
Is it a bubble? It matters if we think it is. - davewiner
http://scripting.com/stories/2011/03/27/isItABubbleItMattersIfWeTh.html
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j_baker
The logic behind this posting (or lack thereof) makes my head hurt.

1\. If people who say no do so with hesitation, but people who say yes do so
without, why would you jump to the conclusion that there's a bubble? I know it
may be a stretch, but _perhaps_ the people who say no are hesitating because
they put more thought into saying no than the people who say yes?

2\. The article seems to be saying "Are we in a bubble? All I know is that
when people stop saying we're not in a bubble, it will have popped." Of
course, the article takes for granted that we're in a bubble when in fact we
clearly aren't. Bubble's are just as much psychological as they are economic.
If you can see a bubble happening, then it will cease to be a bubble.

Seriously, we haven't even recovered from the last economic disaster. How
about we do that before we start worrying about the next one?

~~~
Psyonic
"If you can see a bubble happening, then it will cease to be a bubble."

This statement is over-simplified. Let's talk real-estate speculation for a
minute. You could be aware that the price you're paying for some property is
over-valued, but still take the gamble because you think you'll be able to
dump it before the bubble pops. Once awareness reaches a critical mass it may
cease to be a bubble, but that doesn't happen overnight.

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spencerfry
I like his point that it's the young entrepreneurs and their employees who
will be most affected. Massive revenue generating companies such as Facebook,
Zynga, Groupon etc., will weather the storm but that won't be the case for
smaller companies that are doing little to no revenue generating.

~~~
jdp23
It's more that the risks are different for the massive revenue-generating
companies. In a situation were everybody agrees it's a bubble, Facebook,
Zynga, Groupon etc. will be under huge pressure to generate more revenues to
justify their valuations. If they fall short, their value could plunge;
conversely, they might also overreact and make tradeoffs favoring short-term
revenue that come back to bite them. So yes, they're in a waaaaaay better
position than Webvan and CarsDirect were in ten years ago; but the risks are
still significant.

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klochner

       "didn't cut corners and are using servers they control"
    

That seems a little out of place. If a lot of companies fold, demand for
compute resources would go _down_ , putting downward pressure on pricing.

And the "free" web services are functioning more as a business prototyping
tool than as a long term infrastructure strategy.

Finally, no one hosts their servers at facebook, so it feels like the op is
conflating a few concepts and weakening whatever point he was trying to make.

~~~
HerraBRE
There is a difference between basing your business on commodity offerings
(say, Linux vservers) where there is active competition, and basing your
business on a walled garden of harder to replace services (say, Appengine, or
S3, or Twitter or Facebook).

Appengine is hard to replace, but there are some immature alternatives out
there. Same for S3. If you rely on Twitter or Facebook, you are completely
locked in.

His point is, the more proprietary the stack you rely on, the more likely you
are to get the thumbscrews when people start more aggressively monetizing - or
the more likely you are to lose everything if the tech you are building on
disappears or locks you out.

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jdp23
Well said. From a strategy perspective, if there's a bubble and it pops soon,
a lot of companies will discover that some of their core assumptions no longer
apply. Seems like a great time to be a contrarian.

