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.
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.
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?
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.
I was perhaps being a bit brash in that post. I thought the intentionally satirical and bloviating nature of it would come through. Last night I wrote a 3,500-word essay on the massive upcoming conflict, in the United States, between the intelligent and the powerful. (I'm not going to spam HN with links to my blog, but it's my most recent post.) I guess I am still amped up on adrenaline from last night.
This would require another discussion, but college admissions aren't very meritocratic. There are a bunch of crypto-racist so-called "character" criteria (note: the "right" extracurriculars are only available at rich schools) that were shoved into the process in the 1920 to '60s and have been let to stay there. I'm going to mostly ignore that line of discussion because it's going to be 20 or 30 years before I have kids of that age, and until that point, I don't really care in the least about college admissions. College admissions are less corrupt than politics or the news media, but not by much; the corruption is far less damaging, though, because it's never been that hard for a smart person to get accepted into a good school. (Prestigious schools can be very hard to get into, but we have 200 or so good schools, including most of those state flagships the Republicans want to kill, in the U.S. We have excellent colleges and universities in this country and that's a huge asset.)
Do I think a forceful, tectonic reallocation of resources to smart people would give us a better world? Yes, absolutely. I won't go so far as "resources can never be misallocated" in a meritocracy, because that level of perfection is impossible, but I think we'd have a far better world with smarter, more creative, more visionary, and more compassionate people in charge, instead of the spineless, morally debased, and anti-intellectual corporate strongmen who currently hold most of the cards.
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.