31–40 of 64 posts
I do believe a significantly higher proportion of companies today are doing exactly that, and are quite focused on it, whereas they were not in 1999. That's a general and very un-scientific argument for why this bubble (which it still surely is) is not as bad.
I have a hard time even reading any of these pieces where a VC is complaining about high burn rates / valuations all while continuing to invest. "Because my competition will continue to invest" is not a good reason. You don't see Warren Buffet investing at valuations he believes are untenable, just because the market happens to be up.
On a macro level, a likely hypothesis for this trend is that there is nothing better to invest in than tech. But tech isn't moving fast enough (value is hard to create, not in a gold rush period), so we try to translate money into growth much more. Because otherwise that money's just sitting around! In an ideal world that money might somehow be invested in long-term societal growth than can yield high tech growth in…
I think folks are missing a bigger part of the macro picture: It is not just tech. Low interest rates and easy monetary policy have inflated many types of assets.
By way of example, this is currently headlining on Yahoo Finance: http://finance.yahoo.com/news/some-powerful-voices-add-to-fe...
Earlier quoted context omitted.
I think point (4) is the key here. The original bubble happened on the public exchanges with public money. The "IPO" was the big deal that everyone wanted to get in on after Netscape, et al valuations went crazy. Institutional investors were investing people's retirement accounts into companies they didn't understand. When that finally fell over, the impact was felt across the economy because it involved everybody's…
> This time the money is largely coming from private equity and there's not a lot of splashy IPOs happening. This is an amusing statement in light of the fact that the largest IPO in history (Alibaba) took place last week.
Anyway, the VC bubble will not pop alone. It'll take stocks with it (or the other way around), and people will suffer worldwide again.
An interesting twist in the current incarnation is this story is how big "private" money is taking risks on the tech sector. Overall, I don't really find this story convincing for a few of reasons, though I suppose there is plenty of room for disagreement. (1)T he first boom actually did get a lot right. The PC-internet revolutions was intense and did create a lot of new value. The mistake was treating it like a land…
Even small start ups should continue to do ok -- the hardware overhead for early stage stuff now is so cheap it is nearly free. Models that require huge scale before the revenue comes in could be a problem. I self-funded so my opinion is likely wrong, but it seems like a lot of the excess money is going to questionable things in addition to paid growth (no clue how much Uber, Lyft, and others are spending, Groupon ce…
An interesting twist in the current incarnation is this story is how big "private" money is taking risks on the tech sector. Overall, I don't really find this story convincing for a few of reasons, though I suppose there is plenty of room for disagreement. (1)T he first boom actually did get a lot right. The PC-internet revolutions was intense and did create a lot of new value. The mistake was treating it like a land…
I think point (4) is the key here. The original bubble happened on the public exchanges with public money. The "IPO" was the big deal that everyone wanted to get in on after Netscape, et al valuations went crazy. Institutional investors were investing people's retirement accounts into companies they didn't understand. When that finally fell over, the impact was felt across the economy because it involved everybody's…
Definitely. The hiring market in our industry is _on fire_ right now, we are treated well, paid fairly, etc. When the hard times come, it might be a little less cushy to be an engineer/data scientist.
Earlier quoted context omitted.
I think point (4) is the key here. The original bubble happened on the public exchanges with public money. The "IPO" was the big deal that everyone wanted to get in on after Netscape, et al valuations went crazy. Institutional investors were investing people's retirement accounts into companies they didn't understand. When that finally fell over, the impact was felt across the economy because it involved everybody's…
> This time the money is largely coming from private equity and there's not a lot of splashy IPOs happening. This is an amusing statement in light of the fact that the largest IPO in history (Alibaba) took place last week.
Alibaba has a PE ratio one tenth of amazon - and is already a profitable company. This is the exact opposite of what a bubble is.
This is not at all like the kind of IPOs leading to the 2000 crash.
An interesting twist in the current incarnation is this story is how big "private" money is taking risks on the tech sector. Overall, I don't really find this story convincing for a few of reasons, though I suppose there is plenty of room for disagreement. (1)T he first boom actually did get a lot right. The PC-internet revolutions was intense and did create a lot of new value. The mistake was treating it like a land…
The whole dot-com thing in 99 was pretty much a pyramid scheme, where the first players showed there was promise, then when everyone rushed in with their VC money to spend, they looked solid. When the leaf nodes ran out of VC money though, everything dried up. And that hit not just Yahoo, but software/hardware vendors, and just about everyone else.
What could be dangerous now, is how much of Google's and/or Facebook's money is advertisers who are selling goods/services, or Advertisers wanting traffic for their ads.
Facebook seems to have a lot of ads from Answers.com, which is ad driven itself. Pretty much every mobile ad I get is an add for either Google or a different mobile product. I would say the whole 'freemium' game thing has put a lucrative revenue model to those eyeballs, but how much of that is a fad?
If those advertisers disappear, how badly will Facebook's revenue or Google's mobile revenue be affected?
An interesting twist in the current incarnation is this story is how big "private" money is taking risks on the tech sector. Overall, I don't really find this story convincing for a few of reasons, though I suppose there is plenty of room for disagreement. (1)T he first boom actually did get a lot right. The PC-internet revolutions was intense and did create a lot of new value. The mistake was treating it like a land…
> Private money doesn't (I hope) break the economy in the same way that public money can. If VCs go bust there are ramifications, but these markets are not that liquid. There aren't margin calls going off and forcing fire sales. Too many people trying to compare today's bubble to the first bubble are making the mistake of assuming that it's being led by tech. It isn't. The current "tech bubble" is just one of multipl…
This is interesting. Could you elaborate on some of the other sub-bubbles? Not being facetious, am really curious.
I have a hard time even reading any of these pieces where a VC is complaining about high burn rates / valuations all while continuing to invest. "Because my competition will continue to invest" is not a good reason. You don't see Warren Buffet investing at valuations he believes are untenable, just because the market happens to be up.
Sure it is. VCs aren't the money guys, they just invest the funds of the money guys. Not investing really isn't an option for them.
But they have a conflict of interest because unless they invest, they don't get paid.