I'm calling this Bubble 2.0, and it's ready to burst

On the other hand, if one considers the amount of time we're all dedicating to development and market research on our as yet unprofitable projects...

The 1999 bubble was only an issue because it happened with publicly traded companies that lots of people were investing in and making unrealistic gains on. You couldn't watch television without seeing ads for online brokers showing how easy it was to get rich quick, and your "My Account" page on said brokerage site was eager to tell you about your 10X margin and encourage you to use it. When it popped, all those stock portfolios went back to where they started (or worse), and hilarity ensued.

This time around, there's none of that. The "Bubble" is simply a handful of private companies getting silly valuations. If that stops happening, there's really no aspect of it that will bankrupt your random average family in the Midwest.

So yeah, sure, call it a bubble if you'd like. But it seems from here to be a harmless one floating off in the distance rather than a 1999-style one that we were all living on top of.

In MBA school, you learn about stuff like discounted cash flows and how they are ultimately what is used to value a company. (Comparables and multipliers are really just proxies for the notion of what the present value of a company's cash flow is)

Then you get out and start raising a round, you throw valuations around in the air and to most outsiders it seems illogical. I think this comes about because many founders simply aren't financially literate enough to do more than say "If AirBnB is worth X, then we must be worth at least Y"

Some people get excited by these uninformed valuations, others write blog posts and call it a bubble. In my opinion, the truth is somewhere in the middle. This crop of entrepreneurs learned some big lessons from their older brothers. They've learned the importance of revenue and having an unfair advantage. With a few exceptions, my experience leads me to say that most entrepreneurs are trying to build real businesses and are not gaming the funding community. This is very different from the IPO fever of the dot-com bubble. (Not to mention the fact that the size of many seed rounds today would barely cover a month of runway in 1999)

Capital is out there but the funding environment is not loose and there is less cash in the system than there was the last time around. TechCrunch and YC make it look easy, but fundraising is still fucking hard. Anybody who's pounded the pavement or sat through months of due diligence only to miss closing date after closing date will confirm this.

Instead of arguing on what our companies are worth, we should all be focussed on building a strong, diverse and healthy North American tech industry. It's time to get back to work and stop giving a flying fuck about what some investor thinks you're worth. Debating whether or not we are in a bubble are simply unproductive.

Here's an exaggeration to make a point:

“The housing bubble didn’t really hurt anyone who already owned their home, or those who never owned a home in the first place.”

Yes, a tech/start up bubble burst would not have near as much impact as the housing bubble for the reasons you point out, but when you suggest that it won’t hurt “anyone here” (i.e. people who frequent HN), I’m not sure I agree.

Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc.

So, depending on the percentage of people who depend on work from start up, or early stage companies who are not yet profitable and need to rely on further funding to grow, a “bubble burst” could impact people on HN.

http://ixjy.com/post/22704727159/will-somebody-please-disrup...

There are so many cocked up ideas out there (many of them built with someone else's money in the hope that somehow, someone, somewhere will give them money).

Some of these ideas actually get funding, which is tragic, and some of them actually make it, which might be worse, but most of them never see the light of day.