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You know what's funny is that I already see this happening in lot of startups in Vancouver. It's not only just startups, but video game studios too. Most often

You know what's funny is that I already see this happening in lot of startups in Vancouver. It's not only just startups, but video game studios too. Most often is that founders or executives burn cash for the sake of short term gains without investing in the future. The future where Google suddenly open sources the app you been charging six digits for, the future where your competitors end up with most of your clients. Not pretty but it's a cutthroat environment when you decide to be a pig in a Wall Street sense, not as a derogatory term. Pigs get slaughtered, always, in any market. As soon as someone with an excel spreadsheet says the risk far outweigh the rewards, they close shop and blame the ruling party or the local tech labor market as being 'too expensive'. I can imagine what the impact would seeing that happen in large numbers in SV, that would have a ripple effect.

araes 12y ago
Well, that's the really scary version of the scenario. Where a lot of the sketchy shops start vaporizing. They were the ones that were horribly managed, or had a product that only looked good when money was plentiful, but their catastrophic death signals to other investors that the market is dicey. Slightly higher end folks pull away, and the next tier of shops cave or weather it. This continues until you get to a tier that's stable enough that investors running doesn't destroy them. I'd wager the rate of pullback probably determines how far up the chain it goes. Rapid changes are more frightening and cause pretty sound relationships to collapse simply because the money is afraid the cancer will spread to them too. Do we go to the doctor when we've lost 20 lbs over a year or over a week?
- notastartup 12y ago
  Yes you described the domino effect and the word vaporize is scary and accurate. I think what we are seeing is a business management problem from people who are not fit to run a business to be blunt. Hiding behind product, or a "disruptive" process or basically prancing around on the media about throwing money here and there while slowly, the less funded, leaner guys figure out how to take you down.

araes 12y ago

Well, that's the really scary version of the scenario. Where a lot of the sketchy shops start vaporizing. They were the ones that were horribly managed, or had a product that only looked good when money was plentiful, but their catastrophic death signals to other investors that the market is dicey. Slightly higher end folks pull away, and the next tier of shops cave or weather it. This continues until you get to a tier that's stable enough that investors running doesn't destroy them. I'd wager the rate of pullback probably determines how far up the chain it goes. Rapid changes are more frightening and cause pretty sound relationships to collapse simply because the money is afraid the cancer will spread to them too. Do we go to the doctor when we've lost 20 lbs over a year or over a week?

notastartup 12y ago
Yes you described the domino effect and the word vaporize is scary and accurate. I think what we are seeing is a business management problem from people who are not fit to run a business to be blunt. Hiding behind product, or a "disruptive" process or basically prancing around on the media about throwing money here and there while slowly, the less funded, leaner guys figure out how to take you down.