As the Startup Boom Deflates, Tech Is Humbled
nytimes.com
nytimes.com
Finally more breathing room. And hopefully less competition for capital, so that the people actually really innovating and inventing new stuff have more chances of getting it.
Overall there's only reason for optimism!
With that said they didn’t innovate in any other way, and haven’t shown that they’re able to continue innovating on business models. The world takes for granted their original business-model innovation, now that it’s so commonplace, so all the same, it’s easily understandable to be hearing this.
Consider a hypothetical p2p car renting company (not Uber). With a few thousand users it probably wouldn’t be that useful as a service, but if 80% of the worlds population had their cars available on it the service would be incredibly useful, despite the core idea existing now already.
You could rent someone's vacation house through Craigslist and agree to pay cash/check, but if the place was not what it's cracked up to be, or the owner suddenly demands a higher rate (or slaps some fee that was not previously discussed), you were out of luck.
AirBnB has its own share of scams with non-existent apartments, but their payout rules (as well as reliance on credit cards) provide some new consumer protection previously unavailable with p2p rentals.
If your thesis is true, then any of those "tourist board or various organisations" can just put up a Web site, accept payments and start raking in millions of dollars. Besides Homeaway and Flipkey very few do.
I don't believe venture capital investment is a zero sum game. Money will always chase higher returns. It may come from Private equity, it may come from angels' savings -- if there is a possibility of higher return with lowered risk -- money will find a way to it.
I don't particularly like Uber and AirBnB, to be clear. But it's hard to deny they're rare and valuable.
If you asked me years ago if either concept would work at mass scale, I'd think you were crazy. Too many risks and unknowns to be worth it. These days, people seem to be more willing to take risks and work for AirBnB or Uber. I suspect the economic pressures a typical laborer in the US are currently under has made people more accepting of doing this to help alleviate their financial pressures. I know a lot of people who do AirBnB just to help pay off their mortgages and plan to stop as soon as they finish or make some headway on payments.
Same with AirBNB, its really nice to not have to coordinate any of that, and to be protected from scammers, fake checks, chasing people for money, etc.
It is critically important that all this business activity happens at a profit, otherwise it is unsustainable and a bad use of resources. Profitless activity will stop fairly quickly and won't come back.
one significant benefit of Uber that I've noticed is that people outside of cities are much less likely to drive themselves home after drinking. they either use a ride share both ways, or experience less friction later on when they realize theyve had too much to drink. ten years ago they would just say fuck it and risk a DUI.
At this stage, I'd vote for communism, fascism or whatever it takes to make this nightmare end.
I hope you find peace.
My industry is severely impacted by filter bubbles so investors and customers often don't realize that much better, cheaper, more efficient solutions exist and some of these investors may even intentionally turn a blind eye because the market doesn't seem to care that the incumbents are wasting millions.
The industry has become so detached from value creation that market caps seems to fluctuate randomly and not affected by any decision or any activity of market participants. My industry is quite an extreme (and obvious) case, but I feel that the rest of the economy is in a similar state.
A lot of investors and users are focused on unproductive incumbents and completely missing the real innovation which is happening because of the noise that the incumbents create.
Chill. You don't want to go that way.
Talk to anyone in a country that experienced that... I can tell you that the way actual communism subtly broke the minds of people and twisted their thinking patterns is horrible. I takes more than a couple generations for a society to recover from that.
Try to fix what you have, don't go "burn the system down" and throw the baby with the bathwater!
Most startups I worked at seemed to care more about their slick office space and their culture than the bottom line, equating a successful round of funding with actual business success.
That being said, I won't deny that the well known tech companies did change culture dramatically (Netflix, Google, Amazon, AirBnb, Uber, Facebook, etc).
These days I really prefer the "bootstrapped" business scene. Companies that start small, and are forced to make revenues early on to stay afloat. Why the need to build 100 billion dollar businesses? What's wrong with 50 million dollar businesses? Rather than starting with some grand vision, why not start with the basics: I can create value in x way, and meet the needs of y market. From there it's all just managing finances, spending time wisely, and making tough trade-offs, the hallmarks of any business.
So, really, it's just as well to have a shakeout of unprofitable ideas now, rather than accumulate ever-more bogus ideas sucking up resources. The only unusual thing is that it's been so long since the last recession that this shakeout is happening without one.
Of course, we could have one soon, but I've been thinking that for a while now, so who knows.
The reality is that Mr Market is going to make lots of egos very humble very soon.
They may not be as sexy as the PR-laden BS that we’ve seen in the last few years, but there are many more solid companies with real businesses than there are Caspers, WeWorks, scooter companies etc
I agree with this, and will take it a step further: it'll mostly be B2B and niche business and service applications.
Now, US politics... that circus looks weird from the outside, but whatever works for them ¯\_(ツ)_/¯