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Tech valuations defying reality
- pron 15y agoIt's great to see the perspective of someone living outside the bubble. Another point for consideration is that (almost) every web start-up, by nature of the beast, is global, and so must compete globally. The number of of these companies is so large that even unrelated ventures are competing with each-other simply for people's time. An hour spent on GitHub is one less hour spent on Tumblr, or playing Angry Birds. They're also competing for consumer mindshare. There are only so many brands I can hold in my head, no matter what each represents. Traditional business was limited by physical space. I only had to know the brands available in my town, and there was only enough real-estate to go around. But now I can be potentially reached by a virtually limitless number of businesses, and they're all tripping all-over each other. Just like it's become difficult for internet media to generate enough ad revenue, simply because the readers are spread so thin, I believe this thin-spreading of all types of consumers is already having a big effect on web start-ups' prospects. (BTW, it is in this regard that Zuckerberg's genius really shone, when he chose to tie Facebook, at least at first, to the physical location of college campuses) Also fueling the (possible) insanity is the "Silicon Valley Press" - you know, TechCrunch and its ilk - which is mostly dominated by journalists that seem to have drunk the Kool Aid, and plenty of it. And if the fanboyism wasn't enough, the industry has now bought a few more journalists (see http://gawker.com/5876539/tech-industry-buys-itself-a-mouthpiece http://gawker.com/5876539/tech-industry-buys-itself-a-mouthp... for a great write-up).