

Is a new tech bubble starting to grow? - edw519
http://www.usatoday.com/money/perfi/stocks/2011-03-16-new-tech-bubble-.htm

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BerislavLopac
"He says the enormous size of the social and mobile Internet market — tens of
billions of people — dwarfs the markets for the fledgling Internet (billions)
and personal computers (hundreds of millions), putting companies such as
Facebook, Twitter and Zynga in prime position to strike it rich in IPOs."

Hm, I'm glad to know that aliens are joining the social and mobile Internet
market! :D

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wladimir
He's lost all sense of scale. If there's anything that should set off bubble
alarms it's this kind of blowing things out of proportion.

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michaelcampbell
Maybe it's just the news I happen to read, but I've read a lot of "bubble"
stories recently, and almost every one brings up the pets.com sock puppet; I
don't understand it. Was it just the most memorable (however irrelevant) icon
of one of the biggies that happened to fail in that era?

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artmageddon
It's among the easiest to remember, especially since they had a very popular
Super Bowl ad. Pets.com was among the first to go in the bubble, and their
very, very poor business plan clearly shows why.

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thekevan
He says that companies are overvalued, and they may be. But the difference is
we don't have the situation where everyone and their brother is buying those
overvalued stocks left and right. Risk is very compartmentalized at the
moment, mostly with professionals.

There may be a bit of a bulge here and there, but I do not think it is a true
bubble.

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ZhannaSchonfeld
Good old Useless Today, doing what it does best...being useless.

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michaelochurch
Please, please, please don't use the word "bubble". Ever. Even if there is a
bubble going on, and there's definitely not right now, don't ever use that
fucking word with regard to technology.

First of all, what we have now is something different. Getting venture capital
is still _incredibly_ difficult for most companies. As in, if you have a
4-person startup you'll probably have one or two people working full-time on
the funding game, which puts significant drag on technical growth. Not fun.
Moreover, most startups I know about describe a tension between true technical
excellence (scaling, robustness, and correctness, all of which become
critically important in the middle and end game) and chasing the more
superficial features that appeal to VCs.

Facebook, along with a few other startups that have capitalized on this
bizarre and silly "social" fad, is probably overvalued. Everyday startups are
still severely undervalued. It's a different pattern than the one in the
1990s. In the 1990s, people were absurdly optimistic not only about
technology, but about the economy and society as a whole. People actually
believed, in 1999, that society had permanently transcended the idiocy (um,
wrong!) that characterized the bulk of human economics and social
relationships throughout history. They were loopy. In 2011, people are dismal
and depressed and anxious and only a few of the perennial optimists are
starting to perk up (they were always there, but people are now listening to
them again; I have no idea whether that's a good or bad thing for peoples'
money, but if it's good for smart people with ideas, we must encourage it).

Second, anything that pulls opportunity into the hands of the smart and
ambitious, instead of the socially well-connected who usually monopolize it,
must be encouraged, no matter what its financial implications are. Anything
(except a war) that gives smart people a chance, which most of them haven't
had for a very long time, must be encouraged.

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jimboyoungblood
_Everyday startups are still severely undervalued._

If you believe this to be true, you should immediately invest all of your
savings into startups.

 _Second, anything that pulls opportunity into the hands of the smart and
ambitious, instead of the socially well-connected who usually monopolize it,
must be encouraged, no matter what its financial implications are._

See above. Got your checkbook ready?

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michaelochurch
All of my savings is about $2000 right now. I had $60,000 when I left my last
hedge fund job and decided to work for a startup. Great decision with no
regrets, but in a world where things like multiple liquidation preferences and
participating preferred exist, I think I can say that smart people don't hold
enough cards and powerful people hold too many. (Of course, it's best to be
smart _and_ powerful, but the number of people blessed both by God and Mammon
is, like, seventeen.)

I am working at a startup. Shouldn't that count for something?

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nickbp
Where'd the 58k go? It sounds like you need to get some control over your
finances if it 'just disappeared'.

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michaelochurch
It didn't "just disappear". I took in far less money, especially in the first
year, as a startup founder than my (very modest, by New York standards) living
expenses were. My point was that I put this money _into_ the startup effort.
An investment of time and money, not a loss. At the present time, however, I
can't invest again for a while. So the checkbook is closed.

