which justifies the investment or acquisition cost, whether it's color or their eventual acquirer.

And I'm saying, the acquisition is already planned and these investors aren't investing in Color, they're essentially investing in Facebook pre-IPO without going through Goldman's special investment vehicle.

None of the investors mentioned (Sequoia, Bain Capital, SV Bank) are Facebook investors yet.

Re: 41,000,006 reasons why I think we're in a bubble

#174

Post by dmarinoc » Thu, Mar 24, 2011, 3:50 PM UTC

patio11 wrote: post #125

edw519 wrote: post #30

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…

To add, approximately one half of people in the real world share a common demographic category with a sliver of HN users and a fraction of a sliver of what we create. Women have money. Go take it. Nobody else wants it in tech. (Well, aside from Groupon, Zynga, and a few other companies that missed the opportunity to make an iPhone app that you could wiggle to share photos.)

They do not only have money. They have a strong influence (and almost always the last word) in most of end-consumer buying decisions.

It's strange so little companies focus on them

Re: 41,000,006 reasons why I think we're in a bubble

#175

Post by businessguy » Thu, Mar 24, 2011, 3:51 PM UTC

edw519 wrote: post #30

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…

This is very true. I can give another example(maybe bit-offtopic for HN).

A very good friend of mine worked in IT for like 10 yrs. He was quite good programmer, CTO etc. One day he decided to radically change his carrer and opened... 5 Subways in Eastern Europe (he is originally from there). FFW 2 yrs => his restaurants making him $400-500k/yr, he spends zero time managing them and just focused on opening new ones.

His lesson: IT industry has one of the hardest competition rates cause all super-smart geeks are competing on relatively small marktets. Other industries competition (esp in emerging markets) is seriously overrated.

Another example - my very stupid app for selling video files just crossed $1000/day mark in sales. Ppl just need simple tools to get things done.

Re: 41,000,006 reasons why I think we're in a bubble

#176

Post by yummyfajitas » Thu, Mar 24, 2011, 3:51 PM UTC

cpeterso wrote: post #163

danenania wrote: post #122

Earlier quoted context omitted.

"We were headed toward a deflation without the QEs, which would've been a disaster in a highly illiquid economy." Right, this according to the brilliant minds who created the crisis in the first place. Clearly the financial situation is bad. Your 'good, gradual inflation rate' is WHY we're on the precipice of disaster. It's not like we now have a choice between an economic meltdown and a land full of unicorns and rai…

"Good, gradual inflation" is how The Man keeps the proletariat busy working. They can't afford to stop.

Inflation helps the proletariat, you know. Most of them are net debtors, so inflation makes it easier to pay off their debts.

Re: 41,000,006 reasons why I think we're in a bubble

#177

Post by Travis » Thu, Mar 24, 2011, 3:53 PM UTC

nadam wrote: post #72

edw519 wrote: post #30

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…

B2C (and tools for programmers) is overrepresented amongst hackers because it is easier to gain domain knowledge in these territories especially for young hackers. I also think that B2B is still underrepresented, and I am more interested in that. But we should also note that solving Customer n's problem is very different than solving Customer M's problems at once where M is s big set of customers. The first is 'consu…

b2b startup here! We got our idea b/c 2 of my cofounders worked in the industry, and spent 3 years noting the problems with their field.

That's a very difficult thing for a 23 year old hacker to get exposure to. In order to get that job in the first place, you'd need a mechanical engineering degree, then spend several years at the plant.

On the flip side, we've just started to place ads on our sites via google's adsense, and we're getting > $15 RPM already.

B2B is where the easier money is, in my opinion. (That also applies to women-focused companies).

Re: 41,000,006 reasons why I think we're in a bubble

#178

Post by yummyfajitas » Thu, Mar 24, 2011, 3:58 PM UTC

wat55 wrote: post #101

danenania wrote: post #94

Earlier quoted context omitted.

Good post. It seems common for participants in an industry undergoing a bubble to concoct elaborate industry-specific theories to explain a sudden influx of new money when the real cause is, well, exactly that: a sudden influx of new money. Unfortunately, we've been trained to correlate the numbers in our bank accounts with actual value, but the link has been all but severed for a long time. It seems unbelievable tha…

This is completely wrong and absurd. We've had a gradual inflation rate since the beginning of the U.S. Dollar. We were headed toward a deflation without the QEs, which would've been a disaster in a highly illiquid economy. The QEs simply brought the inflation back to a good, gradual rate, and put more liquidity into the economy so businesses can start hiring again.

The QEs simply brought the inflation back to a good, gradual rate, and put more liquidity into the economy so businesses can start hiring again.

How is that working out so far?

http://research.stlouisfed.org/fred2/series/EMRATIO

The fundamental flaw in this idea is the assumption that increased production/consumption will in turn increase employment. At the end of the last two recessions, production and consumption have increased, but employment has not. The old theories no longer work.

Re: 41,000,006 reasons why I think we're in a bubble

#179

Post by Estragon » Thu, Mar 24, 2011, 4:05 PM UTC

ErrantX wrote: post #158

runevault wrote: post #156

Earlier quoted context omitted.

Selling software to large corporations however requires significant support effort and bending over backwards to make the sale. I seem to recall an article about hunting elephant versus deer that covered the issues quite well. Dealing with just the development side of it in my day job, no way does dealing with them on my own or in a small startup team appeal.

It depends which industry you pick - but often the problems are over-hyped. It's true; I had the same trepidation you talk about when first having to face doing sales... and at the start it can be a disaster ;) but you can soon pick up the tips & tricks needed to sell to corporates. In fact; as hackers we are actually at an advantage selling to corporates, so long as you "get" the process, because they tend to be "at…

If you have any pointers to advice on how to go about this kind of selling, that would be very interesting.

Re: 41,000,006 reasons why I think we're in a bubble

#180

Post by blhack » Thu, Mar 24, 2011, 4:05 PM UTC

edw519 wrote: post #30

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…

You're missing the point.

Most geeks that I know aren't trying to build apps that make money, they're trying to build apps that are fun, and that their friends think are fun.

If you offered me two choices

A) Make a million dollars a year doing something you hate that nobody will know about or care about

B) Make no money doing something you love that your friends think is cool.

I will almost always choose B, and I think most hackers will also always choose B. I would go as far as saying that choosing B is one of the defining characteristics of a hacker.

I got into computers because it was fun, not because I saw dollar signs at the end of it. Writing a video sharing app is a lot more fun than writing a software that reduces credit card fraud.