

Ask HN: If you knew this was a bubble, what would you do differently? - anonym9

When I saw that the valuation of Zynga might be between 7 and 9 billion dollars, I honestly began to get worried. I think that for people in the startup field, it might be hard to think of that as an unrealistic number, because everyone -wants- their new business to be so valuable. Maybe someone has experiences to share from the last time the tech stocks crashed, whether there were warning signs?
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nostrademons
7-9B for Zynga isn't that unreasonable. The valuation for Phillip Morris is
107B, and they sell rolled-up tobacco. Starbucks is 25B, selling coffee.
Simple things that are highly addictive basically give you a license to print
money, and are valued accordingly by stockholders.

The warning signs for the first dot-com bust were when businesses whose only
competitive advantage was that they lost money on any sale got funded. Things
like Value America, or Pets.com, or AllAdvantage.com. When you strip away the
"here, we'll give you money to use our product so we can gain market share",
there was essentially no reason to use those over existing alternatives.
Giving away money is not a sustainable business model, hence bubble.

By that standard, the only major e-property I'd be worried about today is
Bing...

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pestaa
I'd be really interested why you highlighted Bing. Its services, especially
the maps, seem to have potential.

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nostrademons
I highlighted it because of Bing Cashback, which is exactly the sort of money-
losing stunt that dot-com businesses pulled at the height of the boom to gain
market share.

Microsoft, at least, has the cash that they can afford to blow a few hundred
million for nothing, and the smarts to discontinue the program when it's
obvious it doesn't work.

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WillyF
In a bubble I'd be even more wary about working with other companies (I'm
pretty wary as it is).

I rely on a lot of other companies to run my business. I have a web host,
e-mail providers (for personal and bulk), multiple analytics providers, a
cloud backup service, an open source content management system—and that's just
naming a few types of businesses that I rely on.

In a bubble, it's more likely that any of these companies could disappear (but
it could still easily happen in a non-bubble). I'd be even more diligent about
having my data backed up and an alternative plan for if one of these companies
goes out of business.

Another risk is that a company that you rely on will become too successful.
Etacts is a perfect example. I loved their product and used it a lot. Now it's
gone because Salesforce bought them.

I'd also be more aggressive about getting paid for advertising. Right now, I'm
pretty relaxed about invoicing companies after I run a sponsorship campaign. I
want to ensure that they're happy first. If I was really worried, I'd make
them pay up front.

There are some things that I probably couldn't overcome. Google disappearing
would be one. I'd lose 80% of my traffic, my e-mail, my analytics, and a bunch
more.

You should always be wary of whom you work with. There are a lot of sexy
startups for startups right now. They offer some great services, but what will
you do when they disappear, kill the product you rely on, or get rolled into a
bigger company? It will happen, bubble or not.

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run4yourlives
My question would be (assuming you answer yours): Why are you acting in a way
that you wouldn't if you _did_ know it was a bubble?

Doing something stupid has little to with the macro-economy. What you should
be doing is conducting yourself in a non-idiotic manner all of the time, as
protection from things like bubbles; then you don't need to worry about a
thing.

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rdouble
Worried about what? That you don't have any Zygna options?

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dstein
The saying "In a hurricane even turkeys fly" comes to mind.

    
    
      KONAMI CORPORATION = $2.70B
      NINTENDO CO LTD = $41.21B
      ACTIVISION BLIZZARD = $13.21B
      TAKE-TWO INTERACTIVE = $1.37B
      ELECTRONIC ARTS = $6.15B
    

If this were 1998, you would dump all your money into these stocks in the
anticipation that the bubble would continue to expand for several years, and
spill over into related areas. You get your money in, call up your Goldman
Sachs buddies, and flip them to Mutual Funds after they're overvalued. Rinse
and repeat until the bubble blows.

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us
1\. Continue what I'm doing

2\. ??????

3\. Profit?

Bubble or no bubble. Doesn't change a thing. I'm going to keep focusing on
what I do best.

