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The aftermath from this bubble bursting is going to be very very painful. We're going to have high unemployment for programmers again just like after the dot-c

The aftermath from this bubble bursting is going to be very very painful. We're going to have high unemployment for programmers again just like after the dot-com, except this time it will coincide with global economic recession and software market maturation/saturation (thanks to all the free webapps/mobile apps)

AngryParsley 16y ago
Since you think that will be the case, what hedges are you taking to prepare for the lean times?
- radicaldreamer 16y ago
  I think one of the best hedges if you're concerned about your job in the next decade or two would be to learn Mandarin.
  - jrockway 16y ago
    Isn't that what everyone said 40 years ago about the Japanese? My guess is that English is not going to become obsolete because Facebook's investors got burned.
- chailatte 16y ago
  I have savings, investment vehicles and very little debt. However, in this 'interesting times', I doubt even those are enough to safely hedge against what lays ahead.
spamizbad 16y ago
I've wondered: Just how large is this latest tech bubble? I've seen some pretty high valuations of companies, but none of the madness I recall from the dot-com era. I'm not fully convinced the high valuations of a handful of companies it putting the entire tech industry at risk. The dot-com fallout was also exacerbated by the Y2K craze, which isn't a factor this time around.
- vessenes 16y ago
  Completely agreed. Also, this 'bubble' seems to coincide with serious efficiency gains in startups and the sudden ability of startups to a) scale and b) make money. I don't see any boo.com's right now. There may well be a bubble right now. There's certainly a tidal shift toward founders as has been thoroughly discussed on this site and elsewhere. That tide will probably shift back around at some point, who knows? Small dollar placements resulting in mid-size private purchases does not a bubble make; neither does medium-size (500mm) placements in high revenue, profitable, massive growth tech companies.
  - stretchwithme 16y ago
    why do you say startups scaling and making money is a sudden ability? Are they all doing it? Were they never able to before?
    - vessenes 16y ago
      During the bubble 'mindshare' was considered the most valuable thing you could get, more than money. Hence, superbowl commercials for Dotcom startups. Scaling has gotten far, far, far cheaper in terms of hardware, software and staff. This opens up a new class of possible businesses and returns. Remember that Google didn't even exist during the first part of the boom; monetizing with advertising was difficult... Everything cost tens of thousands of dollars back then, phone systems, servers, development environment licenses, ... Anyway, memory lane. Now you can git push to heroku and launch a web app. That's definitely valuable. Heroku probably would have been worth well over $1bn during the boom, though. At the time, you could legitimately spend a year building out a web application.
- BerislavLopac 16y ago
  I like this comment from Don Dodge at http://dondodge.typepad.com/the_next_big_thing/2011/01/facebook-twitter-and-startup-valuations.html http://dondodge.typepad.com/the_next_big_thing/2011/01/faceb... : "Critics point to Twitter raising $200M at a $3.7B valuation, and Facebook being valued at $35 Billion, or Groupon at $6B valuation just 6 months after raising a $135M round at a $1.35B valuation as evidence of a bubble. Bubbles don't typically start with the market leaders. Bubbles happen when investors extrapolate market leader valuations onto 3rd tier players. Sound the bubble alarm when you see this happening."
Timothee 16y ago
Is the bubble very widespread though? Facebook is the darling right now and news like these remind of bubbles, but are there many other startups that receive such a treatment right now? Granted I wasn't there and wasn't following when it happened, but from what I gather, the first Internet bubble was crazy investments and spendings everywhere in the Silicon Valley, not just one or a few startups. To put it simply, is it an industry bubble or a Facebook bubble? And can you point to what shows it's widespread? The question might be moot if you think that, in any case, the fall of Facebook would take the rest with it…
- vessenes 16y ago
  I lived through it, and it was crazy. I lived in Boston, and at the time in Boston Zefer closed a $100mm series A, the largest series A in history. They had lovely offices! There was definitely a 'you have to be spending on tech, you have to be spending on marketing' vibe at any funded tech company at the time. Aeron chairs, yadda-yadda. Content Management systems cost $500k plus. Servers for the CMS'es could run $30k a month(!!!) each. It was really, REALLY different than the vibe today, a vibe in part built by YC -- go cheap, keep overhead low, prove it out, etc. etc. I don't think the current Zeitgeist is comparable at all.
jrockway 16y ago
I highly doubt it. For every Facebook, there are 10 HR reporting systems that need custom software. The bulk of the world's programmers are being employed to do boring stuff. When Facebook disappears, there will just be more good programmers around to make really good HR reporting software (instead of the largely lousy software that the industry accepts now, because all the good programmers want to do something else).

AngryParsley 16y ago

Since you think that will be the case, what hedges are you taking to prepare for the lean times?

radicaldreamer 16y ago
I think one of the best hedges if you're concerned about your job in the next decade or two would be to learn Mandarin.
- jrockway 16y ago
  Isn't that what everyone said 40 years ago about the Japanese? My guess is that English is not going to become obsolete because Facebook's investors got burned.
chailatte 16y ago
I have savings, investment vehicles and very little debt. However, in this 'interesting times', I doubt even those are enough to safely hedge against what lays ahead.

spamizbad 16y ago

I've wondered: Just how large is this latest tech bubble? I've seen some pretty high valuations of companies, but none of the madness I recall from the dot-com era. I'm not fully convinced the high valuations of a handful of companies it putting the entire tech industry at risk. The dot-com fallout was also exacerbated by the Y2K craze, which isn't a factor this time around.

vessenes 16y ago
Completely agreed. Also, this 'bubble' seems to coincide with serious efficiency gains in startups and the sudden ability of startups to a) scale and b) make money. I don't see any boo.com's right now. There may well be a bubble right now. There's certainly a tidal shift toward founders as has been thoroughly discussed on this site and elsewhere. That tide will probably shift back around at some point, who knows? Small dollar placements resulting in mid-size private purchases does not a bubble make; neither does medium-size (500mm) placements in high revenue, profitable, massive growth tech companies.
- stretchwithme 16y ago
  why do you say startups scaling and making money is a sudden ability? Are they all doing it? Were they never able to before?
  - vessenes 16y ago
    During the bubble 'mindshare' was considered the most valuable thing you could get, more than money. Hence, superbowl commercials for Dotcom startups. Scaling has gotten far, far, far cheaper in terms of hardware, software and staff. This opens up a new class of possible businesses and returns. Remember that Google didn't even exist during the first part of the boom; monetizing with advertising was difficult... Everything cost tens of thousands of dollars back then, phone systems, servers, development environment licenses, ... Anyway, memory lane. Now you can git push to heroku and launch a web app. That's definitely valuable. Heroku probably would have been worth well over $1bn during the boom, though. At the time, you could legitimately spend a year building out a web application.
BerislavLopac 16y ago
I like this comment from Don Dodge at http://dondodge.typepad.com/the_next_big_thing/2011/01/facebook-twitter-and-startup-valuations.html http://dondodge.typepad.com/the_next_big_thing/2011/01/faceb... : "Critics point to Twitter raising $200M at a $3.7B valuation, and Facebook being valued at $35 Billion, or Groupon at $6B valuation just 6 months after raising a $135M round at a $1.35B valuation as evidence of a bubble. Bubbles don't typically start with the market leaders. Bubbles happen when investors extrapolate market leader valuations onto 3rd tier players. Sound the bubble alarm when you see this happening."

Timothee 16y ago

Is the bubble very widespread though? Facebook is the darling right now and news like these remind of bubbles, but are there many other startups that receive such a treatment right now? Granted I wasn't there and wasn't following when it happened, but from what I gather, the first Internet bubble was crazy investments and spendings everywhere in the Silicon Valley, not just one or a few startups. To put it simply, is it an industry bubble or a Facebook bubble? And can you point to what shows it's widespread? The question might be moot if you think that, in any case, the fall of Facebook would take the rest with it…

vessenes 16y ago
I lived through it, and it was crazy. I lived in Boston, and at the time in Boston Zefer closed a $100mm series A, the largest series A in history. They had lovely offices! There was definitely a 'you have to be spending on tech, you have to be spending on marketing' vibe at any funded tech company at the time. Aeron chairs, yadda-yadda. Content Management systems cost $500k plus. Servers for the CMS'es could run $30k a month(!!!) each. It was really, REALLY different than the vibe today, a vibe in part built by YC -- go cheap, keep overhead low, prove it out, etc. etc. I don't think the current Zeitgeist is comparable at all.

jrockway 16y ago

I highly doubt it. For every Facebook, there are 10 HR reporting systems that need custom software. The bulk of the world's programmers are being employed to do boring stuff. When Facebook disappears, there will just be more good programmers around to make really good HR reporting software (instead of the largely lousy software that the industry accepts now, because all the good programmers want to do something else).