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Is there a bubble in startups?
Misc ideas
- Stock in companies can be thought of behaving like a currency.
2012.04.29 - Chris Dixon - Is it a tech bubble?
2015.05.14 - Mashable - Startup founders enjoy the tech 'bubble' while they can
Q: Do you think we are currently in a bubble?
A: I’ll give you two answers to this question. One, ask me questions that are useful to this audience because these people are here to learn how to start startups, and I have more data in my head than anybody else and you're asking me questions a reporter does because they cannot think of anything interesting to ask. I will answer your question. There is a difference between prices merely being high and a bubble. A bubble is a very specific form of prices being high where people knowingly pay high prices for something in the hope that they will be able to unload it later on some greater fool. That's what happened in the late 90's, when VC's knowingly invested in bullshit startups thinking that they would be able to take those things public and unload them on other retail investors before everything blew up
I was there for that at the epicenter of it all. That is not what is happening today. Prices are high, valuations are high, but valuations being high does not mean a bubble. Every commodity has prices that go up and down in some sort of sine wave. Definitely prices are high. We tell people if you raise money, don't think the next time you raise money it’s going to be so easy, who knows maybe between now and then the Chinese economy will have exploded then there's a giant disaster recession. Assume the worst. But bubble? No.
2015.07.03 - Aaron Levie (Twitter) - It's not a "bubble".
It's not a "bubble". We just lack a word for "some startups get high valuations because great ones are rare, and investors are protected."
2015.10.11 - NYT - Silicon Valley’s Most Elusive Beast
The lucrative trade in alicorns, which rested on this widespread belief in the unicorn’s power, reached its peak in the Renaissance amid a widespread fear among nobility of being poisoned by their rivals. They lined their cups with pieces of alicorn and placed whole horns on the table, believing that they would sweat in the presence of poison. (Think of the alicorn as Uber, for not dying of poison.) And as the centuries wore on, powdered unicorn horn made the antidote accessible to the masses: London pharmacists carried it in their inventories in the early 1700s. But by the late 18th century, the market became oversaturated, and the horn bubble popped just as the rise of skeptical inquiry prompted people to question the unicorn horn’s effectiveness and the existence of the unicorn itself. In retrospect, it was clear that centuries of wealthy nobles, people who wanted for almost nothing, had thrown away untold fortunes in their pursuit of these worthless baubles. No doubt, many modern-day unicorn hunters will wind up doing the same.
2015.09.26 - Fortune - Why journalists can’t stop asking the tech bubble question
2015.11.02 - Sam Altman - The Tech Bust of 2015
2015.11.22 - NYT - LivingSocial Offers a Cautionary Tale to Today’s Unicorns
Internally at LivingSocial, employees have been skeptical about the strategy shift, according to three employees who left this year. About a dozen former employees and current investors said the company’s strategic missteps had taken a toll on morale. The discontent has been compounded by the inability of early employees — many of whom were lured with lucrative stock packages — to sell their LivingSocial shares.
As a result, retention is an issue, especially as LivingSocial competes with new unicorns for engineers. The company can no longer offer huge salaries and tantalizing stock packages to attract the top talent.
“It’s not the easiest thing in the world to hire tech people, wherever you are,” Mr. Thakar said. “We’re not Google-esque.”
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