Winter Is Probably Coming Soon
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Winter Is Probably Coming Soon
1–10 of 75 posts
Re: Winter Is Probably Coming Soon
#2Winter is always coming. Gurley's analysis is spot on but it really talks about VC money not "real" money. Something not enough startups internalize has always been how "expensive" it is to use the dollars you get from investors to fund operations.
Re: Winter Is Probably Coming Soon
#3Will any of the bootcamps survive, do you think? It seems unlikely given the stories I've read here, lsc hiring a former coworker (his technical superior) out of a sandwich shop, or tptacek having to move from San Francisco to Ann Arbor because there were no jobs going in San Francisco for someone who co-founded a large ISP and had lots of security publications.
I'm sure it'll be bad enough in the US but I pity the graduates of General Assembly London or the Berlin bootcamp.
Re: Winter Is Probably Coming Soon
#4I somehow hope it's gonna happen sooner than later, just because that way it could hurt a little less.
What's not clear here is that the impact on global economy will be not that big.
Anyway, if they're called venture capitalists, shouldn't they be able to look forward a little better than the market? That way they know what will happen if they keep going on like this. A quick deflation of the bubble, with some notable victims, would be better than a complete burst. Especially for VCs
Re: Winter Is Probably Coming Soon
#5Nice link baity title. I thought this was about the new Game of Thrones book being released soon.
Re: Winter Is Probably Coming Soon
#6Nice link baity title. I thought this was about the new Game of Thrones book being released soon.
Heh, I can see where the confusion would stem.
Somehow though, maybe because this came a day or two after Suster's response to the Gurley interivew, I had a good idea going into it that the post had something to do with the impending VC crunch.
Re: Winter Is Probably Coming Soon
#7I hope so. Currently, VC money is a horrible market distortion that encourages what is basically dumping - companies with good products and actual business models being starved of oxygen by cashed-up competitors who simply give products away for free. I'm not even sure of the economic term for it but wouldn't be surprised if it's illegal in a few years, after we've gotten more sophisticated.
Re: Winter Is Probably Coming Soon
#8I don't think there is an overall tech bubble like 1999, but there may indeed be smaller scale bubbles in overheated or overhyped sectors.
There are two areas of worry from what I see. One is free apps and services with high burn and no good path to revenue. Another is what looks to me like a mini-bubble in startups that cater to other startups. Scene-centric inbreeding like that is probably more worrisome than the overvalued pic sharing services.
Re: Winter Is Probably Coming Soon
#9I hope so. Currently, VC money is a horrible market distortion that encourages what is basically dumping - companies with good products and actual business models being starved of oxygen by cashed-up competitors who simply give products away for free. I'm not even sure of the economic term for it but wouldn't be surprised if it's illegal in a few years, after we've gotten more sophisticated.
A related argument had been made a lot lately about how "free" can lead to scummy business models like surveillance and manipulative black hat media tactics.
You can do free sustainably if your costs are low and if you have something a tier up you can sell. That's freemium and it can work for some things. But if your costs are high or if a paid tier does not materialize... Now you have a big problem. You own a liability, one purchased via massive investment and employing many people. You must find a way to make it pay, so you start looking at what you have a little differently. Your users... Now there's a product.
South Park parodied the grow-first-monetize-later gambit in the "underpants gnomes" episode:
1) collect underpants
2) ...?
3) profit!
Nobody knew the second step back then. Of course now companies like Facebook have shown us what step two is. It's:
2) sniff underpants
:)
Re: Winter Is Probably Coming Soon
#10I feel like we've heard this before:
2008: http://techcrunch.com/2008/10/10/sequoia-capitals-56-slide-p...
2011: http://www.startuplessonslearned.com/2011/08/winter-is-comin...
And it makes me think of 2 things:
1. "the market can remain irrational longer than you can remain solvent."
2. The way large companies use layoffs not to actually cut the total number of jobs, but to cut deadwood. This seems like the VC equivalent.