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What's missing from this guy's evaluation: whether or not any of these unicorns are close to or at profitability, and what their actual market potential is. If
by area51org 11y ago
What's missing from this guy's evaluation: whether or not any of these unicorns are close to or at profitability, and what their actual market potential is.
If the businesses are based on bullshit, then he's probably right. If the valuations truly are wildly out of control (and it does seem like it), then sure, they're due for a correction.
It's also worth keeping mind that if there are 144 of these startups, 90% of them is 129. That doesn't add up to that much money in SV terms. This seems like a tempest in a teapot. People love to make headlines, it seems, with "OMG bubble OMG!"
- crystalmeph 11y agoWith minimum valuations of $1 billion each, that's well north of $129 billion in valuation that's about to go up in smoke. I know that's not an actual dollar amount invested in these companies, and in many cases is honestly just people proving they can add a few numbers together to make a billion, but a lot of real money is likely to be lost.
- twoodfin 11y agoJust for some perspective, the current market cap of the S&P 500 is north of $15 trillion dollars. It can gain or lose $129B worth of valuation on a not particularly remarkable trading day. Not that such a geographically and industrially concentrated collapse wouldn't be a big deal, and it surely would have broad secondary effects.