All the oxygen trapped in a bubble • Hacker News Board

Re: All the oxygen trapped in a bubble

#21

Post by ForrestN » Thu, May 17, 2012, 4:38 PM UTC

zackzackzack wrote: post #9

It'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,…

I don't think he is arguing that he doesn't like the problems that are being solved. He does mention that he sees the same problems being solved over and over again for more and more money, photo sharing being a timely example.

I don't know if he's right; in general I don't have a solid grasp on how to value companies that aren't making any money.

Re: All the oxygen trapped in a bubble

#22

Post by will_work4tears » Thu, May 17, 2012, 4:38 PM UTC

I don't have anything really substantial to add to this topic, but I find it interesting I have some serious envy for the "talent" that is so in demand.

I went the easy route, chose the web development path in my education, rather than a more math heavy, software engineering direction. I've been slapping myself for years now, but this just rubs salt in my wounds.

Granted, I interview very poorly, am not the most articulate person (stutter and stammer a lot, etc) and I certainly can't at this point in my life up and move to San Francisco, so it is probably not important anyway.

Re: All the oxygen trapped in a bubble

#23

Post by rudiger » Thu, May 17, 2012, 4:39 PM UTC

The chance that granny is going to lose her pension fund is much more related to the actions of the banking and financial industries. Granny is already losing her savings with near-zero interest rates.

Re: All the oxygen trapped in a bubble

#24

Post by pg » Thu, May 17, 2012, 4:39 PM UTC

The pieces of this argument fit together very neatly, but the problem is that they don't correspond to reality. E.g. the cloud about increased VC fundraising. In reality VCs are having a hard time fundraising:

http://nvcaccess.nvca.org/index.php/topics/research-and-tren...

Thus it also isn't true that the cause of higher valuations is that VCs have more money. Valuations are certainly higher, but I think the reason is that founders are increasingly getting the upper hand over investors. Which is why in addition to getting higher valuations, founders are increasingly able to retain board control.

Re: All the oxygen trapped in a bubble

#25

Post by mxfh » Thu, May 17, 2012, 4:40 PM UTC

I was expecting some illustration like this: http://ga.water.usgs.gov/edu/earthhowmuch.html Just with oxygen instead of water.

Re: All the oxygen trapped in a bubble

#26

Post by lincolnq » Thu, May 17, 2012, 4:44 PM UTC

johnbender wrote: post #11

zackzackzack wrote: post #9

It'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,…

I appreciate your relativistic stance, but there's a part of me that wonders if, as an example, Instagram provided a billion dollars worth of additional photo sharing value over what already existed on Facebook. That is, photo sharing does have value to people who want to stay connected and have shared experiences via the internet, but I don't think that Instagram improved that to the tune of a billion dollars.

Counterexample: I was never interested in photo sharing before Instagram. I wasn't a good enough photographer. Now I can make my photos beautiful enough that I want to share them. Is this worth more than a few dollars to me personally? Yes. If I'm at all like a random person, then it's easy to see how Instagram is worth well over a few billion dollars.

Re: All the oxygen trapped in a bubble

#27

Post by spitfire » Thu, May 17, 2012, 4:48 PM UTC

lmm wrote: post #17

dave1619 wrote: post #5

I 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…

They're probably hung up because it's making them look small-time. What do 37Signals actually do, other than generate a steady stream of blog posts for HN? They make some sort of dropbox knockoff, right?

TODO and project management apps for small business. Unfortunately their success has gone to their heads.

Re: All the oxygen trapped in a bubble

#28

Post by zackzackzack » Thu, May 17, 2012, 4:48 PM UTC

potatolicious wrote: post #14

zackzackzack wrote: post #9

It'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,…

> "It's a shame that all of that talent is working on things the author doesn't think are worthwhile." That's an unfair statement - I think more importantly the bubble is making people work on things that they themselves do not believe are worthwhile. You have more and more people entering the market working on things because they think it will flip for ${MAX_INT}, not working on products they genuinely believe peopl…

That can all be brought back to values though. If you value ${MAX_INT} in your bank account, then working on whatever will get you there is worthwhile to you.

Regarding that very last fragment, if you get that money, then somebody is willing to pay for it; not in the "customer-producer" form of exchange but the "buy you out" form.

Re: All the oxygen trapped in a bubble

#29

Post by michaelpinto » Thu, May 17, 2012, 4:48 PM UTC

talent can't get "trapped" by a bubble: if a bubble is really a bubble then it will burst and the talent will become free. in fact if you feel there is a bubble then you should encourage it because over the long term the market will be flooded by talent which will be cheaper.

but something that everyone here has to think about: even if you don't think there is a bubble, the nature of tech is that it is cyclical in nature. this means that sooner or later there will be winners, and those looking for a job. although i dare say that those down cycles are in fact THE best times to start a new business or venture.

i would also say that at this point in time that most of the costs of most startups are talent. years ago this wasn't the case, and one of the things that screwed me over in the original dot.com bust was the fact that my real estate costs tripled in the same space at the high point of the bubble. i also wasted a ton of money on hardware and have bitter memories of owning expensive servers that were destined for eBay.

i should add that deeply respect 37signals, and i've found myself following their model -- but it's not the only model.

Re: All the oxygen trapped in a bubble

#30

Post by ForrestN » Thu, May 17, 2012, 4:51 PM UTC

pg wrote: post #24

The pieces of this argument fit together very neatly, but the problem is that they don't correspond to reality. E.g. the cloud about increased VC fundraising. In reality VCs are having a hard time fundraising: http://nvcaccess.nvca.org/index.php/topics/research-and-tren... Thus it also isn't true that the cause of higher valuations is that VCs have more money. Valuations are certainly higher, but I think the reason i…

Clearly there isn't just one reason, right? Can't all of these factors, and others, be contributing? I don't claim to know who's right, or how to weight the various factors, but big exits certainly do free up capital to be reinvested in more companies, don't they?

I'm curious in a broader sense what you (or anyone else who is experiencing it first hand) makes of the "bubble question." I'm sure it's unlikely but it would be great to have such people on the record with general predictions about the coming months and years.