5 ms·

Great, can we stop calling it a bubble now? Like if there were an actual bubble in the bay area, bad trends like this would have popped it? The thing is things

by VeilEm 11y ago

Great, can we stop calling it a bubble now? Like if there were an actual bubble in the bay area, bad trends like this would have popped it? The thing is things aren't really see-sawing. The pendulum isn't going to swing as hard as it did in 2000 as it would have done so already. That the technical companies in the bay area seems to be isolated from the hardships of the rest of the economy doesn't make it a bubble, it's simply a place with a different economic focus with different economic realities. I swear people around here actually sometimes seem to wish bad things would happen, as some kind of schadenfreude. We see these high valuation numbers being lobbed around as some kind of insult to good sense, but we're talking about just a few companies and in the grand scheme of the size of the economy in San Francisco, Palto Alto, Mountain View and San Jose these numbers are a tiny fraction of the overall system. The reality is that software is still eating the world, and more change and value to be derived therefrom is still to come: automated vehicles, robotics, smart appliances, VR, and a myriad of far less sexier technological innovations with sound economic value creation.

acdha 11y ago
You had a lot of company saying the same things in 1999. A central fallacy is assuming that because an idea seems inevitable the companies in that field now will be the ones doing it. Software is indeed eating the world but that doesn't mean that, say, those smart vehicles or robots will be made by a startup rather than GE or GM, or in one of the most expensive places in the world. Remember Kozmo.com? They're a fading memory but a lot of my neighbors get their stuff delivered by the same grocery chain which was there in 1995 who now has a great website, mobile apps, and a fleet of delivery drivers. This also has an important corollary for developers: unless you have a significant chunk of equity, never forget that even if your company is one of the successes your personal success does not inevitably follow. Most C-level managers see people like us as an expense to be minimized.
- icebraining 11y ago
  Software is indeed eating the world but that doesn't mean that, say, those smart vehicles or robots will be made by a startup rather than GE or GM, or in one of the most expensive places in the world. But is that what startups are doing? I mean, there's only one startup that has requested an Autonomous Vehicle Testing Permit in California - Cruise (YC W14) -, all the others are established companies. It's true there's a whole bunch of startups producing IoT trinkets, but those products are usually cheap and unambitious, not stuff that require large investments in R&D.
- VeilEm 11y ago
  > unless you have a significant chunk of equity Actually the better bet is to avoid equity as a replacement for a higher salary. Less risk, (lost value, taxes on negative value), and unless your company goes Google huge and you came in early it's not likely to be life changing.
  - acdha 11y ago
    Agreed. I was defining “significant” as founder/early investor level. Many developers self-identify at those levels but tend to be compensated at close to a wash when you compare the risk to higher compensation at a big corporate job. That's not saying that there aren't many other reasons to prefer working at a startup but simply that you don't want fantasies about getting rich distorting the comparison.
- richmarr 11y ago
  > You had a lot of company saying the same things in 1999. It doesn't seem like a useful comparison though. Adjusting for inflation, current investment levels (2014 at least) are less than half what they were in 2000. There are also, what, 8+ times as many people online, spending upwards of $350bn (2014 figures I think), compared to $50bn in 2000.
JonFish85 11y ago
"That the technical companies in the bay area seems to be isolated from the hardships of the rest of the economy doesn't make it a bubble, it's simply a place with a different economic focus with different economic realities." "I swear people around here actually sometimes seem to wish bad things would happen, as some kind of schadenfreude." "The reality is that software is still eating the world, and more change and value to be derived therefrom is still to come: automated vehicles, robotics, smart appliances, VR, and a myriad of far less sexier technological innovations with sound economic value creation." Rewind to the dot-com times, and I believe you'd find people saying the exact same things.
- zwischenzug 11y ago
  They did; I was there for the tail-end of it. I remember Flash developers on salaries big enough to buy apartments in London for one years' pay. I'm reminded of the Victorian railway investors: railway was the future, but that didn't mean that investment always worked. If the music stopped you would be ruined. But the railways continued to spread.
- eli_gottlieb 11y ago
  >Rewind to the dot-com times, and I believe you'd find people saying the exact same things. Charles Stross basically wrote Accelerando by writing down the stuff people were gossiping and fantasizing about building in Silicon Valley circa the first Dot-Com Bubble, IIRC. Basically none of it actually happened, and almost all companies at that time were basically focused on the same "Stuff my mom used to do for me -- now through a website!" premise. Same as today, mostly. Automated vehicles, robotics, smart appliances, VR, and basically every major technological innovation are capital intensive: five guys in a rented room in a coworking space are not enough. You need a real R&D division.
- tomjen3 11y ago
  Almost certainly, but that is at least three disruptions ago (a computer in every home, always on internet and a computer with internet in every pocket) - by definition after a disruption you can't use the old predictions because you no longer have the same rules. Today what you can build without engineers (other than your founders) and the cost you of hosting it are magnitudes less than what they were then, which is a change in quantity that causes a change in quality. Look you may be right, but I would need to see much deeper evidence for it, based on current trends and predictions and not stuff people said an eon ago. I would also expect them to be able to use their theory to explain why the "the good times are over" memo didn't cause or predict a crash.
forgetsusername 11y ago
>I swear people around here actually sometimes seem to wish bad things would happen, as some kind of schadenfreude. Some people like to be a step ahead of the curve, because that's where the money's made.
- niccaluim 11y ago
  And some people are keeping their fingers crossed for knock-on effects in the housing market.
dxhdr 11y ago
"the technical companies in the bay area seems to be isolated from the hardships of the rest of the economy" There's a financial book called "This Time Is Different" that outlines the similarities between asset bubbles and financial crises worldwide over the last several centuries. As outlined by the book, be careful whenever you're attempting to justify the current bubbly situation as the new normal, the rules have changed, the old financial laws no longer apply, this is a new paradigm, et cetera. Because "no, this time is not different," as the meme goes.

by VeilEm 11y ago

acdha 11y ago

You had a lot of company saying the same things in 1999. A central fallacy is assuming that because an idea seems inevitable the companies in that field now will be the ones doing it. Software is indeed eating the world but that doesn't mean that, say, those smart vehicles or robots will be made by a startup rather than GE or GM, or in one of the most expensive places in the world. Remember Kozmo.com? They're a fading memory but a lot of my neighbors get their stuff delivered by the same grocery chain which was there in 1995 who now has a great website, mobile apps, and a fleet of delivery drivers. This also has an important corollary for developers: unless you have a significant chunk of equity, never forget that even if your company is one of the successes your personal success does not inevitably follow. Most C-level managers see people like us as an expense to be minimized.

icebraining 11y ago
Software is indeed eating the world but that doesn't mean that, say, those smart vehicles or robots will be made by a startup rather than GE or GM, or in one of the most expensive places in the world. But is that what startups are doing? I mean, there's only one startup that has requested an Autonomous Vehicle Testing Permit in California - Cruise (YC W14) -, all the others are established companies. It's true there's a whole bunch of startups producing IoT trinkets, but those products are usually cheap and unambitious, not stuff that require large investments in R&D.
VeilEm 11y ago
> unless you have a significant chunk of equity Actually the better bet is to avoid equity as a replacement for a higher salary. Less risk, (lost value, taxes on negative value), and unless your company goes Google huge and you came in early it's not likely to be life changing.
- acdha 11y ago
  Agreed. I was defining “significant” as founder/early investor level. Many developers self-identify at those levels but tend to be compensated at close to a wash when you compare the risk to higher compensation at a big corporate job. That's not saying that there aren't many other reasons to prefer working at a startup but simply that you don't want fantasies about getting rich distorting the comparison.
richmarr 11y ago
> You had a lot of company saying the same things in 1999. It doesn't seem like a useful comparison though. Adjusting for inflation, current investment levels (2014 at least) are less than half what they were in 2000. There are also, what, 8+ times as many people online, spending upwards of $350bn (2014 figures I think), compared to $50bn in 2000.

JonFish85 11y ago

"That the technical companies in the bay area seems to be isolated from the hardships of the rest of the economy doesn't make it a bubble, it's simply a place with a different economic focus with different economic realities." "I swear people around here actually sometimes seem to wish bad things would happen, as some kind of schadenfreude." "The reality is that software is still eating the world, and more change and value to be derived therefrom is still to come: automated vehicles, robotics, smart appliances, VR, and a myriad of far less sexier technological innovations with sound economic value creation." Rewind to the dot-com times, and I believe you'd find people saying the exact same things.

zwischenzug 11y ago
They did; I was there for the tail-end of it. I remember Flash developers on salaries big enough to buy apartments in London for one years' pay. I'm reminded of the Victorian railway investors: railway was the future, but that didn't mean that investment always worked. If the music stopped you would be ruined. But the railways continued to spread.
eli_gottlieb 11y ago
>Rewind to the dot-com times, and I believe you'd find people saying the exact same things. Charles Stross basically wrote Accelerando by writing down the stuff people were gossiping and fantasizing about building in Silicon Valley circa the first Dot-Com Bubble, IIRC. Basically none of it actually happened, and almost all companies at that time were basically focused on the same "Stuff my mom used to do for me -- now through a website!" premise. Same as today, mostly. Automated vehicles, robotics, smart appliances, VR, and basically every major technological innovation are capital intensive: five guys in a rented room in a coworking space are not enough. You need a real R&D division.
tomjen3 11y ago
Almost certainly, but that is at least three disruptions ago (a computer in every home, always on internet and a computer with internet in every pocket) - by definition after a disruption you can't use the old predictions because you no longer have the same rules. Today what you can build without engineers (other than your founders) and the cost you of hosting it are magnitudes less than what they were then, which is a change in quantity that causes a change in quality. Look you may be right, but I would need to see much deeper evidence for it, based on current trends and predictions and not stuff people said an eon ago. I would also expect them to be able to use their theory to explain why the "the good times are over" memo didn't cause or predict a crash.

forgetsusername 11y ago

>I swear people around here actually sometimes seem to wish bad things would happen, as some kind of schadenfreude. Some people like to be a step ahead of the curve, because that's where the money's made.

niccaluim 11y ago
And some people are keeping their fingers crossed for knock-on effects in the housing market.

dxhdr 11y ago

"the technical companies in the bay area seems to be isolated from the hardships of the rest of the economy" There's a financial book called "This Time Is Different" that outlines the similarities between asset bubbles and financial crises worldwide over the last several centuries. As outlined by the book, be careful whenever you're attempting to justify the current bubbly situation as the new normal, the rules have changed, the old financial laws no longer apply, this is a new paradigm, et cetera. Because "no, this time is not different," as the meme goes.