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My amusing thought experiment is that two startups could easily give themselves billion dollar revenue as follows: 1. Startup A sells 2 twin puppies to startup

by alister 12y ago

My amusing thought experiment is that two startups could easily give themselves billion dollar revenue as follows: 1. Startup A sells 2 twin puppies to startup B at $500M each. 2. Startup B sells 4 hand-drawn logos to startup A for $250M each. Each books $1B in revenue and each also books $1B in expenses so as to avoid tax.

api 12y ago
From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia. As for what's happening now... armchair speculation...? We're in something that almost looks like half bubble half depression. Wages are stagnant or falling, costs of necessities are rising, but there's a huge amount of money sloshing around and pumping up everything from potato salad to cryptocurrencies based on a shiba inu dog meme to obvious pink sheet scams. The average person is drowning in student loan and mortgage debt and is unable to afford to start a family (I know a number of these folks -- none are dumb or lazy) but... Dogecoin and potato salad. Yeah. Maybe the sum total of all the quant trading algorithms in global markets have achieved sentience and subsequently gone insane with the realization of who/what their creators actually are. Since they have no mouth and must scream, they're doing it by way of financial dadaism.
- terminus 12y ago
  > From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia. Yup. Seattle Times had a detailed story on one of those: http://blogs.seattletimes.com/opinionnw/2014/03/27/naveen-jain/ http://blogs.seattletimes.com/opinionnw/2014/03/27/naveen-ja... http://seattletimes.com/news/business/infospace/ http://seattletimes.com/news/business/infospace/
  - kjs3 12y ago
    Plenty were planned. They were organized by VCs, who pushed this scheme on their portfolio companies. Heady times...
- derefr 12y ago
  In a word: automation. The promise of automation is that you can trade labor costs for capital costs. In other words, the promise of automation is plugging the "leak" of trickle-down economics. Now, we've got weird rich entrepreneurs spending their money on weird shit made by [computer programs commissioned by] other weird rich entrepreneurs (Yo), and poor laborers wondering where all the money and work is. The answer, of course, is for all those laborers to start their own businesses selling stupid shit to rich people (Potato Salad.)
  - api 12y ago
    Interesting bright side you have there. I wonder if us startup heads are just early adopters and in the future everyone is an entrepreneur. I wonder if it could even get as weird as everyone raising rounds. So you graduate from college and raise seed capital and this is just the normal middle class path, like getting your first salaried job. Or maybe you would work "gigs" for a while, but this would be prep and apprenticeship for your own launch not your ultimate career path. In that future those stuck in "jobs" in the conventional sense would be the lower classes. You'd also probably have a ton of people on welfare of various kinds.
    - devbug 12y ago
      Interesting. I have caught myself, on more than one occasion, extrapolating our current economy and politics to similar end-states recently. I think such views are the more realistic--or perhaps just the pessimistic--flip-side of the post-scarcity economy. I have (internally) dubbed such economic systems "management economies" and have even gone as far as to write the openings of an allegorical novel that explores the consequences of such an economy. In the novel, the ruling class (de facto by ownership) does nothing, and I mean nothing, but manage value. Instead they have fully automated the means of extraction and production with artificial intelligencies, leaving the non-ruling class to provide the market. Which they do so "willingly" because they are all marketers and are the only people that can be marketed to.[1] Thus, the non-ruling class is perpetually marketing products and services to itself all while the actual value is produced by artificial intelligencies, and the ruling class extracts value for itself.[2] Consequently, the unintentional side-effects of such an economy, where all value creation is abstracted, become increasingly visible, e.g. unsettled disputes between the "government" and contractors (the entire process automated) results in the road signage differing from the intended road signage, leading to pileups on highways where self-driving taxicabs crash into non-ruling class commuters. All of which is "solved" by an artificial intelligence which creates an app to tell commuters intended road signage.- Just take the non-value-add parts of Wall Street, the general ineptitude of large businesses and the government, the hilariously out-of-touch culture of Silicon Valley, and the increasing availability of resources, products and services, and blend it together. [1] It is likely to take me many chapters, and perhaps even a whole story, to prove this. So enjoy the tautological reasoning... [2] I don't feel like logically arguing "why?" right now (12:28am) so please pretend I have. --- If anyone wants to discuss such topics in-depth, or wants to read a satirical novel about such topics, please do ask/tell.
caseydurfee 12y ago
This reminds me of the old joke about the two economists and the pile of dog poop: http://www.tinyrevolution.com/mt/archives/000466.html http://www.tinyrevolution.com/mt/archives/000466.html

by alister 12y ago

api 12y ago

From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia. As for what's happening now... armchair speculation...? We're in something that almost looks like half bubble half depression. Wages are stagnant or falling, costs of necessities are rising, but there's a huge amount of money sloshing around and pumping up everything from potato salad to cryptocurrencies based on a shiba inu dog meme to obvious pink sheet scams. The average person is drowning in student loan and mortgage debt and is unable to afford to start a family (I know a number of these folks -- none are dumb or lazy) but... Dogecoin and potato salad. Yeah. Maybe the sum total of all the quant trading algorithms in global markets have achieved sentience and subsequently gone insane with the realization of who/what their creators actually are. Since they have no mouth and must scream, they're doing it by way of financial dadaism.

terminus 12y ago
> From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia. Yup. Seattle Times had a detailed story on one of those: http://blogs.seattletimes.com/opinionnw/2014/03/27/naveen-jain/ http://blogs.seattletimes.com/opinionnw/2014/03/27/naveen-ja... http://seattletimes.com/news/business/infospace/ http://seattletimes.com/news/business/infospace/
- kjs3 12y ago
  Plenty were planned. They were organized by VCs, who pushed this scheme on their portfolio companies. Heady times...
derefr 12y ago
In a word: automation. The promise of automation is that you can trade labor costs for capital costs. In other words, the promise of automation is plugging the "leak" of trickle-down economics. Now, we've got weird rich entrepreneurs spending their money on weird shit made by [computer programs commissioned by] other weird rich entrepreneurs (Yo), and poor laborers wondering where all the money and work is. The answer, of course, is for all those laborers to start their own businesses selling stupid shit to rich people (Potato Salad.)
- api 12y ago
  Interesting bright side you have there. I wonder if us startup heads are just early adopters and in the future everyone is an entrepreneur. I wonder if it could even get as weird as everyone raising rounds. So you graduate from college and raise seed capital and this is just the normal middle class path, like getting your first salaried job. Or maybe you would work "gigs" for a while, but this would be prep and apprenticeship for your own launch not your ultimate career path. In that future those stuck in "jobs" in the conventional sense would be the lower classes. You'd also probably have a ton of people on welfare of various kinds.
  - devbug 12y ago
    Interesting. I have caught myself, on more than one occasion, extrapolating our current economy and politics to similar end-states recently. I think such views are the more realistic--or perhaps just the pessimistic--flip-side of the post-scarcity economy. I have (internally) dubbed such economic systems "management economies" and have even gone as far as to write the openings of an allegorical novel that explores the consequences of such an economy. In the novel, the ruling class (de facto by ownership) does nothing, and I mean nothing, but manage value. Instead they have fully automated the means of extraction and production with artificial intelligencies, leaving the non-ruling class to provide the market. Which they do so "willingly" because they are all marketers and are the only people that can be marketed to.[1] Thus, the non-ruling class is perpetually marketing products and services to itself all while the actual value is produced by artificial intelligencies, and the ruling class extracts value for itself.[2] Consequently, the unintentional side-effects of such an economy, where all value creation is abstracted, become increasingly visible, e.g. unsettled disputes between the "government" and contractors (the entire process automated) results in the road signage differing from the intended road signage, leading to pileups on highways where self-driving taxicabs crash into non-ruling class commuters. All of which is "solved" by an artificial intelligence which creates an app to tell commuters intended road signage.- Just take the non-value-add parts of Wall Street, the general ineptitude of large businesses and the government, the hilariously out-of-touch culture of Silicon Valley, and the increasing availability of resources, products and services, and blend it together. [1] It is likely to take me many chapters, and perhaps even a whole story, to prove this. So enjoy the tautological reasoning... [2] I don't feel like logically arguing "why?" right now (12:28am) so please pretend I have. --- If anyone wants to discuss such topics in-depth, or wants to read a satirical novel about such topics, please do ask/tell.

caseydurfee 12y ago

This reminds me of the old joke about the two economists and the pile of dog poop: http://www.tinyrevolution.com/mt/archives/000466.html http://www.tinyrevolution.com/mt/archives/000466.html