This Industry Is Still Completely Ridiculous
techcrunch.com
techcrunch.com
Long before software people drew lines in the sand that formed pictures only visible from airplanes which did not exist. Stuff is weird, get used to it.
At the end of the article, however, I was pleased to find that the author came to the same conclusion. Yes, tech can be weird, and it seems especially so to those outside of tech, but I strongly believe that in the long run all of this experimentation will be a good thing.
The author seems to take at face value that the ridiculousness is somehow grounded on something. When valuations for things like an app that does nothing except send 'Yo' compares favorably with a company like SpaceX, I have to wonder whether, really, we're in another bubble and in for another burst.
The first dot-com collapse was spectacular. Empty streets in San Jose and San Francisco. Huge, empty office complexes. Excite@Home built a huge headquarters facility at the end of Seaport Drive in Redwood City, bigger than Facebook or Oracle. It was vacant for years. About 40% of the twentysomethings in SF left town. The excess furniture ended up at Consolidated Office Outfitters in San Jose, which had a warehouse covering an entire city block full of partitions, desks, and chairs. The computers went to Weird Stuff Warehouse in Sunnyvale, where you can get all the parts for a previous-generation data center cheaply.
That doesn't seem to be happening this time. Most of the startups can cover their operating costs. Many are overvalued, though, because their future growth may not be that large.
I found what you said about IPOs interesting. Why is it that you think going public (before or after being profitable) is an indicator of a bubble? It seems to me to be a minor detail.
From what I can tell (there is no universally accepted definition of a bubble) all that is needed for a bubble is for speculation (trade-value) to outgrow revenue (use-value) at the same time speculation appears to increase the demand for, lack of supply of, or actual underlying value of a business/commodity/whathaveyou. Upon entering a feedback loop of increased speculative investment because of rapidly inflating possible returns (which do pay out up until the bubble bursts) and increased returns because of rapid inflation in the amount of venture capital, the numbers get bigger on their own without a need for change in underlying value. That is until investors withdraw, causing capital and valuations to plummet, and more investors to withdraw, ad nauseum.
The important thing here is that the source of investment (venture/speculative) capital need not come from any particular source, be it public option or nay. It's possible in principle to have a bubble based on Venture Capital and private money, but its also true in practice that these VC firms are often traded publicly themselves and promise returns based on their investments.
The second paragraph and last sentence are fascinating, but isn't the hypothesis here that the bubble hasn't burst yet?
This was a good, funny article but there are thousands going bust or running their credit cards to the max trying to create new firms which is the darker side of all this...
The Valley tech funding circus is beyond bizarre...
Not that I'm jealous, or anything...
On a side not, that page/article/site is a work of art in* demonstrating painful mobile design.