7 ms·

Bubble? I feel like people who are claiming that we are in a startup bubble weren't really around in the 90s. Guys were getting paid $100/hour to do HTML. Just

by weeksie 13y ago

Bubble? I feel like people who are claiming that we are in a startup bubble weren't really around in the 90s. Guys were getting paid $100/hour to do HTML. Just HTML. Literally just HTML. The excess was mind-boggling. In contrast, today it just seems like lots of investors have found a good way to pump money into a reasonable risk pool and extract value. Seems fairly sustainable. In the 90s, companies were doing IPOs and their shares were skyrocketing from public investment. For the most part right now it's institutional investors who are a lot more qualified than John Q. Public.

austenallred 13y ago
It seems odd to me that people are seriously talking about a bubble coming as if it's never been talked about before. It seems to be once a month that there's another article on TechCrunch decrying Silicon Valley as a bubble after stumbling upon the party of some douchebag who watched The Social Network and decided to snort cocaine in Palo Alto. But I quote Peter Thiel's "Party like it's 1999" lecture: http://blakemasters.com/post/20582845717/peter-thiels-cs183-startup-class-2-notes-essay http://blakemasters.com/post/20582845717/peter-thiels-cs183-... "Bubbles arise when there is (1) widespread, intense belief that’s (2) not true. But people don’t really believe in anything in our society anymore. You can’t have a bubble absent widespread, intense belief. The incredible narrative about a tech bubble comes from people who are looking for a bubble. That’s more overreaction to the pain of the ‘90s than it is good analysis." In other words, if the majority of people believe there is a bubble, there is not, by definition, a bubble. Valuations for seed-rounds are frothy because there are a lot of investors competing and looking for astronomical returns, but Series A is still hard to come by. Just a couple days ago there was an article on HN about "avoiding the Series A crunch," and today we have a "what to do in the bubble" article. If anything is widespread, it's good old fashioned paranoia.
- berntb 13y ago
  >>If anything is widespread, it's good old fashioned paranoia. Well, you will see this as paranoia then: There were lots of people arguing like you that there were no bubble -- just until it burst. For instance, this "everyone learn to code to earn money" thing imho indicates that it is highly likely that the programming profession will burst in a short while. Again. (The reason there is a lack of software people now is at least partly because everyone stopped studying computer science after the IT death.) Edit: jonnathanson (and others) answers you better than me https://news.ycombinator.com/item?id=6440516 https://news.ycombinator.com/item?id=6440516
  - runawaybottle 13y ago
    This is the part that I've been concerned about as well, "everyone learn to code". The truth of the matter is if you're about to head into college, it's very difficult to see any hope of getting a job in all but a few industries. Software is one of the bright spots in the economy right now, so we will absolutely see a huge influx of programmers in the coming years. I don't know how this will impact the current crop of developers going forward, but I do hope the industry gets bigger with things like more hardware to develop for (Google glass, car software like the dashboard in the model s, 3d printing, etc). If it doesn't, then the tides will definitely turn as I just don't think we need that many web/app developers.
- wwweston 13y ago
  > people don’t really believe in anything in our society anymore Should I believe that? (And is this another way of say "This time is different"?) Is it actually possible for people not to believe anything, in our society or any society? > In other words, if the majority of people believe there is a bubble, there is not, by definition, a bubble. Does this go beyond first-order consequences? Is it also true that the more people utilize the rationale to convince themselves that talk of/paranoia regarding a bubble is a sign of no bubble, the more likely there can be a bubble? Also, there seems to be the assumption that when people realize there's a bubble, they'll immediately engage in attenuating behavior. I think there's evidence to the contrary -- that as long as people can see a way to continue to profit from it (say, a critical mass of people believing everyone else is the greater fool), a bubble can continue while being widely acknowledged.
  - jonnathanson 13y ago
    "Is it actually possible for people not to believe anything, in our society or any society?" "We are nihilists, Lebowski! We believe in nothing!" Sorry, couldn't resist. :) With all due respect to Peter Thiel, who is much smarter and more successful than I am, I'm really baffled by the statement that "people in our society don't really believe in anything anymore." And I am especially baffled by the implication that this putative, ubiquitous nihilo-cynicism -- even if we accept it to be true, which I don't -- necessarily precludes the formation of bubbles. Did people not believe in anything back in the mid-2000s housing bubble? It seems as if they believed in housing, for one thing. The belief was "widespread and intense" enough to cause a serious freakin' problem. I'm going to give a guy like Peter Thiel the benefit of the doubt and assume that I'm missing a lot for lack of context. But that quote, at least out of its original context and so presented, is really strange.
    - wwweston 13y ago
      > "We are nihilists, Lebowski! We believe in nothing!" :) > With all due respect to Peter Thiel, who is much smarter and more successful than I am Remember, these two things sometimes go together. Another guy who's more successful than many of us said “Success is a lousy teacher. It seduces smart people into thinking they can't lose.” > I'm going to give a guy like Peter Thiel the benefit of the doubt and assume that I'm missing a lot for lack of context I'm a little less generous; my guess is that what Thiel says is very smart indeed in the context of boosting certain business interests and/or political philosophies.
- Vivtek 13y ago
  So if anything, there's a metabubble? A widespread, intense belief that there may or may not be a bubble?
ry0ohki 13y ago
HTML was a new thing then. Despite how simple it seems now, it was a black art then. I was also around for those times and this is pretty similar. The warning signs to me are when people "not in the industry" want to become involved. IE, in the 90s bubble, accountants were looking to become IT Professionals with MCSE certifications because the job market was so hot. Now people who had no interest in starting a business or technology are starting companies left and right. It will be a different type of bubble, but it's definitely a bubble.
- Homunculiheaded 13y ago
  The biggest difference I see is that while I know many non-developers wanting to get into software, only those that actually become strong developers make it. In the 90s it wasn't just that HTML was new, anyone that was "good with computers" was able to land jobs that paid stupid amounts of money for the skill set. There's good money and a demand for developers now, but companies are still looking for good developers, not just bodies with the right buzzwords on a resume. And also mentioned in the parent comment: there's nowhere near the zeal from the general public. I don't know anyone in the non-tech world that thought groupon or zynga was a good deal, and almost everyone is curious how exactly fb plans to make money in the long run. Compare this to the dotcom bubble or the real-estae bubble and it is very different (I remember many people telling me in 2007 that I was foolish not to buy a house).
  - runawaybottle 13y ago
    I'll add that if we have to make some kinda of parallel, the best we can do is put the cut-off at low-level frontend development. That includes taking PSDs and slicing them, maybe hook up some jquery. Anything beyond that such as complex html5/js web and mobile development, native apps, and backend work all take a significant investment of time. I don't think one can just jump into it.
- Terretta 13y ago
  No, it's not the same. Those late 90s guys were well employed. The current crop of wantrepreneurs are very often not.
bdcravens 13y ago
I don't think salary has much to with it. Then again, how much are some devs getting paid who have less than 3 years of experience and are scarcely more than experts at "rails scaffold"? It's not even IPOs or stock price. It's more VC funding and big exits. As for John Q. Public, that's about to get WAY more interesting, since general solicitation is now a thing.
- 7Figures2Commas 13y ago
  > As for John Q. Public, that's about to get WAY more interesting, since general solicitation is now a thing. It may not be as entertaining as the .com bubble, but there's potential here. I mean, just look at http://www.wefunder.com/terrafugia http://www.wefunder.com/terrafugia. If that's too over the top, even http://www.wefunder.com/casetext http://www.wefunder.com/casetext is mind-boggling. 2% interest, an $8 million valuation cap and no discount on a $1.3 million convertible note for a startup that says it can't start acquiring paid customers until its "enterprise software is ready to the security standards that firms demand -- likely in six months"?
  - robg 13y ago
    RE: Terrafugia $30 million in pre-orders 2 production-ready prototypes built (i.e., actual, flyable planes that readily turn into road-worthy cars and back again) I wouldn't call that over the top. I'd call that awesome.
    - 7Figures2Commas 13y ago
      Did you actually read the history of the company and the Investor Q&A?
  - nostrademons 13y ago
    FWIW, DropBox took a helluva lot longer than 6 months to get to the "security standards enterprise firms expect" (they still had major security incidents several years after public launch), and look where they got to. Casetext seems eminently reasonable. They have founders with solid domain knowledge, are solving a very painful problem for an industry with deep-pocketed players, seem to have an easy-to-use product, and have demonstrated measurable traction. I'm tempted to invest once I do a bit more due diligence on both WeFunder and CaseText.
netcan 13y ago
I'm not disagreeing with the main point but in fairness html was a new technology at the time and coding websites was something few people knew how to do. Seems easy now but we've go tools, tutorials and people to learn from now.
- twistedpair 13y ago
  "HTML was a new technology at the time" Really? I recall my personal roadkill website I had back in 1996 as a 6th grader. Picked up an HTML manual at the library when they still had card catalogs. Nothing too hard about it at all and Dreamweaver and Photoshop made it a snap if you were ignorant of markup. It was a bubble. Too bad I was learning about Earth Science while people were making frivolous dollars.
  - andrevan 13y ago
    I actually made money in the mid 90s making websites for people and I was born in 1989. I made websites for local teachers and the middle school. I had lots of walking around money as a kid in high school because I had a recurring payment from work that had begun in 2001 at the height of the dotcom era.
  - pfranz 13y ago
    DreamWeaver 1.0 wasn't released until December of '97 [1] and in November '96 Photoshop just released 4.0 [2], the first version with Layers, it still only had 1 undo, and text was rasterized (you couldn't edit it). FrontPage wasn't even released until around '96. Most of the websites I remember from that period had a lot of cut and paste graphics (Photoshop was expensive, has a learning curve, and harder to use than today) so I'm sure custom graphics were expensive and people charged a high rate (with lower productivity). I can't remember any popular WYSIWYG authoring software prior to DreamWeaver/FrontPage. I would guess most were hand-written--which, as you know isn't hard, but the tools were a lot less refined and harder to find out about back then. [1] http://en.wikipedia.org/wiki/Dreamweaver#History http://en.wikipedia.org/wiki/Dreamweaver#History [2] http://en.wikipedia.org/wiki/Adobe_Photoshop_version_history#4.0 http://en.wikipedia.org/wiki/Adobe_Photoshop_version_history...
capkutay 13y ago
I'm not too familiar with the landscape but I'm seeing some IPOs valued at $3-4b from companies that are generating about $100m in revenues. 5 years ago those same companies would be a <$1b acquisition.
- weeksie 13y ago
  There were around 300 tech IPOs in 1999. There were 136 total IPOs in 2012. It's a completely different field right now. If it was 1999 almost all of the series A companies we see right now would have already IPO'd.
xophe 13y ago
This comment is hilariously shortsighted. Ten years later: >> "Guys were being paid $100/hour to get CRUD working through a web framework." People weren't being paid to write HTML. They were being paid to publish information on the Internet for the first time ever. Like, before W3 schools and NodeJS. Like, back when you got your morning news from the paperboy. If typesetters were paid a dime back in the 1700s, anyone who could design a webpage in the 90s was certainly worth their weight in gold. And with time, one day your job will also be super unflattering to talk about.
- weeksie 13y ago
  This comment is hilariously unaware of the actual history. Remember, I was around for the whole thing. Those guys writing HTML were writing static pages. Not guys that were writing Perl scripts, not guys that were deploying the websites—those guys were getting payed a LOT more. The pay was out of whack because public money was flowing into tech stocks and companies were doing IPOs with little to no due diligence. You had do-nothing companies with ten to fifty times the capital that a typical well-funded company would have today. Large companies were buying things left and right out of sheer terror and misunderstanding of what the web meant to commerce. So no. We're not in a bubble.
deleted 13y ago
[deleted]

by weeksie 13y ago

austenallred 13y ago

It seems odd to me that people are seriously talking about a bubble coming as if it's never been talked about before. It seems to be once a month that there's another article on TechCrunch decrying Silicon Valley as a bubble after stumbling upon the party of some douchebag who watched The Social Network and decided to snort cocaine in Palo Alto. But I quote Peter Thiel's "Party like it's 1999" lecture: http://blakemasters.com/post/20582845717/peter-thiels-cs183-startup-class-2-notes-essay http://blakemasters.com/post/20582845717/peter-thiels-cs183-... "Bubbles arise when there is (1) widespread, intense belief that’s (2) not true. But people don’t really believe in anything in our society anymore. You can’t have a bubble absent widespread, intense belief. The incredible narrative about a tech bubble comes from people who are looking for a bubble. That’s more overreaction to the pain of the ‘90s than it is good analysis." In other words, if the majority of people believe there is a bubble, there is not, by definition, a bubble. Valuations for seed-rounds are frothy because there are a lot of investors competing and looking for astronomical returns, but Series A is still hard to come by. Just a couple days ago there was an article on HN about "avoiding the Series A crunch," and today we have a "what to do in the bubble" article. If anything is widespread, it's good old fashioned paranoia.

berntb 13y ago
>>If anything is widespread, it's good old fashioned paranoia. Well, you will see this as paranoia then: There were lots of people arguing like you that there were no bubble -- just until it burst. For instance, this "everyone learn to code to earn money" thing imho indicates that it is highly likely that the programming profession will burst in a short while. Again. (The reason there is a lack of software people now is at least partly because everyone stopped studying computer science after the IT death.) Edit: jonnathanson (and others) answers you better than me https://news.ycombinator.com/item?id=6440516 https://news.ycombinator.com/item?id=6440516
- runawaybottle 13y ago
  This is the part that I've been concerned about as well, "everyone learn to code". The truth of the matter is if you're about to head into college, it's very difficult to see any hope of getting a job in all but a few industries. Software is one of the bright spots in the economy right now, so we will absolutely see a huge influx of programmers in the coming years. I don't know how this will impact the current crop of developers going forward, but I do hope the industry gets bigger with things like more hardware to develop for (Google glass, car software like the dashboard in the model s, 3d printing, etc). If it doesn't, then the tides will definitely turn as I just don't think we need that many web/app developers.
wwweston 13y ago
> people don’t really believe in anything in our society anymore Should I believe that? (And is this another way of say "This time is different"?) Is it actually possible for people not to believe anything, in our society or any society? > In other words, if the majority of people believe there is a bubble, there is not, by definition, a bubble. Does this go beyond first-order consequences? Is it also true that the more people utilize the rationale to convince themselves that talk of/paranoia regarding a bubble is a sign of no bubble, the more likely there can be a bubble? Also, there seems to be the assumption that when people realize there's a bubble, they'll immediately engage in attenuating behavior. I think there's evidence to the contrary -- that as long as people can see a way to continue to profit from it (say, a critical mass of people believing everyone else is the greater fool), a bubble can continue while being widely acknowledged.
- jonnathanson 13y ago
  "Is it actually possible for people not to believe anything, in our society or any society?" "We are nihilists, Lebowski! We believe in nothing!" Sorry, couldn't resist. :) With all due respect to Peter Thiel, who is much smarter and more successful than I am, I'm really baffled by the statement that "people in our society don't really believe in anything anymore." And I am especially baffled by the implication that this putative, ubiquitous nihilo-cynicism -- even if we accept it to be true, which I don't -- necessarily precludes the formation of bubbles. Did people not believe in anything back in the mid-2000s housing bubble? It seems as if they believed in housing, for one thing. The belief was "widespread and intense" enough to cause a serious freakin' problem. I'm going to give a guy like Peter Thiel the benefit of the doubt and assume that I'm missing a lot for lack of context. But that quote, at least out of its original context and so presented, is really strange.
  - wwweston 13y ago
    > "We are nihilists, Lebowski! We believe in nothing!" :) > With all due respect to Peter Thiel, who is much smarter and more successful than I am Remember, these two things sometimes go together. Another guy who's more successful than many of us said “Success is a lousy teacher. It seduces smart people into thinking they can't lose.” > I'm going to give a guy like Peter Thiel the benefit of the doubt and assume that I'm missing a lot for lack of context I'm a little less generous; my guess is that what Thiel says is very smart indeed in the context of boosting certain business interests and/or political philosophies.
Vivtek 13y ago
So if anything, there's a metabubble? A widespread, intense belief that there may or may not be a bubble?

ry0ohki 13y ago

HTML was a new thing then. Despite how simple it seems now, it was a black art then. I was also around for those times and this is pretty similar. The warning signs to me are when people "not in the industry" want to become involved. IE, in the 90s bubble, accountants were looking to become IT Professionals with MCSE certifications because the job market was so hot. Now people who had no interest in starting a business or technology are starting companies left and right. It will be a different type of bubble, but it's definitely a bubble.

Homunculiheaded 13y ago
The biggest difference I see is that while I know many non-developers wanting to get into software, only those that actually become strong developers make it. In the 90s it wasn't just that HTML was new, anyone that was "good with computers" was able to land jobs that paid stupid amounts of money for the skill set. There's good money and a demand for developers now, but companies are still looking for good developers, not just bodies with the right buzzwords on a resume. And also mentioned in the parent comment: there's nowhere near the zeal from the general public. I don't know anyone in the non-tech world that thought groupon or zynga was a good deal, and almost everyone is curious how exactly fb plans to make money in the long run. Compare this to the dotcom bubble or the real-estae bubble and it is very different (I remember many people telling me in 2007 that I was foolish not to buy a house).
- runawaybottle 13y ago
  I'll add that if we have to make some kinda of parallel, the best we can do is put the cut-off at low-level frontend development. That includes taking PSDs and slicing them, maybe hook up some jquery. Anything beyond that such as complex html5/js web and mobile development, native apps, and backend work all take a significant investment of time. I don't think one can just jump into it.
Terretta 13y ago
No, it's not the same. Those late 90s guys were well employed. The current crop of wantrepreneurs are very often not.

bdcravens 13y ago

I don't think salary has much to with it. Then again, how much are some devs getting paid who have less than 3 years of experience and are scarcely more than experts at "rails scaffold"? It's not even IPOs or stock price. It's more VC funding and big exits. As for John Q. Public, that's about to get WAY more interesting, since general solicitation is now a thing.

7Figures2Commas 13y ago
> As for John Q. Public, that's about to get WAY more interesting, since general solicitation is now a thing. It may not be as entertaining as the .com bubble, but there's potential here. I mean, just look at http://www.wefunder.com/terrafugia http://www.wefunder.com/terrafugia. If that's too over the top, even http://www.wefunder.com/casetext http://www.wefunder.com/casetext is mind-boggling. 2% interest, an $8 million valuation cap and no discount on a $1.3 million convertible note for a startup that says it can't start acquiring paid customers until its "enterprise software is ready to the security standards that firms demand -- likely in six months"?
- robg 13y ago
  RE: Terrafugia $30 million in pre-orders 2 production-ready prototypes built (i.e., actual, flyable planes that readily turn into road-worthy cars and back again) I wouldn't call that over the top. I'd call that awesome.
  - 7Figures2Commas 13y ago
    Did you actually read the history of the company and the Investor Q&A?
- nostrademons 13y ago
  FWIW, DropBox took a helluva lot longer than 6 months to get to the "security standards enterprise firms expect" (they still had major security incidents several years after public launch), and look where they got to. Casetext seems eminently reasonable. They have founders with solid domain knowledge, are solving a very painful problem for an industry with deep-pocketed players, seem to have an easy-to-use product, and have demonstrated measurable traction. I'm tempted to invest once I do a bit more due diligence on both WeFunder and CaseText.

netcan 13y ago

I'm not disagreeing with the main point but in fairness html was a new technology at the time and coding websites was something few people knew how to do. Seems easy now but we've go tools, tutorials and people to learn from now.

twistedpair 13y ago
"HTML was a new technology at the time" Really? I recall my personal roadkill website I had back in 1996 as a 6th grader. Picked up an HTML manual at the library when they still had card catalogs. Nothing too hard about it at all and Dreamweaver and Photoshop made it a snap if you were ignorant of markup. It was a bubble. Too bad I was learning about Earth Science while people were making frivolous dollars.
- andrevan 13y ago
  I actually made money in the mid 90s making websites for people and I was born in 1989. I made websites for local teachers and the middle school. I had lots of walking around money as a kid in high school because I had a recurring payment from work that had begun in 2001 at the height of the dotcom era.
- pfranz 13y ago
  DreamWeaver 1.0 wasn't released until December of '97 [1] and in November '96 Photoshop just released 4.0 [2], the first version with Layers, it still only had 1 undo, and text was rasterized (you couldn't edit it). FrontPage wasn't even released until around '96. Most of the websites I remember from that period had a lot of cut and paste graphics (Photoshop was expensive, has a learning curve, and harder to use than today) so I'm sure custom graphics were expensive and people charged a high rate (with lower productivity). I can't remember any popular WYSIWYG authoring software prior to DreamWeaver/FrontPage. I would guess most were hand-written--which, as you know isn't hard, but the tools were a lot less refined and harder to find out about back then. [1] http://en.wikipedia.org/wiki/Dreamweaver#History http://en.wikipedia.org/wiki/Dreamweaver#History [2] http://en.wikipedia.org/wiki/Adobe_Photoshop_version_history#4.0 http://en.wikipedia.org/wiki/Adobe_Photoshop_version_history...

capkutay 13y ago

I'm not too familiar with the landscape but I'm seeing some IPOs valued at $3-4b from companies that are generating about $100m in revenues. 5 years ago those same companies would be a <$1b acquisition.

weeksie 13y ago
There were around 300 tech IPOs in 1999. There were 136 total IPOs in 2012. It's a completely different field right now. If it was 1999 almost all of the series A companies we see right now would have already IPO'd.

xophe 13y ago

This comment is hilariously shortsighted. Ten years later: >> "Guys were being paid $100/hour to get CRUD working through a web framework." People weren't being paid to write HTML. They were being paid to publish information on the Internet for the first time ever. Like, before W3 schools and NodeJS. Like, back when you got your morning news from the paperboy. If typesetters were paid a dime back in the 1700s, anyone who could design a webpage in the 90s was certainly worth their weight in gold. And with time, one day your job will also be super unflattering to talk about.

weeksie 13y ago
This comment is hilariously unaware of the actual history. Remember, I was around for the whole thing. Those guys writing HTML were writing static pages. Not guys that were writing Perl scripts, not guys that were deploying the websites—those guys were getting payed a LOT more. The pay was out of whack because public money was flowing into tech stocks and companies were doing IPOs with little to no due diligence. You had do-nothing companies with ten to fifty times the capital that a typical well-funded company would have today. Large companies were buying things left and right out of sheer terror and misunderstanding of what the web meant to commerce. So no. We're not in a bubble.

deleted 13y ago

[deleted]