

AVC: The Word Bubble - lerix
http://www.avc.com/a_vc/2011/04/the-word-bubble.html

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Kilimanjaro
When investors throw their money away in startups like 'color', that is not a
bubble, just sheer stupidity.

When joe sixpack 'invests' his house in facebook's ipo, then borrows some
money to invest in groupon's; that, my friends, is a bubble.

We'll be there in a couple of years, nobody can escape from that. The hype
machines will be in full swing with ten posts per day on the front page
feeding the frenzy, tv shows, newspapers headlines about the best initial day
for an IPO since google, everybody making millions overnight and nobody wants
to be left behind. We all know that feeling.

Then joe sixpack enters the party, and the bubble pops.

~~~
pedalpete
The same investor who 'threw their money away' on color also threw money away
on Google, Yahoo, Paypal, YouTube, LinkedIn, Admob and Zappos.

Of course, they've invested in many companies that didn't return on the
investments.

Just because you don't believe they made a good investment decision, I would
think it wise to respect their very good track record.

~~~
Kilimanjaro
Color was picked just to name one investment that 'looks' stupid from the
outside, nothing else. No need to put your gloves on.

~~~
pedalpete
The gloves aren't on, sorry if it came across that way.

I just think as start-ups we shouldn't single out large investments as
unreasonable until/unless they are proven so.

With the odds stacked against us already, it may be in our best interest to
not be the naysayers of our own industry.

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stevenj
I think the public (i.e. IPO) performance of this period's major startups will
be telling.

Facebook, Zynga, Groupon, Living Social, LinkedIn, Twitter, etc.

If/when they go public, we'll get to see how they're really doing.

And I think how they're doing will affect the rest of the startup industry.

~~~
dglassan
Completely agree here. We'll have a much better picture of where the startup
industry stands once we find out the real market value of all these companies
set to go public.

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lerix
The bottom line is that if the company is a solid proof of success, no matter
how hard the storm hits it, it will survive the hurricane and reap more
harvest than ever. If the company lacks solid foundation, and poorly executes,
then it will be wiped out by the rain, resulting in “liquidation”. The biggest
difference the bubble makes is putting more players into the game, providing
more opportunities for entrepreneurs to create something outstanding that the
world can benefit from.

Economists might argue that these poor investments will greatly affect the
economy; after all there is a trickledown effect in every financial sector.
But Keynes boom-and-bust cycle is not just some theory that can be eliminated
with caution. The roots of the boom-and-bust cycle engraved within human
nature, and unless we alter the behaviors of all the participants in the
economy, and wipe out the concept of greed, preventing this cycle is almost
impossible. Thus instead of preventing such cycle, why not let the true
entrepreneurs take their innovation to the next level with the boost from the
market, and give them the opportunity to change the world, and turn it into a
better place? If the bubble can harness more innovation for the world, why is
it a bad thing?

(this is the final passage from my blog @ <http://milogao.tumblr.com/>)

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code_duck
I thought just two months ago we were reading a Fred Wilson article about how
this is not a bubble. So, it _is_ a bubble now, but Fred just doesn't like
that word?

This is a off topic, for which I apologize, but the way his Etsy Mini is cut
off there doesn't exactly highlight the wonderful design and programming
prowess of Etsy. Or well, actually sad to say it does encapsulate their design
skills very accurately. The Etsy mini has not been updated since 2006. Can you
imagine? I guess the fact that one of Etsy's main investors puts that on his
blog, with the right 25% cut off no less, and seems to think it looks fine
explains a lot.

~~~
fredwilson
i don't think it looks fine. i run the etsy mini as the "default ad" on AVC. i
rarely see it but i suspect it is seen by a lot of people outside of the US.
out of curiosity, are you outside the US?

~~~
code_duck
I'm in the US and I was seeing it every 2-3 times I loaded the page.

I assumed you thought it looked okay from how it was on your blog, as
personally, I would have said "hmm, it doesn't fit". At this point in the
story, I would go to the Etsy App Gallery and see if a helpful third party
developer had one in a smaller size. On the other hand, if I was on the Board
of Etsy, I'd probably get on Etsy IRC instead and tell one of the 70+
engineers there to make me one that fits.

If only every browser supported the 'zoom' CSS property, we could just apply
zoom:80%. Then this one would fit fine... alas. Next we ponder what happened
to the 'Super Etsy Mini', which died in creation with only the epitaph: "It
was trying to do too much".

It's cool you're showing your Etsy stuff on your blog. There's still a huge
mass of people who don't know about what is found on Etsy.

~~~
code_duck
Oops, sorry - I meant to say I'm 'NOT' in the US, but I couldn't edit the post
by the time I noticed.

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nikcub
my only concern is that the masses will discover secondmarket and NASDAQ that
thing like it is '99

otherwise we all cool

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fleaflicker
_Markets are defined by greed and fear. We are in the greed mode right now._

Great line.

