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Dizzying Ride May Be Ending for Startups

nytimes.com

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Re: Dizzying Ride May Be Ending for Startups

#71

Post by jacquesm »

ocdtrekkie wrote: post #49
bryanlarsen wrote: post #16

Earlier quoted context omitted.

And some of those articles were from 1998 . It can take a long time for a bubble to burst. I remember hearing about the housing bubble in 2001. It even made the front cover of the Economist in 2005. As Keanes said "The market can stay irrational for longer than you can stay solvent".

Exactly. When I say things that seem outrageous, and get downvoted or called out, like claiming Google is past it's peak, I'm aware it may take a couple years for public opinion or actual monetary figures to catch up. I called the antitrust investigations around Android which have been opening up this year, a couple years ago. People are quick to downvote and say you're crazy, but often, you're just early. And it can…

I have a watch in my drawer that's exactly right twice every day.

Re: Dizzying Ride May Be Ending for Startups

#73

Post by debacle »

andy_ppp wrote: post #56

I actually think the opposite, that we are in a period of history where all the software (and arguably businesses) people use day to day go from being crap to fantastic. A gold rush for good startups I think. The returns from sitting the right group of people in a room and getting them to make doing something a few orders of magnitude better than it was before is always going to be fantastic.

Modern capitalism has a strong basis on theories of social darwinism; evolution only ever does things well enough to get by.

Re: Dizzying Ride May Be Ending for Startups

#74

Post by rchaud »

superuser2 wrote: post #63

It's an interesting time to be a year from graduation in CS, that's for sure. Maybe the folks beating the STEM drum will finally shut up when CS sees employment comparable to underwater basket weaving.

That assumes that CS grads will look for work exclusively in a technology role. The skill set of a CS major is applicable to roles well outside programming. Management consulting and financial services for instance recruit CS and EE grads by the bucket load.

CS employment in startups may decrease in the event of a startup bust, but mature companies like Apple, Amazon, Microsoft, Google, IBM etc. aren't likely to drastically change their hiring patterns unless their own business have been materially impacted.

Re: Dizzying Ride May Be Ending for Startups

#75

Post by jacquesm »

nilkn wrote: post #66
code4tee wrote: post #60

The only people that don't see a bubble at the moment are the people inside the bubbles. If your business has real revenue and real profit then there isn't much to worry about. If your business is valued on "hype" and theoretical valuations then you have reason to worry.

I'm so glad I work at a company right now that has never taken funding and is legitimately profitable. Hiring and expansion have been hard when you don't have access to far more cash than you could ever generate yourself, but it's hard to put a number on knowing that you won't be affected much by an industry downturn (doubly so since none of our customers are software companies).

In fact everybody else's downturn will be your opportunity.

Re: Dizzying Ride May Be Ending for Startups

#76

Post by zzalpha »

learc83 wrote: post #61
xienze wrote: post #39

Earlier quoted context omitted.

The thing is though, there are just as many people saying "it's different this time". The person predicting a downturn will inevitably be right. The other person... not so much :).

There will inevitably be a downturn. When people say "it's different this time" they don't mean that there can never be a downturn, they mean that when it happens can't be predicted by looking at past events. And they mean that when it happens it will be different--perhaps not as bad. There is a huge difference between this time and last time. The internet is much more mature for one. People depend on web apps now in…

There is a huge difference between this time and last time.

Is it, though?

Instead of overvalued companies based on the theory of "put it on the internet", we have overvalued companies based on the theory of "put it on the internet and get a billion users". Companies that, by and large, struggle to break even without telling a compelling story for how they'll monetize (let alone achieve or retain) that huge projected subscriber base.

For those that have a semi-believable revenue model (e.g., Uber), they make their money as rentiers, trying to scrape money off the top by matchmaking between actual service providers and customers... and in a lot of cases, they do so while violating labour laws vis a vis contractors (and in a lot of cases, regulations in the industry they're attempting to disrupt).

I know the Pollyanna's around here want to insist that this time is different. That these companies have fundamentals now! Except, I don't see it. It looks like the same billion dollar gimmicks to me, just a decade and a half further down the road.

Re: Dizzying Ride May Be Ending for Startups

#77

Post by angersock »

jacquesm wrote: post #69
ChuckMcM wrote: post #59

Earlier quoted context omitted.

This is exactly right, bubbles are a sort of "mass hysteria" where everyone in the herd is trying to get the most for themselves. Generally to be successful you need otherwise rational people to put aside reason and to invest in the belief that things are going up. And they do, and you get these things. And when that belief is dispelled, they go elsewhere. What isn't well spelled out is how people step out of the bub…

I'm pretty sure the chapter 7 won't fly because of illegitimate removal of resources from the company knowing you're headed for chapter 7.

Eh? What're you talking about?

Months ago, we started a re-org to streamline our management and to help focus on our core competencies. We wanted to put more wood behind fewer arrows, and so divested ourselves of our legacy customers and technology so we could focus on our growth strengths.

Now, today, surely, the growth numbers haven't been there, but we wish all the best to our former coworkers and business assets at DroppedBox. ;)

Re: Dizzying Ride May Be Ending for Startups

#78

Post by saalweachter »

debacle wrote: post #57
sp332 wrote: post #20

Earlier quoted context omitted.

A pegasus doesn't have a horn. A flying unicorn is usually called an "alicorn" but also pegacorn, unisus, or unipeg. /pedantic

To be far more pedantic, Pegasus is the name of a single flying horse, it's not the name for horses with wings.

And heaping on, Pegasus was not part of a breed or species. He was a one-off, the offspring of Poseidon and Medusa. He had a brother, Chrysaor, a man.

Re: Dizzying Ride May Be Ending for Startups

#79

Post by [deleted] »

creamyhorror wrote: post #70
hvs wrote: post #14

For those of you too young to remember, there were numerous articles written about the bubble bursting before it finally did in 2000-01. It wasn't a surprise that it did, just that no one knew precisely when it would. My point is that arguing that people have said this bubble was about to burst and that it hasn't yet isn't an argument that it won't.

"Unicorns Dropping Like Flies: First Dropbox; Then Square; Now Fidelity Cuts Snapchat Valuation By 25%" - Zero Hedge https://news.ycombinator.com/item?id=10546947 * Dropbox was warned by its investment bankers that it would be unable to go public at a valuation anywhere near close to what its last private round (which had most recently risen to $10 billion from $4 billion a year ago) valued it at. * Square, last priv…

[deleted]

Re: Dizzying Ride May Be Ending for Startups

#80

Post by ojbyrne »

dgreensp wrote: post #26

Sam Altman has already explained why late-stage private valuations -- but not earlier-stage or public valuations -- are bubble-like right now: >To summarize: there does not appear to be a tech bubble in the public markets. There does not appear to be a bubble in early or mid stages of the private markets. There does appear to be a bubble in the late-stage private companies, but that’s because people are misunderstand…

I think "argued" is more correct than "explained." Not everything sama says is guaranteed to be correct.

What I found interesting about this article is that these are mutual funds - i.e. public markets. I had not realized that "unicorns" were being invested in by funds available to the small investor.

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