Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

All the oxygen trapped in a bubble

37signals.com

Post reply on HN
Print view View original

61–70 of 124 posts

Re: All the oxygen trapped in a bubble

#61

Post by billybob »

edwinnathaniel wrote: post #36
izak30 wrote: post #15

Earlier quoted context omitted.

Agree or not, that's what DHH is saying here. It's harder for sustainable businesses to hire talent, when talent is getting paid more at places with enormous valuations. This of course falls down if the large valuation and the large pay are justified by things like large revenues, or value to those with large revenues.

Sometimes I just wonder: what "talent" are you guys talking about? It's almost as if there exist a group of fresh-grads who just completed their CS degree but can magically write a better compression engine or a revolutionary protocol that is better than TCP.

Why does "talent" have to mean "incredible geniuses"?

Lots of companies need programmers who are "pretty good," whatever that means to you.

Re: All the oxygen trapped in a bubble

#62

Post by klenwell »

cletus wrote: post #35

I'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…

One common factor with the dotcom and then the housing bubble was the democratization of access to previously restricted forms of economic behavior. They both liberalized of credit and investing. Day trading and online brokers that emerged with the dotcom bubble helped fuel the investment that drove it. Subprime lending and the mad financial engineering that supported it made a home mortgage available to almost anyone. Both innovations facilitated a lot of shadiness.

The other morning I caught a segment on CNBC talking about some financial company that wanted to make startups more accessible to ordinary investors. That's already a reality to some extent, at the grassroots level, with kickstarter. These seem like the sort of innovations that would again liberate a lot investment and speculation.

They're sort of unrelated to the Groupon and Facebook IPOs -- those IPOs don't have anything to do with them. And yet at the same time they are trends that draw momentum from the buzz surrounding Groupon and Facebook.

I keep looking for the next bubble, more as a casual student of human nature than any sort of financial whiz. McIPOs for the masses seems like it could deliver on that promise.

But I agree that we aren't necessarily there yet.

Re: All the oxygen trapped in a bubble

#63

Post by joering2 »

cletus wrote: post #35

I'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…

Good post, thank you. Now:

> Pinterest: [...]

- how do you see them dealing with copyrights of content? I don't think they will make much of profit if are willing to share $ with photography owners. The majority of value in Pinterest's user experience is that its fresh and content is created (pinned) by other users, NOT by corporations. The moment you will see every other picture a picture of an Ikea Kettle (or desk, or anything else thats been uploaded as "promoted pin") that resembles in color, shape, etc to what you were looking for, entire experience will loose its cool and Pinterest will start to stink!

> Youtube: [...]

- this was a huge gamble from many perspectives and owners had amazing amount of luck. Due to copyright issues, some board members were pressed very hard to vote with for a buy, but were strongly against (sorry I cannot back this up, but I read it somewhere couple years ago). Further, Viacom shoot itself in the foot by uploading their own material, but during discovery it clearly came up that owners knew about copyright infringement (duh!) and were willing to "slow down" with taking content down to gain more attraction. Clearly, in # of users AND eventual exit, they benefit in huge way off of Viacom content. Again, they were extremely lucky and in the light of recent Kim DotCom case, even more lucky Mashable is not interviewing them in a jail cell. But AFAIK some court cases Goog vs Viacom are still pending. As of whether it will turn out to be a huge success, I think we still need to wait. People are social today like never before. Instagram you mentioned was bought because FB was afraid of its growing userbase. As we both know, YouTube is only a little bit social -- not as social as comparing Instagram to Flickr, for example. If the userbase of the next thing (video) of sites like viddly will keep growing, and at some point owners will tell Google "fuck off, we ain't selling!", I say YouTube will be screwed. Also, if you look even further in the future, it obviously won't be as cool as today, or 3 years ago. Its like with Caddilac - they are building amazing cars for 110 years now, but if you ask your son: do you want Caddilac or Honda, guess what he will say.

Re: All the oxygen trapped in a bubble

#64

Post by johnbender »

lincolnq wrote: post #26
johnbender wrote: post #11

Earlier quoted context omitted.

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.

Given the context of the article I think the argument can be made that: even _if_ people are willing to pay a couple dollars and in aggregate a billion dollars it doesn't mean that the money is being well spent or that the product actually provides value.

Thought at that point I think we're dipping into issues of free market and a consumer driven bubble.

Either way, your point is well taken.

Re: All the oxygen trapped in a bubble

#65

Post by pg »

richcollins wrote: post #31
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…

Where is the money that's driving increased developer/designer demand coming from?

I don't think investor money is the main driver of increased demand for hackers. The biggest sources of demand are the big companies, like Google and Facebook, and they're paying the hackers' salaries out of revenues.

Re: All the oxygen trapped in a bubble

#66

Post by tferris »

mhartl wrote: post #45
tferris wrote: post #12

> 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 migh…

> ... grabbing a ton of users and hoping for the best isn't a good general strategy for building a business.

Everyone has their own way and why do people judge about others? Some grab a ton of users and hoping for the best and others write online tutorials for aged technologies. Let people just do what they like and appreciate if they are successful (grabbing a ton of users is as hard as it is to write good online tutorials).

Re: All the oxygen trapped in a bubble

#67

Post by mcguire »

edwinnathaniel wrote: post #36
izak30 wrote: post #15

Earlier quoted context omitted.

Agree or not, that's what DHH is saying here. It's harder for sustainable businesses to hire talent, when talent is getting paid more at places with enormous valuations. This of course falls down if the large valuation and the large pay are justified by things like large revenues, or value to those with large revenues.

Sometimes I just wonder: what "talent" are you guys talking about? It's almost as if there exist a group of fresh-grads who just completed their CS degree but can magically write a better compression engine or a revolutionary protocol that is better than TCP.

What is this "completed their CS degree" stuff you're talking? That's ancient school.

Re: All the oxygen trapped in a bubble

#68

Post by potatolicious »

ahlatimer wrote: post #51
potatolicious wrote: post #14

Earlier quoted context omitted.

> "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…

> 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 people want, or will pay for. Do you have any actual examples of this happening? I'm not saying there aren't people starting companies because they want to get rich, but I don't think it's happening in the droves that people make it seem like it is. I'm a…

> "Do you have any actual examples of this happening?"

As a guy who hangs out at a number of SF-area meetups and startup events (free booze and food? count me in) I have met many startup employees and founders who freely admit to this.

For the most part people are interested in the work they're doing (big scalability issues, big data problems, etc), but many people are in it for the money (either ludicrous SV salaries or the hope of a massive flip) and don't genuinely believe in what their product does.

I think this is the attitude OP was railing against, and I'm inclined to agree. There are some damn smart cookies in this town, most of whom are incredibly well paid and mobile - to work on something you don't believe in... that seems incredibly wasteful.

Re: All the oxygen trapped in a bubble

#69

Post by mbesto »

cletus wrote: post #35

I'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…

> he subprime collapse was a bubble.

No, that was a bubble bursting. The act of excessive lending was the bubble.

Bubbles are only boring until they pop. But they are interesting to identify because we know they do pop eventually. I think the general argument is that people are trying to head warning to those who are less fortunate about seeing the bubble begin to pop. If we all (and we don't) agree there is a bubble than who in their right mind puts a value on such a bubble'd finance valuation. Well, that's easy, the ones who seek to gain the most benefit from it. The ones who are manipulated (i.e. pensions, 401k, etc.) are the ones who get screwed and unfortunately that ends up being the less fortunate.

Re: All the oxygen trapped in a bubble

#70

Post by waratuman »

Inflation isn't an increase in demand that leads to higher cost. Inflation is a general increase in supply. A rise in prices is not the same as inflation. Inflation will eventually cause a rise in prices but it is not the only reason for an increase in prices.
Post reply on HN