To me the most convincing part is the bridge to nowhere.
So, just build bridges to somewhere.
Build what people want, and preferably, will pay for.
Even if you build it in a bubble, its still a bridge, somewhere.
All the oxygen trapped in a bubble
41–50 of 124 posts
Re: All the oxygen trapped in a bubble
#42I'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…
It won't last a year with several parallel bubbles (one on the other side of Atlantic, another on the other side of Pacific) imploding.
Re: All the oxygen trapped in a bubble
#43I 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?
They invented Ruby on Rails.
Re: All the oxygen trapped in a bubble
#44The 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 wo…
No, the capital returned to a VC fund after an exit is not reinvested. It's distributed to the LPs. And while yes, strictly speaking, the LPs now have more money to invest than they had before, they are mostly giant endowments, pension funds, and foundations who only have a small fraction of their assets in VC funds, and whose future investment decisions are decided by asset allocation policies and not by recent returns.
The way big exits cause more money to be invested by VCs is not that capital is freed up thereby, but rather that news of them makes more people want to start or invest in VC funds. But that process is much slower.
Re: All the oxygen trapped in a bubble
#45> All those smart and talented heads, and all those benjamins, didn’t progress the economic base in a way we’re going to care about tomorrow. He's talking of Facebook, Instagram, Pinterest, etc. and doesn't have the courage to name then. Is this envy? That DHH's products haven't got this far? Or just naive? Because he should know the typical deal terms of a Pinterest and that valuations and raising are blown up for t…
The benchmark is profits. "Instapintora" might work out well for its founders, but DHH argues that grabbing a ton of users and hoping for the best isn't a good general strategy for building a business. I'd amend that slightly by saying that companies with a huge number of users are valuable, either as eventual cash cows or as strategic acquisitions, but at best following that route is a risky strategy. Sure, you might win the startup lottery, but you probably won't. Actually charging customers with the goal of becoming profitable in the shorter term is a likelier route to success. Even if you don't end up with a cash cow, you still have a good chance at a cash goat—which is still worth milking.
Re: All the oxygen trapped in a bubble
#46I've called the kneejerk "bubble" reactions "boring" [1] and I stand by that. That doesn't mean I disagree (or agree for that matter). It just means that banal perjoratives with nothing to back them up are boring . To call this a bubble, one must first describe what one means by a bubble. A bubble in my mind is a period of rapid growth in valuations followed by a massive devaluation on such a scale that it hinders in…
Thank you for keeping a good perspective on the bubble commentary. I've been impressed with your (always top) comments on threads such as these lately, and it is always good to consider the perspective that you are sharing.
That's all, no discussion, just a thanks from at least me and I'm sure a bunch of other folks that feel the same way. It's to the point now where I see a story like this and mentally wager that you're here, at the top, before I click.
Re: All the oxygen trapped in a bubble
#47I've called the kneejerk "bubble" reactions "boring" [1] and I stand by that. That doesn't mean I disagree (or agree for that matter). It just means that banal perjoratives with nothing to back them up are boring . To call this a bubble, one must first describe what one means by a bubble. A bubble in my mind is a period of rapid growth in valuations followed by a massive devaluation on such a scale that it hinders in…
To call this a bubble, one must first describe what one means by a bubble...Please, I beg of you, if you're going to jump and down and yell "bubble" at least add something to the conversation or back it up with something.
Is there something broken about the hiring market? 37signals might be closer to that than Google.
Re: All the oxygen trapped in a bubble
#48The 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…
Is this really true? seems like the early and late stage guys are doing pretty well raising funds.
- Summit closed 2 funds with a combined 3.2bn in January
- NEA is raising 2.5bn
- AH raised 1.5bn
- General Catalyst is raising around $500m
- Accel has raised Big Data and India funds in the last year
Also from that article: "The dollars raised this year may equal or surpass 2011 levels – but the number of funds managing that capital will almost certainly be less. "
It may be true a lot of follow-on Sand Hill Series B and C guys are struggling, but a lot of them haven't generated returns in forever and should have been out of business years ago. Won't they just get replaced?
And don't founders tend to get the upper hand when capital is easiest to come by and optimism is at its highest?
Re: All the oxygen trapped in a bubble
#49I've called the kneejerk "bubble" reactions "boring" [1] and I stand by that. That doesn't mean I disagree (or agree for that matter). It just means that banal perjoratives with nothing to back them up are boring . To call this a bubble, one must first describe what one means by a bubble. A bubble in my mind is a period of rapid growth in valuations followed by a massive devaluation on such a scale that it hinders in…
To call this a bubble, one must first describe what one means by a bubble...Please, I beg of you, if you're going to jump and down and yell "bubble" at least add something to the conversation or back it up with something. Is there something broken about the hiring market? 37signals might be closer to that than Google.
The only recruiting mail I get aggressively is from startups and Google. That's it. I hear all the time that there is a significant talent shortage, but part of me wonders whether that's a combination of people that don't want to work at Google for whatever reason and developers with families that don't want to bet on a startup.
My colleagues in big iron, however, are much choosier about who they hire.
Re: All the oxygen trapped in a bubble
#50I'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…
It won't last a year with several parallel bubbles (one on the other side of Atlantic, another on the other side of Pacific) imploding.
strong pointers without back up info