Startup tsunami in silicon valley • Hacker News Board

Re: Startup tsunami in silicon valley

#21

Post by tathastu » Wed, Apr 22, 2015, 9:13 PM UTC

I think it's important to separate out two things -- the startup boom vs the housing boom.

The startup boom in some sense has always been there. There is a bubble-like environment but I don't think it equates to 1999 -- most of the high-value companies are doing fairly well, having either good exits (Whatsapp, Tumblr, Etsy), or raking in decent revenue (AirBnB) or having marketing executives fight over the chance to advertise (Snapchat, Pinterest).

As other folks have pointed out, VC firms have gotten rich and there is money to go around so the amount firms are being offered is a little higher than normal especially for late-stage rounds when it looks fairly sure that the company is on solid ground.

The housing boom on the other hand is simply an effect of not enough housing. Startups aren't the major employer in Silicon Valley. The major employers are Google, Facebook, Apple, Microsoft, LinkedIn etc -- all employing thousands of people, all generating loads of profit and they aren't shutting down anytime soon; nor are they going to relocate anywhere in the near term. These people need places to live, but SV suburbs don't want to authorize extra housing, leading to the spike in prices. Even San Francisco they city has had way lower housing built than a city like Seattle over the last few years, though the demand has been far higher.

The housing boom / bubble will burst if there is a sudden, huge surge of new housing projects; but I doubt it.

Re: Startup tsunami in silicon valley

#22

Post by jtfairbank » Wed, Apr 22, 2015, 9:56 PM UTC

_metamorphosis_ wrote: post #19

dquail wrote: post #7

Earlier quoted context omitted.

There's a perception that raising money is "easy" in the current climate. The reality though is that it's simply not that easy and that there most certainly isn't many founders coasting on beaches. I know a lot of entrepreneurs and founders here in SF/Bay, and every one of them is working much more than 9-5 5 days a week. And none of them got a "free ride" from an investor - but rather went through the slog of buildi…

Frankly, given the number of startups, I too think it must be easy to raise money. May be not from A16Z, YC, LSV or other experienced ones but I see so many new VC firms now days.

Trust me, as a startup founder raising money is never easy.

Re: Startup tsunami in silicon valley

#23

Post by sjg007 » Wed, Apr 22, 2015, 10:25 PM UTC

Balgair wrote: post #10

This is called a bubble. Where a lot of these start-ups are getting their funds is from the Bank of Mom&Dad, regular old credit cards, or they are 'bootstrapping' out of their jobs at places like Starbucks. Not many investors are actually doing this, it just seems like it because most of the people are lying, trying their best not to lie per se , really good at saying their cousin is a big time investor because he ga…

It's Phil's man, not Starbucks.

Re: Startup tsunami in silicon valley

#24

Post by SoBe1 » Thu, Apr 23, 2015, 9:42 PM UTC

I think it's perfectly normal to have so many startups nowadays, the cost of starting one has gone way down and it's a much better environment (but highly competitive) than late 90s to try out an idea. You can slap some code together or get it over the counter/plug&play and rent some cheap server power and you're good to go. The question is how many will be able to make money? US stats say 95% of them fail, but you could have 1% making some serious money, VCs/investors are not dumb to repeat late 90s mistake and they now gamble with smaller bets, pool money & collaborate alot.

You should go out and try out your idea. It's fun but hard work as I'm in middle of one, taking a break writing this :)