
You can see it coming... - ivankirigin
http://www.kottke.org/remainder/08/03/15280.html
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ivankirigin
He's right, but so many tiny startups aren't overvalued and they won't tank.
Also, I find it hard to imagine an event that would lead to a collapse. It's
not like there are tons of IPOs that can dry up.

The interesting part is the diff between now and then. The availability of
easy money can change fast. Unless there is a very large collapse in the
dollar, most startups wouldn't be affected by the marginal changes in consumer
behavior.

~~~
tom_rath
What about the significant drop in ad spending which occurs in every
recession? Or is it "different this time" like in 2000?

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ivankirigin
I'm probably biased because Tipjoy isn't affected in the least by a drop in
spending in Ads. We're probably boosted, all things being equal. Consumer
frugality would certainly affect us though.

Your business model shouldn't change on the margins. A slow or fast season in
Ads won't make a typical business die or become viable.

~~~
pchristensen
Otherwise you would be, by definition, a marginal business, and that's not a
good place to be (again by definition, the first one to die when things go
bad).

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tim2
I tend to value people's bets based on what they're willing to risk on it. All
of this idle surface speculation doesn't do much for me. Particularly non-
insightful.

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ivankirigin
How could you bet against an overvalued private company? Are VC funds ever
publicly traded?

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tim2
You can always wager your reputation, or at least make some definitive claims
that can be held against you if you end up being wrong.

"Some companies with high valuation will tank" is neither informative nor
original advice. It's beating up on an easy target without adding anything
new.

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ivankirigin
This was pretty specific:

"companies who make widgets for Facebook are not worth anything close to
$500,000,000."

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tim2
It's not about what the company does now. It's about what they're going to do
in the future. Tons of profitable companies have humble beginnings.

So really there's not much to discuss here without more information.

~~~
ivankirigin
I agree with your last thought, but let me just point out that there is
absolutely nothing humble about the kinds of companies in question. It's
explosive growth built upon ephemera.

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TrevorJ
/Agreed.

