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Why now? What about all the years startups have been burning cash? It's nothing new. Parties, entitlements like free meals for employees, fancy offices and furn

Why now? What about all the years startups have been burning cash? It's nothing new. Parties, entitlements like free meals for employees, fancy offices and furniture, too much travel, ads and PR spending, fancy hardware... when a startup has zero or negligible revenue, this kind of excessive spending is absurd. Not clear why Marc thinks it's time to sound a warning now.

jsonne 12y ago
>ads and PR spending These are growth activities as opposed to the others you list. The truth is many products never have just organic "viral" growth. They need ads, sales, or both to drive it.
- thedaveoflife 12y ago
  Some would argue all the things he mentioned are growth activities. Employees are a vital resource... taking care of them can be valuable and can attract new talent as well
- fleitz 12y ago
  And most importantly PR people to spin massive ad buys as organic growth.
latchkey 12y ago
So that when his dire warnings come true, he can tell you 'he told you so'... =)
randomdata 12y ago
Maybe he is seeing new investment opportunities on the near horizon, perhaps including the rise in interest rates, which is expected at the beginning of next year? Tech has been one of the few places for people to put their money for quite a while, but it doesn't mean that will hold true forever. Commodities started heating up around the same time as this round of the tech industry "boom", and has pretty much crashed now.
- AJ007 12y ago
  There is an interesting relationship right now between the Federal Reserve and asset prices. It is a place we have been before. Investor confidence in interest rates being low for a long time makes investors comfortable with current public equity valuations (besides all of the other things low interest rates can do to asset prices.) It is even more interesting now because a big jump in interest rates would cripple the US budget with debt payments. One of the things I think about a lot is what is the fair market value of certain technology companies? It would be helpful to be back at a place where I know Netflix, Facebook, etc, are worth more than their public valuations. Additionally it would be healthy for the long term human impact of tech to extinguish some of the arrogance that has been building up for the past decade.

jsonne 12y ago

>ads and PR spending These are growth activities as opposed to the others you list. The truth is many products never have just organic "viral" growth. They need ads, sales, or both to drive it.

thedaveoflife 12y ago
Some would argue all the things he mentioned are growth activities. Employees are a vital resource... taking care of them can be valuable and can attract new talent as well
fleitz 12y ago
And most importantly PR people to spin massive ad buys as organic growth.

latchkey 12y ago

So that when his dire warnings come true, he can tell you 'he told you so'... =)

randomdata 12y ago

Maybe he is seeing new investment opportunities on the near horizon, perhaps including the rise in interest rates, which is expected at the beginning of next year? Tech has been one of the few places for people to put their money for quite a while, but it doesn't mean that will hold true forever. Commodities started heating up around the same time as this round of the tech industry "boom", and has pretty much crashed now.

AJ007 12y ago
There is an interesting relationship right now between the Federal Reserve and asset prices. It is a place we have been before. Investor confidence in interest rates being low for a long time makes investors comfortable with current public equity valuations (besides all of the other things low interest rates can do to asset prices.) It is even more interesting now because a big jump in interest rates would cripple the US budget with debt payments. One of the things I think about a lot is what is the fair market value of certain technology companies? It would be helpful to be back at a place where I know Netflix, Facebook, etc, are worth more than their public valuations. Additionally it would be healthy for the long term human impact of tech to extinguish some of the arrogance that has been building up for the past decade.