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

Today’s correction isn’t much like the dot-com bubble

theatlantic.com

Post reply on HN
Print view View original

101–110 of 156 posts

Re: Today’s correction isn’t much like the dot-com bubble

#101

Post by megaremote »

GhettoMaestro wrote: post #75
code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

I never understood the "grow fast at any cost" mentality. If you can't make your shit break-even or near-profitable at small scale, there is a big chance you will not be able to make it work at large scale.

Like Youtube, which lost money every year until it was bought by Google. Or Instagram? Or a variety of others.

You don't understand why people want to copy those models of growths and get those big payouts? Which part confuses you?

Re: Today’s correction isn’t much like the dot-com bubble

#102

Post by TheSpiceIsLife »

code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

The whole point of fast growing startups with ever-increasing valuations is to enable early investors to cash out at huge multiples.

Everything else is a side show.

Re: Today’s correction isn’t much like the dot-com bubble

#103

Post by Retric »

sfilipov wrote: post #61
jeremydeanlakey wrote: post #48

One perspective that I gained much later than I should have: Suppose you have a small software company, Reinvest Software with big margins and lots of opportunities to expand. You can take home that profit and pay taxes. Or you can invest in growth. That investment in growth is an investment in intangible assets with insanely good tax treatment. But it looks bad on the financial statements. Suppose an investor, Smart…

What are good examples of Reinvest Software? My guess would be Amazon, but what others?

Facebook was a good example. They avoided excessive advertising in their growth phase, effectively spending potential profit for a huge user base. Critically, the profit was intangible as was the investment as the IRS does not care about money you never collected or the number of users you have only cash.

YouTube is another, as far as we can tell it’s currently extremely profitable yet people looking at their financials where laughing at the sale price when Google Snatched it up. Part of this is from ever more advertising coupled with ever lower bandwidth costs.

Re: Today’s correction isn’t much like the dot-com bubble

#104

Post by saberience »

lordleft wrote: post #54

Something I've been wrestling with is the perceived 'unsexiness' of certain technologies, like C#. When I joined this industry, I thought that anything that wasn't powered by Rust or Python or Haskell was irredeemable, that C# was a dinosaur not long for this world, and that tech unicorns would be set the tone of our industry going forward. Now that I'm a bit older I've begun to see that something like C# isn't going…

I'm reading this comment thinking about how wrong you could possibly be, or maybe how out of touch you are with C#, .Net, and how its perceived.

C# and .Net Core are miles away from unsexy, enterprise technologies. Microsoft has been doing an amazing job on the C# language in recent years, open-sourcing everything, making .Net Core run on every platform, being totally open about future updates, and pushing the .Net core framework to be more performant than about every other language other than C++, C, and Rust.

I work for a 2B valuation "startup" and we are fully .net core, all running in orchestrated Docker clusters and I perceive that choice as one of the reasons behind our success. The tooling and libraries, documentation, performance, etc, are in my opinion ahead of any other languages we could use: e.g. Java, Python, Haskell etc.

Re: Today’s correction isn’t much like the dot-com bubble

#105

Post by SpicyLemonZest »

jjeaff wrote: post #92
SpicyLemonZest wrote: post #62

Earlier quoted context omitted.

I think calling Juicero a shitty idea is too strong. It didn't end up working, and probably it was knowable in advance that it wouldn't, but the difference between early-stage Juicero and early-stage Keurig is smaller than most people gave it credit for. There's a strong and robust market (at least in the SF Bay Area) for weird expensive juices.

I agree, fresh juice on demand is a good idea (besides the fact that the amount of sugar is usually terrible for you). But they had to have found out very early on with Juicero that squeezing the packets by hand basically produced as much juice as their expensive machine.

They did. As the Bloomberg article mentioned^, Juicero plus at least some of their investors knew, and multiple investors felt that the product Juicero delivered didn't live up to what they were pitched. (Note that Juicero didn't get any new funding between their initial launch and going out of business.)

^ https://www.bloomberg.com/news/features/2017-04-19/silicon-v...

Re: Today’s correction isn’t much like the dot-com bubble

#107

Post by p1necone »

rubicon33 wrote: post #66
code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

That's not an uncommon nor unheard of tactic in business. Fuel growth, and capture the market for your brand, by selling at a loss. The trick is always the transition to profitability. Generally, this comes through layoffs and maybe price increases.

Imo this should be illegal. Taking a loss undercutting smaller competitors in a way that's only possible because you have piles of money unrelated to your actual business is going to distort the market in a way that's really bad for consumers in the long run.

Anecdotally I noticed this with Pita Pit in New Zealand. There used to be lots of independent pita places that had decent pricing, then pita pit started buying them out and replacing them with pita pit chains, while still competing on price relatively well. But as soon as they'd bought out all the competitors in the area they immediately almost doubled their prices.

Re: Today’s correction isn’t much like the dot-com bubble

#108

Post by hammock »

p1necone wrote: post #107
rubicon33 wrote: post #66

Earlier quoted context omitted.

That's not an uncommon nor unheard of tactic in business. Fuel growth, and capture the market for your brand, by selling at a loss. The trick is always the transition to profitability. Generally, this comes through layoffs and maybe price increases.

Imo this should be illegal. Taking a loss undercutting smaller competitors in a way that's only possible because you have piles of money unrelated to your actual business is going to distort the market in a way that's really bad for consumers in the long run. Anecdotally I noticed this with Pita Pit in New Zealand. There used to be lots of independent pita places that had decent pricing, then pita pit started buying…

What you describe is illegal in certain manifestations. It's called predatory pricing.

Re: Today’s correction isn’t much like the dot-com bubble

#109

Post by hammock »

code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

> if I sell $2 for $1 that’s a false market

You're assuming that there is some objective value of a dollar, and that all dollars are worth that same. These assumptions are not necessarily true. Rather, they are myths that are propping up the current system.

Re: Today’s correction isn’t much like the dot-com bubble

#110

Post by Spooky23 »

GhettoMaestro wrote: post #75
code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

I never understood the "grow fast at any cost" mentality. If you can't make your shit break-even or near-profitable at small scale, there is a big chance you will not be able to make it work at large scale.

It works out often enough that it’s worth investing in. The WeWork thing is a great example — if they could dominate commercial real estate, that would be nearly unlimited upside.
Post reply on HN