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I saw an NYT piece about profits mattering again in Silicon Valley: https://www.nytimes.com/2019/10/08/technology/silicon-valley-startup-profit.html https://www
by firasd 7y ago
I saw an NYT piece about profits mattering again in Silicon Valley: https://www.nytimes.com/2019/10/08/technology/silicon-valley-startup-profit.html https://www.nytimes.com/2019/10/08/technology/silicon-valley...
I don't quite agree that this is actually what the issue is lately. I think there have been two types of bubbles in the general startup ecosystem over the past few years that are not related to whether early stage startups are profitable:
1) One has been the under-estimating of unit economics in companies that interact with the real world (unlike pure software companies), which caused a lot of 'Uber-for-X' startups to go under, not to mention Uber itself struggling to maintain its hoped-for valuation.
2) The second aspect has been the influx of late-stage money into companies like Uber and WeWork, delaying IPOs, which has definitely caused some irrational exuberance in the sector.
- bitcoinbutter 7y agoYou could argue that SoftBank alone has greatly impacted #2. Before they came around these types of investments were quite rare.
- matwood 7y agoCheck out Scott Galloway on Twitter (https://twitter.com/profgalloway https://twitter.com/profgalloway) and his website (linked from his Twitter bio). He's been calling out Uber and We for awhile. He has also had some heated exchanges with SV VCs on Twitter. In the case of We I think you are being too generous thinking the IPO is only delayed. The S1 pulled the covers back, and I'm not sure it will ever IPO and may end up out of business. Uber is not in a much better position, as their financials only work by significantly raising prices and/or driverless self-driving coming to market. I think the later is much farther away than people assume.
- agota 7y agoHis blog seems really interesting, thank you for mentioning it!