Amazing how a post with this title gets to the top of Hacker News in a matter of minutes EVERY TIME
We are in a Bubble
11–20 of 98 posts
Re: We are in a Bubble
#12I am not interested in any of the "we are in a bubble" posts as much as I am interested in "What the fuck will happen when this bubble bursts!" I have been in tech in SV since 1997. I was here for the build, frenzy and pop of the last bubble. In 2001 I had a BBQ at my place - 50 people came and we ate and drank by the pool. Of those 50 - all tech workers - 4 had jobs. I was out of work for 18 months (6 of which I tra…
Of more concern to me is the bursting of valuation bubble for the United States. Currently, people are undervaluing the risk of lending money to it. What happens when they realize its future revenues won't cover all of its commitments?
Re: We are in a Bubble
#13Each incremental company, to some extent, dilutes the values of others. Ask yourself: Are you part of a herd? Is your company doing what the next one is doing, just slicker and faster and with a twist? If the answer is yes, and you're trying to do a startup, then you are part of the bubble that will pop. (In a bad way. Worse still, you may be part of a "reputation bubble" as in the music or fashion industry.) Also as…
For those standing off to the side: Are there an awful lot of startups doing similar looking things?
Yes.
EDIT: It is getting increasingly difficult to see actual technology companies through the haze of consumer internet startups, many of which are indistinguishable "the of " roadkill.
EDIT 2: Not that technology companies are the only ones that can be profitable; but many of the small startups are positioning themselves as technology companies, because they don't have any other conceivable identity.
Re: We are in a Bubble
#14if a developer sells a game for .99 cents and it sells 1.3 million copies, is the company worth a million dollars? No one knows how this "bubble" will go down, there should be more focus on the evolution of Javascript
Re: We are in a Bubble
#15I think the OP is missing the point here, because there is much more than just profits when we talk about valuation. There is sales obviously, but assets too like more materials things (chair, buildings, etc) but also immaterial assets (employee, IP, so on).
On top of that, the whole situation (the when/how/where thing) is also important, like someone said, a glass of water worth much more if Zuckerberg is in the desert, than instagram at that moment...
Valuating a company just with profits (or users) is in my opinion, too simplistic and so undermine a little bit the argument here.
Re: We are in a Bubble
#16I'm getting tired of hearing people claim we're in a bubble, especially when people cite the Instagram deal. Instagram didn't have any revenues? So what. The value of a company is whatever someone is willing to pay for it.
Facebook's killer feature is their photo sharing. Given Instagram's surging popularity and mobile dominance, Zuckerburg saw Instagram as a threat, especially if Instagram fell into the hands of a competitor, like Twitter. So Zuck pulled out FB's wallet and scooped up Instagram.
I've been hearing people say we're in a bubble for at least 2-3 years now, yet venture firms are raising new funds every week. Acquisitions are happening every day, IPO's are ramping up again. Unlike the companies of the DotCom bubble, companies going public today have real business models, with real revenues, and most of them are already profitable. In 2000 there were companies going public that were still trying to figure out what their business model actually was. I guarantee you'd never see that today.
Sure, it may seem like it's easier to raise seed funding nowadays, but that's thanks to all the incubators that have popped up and the funding model pioneered by YC. That doesn't mean we're in a bubble. Angel Investors simply found a way to make seed funding scale in a way that reduces risk.
We're not in a bubble, and no, I have nothing to gain from saying that.
Re: We are in a Bubble
#17I am not interested in any of the "we are in a bubble" posts as much as I am interested in "What the fuck will happen when this bubble bursts!" I have been in tech in SV since 1997. I was here for the build, frenzy and pop of the last bubble. In 2001 I had a BBQ at my place - 50 people came and we ate and drank by the pool. Of those 50 - all tech workers - 4 had jobs. I was out of work for 18 months (6 of which I tra…
> What will it look like
It depends on how much leverage gets into the system before the burst. Witness the difference between the tech and housing bubble bursts: People were buying tech stocks with the 1:1 margin requirements (because dude! tech stocks only go up!) vs housing which were leveraged by the home buyers at 5:1 - 10:1 (because dude! home prices only go up!) and by the hedge funds at 30:1 (because dude! national home prices never go down!)
I haven't heard a lot of people buying GRPN/ZNGA/LNKD on margin yet. FB might well change the tone though.
Re: We are in a Bubble
#18We are seeing growth in online advertising which is driving the perception of a bubble regardless of whether one exists or not.
The "We are in a bubble" argument should be - Ad revenue is capped at a total # of dollars. We have seen various internet businesses take share from magazines, cable broadcasters, billboards which has led to unsustainable growth which will end soon. When it ends people will realize projecting 30%+ growth for website ad revenue is dumb and will lead to massive losses.
The "we are not in a bubble" argument should be: Internet advertising is taking share from other sources and will continue to do so for a long time. Because online advertising allows you to buy products right away or customize ads to individuals, its more efficient. That efficiency makes advertising spending more likely to increase as a percentage of costs for businesses. A combination of those will help fuel continued growth in startups.
Regardless of which you believe or a hybrid version, at some point internet advertising will reach its max and there will be a bubble followed by a crash. I have no idea whether that is happening now or will happen sometime soon or in 20 years.
[edit] it is also possible that it will never happen
Re: We are in a Bubble
#19So long as people are still saying its a bubble, its not a bubble.
Beware of a market so hot that you are a fool not to be part of it.
Re: We are in a Bubble
#20General rule of thumb. If your company has solid revenue or is close to profitability...you will be fine when the bubble bursts. If your company is not even close to profitable...you will need to polish that resume some more. The better option is not to let other people's opinions, abilities and spending habits control your life.