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Comment by dmritard96 | Hacker News Reader

I am not really qualified to determine whether there is a bubble nor do I believe there is much value in speculating constantly about it. If there is one, valuations will drop, cash will be harder to get. Its not going to change the kind of work I like to pursue or the work that makers, builders and engineers do. It will probably change how much everyone is stuffing in their pockets, fine.

One glaringly bizarre thing from my perspective is why anyone would listen to VCs about whether we are or are not in a bubble. I'm sure there are other perspectives, but it would seem someone heavily invested in seeing valuations go up wouldn't want to ring alarm bells... I think instead I would rather gauge things by the numbers which unfortunately, are probably not frequent enough to reach true statistical significance to not have incredibly large confidence ranges. That being said, some of the money flying by on crunchbase every morning is ludicrous.

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> Its not going to change the kind of work I like to pursue or the work that makers, builders and engineers do.

As someone who lived through the original dot-com bubble, I would respectfully argue that this viewpoint is naïve. There were lots of "makers, builders and engineers" who had to settle for things other than the work they liked to pursue for many years after it popped.

It took several years around silicon valley for things to get interesting again. I think I became a better developer during that time because it forced me to do/learn things I might never have. Nevertheless, yes, it TOTALLY changed the kind of work many of us were doing at the time.

>I am not really qualified to determine whether there is a bubble nor do I believe there is much value in speculating constantly about it

Bubbles exist when enough investors decide that a bubble exists. When markets crash, nothing has actually happened...other than people deciding that equity values are going to drop. When they stop buying based upon that belief, it becomes a self-fulfilling prophecy.

That said, of course we're in a bubble. Someone gave "Yo" $1 million ffs. I won't even go into Clinkle - a failed experiment in Silicon Valley cronyism. While those investments are poster children for this problem, there are hundreds of other equally absurd investments and valuations going around.

Fortunately, there is a way to protect yourself that has worked since the beginning of time. Create a scalable business that produces both revenue and profits, even during its growth phase. One that actually creates value both for customers and shareholders. Like magic, you'll still have a fantastic business while reading about how horrible things are for everyone else.

> Fortunately, there is a way to protect yourself that has worked since the beginning of time. Create a scalable business that produces both revenue and profits, even during its growth phase. One that actually creates value both for customers and shareholders. Like magic, you'll still have a fantastic business while reading about how horrible things are for everyone else.

This is less foolproof than you think. Cisco and Sun both had a business like you describe going into the bubble. They had tons of revenue and profit during the bubble. But when it popped, all the funny money that had been flowing to them through startups went away and their businesses took a huge hit. You have to make sure that not only do you have a stable business, but also that the majority of your customers are stable too. I would be very worried right now if I was any company that startups rely on. The obvious one is AWS and the other cloud providers, but they're not the only ones. If there's disruption to startups, there will be a ripple effect that will hit a lot of the tech world.

That's something I had overlooked. There is definitely a ripple effect in the event of a bubble popping, and if we are in one and if it does pop that will potentially ruin a lot of 'for devs, by devs' companies.

Waitwaitwaitwaitwait someone gave Yo money? Yeah run for cover.

Yo money? Mo' problems.

Couldn't resist.

> If there is one, valuations will drop, cash will be harder to get. Its not going to change the kind of work I like to pursue or the work that makers, builders and engineers do.

It might change the work that makers, builders, and engineers can get paid to do (and, thus, what work they will do, if they need money from work to pay the bills.) Becuase "cash will be harder to get" mean that "people paying you for what you want to work on will be harder to find".

you listen to VCs about this because their whole job is to be sensitive to any risks to their investments, including systemic and idiosyncratic risk. they also have more breadth across the early venture market than most people. that said, they're guessing based on what they see, so it's not a perfect predictor. you're at least getting a glimpse of what they see via articles like this though.

VCs aren't oracles, but they're invested on 5-10 year cycles. Moreover, big VCs are always in multiple funds at once, so one is beginning while another is halfway through it's life. So even if you think they trade more on reputation and influence than actual value, I think it'd be incredible to claim that they're totally divorced from actual value creation.

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