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So what exactly is supposed to happen when this Bubble bursts that in any way affects anybody here? The 1999 bubble was only an issue because it happened with

So what exactly is supposed to happen when this Bubble bursts that in any way affects anybody here? The 1999 bubble was only an issue because it happened with publicly traded companies that lots of people were investing in and making unrealistic gains on. You couldn't watch television without seeing ads for online brokers showing how easy it was to get rich quick, and your "My Account" page on said brokerage site was eager to tell you about your 10X margin and encourage you to use it. When it popped, all those stock portfolios went back to where they started (or worse), and hilarity ensued. This time around, there's none of that. The "Bubble" is simply a handful of private companies getting silly valuations. If that stops happening, there's really no aspect of it that will bankrupt your random average family in the Midwest. So yeah, sure, call it a bubble if you'd like. But it seems from here to be a harmless one floating off in the distance rather than a 1999-style one that we were all living on top of.

F_J_H 15y ago
hmmm.... Here's an exaggeration to make a point: “The housing bubble didn’t really hurt anyone who already owned their home, or those who never owned a home in the first place.” Yes, a tech/start up bubble burst would not have near as much impact as the housing bubble for the reasons you point out, but when you suggest that it won’t hurt “anyone here” (i.e. people who frequent HN), I’m not sure I agree. Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc. So, depending on the percentage of people who depend on work from start up, or early stage companies who are not yet profitable and need to rely on further funding to grow, a “bubble burst” could impact people on HN.
- firefoxman1 15y ago
  The difference is that this time there's only a few hot .com IPO's that could "pop" (ZNGA, GRPN, LNKD) and most of Wall Street is really skeptical of those already...just look at their charts. If it is a bubble and it doest pop, it's really only going to affect the tech jobs market and the ridiculous valuations at which tech companies can be acquired or raise money. So it will be like 2-4 years ago when we all thought Mint.com was an enormous exit, and 12 million for Reddit was more than fair.
- dkrich 15y ago
  > Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc. This is precisely what the view looks like for those inside the bubble. Outside the bubble, that would be called a return to normalcy. A world in which solid businesses that have a prayer of actually returning investor money are rewarded and those that don't, die on the vine. The reality is that if you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks and it's time to do something other than create slide decks and beg people for money.
  - F_J_H 15y ago
    hmmm...not sure I agree that "you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks". When funding dries up, even good businesses have a very difficult time raising capital, and it's not uncommon for a "good" business to be unprofitable for a couple of years (or more) as it ramps up. (See Amazon, Twitter, etc.)
    - dkrich 15y ago
      When has Amazon or Twitter ever had any trouble raising cash?
      - F_J_H 15y ago
        I should have been more clear. What I meant by those example is that the companies were not profitable in their early years, and paying employees may have been difficult without the capital they had raised.
        dkrich 15y ago
        Well my point was that if you can't raise money and you aren't making profits, then your business sucks. That was poorly worded, but Amazon and Twitter never had a problem raising capital when they needed it because there was a huge amount of competition to get into them. The companies that aren't profitable in their early years and simultaneously can't raise cash are screwed and probably shouldn't be funded in the first place.
dkrich 15y ago
Agreed 100%. This is not a bubble that is going to burst because this "bubble" consists of VC's, angels, and private investors putting their own cash into the businesses. These people are already wealthy. If they stop nobody will notice except the people who are desperately seeking funding. There are a few tech stocks that are insanely overvalued (Linkedin, Zynga, Groupon, and Pandora to name a few). But even those only represent a very small amount of money relative to the market overall, and they are all crashing down to earth as we speak.
ajross 15y ago
But you're skipping a bubble: the 2008 collapse wasn't like that at all. Everyone ("everyone") knew we were in a housing bubble. Everyone expected housing prices to collapse. No one expected what happened. As it turned out, all of the big investment banks were insanely leveraged in the housing market. And when it went sound just a little bit they went belly up first. No one outside the inner sanctums of those companies had any clue this was going to happen. So the question here isn't "is there a bubble?", but "what unforseen side effects will it have?".

F_J_H 15y ago

hmmm.... Here's an exaggeration to make a point: “The housing bubble didn’t really hurt anyone who already owned their home, or those who never owned a home in the first place.” Yes, a tech/start up bubble burst would not have near as much impact as the housing bubble for the reasons you point out, but when you suggest that it won’t hurt “anyone here” (i.e. people who frequent HN), I’m not sure I agree. Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc. So, depending on the percentage of people who depend on work from start up, or early stage companies who are not yet profitable and need to rely on further funding to grow, a “bubble burst” could impact people on HN.

firefoxman1 15y ago
The difference is that this time there's only a few hot .com IPO's that could "pop" (ZNGA, GRPN, LNKD) and most of Wall Street is really skeptical of those already...just look at their charts. If it is a bubble and it doest pop, it's really only going to affect the tech jobs market and the ridiculous valuations at which tech companies can be acquired or raise money. So it will be like 2-4 years ago when we all thought Mint.com was an enormous exit, and 12 million for Reddit was more than fair.
dkrich 15y ago
> Let’s say Angel and VC money dries up, and Series A funding also dries up. You then have a bunch of start ups that don’t get funded at all, or who burn through their first Angel/VC raise, and then can’t get any further funding. They then can’t afford to hire or keep talent (hackers, system admins, designers, etc. – i.e. the people here) and there are only so many positions at companies like Apple, Google, Facebook, etc. This is precisely what the view looks like for those inside the bubble. Outside the bubble, that would be called a return to normalcy. A world in which solid businesses that have a prayer of actually returning investor money are rewarded and those that don't, die on the vine. The reality is that if you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks and it's time to do something other than create slide decks and beg people for money.
- F_J_H 15y ago
  hmmm...not sure I agree that "you can't raise money for your startup and you aren't making enough to pay your employees, your business sucks". When funding dries up, even good businesses have a very difficult time raising capital, and it's not uncommon for a "good" business to be unprofitable for a couple of years (or more) as it ramps up. (See Amazon, Twitter, etc.)
  - dkrich 15y ago
    When has Amazon or Twitter ever had any trouble raising cash?
    - F_J_H 15y ago
      I should have been more clear. What I meant by those example is that the companies were not profitable in their early years, and paying employees may have been difficult without the capital they had raised.
      - dkrich 15y ago
        Well my point was that if you can't raise money and you aren't making profits, then your business sucks. That was poorly worded, but Amazon and Twitter never had a problem raising capital when they needed it because there was a huge amount of competition to get into them. The companies that aren't profitable in their early years and simultaneously can't raise cash are screwed and probably shouldn't be funded in the first place.

dkrich 15y ago

Agreed 100%. This is not a bubble that is going to burst because this "bubble" consists of VC's, angels, and private investors putting their own cash into the businesses. These people are already wealthy. If they stop nobody will notice except the people who are desperately seeking funding. There are a few tech stocks that are insanely overvalued (Linkedin, Zynga, Groupon, and Pandora to name a few). But even those only represent a very small amount of money relative to the market overall, and they are all crashing down to earth as we speak.

ajross 15y ago

But you're skipping a bubble: the 2008 collapse wasn't like that at all. Everyone ("everyone") knew we were in a housing bubble. Everyone expected housing prices to collapse. No one expected what happened. As it turned out, all of the big investment banks were insanely leveraged in the housing market. And when it went sound just a little bit they went belly up first. No one outside the inner sanctums of those companies had any clue this was going to happen. So the question here isn't "is there a bubble?", but "what unforseen side effects will it have?".