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Why do they call this a bubble? Almost all startups fail, and this has been true since the beginning of time. If there's suddenly a glut of seed investors willi

by elaineo 14y ago

Why do they call this a bubble? Almost all startups fail, and this has been true since the beginning of time. If there's suddenly a glut of seed investors willing to give startups a shot at survival, we're only increasing the chances of unearthing another dropbox. http://www.paulgraham.com/swan.html http://www.paulgraham.com/swan.html

citizenkeys 14y ago
Bloomberg TV (which also owns Business Week) covered this a month ago in an interview with Paul Graham: http://ycuniverse.com/pg-on-bloomberg-tv http://ycuniverse.com/pg-on-bloomberg-tv As was said at the time, the portfolio effect requires investing in many startups to diversify risk. Most startups are high-risk investments that will obviously fail. And only extremely qualified investors should invest in startups. One major issues with all these accelerators is the mentors are increasingly less qualified and experienced to give advice. The other major issue is the startups themselves are not focusing on actually making anything people want, but rather focusing on raising money. Paul Graham said as much at Demo Day for YCS12, where the startups were prohibited from speaking about fundraising efforts: http://ycuniverse.com/ycw13-likely-less-than-50-companies http://ycuniverse.com/ycw13-likely-less-than-50-companies
pedalpete 14y ago
This isn't about the start-ups in the incubators being a bubble, but rather the incubators themselves. There are too many incubators supporting too many companies, and if incubators don't have exists, which many won't, they aren't making money and therefore will fold. It's a flawed business model for all but the top few.
vannevar 14y ago
Yes, people frequently use the term 'bubble' these days when they actually mean 'fad'. Bursting bubbles attract more attention than passing fads, apparently. But accelerators are clearly a fad, not a bubble.

by elaineo 14y ago

citizenkeys 14y ago

Bloomberg TV (which also owns Business Week) covered this a month ago in an interview with Paul Graham: http://ycuniverse.com/pg-on-bloomberg-tv http://ycuniverse.com/pg-on-bloomberg-tv As was said at the time, the portfolio effect requires investing in many startups to diversify risk. Most startups are high-risk investments that will obviously fail. And only extremely qualified investors should invest in startups. One major issues with all these accelerators is the mentors are increasingly less qualified and experienced to give advice. The other major issue is the startups themselves are not focusing on actually making anything people want, but rather focusing on raising money. Paul Graham said as much at Demo Day for YCS12, where the startups were prohibited from speaking about fundraising efforts: http://ycuniverse.com/ycw13-likely-less-than-50-companies http://ycuniverse.com/ycw13-likely-less-than-50-companies

pedalpete 14y ago

This isn't about the start-ups in the incubators being a bubble, but rather the incubators themselves. There are too many incubators supporting too many companies, and if incubators don't have exists, which many won't, they aren't making money and therefore will fold. It's a flawed business model for all but the top few.

vannevar 14y ago

Yes, people frequently use the term 'bubble' these days when they actually mean 'fad'. Bursting bubbles attract more attention than passing fads, apparently. But accelerators are clearly a fad, not a bubble.