All the oxygen trapped in a bubble
37signals.com
All the oxygen trapped in a bubble
1–10 of 124 posts
Re: All the oxygen trapped in a bubble
#2I'm finally coming around to thinking that it is starting. About three years ago people were screaming bubble because YC companies were getting $4m or $5m valuations and I wrote the following:
"The truth is this: Bubbles don't exist without my aunt's mutual fund getting involved or my next door neighbor getting told to mortgage his house to invest by his financial advisor. Web 1.0 was all about IPOing on the nasdaq and fleecing the public with business models that disregarded profit. This time around things are different. At every stage of the process you see startups with business models. Guestlist, Github, FreshBooks, heck even Groupon, are making nontrivial money relative to the valuations and expected future growth."
And the money is starting to come in from my Aunts pension fund (Facebook buying instagram because they knew they were going to have her money within a couple months). Just barely starting, so we've got probably 2 to 4 years before the pop actually happens. But what are we supposed to do while it is happening? We can warn people for a while, but it won't change anything. Get money while you can, build a warchest like paypal did and get ready for the winter of 2015 to 2018.
Re: All the oxygen trapped in a bubble
#3I'm finally coming around to thinking that it is starting. About three years ago people were screaming bubble because YC companies were getting $4m or $5m valuations and I wrote the following: "The truth is this: Bubbles don't exist without my aunt's mutual fund getting involved or my next door neighbor getting told to mortgage his house to invest by his financial advisor. Web 1.0 was all about IPOing on the nasdaq a…
Or you can just concentrate on building a sustainable business, and worry about more urgent things that will affect your business, rather than the macro-trends.
Re: All the oxygen trapped in a bubble
#4Strategically, it makes sense for a programmer to let his / her skills get bid up and use the surplus to store up some dry powder for the next recession. If you stay focused, bubbles are great times to build up your skills and do something real.
Unless you're planning to play the startup lottery by creating a gamified social network for teenaged felines or something, in which case, good luck, and have fun. You can probably still come out ahead in skills and experience.
Re: All the oxygen trapped in a bubble
#5I know the guys at 37Signals are a smart pack, but I don't understand their hangup with Instagram and Pinterest... and apparently FB (esp. their older posts). FB has proven to be able to make $billions of revenue and substantial profit, and is only growing. Isn't that proof that an ad-based model can work if it's large enough?
Instagram was FB's biggest competitor... huge growth and huge adoption amongst young groups of friends. FB was smart to buy them.
Pinterest... I'm less bullish on. I can see how they can make money with affiliate commissions on products and such. But I just don't see Everyone using this. Pinterest at $1.5billion might be over-valued for where it's at. But then again, I don't have privy to their internal numbers (ie., traction, metrics, retention, etc). But, I can see Pinterest be worth a lot in the future, just right now I'm not sure about the $1.5b.
FB, Instagram and maybe Pinterest are amazing companies with crazy traction. They're all riding on the huge distribution channels of our day (web, mobile, social) and have reached or are close to reaching the 100+million users mark (for FB is the 1+billion user mark). Any service that can garner 100s of millions of users can find a way to monetize. How much in monetization is another story, but I wouldn't bet against them to create some substantial value.
Re: All the oxygen trapped in a bubble
#6Worst thing for me is that I actually feel completely out of place actually building my company up last 6 months so I can take on an idea I have, completely self-funded.
Re: All the oxygen trapped in a bubble
#7The issue in my mind is that "all those smart and talented heads" which the article mentions, even if they're aware of the bubble, have no incentive to change directions.
Call me jaded, but I don't think most startups are created with the intention of improving society. So long as there's an Ouroboros effect of VCs funding brilliant engineers without truly revolutionary ideas, those engineers are going to create business models revolving around getting a big enough user base to justify high valuations, and eventual acquisition.
And businesses shouldn't be about exit strategies.
Re: All the oxygen trapped in a bubble
#8I'm finally coming around to thinking that it is starting. About three years ago people were screaming bubble because YC companies were getting $4m or $5m valuations and I wrote the following: "The truth is this: Bubbles don't exist without my aunt's mutual fund getting involved or my next door neighbor getting told to mortgage his house to invest by his financial advisor. Web 1.0 was all about IPOing on the nasdaq a…
Or you can just concentrate on building a sustainable business, and worry about more urgent things that will affect your business, rather than the macro-trends.
But "macro-trends" always affect your business even if you are building a sustainable one. Even if you have no investors, if your clients are suffering, you are suffering. If your clients' clients are suffering, you are suffering. If your clients' clients' clients are suffering, you are suffering.
Re: All the oxygen trapped in a bubble
#9It's a shame that all of that talent is working on things the author doesn't think are worthwhile. I mean, everyone should work on what everyone can agree on is worth their time, right?
Yet, I don't think everybody can really agree on what is worthwhile for a person's time. I can point at people working on things like Linux and Khan Academy and say "Their efforts are worthwhile!" but then Microsoft and that one guy, who bitches about Khan Academy stealing all the VC money or whatever, will wag their fingers and say "They are hurting our business! Their time isn't worthwhile!"
Personally, the efforts DHH has put into basecamp and their products is worthless to me. I don't use the products and see no reason to start. That isn't a diss to the products themselves: I literally have no use for them right now. I freelance and study at college and their suite of products doesn't solve any of my problems.
So, who decides what's worthwhile? There are at least two instances where two groups of people don't all agree the same thing is worthwhile. It's a hard problem and implying "adopt my values so you will work on things I think are worthwhile" isn't going to solve it.
(Also, I agree we are in a bubble. I value economic growth and American strength, not pictures of cats.)
Re: All the oxygen trapped in a bubble
#10If it's a bubble then Facebook's IPO could be the turning point.