

This Industry Is Still Completely Ridiculous - nikunjk
http://techcrunch.com/2015/01/24/this-industry-is-still-completely-ridiculous/

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InfiniteRand
I think the author misses how weird the world already is. The broad point,
that software is becoming more important culturally, and software can become
culturally important faster and for less justification, is I think probably
true. But I am not convinced that software is more weird than most people.

Long before software people drew lines in the sand that formed pictures only
visible from airplanes which did not exist. Stuff is weird, get used to it.

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zek
When I started reading this article I found myself a bit annoyed. The author
was complaining and pointing out the fact that some tech companies do some
crazy/inane stuff, while ignoring all of the positive things that comes out of
tech. Plus, even the crazy/inane stuff can end up having positive impact or
side effects!

At the end of the article, however, I was pleased to find that the author came
to the same conclusion. Yes, tech can be weird, and it seems especially so to
those outside of tech, but I strongly believe that in the long run all of this
experimentation will be a good thing.

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xnull2guest
I remember hearing similar ridiculous things before the last software bubble
burst. Huge valuations, investments in websites that do nothing, the success
of gimmicky zany stuff like "sell 1 million single pixel ads!".

The author seems to take at face value that the ridiculousness is somehow
grounded on something. When valuations for things like an app that does
nothing except send 'Yo' compares favorably with a company like SpaceX, I have
to wonder whether, really, we're in another bubble and in for another burst.

~~~
Animats
I keep thinking that, too. But this time, most of the silly stuff is
profitable. In the first dot-com boom, companies went public long before they
were profitable. (I had a program to track that, Downside's Deathwatch:
[http://www.downside.com/deathwatch.html](http://www.downside.com/deathwatch.html)).
There are lots of failures, but they fail small, with YCombinator-sized
funding. We're not seeing failures the size of Webvan or Excite@Home this time
around.

The first dot-com collapse was spectacular. Empty streets in San Jose and San
Francisco. Huge, empty office complexes. Excite@Home built a huge headquarters
facility at the end of Seaport Drive in Redwood City, bigger than Facebook or
Oracle. It was vacant for years. About 40% of the twentysomethings in SF left
town. The excess furniture ended up at Consolidated Office Outfitters in San
Jose, which had a warehouse covering an entire city block full of partitions,
desks, and chairs. The computers went to Weird Stuff Warehouse in Sunnyvale,
where you can get all the parts for a previous-generation data center cheaply.

That doesn't seem to be happening this time. Most of the startups can cover
their operating costs. Many are overvalued, though, because their future
growth may not be that large.

~~~
xnull2guest
Hmm. The silly and zany stuff was profitable then as well. Sure, not all of it
(but nor is all of it today). The profit "on the silly stuff" then came mostly
from speculative investment, buyouts and advertisers - not from direct
consumer sales. I'm not sure how different that is from today. I'm not on the
latest numbers; maybe you're better informed. Is the revenue being generated
by today's startups more often and in larger quantities from direct consumer
sales?

I found what you said about IPOs interesting. Why is it that you think going
public (before or after being profitable) is an indicator of a bubble? It
seems to me to be a minor detail.

From what I can tell (there is no universally accepted definition of a bubble)
all that is needed for a bubble is for speculation (trade-value) to outgrow
revenue (use-value) at the same time speculation appears to increase the
demand for, lack of supply of, or actual underlying value of a
business/commodity/whathaveyou. Upon entering a feedback loop of increased
speculative investment because of rapidly inflating possible returns (which do
pay out up until the bubble bursts) and increased returns because of rapid
inflation in the amount of venture capital, the numbers get bigger on their
own without a need for change in underlying value. That is until investors
withdraw, causing capital and valuations to plummet, and more investors to
withdraw, ad nauseum.

The important thing here is that the source of investment
(venture/speculative) capital need not come from any particular source, be it
public option or nay. It's possible in principle to have a bubble based on
Venture Capital and private money, but its also true in practice that these VC
firms are often traded publicly themselves and promise returns based on their
investments.

The second paragraph and last sentence are fascinating, but isn't the
hypothesis here that the bubble hasn't burst yet?

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olivermarks
Pot. kettle. black - 'Tech Crunch' (stupid name) is the poster child for
boosting sketchy tech that has more to do with financial shell games to pump
and dump products and services than advancing tech for the good of mankind.

This was a good, funny article but there are thousands going bust or running
their credit cards to the max trying to create new firms which is the darker
side of all this...

The Valley tech funding circus is beyond bizarre...

~~~
pavel_lishin
You should never bite the hand that feeds you, but sometimes it's okay to gnaw
on it a little, just to see what it tastes like.

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anonymousab
Interesting times and all that. I have to wonder at what industries centuries
ago were viewed in the same way.

On a side not, that page/article/site is a work of art in* demonstrating
painful mobile design.

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minthd
A lot of the consumer stuff people buy is pretty silly or of minute
importance, and i'm sure it was also considered silly in the past. And yet, it
forms a pretty large industry.

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squozzer
When the author ran off the names of those NSA projects (horsewrap, iceblock,
micefur...) for some reason the REM song "it's the end of the world as we know
it" popped into my head.

~~~
InfiniteRand
I think there was a period of time when the military used a random word
generator for operations. Whether or not this is a figment of my imagination,
I think it would not be a bad idea for the NSA or any organization with a
constant churn of operations that need names.

~~~
pconner
I wonder if the random word generator is cryptographically secure, or if there
is a backdoor into it.

