Tech bubbles are bursting all over the place • Hacker News Board

Re: Tech bubbles are bursting all over the place

#141

Post by rapfaria » Fri, May 13, 2022, 5:19 PM UTC

izzydata wrote: post #118

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

Over a long enough time frame the stock market and even the whole economy behaves like a pyramid scheme as it is dependent on new generations to be more people than the previous one.

What about life becoming more efficient?

Re: Tech bubbles are bursting all over the place

#142

Post by amelius » Fri, May 13, 2022, 5:22 PM UTC

lumost wrote: post #7

avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

Across every investment class there has been a trend of buyers needing to become more financially irresponsible in order to participate in the market. Need to buy a house? bid 20% more than asking, if you don't - someone else will.. in cash. Need to build a ride-hailing app? prepare to pay people to ride indefinitely. Need to own a growth stock? prepare to pay upwards of 100x multiple on revenue. All around, there ha…

Housing cost is part of how inflation is computed.

Re: Tech bubbles are bursting all over the place

#143

Post by nostromo » Fri, May 13, 2022, 5:22 PM UTC

prohobo wrote: post #21

People said this was the "best time ever to get funding" for a startup. I disagree. In my view, it was the best time ever if you played a particular game and had the right connections. I pitched an idea to a VC, which I had a prototype for, looking for $100k. He liked it but wouldn't fund because I didn't have a solid business plan. Fair enough, I need to find a business partner. But then he told me something about h…

VC is a numbers game. You'll get lots of nos; every seed round gets lots of nos unless you've got a track record of big successes.

Just keep at it. Don't get upset at any particular no. Remember that it's their money and you're not entitled to it.

Re: Tech bubbles are bursting all over the place

#144

Post by s1artibartfast » Fri, May 13, 2022, 5:22 PM UTC

corrral wrote: post #139

s1artibartfast wrote: post #132

Earlier quoted context omitted.

In what market? In the SF bay area 99% of houses appraise, even if they go 50% or $0.5m over asking

Boring Midwestern City that's not even a 3rd-tier tech hub. Other boring Southern city that's also not even a 3rd-tier tech hub. Buyers are having to take on the risk of having to cover any extra over appraisal in cash, consistently, while that used to be rare (and, yes, usually for "I am super invested, emotionally, in getting this particular house" reasons). My unremarkable suburban house in a boring city that's be…

I think Inflation scares are a big part of it - at least it was for me.

If inflation is 8.5% and a mortgage is 3%, the bank is paying me to buy a more expensive house.

At the same time, If I hold and wait to buy, my savings are evaporating while the price goes higher.

Re: Tech bubbles are bursting all over the place

#145

Post by PeterCorless » Fri, May 13, 2022, 5:23 PM UTC

conductr wrote: post #96

avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

Tangential. But I work in corporate finance. I'm generally privy to a large amount of information about the companies I work for. If there's something I don't know, I ask for it and people share because of my role. If I'm interviewing, we discuss a lot more than most people would about the health of the company that I would be joining. It's normal. That said. I'm obviously heavily biased but I have realized MOST non-…

I may be unusual but I've always found it prudent to ask my CEO about things like rate of corporate growth, funding and customer revenue generation, M&A, etc.

Because if I am a vesting or fully-vested employee, then that's my own future at stake. The 401(k) can be dwarfed by many times by a successful stock worth millions, or, in a badly run or positioned company, the stock could be worthless underwater paper shares and I become dependent exclusively on the 401(k) for my sunset days.

The financial literacy of many workers is low though. They don't understand what options are or what it means to really be a shareholder.

When I was at Cisco — I'm talking in the 1990s — we used to describe what we called "stockholder angry." This was when a fully-vested employee heard a VP or above talking about some idea so stupid it would literally cost the company a penny per share or more. That's when the old dogs would get "stockholder angry" and propose alternatives, or ask people to stop ideas that were retrograde for the sake of the company's valuation. Because we knew what a penny per share meant to each of us.

I believe it is valuable for employees at all levels to be able to know the state of their company's health, and then, with an informed mind, be able to voice their opinion on the fate of their organizations.

Re: Tech bubbles are bursting all over the place

#146

Post by ditonal » Fri, May 13, 2022, 5:24 PM UTC

blagie wrote: post #112

MAGZine wrote: post #93

Earlier quoted context omitted.

It depends on the stage of the startup, but the books should probably be open to people who have made it to the offer stage until at least series b. if they're not, I'd be worried about the financials, the culture, or both. Refusing to disclose the number of outstanding shares is a huge red flag.

It's a huge red flag, and it's a hugely common red flag. A startup was peeved I valued their equity at zero when they wouldn't share. I got strong hints my equity was worth at least $100k in extra annual salary, but they wouldn't budge on disclosing anything I could hold them accountable to. I think they were being honest, but I didn't take the job. I did take a previous job like that, and when the company sold, we w…

The reason for the opacity is obvious, they want you to think the equity is worth more than it is.

People constantly assume good faith in these things when they shouldn’t.

Obviously number of outstanding shares is a bare minimum, but things like cash reserves and cash flow should also be shared but they don’t want to share that information, often times because it’s not good, they just wasn’t people who believe in the “mission” or that it’s a rocketship or whatever.

The secondary reason is that there are still too many naive engineers who assume good faith, drink the startup koolaid, and take these offers . Sometimes even declining public RSU grants to do so. One company out of ten thousand have ISOs that are worth anything but those are the only company in the headlines so the mystique continues.

The only solution is education. ISO (Incentive Stock Options) are one of the biggest scams of all time and you’re financially illiterate if you value them more than zero. They are carefully designed by venture capitalists to screw employees. NFTs of monkey pictures are infinitely stronger financial assets than startup ISO - I mean, as least the monkey jpegs have liquidity and volume, and no liquidation preference coded in to screw you over.

Re: Tech bubbles are bursting all over the place

#147

Post by brobinson » Fri, May 13, 2022, 5:25 PM UTC

immigrantheart wrote: post #59

I almost got offer from DoorDash, with obviously RSU as one of the compensation. Eventually didn't get the offer because they said I didn't pass leadership interview. Apparently I was interviewing at one level above I thought I was interviewing (the recruiter messed up). Anyway, I accepted an offer from a hedge fund, comparatively similar, but all cash. Now I feel that I am glad I accepted the hedge fund offer. I don…

Same as any other time... build an intra-sector long/short beta-hedged portfolio with minimal net exposure. Overall market and sector movements don't affect this. You can do cross-sector trades for even more profit at the cost of assuming sector risk.

Re: Tech bubbles are bursting all over the place

#148

Post by s1artibartfast » Fri, May 13, 2022, 5:26 PM UTC

bombcar wrote: post #90

vkou wrote: post #78

Earlier quoted context omitted.

It's not irresponsible to bid 20% over asking. Asking is deliberately underpriced, because it is excellent advertising in a hot RE market. It's irresponsible to bid 20% over what the house is worth (which has nothing to do with asking price), just because you got emotionally attached to the house, and started a bidding war with another person emotionally attached to the house.

Which is exactly what the "ask below" is trying to get you to do; you act differently (emotionally) in a bidding war than in a price negotiation.

I don't think it has to be emotional at all.

There is what the house is worth to the seller, and what it is worth to the buyer, and the sale price is always somewhere in between.

It is just taking advantage of an information asymmetry to get the sale price closer to what it is worth to the buyer.

Re: Tech bubbles are bursting all over the place

#149

Post by aoms » Fri, May 13, 2022, 5:26 PM UTC

avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

I often wonder how many of these startups even exist. How they ever get any funds to keep a run rate.. very puzzling but interesting non the less

Re: Tech bubbles are bursting all over the place

#150

Post by matwood » Fri, May 13, 2022, 5:26 PM UTC

MAGZine wrote: post #16

avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

the fact that you stopped to ask those questions makes me think that you're at minimum, an above average developer. caring about the business and its fundamentals is important beyond just slinging code.

> an above average developer

I'm average and have always asked these questions :) When I got my CS undergrad I almost had a minor in business, so that side has been an interest from the start.

How the company is doing, what is their core business, and how will my position fit in that business have always been key questions for me when interviewing a company.