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Don't build bubbly products. Startup/VC bubble seems to be a very popular topic in hacker circles, as if all web businesses might get wiped out when the bubble

Don't build bubbly products. Startup/VC bubble seems to be a very popular topic in hacker circles, as if all web businesses might get wiped out when the bubble "bursts". It's wrong to think of all startups as being susceptible to the same sorts of valuation bubble concerns -- tons of "web startups are just businesses with a web component". Tons of web startups are just retail outlets that happen to do most of their business on the web. Airbnb, Etsy, Amazon, etc just connect buyers and sellers, which is something brick and mortar retail outlets have been doing for time eternal. The valuation of Color doesn't affect their (Airbnb's, Etsy's, Amazon's) business model. Don't build bubbly products. Investors will always invest in cashflow, whether its web based or otherwise. Edit: Clarify ambiguous referent.

jmathai 16y ago
Well, I'd disagree that Color's valuation doesn't affect their business model. When you take $40M then you're saying a few things including: we're going to build a great (ala expensive) team, we're going to build it fast, and we're going to get users right away. That impacts one's business model greatly. Also, I don't want to build products to appease investors. Cashflow is the goal, investors are a less important detail if you want to go that route.
- baberuth 16y ago
  That was unclear on my part. What I meant is that Color's valuation doesn't affect Amazon's business (obviously a simplification and subject to some overlapping macroeconomic factors). i.e. Who cares if some investments are bubbly, so long as you're building businesses that are less susceptible to bubble dynamics. Editing previous comment to reflect the original intent.
  - jmathai 16y ago
    Gotcha. I agree with that. So I was curious if taking funding now has any implications that are not present if there wasn't bubbly activity. Your point about building a business regardless is the key though.

jmathai 16y ago

Well, I'd disagree that Color's valuation doesn't affect their business model. When you take $40M then you're saying a few things including: we're going to build a great (ala expensive) team, we're going to build it fast, and we're going to get users right away. That impacts one's business model greatly. Also, I don't want to build products to appease investors. Cashflow is the goal, investors are a less important detail if you want to go that route.

baberuth 16y ago
That was unclear on my part. What I meant is that Color's valuation doesn't affect Amazon's business (obviously a simplification and subject to some overlapping macroeconomic factors). i.e. Who cares if some investments are bubbly, so long as you're building businesses that are less susceptible to bubble dynamics. Editing previous comment to reflect the original intent.
- jmathai 16y ago
  Gotcha. I agree with that. So I was curious if taking funding now has any implications that are not present if there wasn't bubbly activity. Your point about building a business regardless is the key though.