
Bloomberg U.S. Startups Barometer - SQL2219
https://www.bloomberg.com/graphics/startup-barometer/
======
delegate
Just a decade ago, a 'startup' meant a group of enthusiastic young people
wanting to affirm themselves by creating some cool technology which will
change the world, trying to convince people with money to 'invest'.

Today, a 'startup' means a group of people with money hiring enthusiastic
youngsters to implement _something_. They bet their youth, health,
relationships and mental health to work for that _something_ in exchange for
'funding rounds' and the chance to be the next Xberg.

Unfortunately, more or less 90% of the enthusiastic young founders end up
broke, depressed and resigned as a consequence. I know this because I've been
the founder of a startup in the 90% club. Took me years to recover
financially, mentally and personally.

The quiet winners in this case are the big corporations, who's technology and
services have been paid for with seed/venture money given to startups. The
investors loose their money, but no worries, because they have other groups of
young people who are doing the same thing.

But of course there's a bright side to this - the 10% winners. Those that go
on to transform the world around us. Again, I've been there - I was lucky to
work for a startup that eventually made a multi-billion dollar exit. And
change the world it did !

But now I'm looking at this changed world around me - what kind of reality are
we living in ? We're constantly inside these cool shiny gadgets which can do
incredible things, while the world around us is disintegrating - climate is
going nuts, crazy politicians are getting elected and dystopia is settling in
with clouds of war and destruction forming on the horizon.

How did we get to this ? How come all these young and enthusiastic dreams
morphed into dystopia ? Make no mistake - technology that you and I have been
developing is very much a cause of what the outside world looks like today -
didn't we 'change the world' ?

And since most of this technology was born out of startups, we can conclude
that the 'startup culture' was the precursor to the dystopia we're currently
in.

This has to change. It has to at least go back to 'young people solve world
problems with money as a means' instead of 'young people do something for the
sake of hitting the jackpot'.

~~~
JumpCrisscross
> _90% of the enthusiastic young people end up broke_

The median salary for a "high-tech" worker in the United States with 1 to 4
years' experience is about $70,000 [1]. That's almost 60% higher than the
median American family's $43,500 household income [2].

[1] [http://www.payscale.com/research/US/Industry=High-
Tech/Salar...](http://www.payscale.com/research/US/Industry=High-Tech/Salary)

[1]
[https://en.wikipedia.org/wiki/Median_income](https://en.wikipedia.org/wiki/Median_income)

~~~
vonmoltke
Not that it changes your point much, but the intro paragraph says it's
$56,000. Where did you get $43,500 from?

------
DenisM
Tracking sales of pin-pong tables might be a better indicator. [1]

Also during dotcom bubble somone people used number of Porche Boxters in the
street. These days it might be a different model, such as Tesla.

[1] [https://qz.com/676050/if-ping-pong-table-sales-are-
falling-t...](https://qz.com/676050/if-ping-pong-table-sales-are-falling-then-
silicon-valley-is-clearly-doomed/)

------
JumpCrisscross
This index appears to have been "designed and develop[ed]" by a digital artist
[1], a "data journalist/designer for Bloomberg" [2] and a software developer
[3].

Where are the econometricians? What guided the data sources and weighting of
this index? What is it designed to predict, and how accurately does it do that
in backtests?

[1] [https://aubergene.com/sketches/2014/paddle-
clock/](https://aubergene.com/sketches/2014/paddle-clock/)

[2] [https://twitter.com/homiedonttweet](https://twitter.com/homiedonttweet)

[3]
[https://www.linkedin.com/in/brendazysman/](https://www.linkedin.com/in/brendazysman/)

~~~
stagbeetle
An econometrician does not have the necessary experience to create a practical
"barometer" for an industry.

Second, this is just a quick reference and nothing more. It's a simpler
version of what the S&P stands for.

It was done in collaboration with an analyst[0] and two execs[1][2] (insight
maybe?).

[0]
[https://www.linkedin.com/in/jonbirchler](https://www.linkedin.com/in/jonbirchler)

[1][http://www.bloomberg.com/research/stocks/people/person.asp?p...](http://www.bloomberg.com/research/stocks/people/person.asp?personId=61025125&privcapId=875458)

[2][http://www.bloomberg.com/research/stocks/people/person.asp?p...](http://www.bloomberg.com/research/stocks/people/person.asp?personId=380632481&capId=379520491&previousCapId=379520491&previousTitle=Tune%20Labs)

~~~
JumpCrisscross
> _An econometrician does not have the necessary experience to create a
> practical "barometer" for an industry_

Gross domestic product, producer price indices, consumer price indices,
employment statistics, housing starts, manufacturing and trade inventory
levels and flows and stock indices are not practical? I think you
underestimate the role and prevalence of econometric methods.

> _It 's a simpler version of what the S&P stands for_

The S&P 500 has a clearly-stated goal and methodology [1]. It's used as a
shorthand for U.S. large cap equities because it's well designed for that
purpose.

The Bloomberg "barometer" doesn't do any of these. Is it supposed to forecast
valuations? Ease of fundraising? IPO conditions? Nailing down what an index is
designed to do, practically, is important because that directs which data one
uses and how one weights them. Calling this a "quick reference" is a farce--
it's an obfuscated infographic that fails to make a point.

[1]
[https://us.spindices.com/documents/methodologies/methodology...](https://us.spindices.com/documents/methodologies/methodology-
sp-us-indices.pdf)

~~~
stagbeetle
> Gross domestic product, producer price indices, consumer price indices,
> employment statistics, housing starts, manufacturing and trade inventory
> levels and flows and stock indices are not practical? I think you
> underestimate the role and prevalence of econometric methods.

They're very prevalent, I have no qualms about that. But, economics is a young
field and we're starting to see the old methods come apart. Specifically, GDP.
It has been touted as the end-all-be-all to measure a country's wealth
(quality of life), however this notion is incorrect[0].

> The S&P 500 has a clearly-stated goal and methodology [1]. It's used as a
> shorthand for U.S. large cap equities because it's well designed for that
> purpose.

I am speaking purely of a practical sense. That is, what use do market
practitioners (investors, speculators, etc.) assign to it. The group of S&P
indices (not just the popular 500) is used as a quick tool to gauge segment
"health," i.e current level compared to all levels and means before it. This
is the same reason this barometer is _supposed_ to serve.

>The Bloomberg "barometer" doesn't do any of these. Is it supposed to forecast
valuations? Ease of fundraising? IPO conditions?

It's _supposed_ to be shorthand for the "startups" segment. However, since
most startups (and in particular the technology startups that dominate this
segment) are difficult to assign accurate valuation (due to: risk, intangible
assets (see: goodwill), opaqueness of financials, private ownership, etc.),
there is very little work with.

>Nailing down what an index is designed to do, practically, is important
because that directs which data one uses and how one weights them. Calling
this a "quick reference" is a farce--it's an obfuscated infographic that fails
to make a point.

I believe it's a step into the right direction, but it definitely will need
updating moving forward as we learn more about the nature of startups.

[0][http://www.economist.com/news/briefing/21697845-gross-
domest...](http://www.economist.com/news/briefing/21697845-gross-domestic-
product-gdp-increasingly-poor-measure-prosperity-it-not-even) _(as only one
quick example)_

------
rdlecler1
25-30% swings seem a little excessive for a barometer when most of that
volatility is market noise rather than real sentiment. If there was a 30%
Market crash on Wall Street there would be blood in the streets. Seems like
this index needs some work to capture real sentiment.

------
plantsoftware
VCs are finding themselves with less cash than they expected because they
invested in stupid ideas/people. This is good no matter how you cut it, if you
have a shitty idea you wont get funded. If you have a good idea there will be
less competition.

