

Bubbles vs Growth - stefanobernardi
http://bernardi.me/2012/05/bubbles-growth/

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bunderbunder
Some more statistics:

    
    
      - Active Facebook users:  800,000,000
      - Price per user at current valuation: $125/user
      - Annual profit per user: $1.20
    

The late 1990s saw enormous growth in the tech industry, as have the past
several years. But in contrast to what the article's author would like to
believe, growth and bubble are not mutually exclusive conditions. In fact,
growth begets bubble: One easy way for businesses in a sector to become
overvalued is as a result of the hype that tends to accompany periods of
growth.

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stefanobernardi
I agree that growth and bubble are definitely not exclusive and that the
former is usually what triggers speculation and ends up in the latter.

I also think that right now we're in a phase of growth, without financial
speculation. It might be very well possible that this will kick in pretty
soon, but I'm leaning towards the idea that it's still going to be difficult
given the hard time that their public stock is having.

(btw you miss 3 zeros on your FB active users).

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bunderbunder
Thanks. Fixed & double-checked the other numbers.

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mtts
It's different this time.

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sullof
Sometimes I have the impression that some entrepreneurs like to say that there
is a bubble because so they can say: "Yes, he raised all that money, or had
that big exit, but not because he is better than me, only because there is the
bubble".

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stefanobernardi
There's a very nice piece by Fred Wilson related to that:
[http://www.avc.com/a_vc/2012/05/wheres-my-billion-dollar-
che...](http://www.avc.com/a_vc/2012/05/wheres-my-billion-dollar-check-i-
wonder.html)

~~~
eli_gottlieb
Because God forbid someone start a business to make a living rather than to
burn up their life savings on a monetarily pointless _passion_.

I could probably make more money by literally selling tickets to have people
come see me set my life savings in cash on fire.

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LeonigMig
Infomation technology means that cost are falling, old business models are
getting over turned and innovation is happening in established and new
markets.

Bubbles can occur in equity markets independently of this.

Due to easy credit over the past 20 years a lot of debt has built up which is
retarding real growth now via the financial crisis.

In summary money introduces a layer of indirection into the system which can
mean that growth is slow even when technological conditions promote in some
sectors.

