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

theatlantic.com

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

#51

Post by jschwartzi »

chubot wrote: post #45
lotsofpulp wrote: post #25

Earlier quoted context omitted.

Why hotel businesses? There are many different hotel brands to choose from, pricing is transparent, photos/reviews are available on many websites, customer service at the chains take care of complaints pretty well, and there has been a ton of new hotel room supply added.

I started staying in AirBNB's around 2013 because I could get a kitchen, e.g. for a week-long stay. I like drinking water and not eating out 2-3 times a day, every day, for a week! I was staying by myself, but I've heard from traveling families that hotels are a big hassle for them because they lack a kitchen. Imagine feeding a couple kids while staying for a week. That cost will really add up if you're eating out 3…

The last AirBnb I stayed in was sparkling clean and totally infested with cockroaches. And they had the nerve to tell me they couldn't get me a full refund, and that I should be used to staying in lower-end places. In the end my fiance and I had to book a hotel anyway, at great inconvenience to ourselves and with no guarantee from AirBnb that they would refund anything. That was way more inconvenient than not having a kitchen for a few days.

So the flip side of it is that you're rolling the dice and AirBnb doesn't actually have a way to guarantee anything for you the way a hotel would.

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

#52

Post by ghaff »

jschwartzi wrote: post #47
firasd wrote: post #9

Earlier quoted context omitted.

I think the word 'subsidy' is kinda questionable here. (This writer's previous article used the same word to discover many companies[1]) If a company is not losing money on gross margins--if they are losing money in total 'unit economics' because the customer acquisition cost is high--does it really mean they are subsidizing usage? An example is Casper, the mattress company. They are still selling mattresses to consu…

Casper is an interesting example to me because I've learned not to buy durable goods from companies that aren't solvent. If Casper went belly up next year, there's nobody providing any warranty for your mattress. And if it's discovered that the mattress is dangerous to sleep on because of contamination during the cheap manufacturing process, good luck getting anyone to recall it and replace it with something safe.

I'd worry less about a product like Casper's than a lot of other products that you expect will need repair/supplies/etc. at some point. Sure it's possible that some gross defect will be discovered in Casper mattresses in a couple years. But it's not like there isn't lots of other furniture that turns out to not be well made. And good luck getting refunds on that after 2 or 3 years in many/most cases.

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

#53

Post by ethbro »

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 South Park gnome episode comes to mind. For values of:

1 - Demonstrate growth

2 - ?

3 - Profit

https://en.m.wikipedia.org/wiki/Gnomes_(South_Park)#/media/F...

Who knew it was a billion dollar business model?

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

#54

Post by lordleft »

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 away anytime soon - that people still use .NET and other technologies because the enterprise endures, and companies like Microsoft are continually investing in their tooling. This article reminded me that sometimes unsexy technology powers the world, and if you can bring value and or mastery of that technology you can greatly benefit.

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

#55

Post by hurrdurr2 »

easytiger wrote: post #12
puranjay wrote: post #7

It's an incredible mix of hubris (on the startup's part) and delusion (on the investors part) to call some of these "tech companies". Like WeWork. It's a real estate company that should be valued like a real estate company. But somehow everyone concurred that it is, indeed, a tech company. How or why, no one bothered to ask.

To be more specific it's a real estate company, that started out with a low asset ownership position. Then it got into the asset game leveraging their revenue, but mostly leveraging some meaningless sociological/technological gibberish to skewer an investor. I think this speaks to the state of the kind of people making decisions about things they don't even try to understand.

This is what amazes me; that there are so many supposedly intelligent individuals throwing money at shitty ideas.

Google investing in Juicero comes to mind.

It's like any semblance of due diligence is just an afterthought.

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

#56

Post by oldmanhorton »

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…

Dont forget that even if C# feels old and stodgy, F# gives a very fresh and "cool" experience on top of .NET

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

#57

Post by semiotagonal »

cptskippy wrote: post #13
muglug wrote: post #4

The obvious counter-example to this is Slack, a "pure-tech" company whose value has halved since IPO, and there's a similar story with Snapchat (though its value has recovered somewhat in the past year).

I don't think Slack counts, Slack's IPO was just a cash out because they saw the writing on the wall.

Slack's stock price chart has a "down and to the right" appearance.

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

#60

Post by wbronitsky »

rossdavidh wrote: post #37
wbronitsky wrote: post #34

Earlier quoted context omitted.

I don’t understand this argument at all; it seems to be only buzzwords. What is the relation of the gig economy to a cloud hosting service, other than most gig economy apps are built on cloud servers? Also, how does looking at the problem this way enlighten us?

I think the idea is that a cloud company is primarily renting hardware. Therefore, it doesn't scale like a software company; as its number of customers goes up, its number of employees and amount of capital equipment has to go up as well. This would mean it should not have a multiple like a pure-play software company, where the costs go up little if any as the number of customers goes up, because almost all of the so…

I assume you mean that these companies are in the business of renting hardware, not that they themselves rent the hardware they are using.

I believe the virtualization they are offering allows the service to scale a bit more like software, but I do agree that these cloud providers don’t have 0 marginal cost.

Either way, thank you for de-buzzwording the original argument. It makes much more sense in English

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