2 ms·

I think it's a testament to how quickly the business is changing and how increasingly broken the conventional wisdom surrounding investment and acquisition is b

I think it's a testament to how quickly the business is changing and how increasingly broken the conventional wisdom surrounding investment and acquisition is becoming. If you look at the way business worked in, say, the '80s most companies that became big did so by selling stuff, and having positive rates of return. And the general trend for a company that was growing was for it to maintain that growth for several years, or at least retain that level of business. But today business is far more ephemeral. Revenue can be far more sporadic, monetization can be far more complex, and the valuation of a "customer base" can be much more difficult because of that. So you can get these flash in the pan products that produce millions of dollars in revenue for a few months but then maybe they go away just as quickly and aren't worth anything later. It makes for a weird market, and it makes for an even weirder industry, especially when things tend to be organized around "empire building" and such-like. I suspect that in the future there will be more and more of a focus around project-based business services rather than organization-based services. Kickstarter, I think, is an example of this.

tomkarlo 13y ago
Highly speculative publicly-traded businesses have been around as long as there have been stock markets and aren't new at all. Historians have suggested that in the 1850s/1860s more money was made selling shares in mining companies than was ever mined out of the ground. In the 80s you had the S&Ls and the post-deregulation airlines. Then the Dot Coms and Enrons of 2000 era. Everyone just tends to conveniently forget, because the companies disappear and our memories are short.
- acjohnson55 13y ago
  The book Doing Capitalism in the Innovation Economy by William Janeway has a fantastic history of speculative bubbles and venture capital, and then some. It's a tough book to read if you don't have a background in finance and econ, but it's well worth the effort if you want to understand Western capitalism in practice.

tomkarlo 13y ago

Highly speculative publicly-traded businesses have been around as long as there have been stock markets and aren't new at all. Historians have suggested that in the 1850s/1860s more money was made selling shares in mining companies than was ever mined out of the ground. In the 80s you had the S&Ls and the post-deregulation airlines. Then the Dot Coms and Enrons of 2000 era. Everyone just tends to conveniently forget, because the companies disappear and our memories are short.

acjohnson55 13y ago
The book Doing Capitalism in the Innovation Economy by William Janeway has a fantastic history of speculative bubbles and venture capital, and then some. It's a tough book to read if you don't have a background in finance and econ, but it's well worth the effort if you want to understand Western capitalism in practice.