51–60 of 98 posts
As a personal exercise please go and watch this documentary: Startup.com http://www.imdb.com/title/tt0256408/ And then ask yourself if what happened then is anyway similiar to what is happening now. For starters, I think you will realise that most startups circa 2000/1 were nothing more than litteral "thin air" -- compare that to the likes of Facebook who actually have revenues, hell, they even have a product . I kno…
I am not interested in any of the "we are in a bubble" posts as much as I am interested in "What the fuck will happen when this bubble bursts!" I have been in tech in SV since 1997. I was here for the build, frenzy and pop of the last bubble. In 2001 I had a BBQ at my place - 50 people came and we ate and drank by the pool. Of those 50 - all tech workers - 4 had jobs. I was out of work for 18 months (6 of which I tra…
Nobody was F*'d, although there was a lot of self-centered melodrama.
The same thing will happen again and again. Areas of the economy will get overheated, and subsequently get overcooled. Fortunes will be made, fortunes will be lost.
And in the end it's just life as usual.
As a personal exercise please go and watch this documentary: Startup.com http://www.imdb.com/title/tt0256408/ And then ask yourself if what happened then is anyway similiar to what is happening now. For starters, I think you will realise that most startups circa 2000/1 were nothing more than litteral "thin air" -- compare that to the likes of Facebook who actually have revenues, hell, they even have a product . I kno…
But did Instagram have revenue? The question wasn't if investors back then had money, but if the company they invested in were making any money. Facebook had money, Instagram wasn't making any. So to me that's very similar. Also he's right that now that Instagram was valued at $1 billion, we're already starting to see others like Square immediately looking to raise capital at huge valuations, just because Instagram w…
When these deals become commonplace, we'll be back to the bubble in full force. The rumor about Cloudflare worries me more.
This bubble will hurt the smaller startups by no-name people, people that invested everything in an idea that in a non-bubble environment would be laughed out of the room, but with companies like YC around (not that this is their fault) that are harping on about the value of ideas and people it's growing. There are people here on HN daily that post links to their blog posts that have put all their savings into their…
Absolutely. Cycles happen, and for now those of raising money can enjoy the peak. The problem is that with all the fanfare, people forget that companies need to make money.
As a personal exercise please go and watch this documentary: Startup.com http://www.imdb.com/title/tt0256408/ And then ask yourself if what happened then is anyway similiar to what is happening now. For starters, I think you will realise that most startups circa 2000/1 were nothing more than litteral "thin air" -- compare that to the likes of Facebook who actually have revenues, hell, they even have a product . I kno…
In 2000/2001 Yahoo! was one of the biggest websites on the planet. Its revenue doubled in 1999. Between 2000 and 2001 Yahoo stocks went from a high of $118.75 to $4.05 (though they obviously recovered to an extent and are still a cash cow today). Perhaps that could be a good comparison for FB?
They also spent big on acquisitions in the late 90s just before the bubble burst.
Surplus of capital is a huge factor. Got numbers? When Peter Thiel started his class at Stanford, he spent the first couple of lectures reviewing the 90's. One of his argument to explain the dot com bubble was the influx of capital from around the world to the U.S., and ultimately to the valley. Could be the same here. not sure.
The rise in the inequality of wealth has led to an excess of capital and a lack of demand for it to fill. It's not just the US: around the world there is more people who want to invest than there are people with money to spend on the things they might make.
Well, that or to build a luxury rich people will pay for.
As a personal exercise please go and watch this documentary: Startup.com http://www.imdb.com/title/tt0256408/ And then ask yourself if what happened then is anyway similiar to what is happening now. For starters, I think you will realise that most startups circa 2000/1 were nothing more than litteral "thin air" -- compare that to the likes of Facebook who actually have revenues, hell, they even have a product . I kno…
Earlier quoted context omitted.
Of more concern to me is the bursting of valuation bubble for the United States. Currently, people are undervaluing the risk of lending money to it. What happens when they realize its future revenues won't cover all of its commitments?
If the US had European tax rates, it could support its current commitments and more. The risk is political: that the US will default on debts which it has the ability to pay.
Earlier quoted context omitted.
US Gross debt is currently around 16.4 trillion, its GDP in a given year is around 14.6 trillion, and its operating budget is around 2.5 trillion with a 1 trillion deficit. It seems within its capabilities to repay its debts, though it has opened up the throttle a good amount in the past couple years, and there seems to be no political will to raise taxes right now.
By "operating budget" I assume you mean revenues. For reference, the US spent $2.73 trillion in 2007 and $2.9 trillion in 2008. It plans on spending $3.8 trillion in 2012 and about the same in 2013. When you say "opened up the throttle a good amount" that amount is in the vicinity of ~35%. (These numbers are not adjusted for inflation. Sorry.)
