AVC: The Word Bubble

http://www.avc.com/a_vc/2011/04/the-word-bubble.html

by lerix • 15 years ago

32 18 15 years ago

Kilimanjaro3• 15 years ago

When investors throw their money away in startups like 'color', that is not a bubble, just sheer stupidity.

When joe sixpack 'invests' his house in facebook's ipo, then borrows some money to invest in groupon's; that, my friends, is a bubble.

We'll be there in a couple of years, nobody can escape from that. The hype machines will be in full swing with ten posts per day on the front page feeding the frenzy, tv shows, newspapers headlines about the best initial day for an IPO since google, everybody making millions overnight and nobody wants to be left behind. We all know that feeling.

Then joe sixpack enters the party, and the bubble pops.

Alex3917• 15 years ago

"We'll be there in a couple of years, nobody can escape from that."

The difference is that today, thanks to the Internet, the people who were saying the Internet wasn't going to change everything have much more of a voice. The peaks and troughs are going to be less extreme, and the cycles will be longer. The little picture stuff we're getting better at understanding and predicting, while the big picture stuff just keeps getting more and more broken as society collapses in slow motion.

Kilimanjaro3• 15 years ago

The easiest way to make money, is to take it from the fool. When millions of fools are manipulated into investing in get-rich-quick schemes of hot IPOs in a new glamorous era, they all end up without money.

There is nothing we can do, fools will be fools. (I was in the fools pack too in early 2000)

If there is only one advice we can give to our family and friends is this: do not invest in hype. Plug your ears with wax or tie yourself to the mast to keep your sanity.

pedalpete2• 15 years ago

The same investor who 'threw their money away' on color also threw money away on Google, Yahoo, Paypal, YouTube, LinkedIn, Admob and Zappos.

Of course, they've invested in many companies that didn't return on the investments.

Just because you don't believe they made a good investment decision, I would think it wise to respect their very good track record.

Kilimanjaro3• 15 years ago

Color was picked just to name one investment that 'looks' stupid from the outside, nothing else. No need to put your gloves on.

fleaflicker• 15 years ago

Markets are defined by greed and fear. We are in the greed mode right now.

Great line.

stevenj• 15 years ago

I think the public (i.e. IPO) performance of this period's major startups will be telling.

Facebook, Zynga, Groupon, Living Social, LinkedIn, Twitter, etc.

If/when they go public, we'll get to see how they're really doing.

And I think how they're doing will affect the rest of the startup industry.

fredwilson2• 15 years ago

i agree

dglassan• 15 years ago

Completely agree here. We'll have a much better picture of where the startup industry stands once we find out the real market value of all these companies set to go public.

lerix• 15 years ago

The bottom line is that if the company is a solid proof of success, no matter how hard the storm hits it, it will survive the hurricane and reap more harvest than ever. If the company lacks solid foundation, and poorly executes, then it will be wiped out by the rain, resulting in “liquidation”. The biggest difference the bubble makes is putting more players into the game, providing more opportunities for entrepreneurs to create something outstanding that the world can benefit from.

Economists might argue that these poor investments will greatly affect the economy; after all there is a trickledown effect in every financial sector. But Keynes boom-and-bust cycle is not just some theory that can be eliminated with caution. The roots of the boom-and-bust cycle engraved within human nature, and unless we alter the behaviors of all the participants in the economy, and wipe out the concept of greed, preventing this cycle is almost impossible. Thus instead of preventing such cycle, why not let the true entrepreneurs take their innovation to the next level with the boost from the market, and give them the opportunity to change the world, and turn it into a better place? If the bubble can harness more innovation for the world, why is it a bad thing?

(this is the final passage from my blog @ http://milogao.tumblr.com/)

code_duck3• 15 years ago

I thought just two months ago we were reading a Fred Wilson article about how this is not a bubble. So, it is a bubble now, but Fred just doesn't like that word?

This is a off topic, for which I apologize, but the way his Etsy Mini is cut off there doesn't exactly highlight the wonderful design and programming prowess of Etsy. Or well, actually sad to say it does encapsulate their design skills very accurately. The Etsy mini has not been updated since 2006. Can you imagine? I guess the fact that one of Etsy's main investors puts that on his blog, with the right 25% cut off no less, and seems to think it looks fine explains a lot.

fredwilson2• 15 years ago

i don't think it looks fine. i run the etsy mini as the "default ad" on AVC. i rarely see it but i suspect it is seen by a lot of people outside of the US. out of curiosity, are you outside the US?

matthewsimon• 15 years ago

I'm getting the Etsy mini as well, and I'm in New York City.

(The Etsy iframe that's being served is 368px wide, but your sidebar only has 300px available.)

code_duck3• 15 years ago

I'm in the US and I was seeing it every 2-3 times I loaded the page.

I assumed you thought it looked okay from how it was on your blog, as personally, I would have said "hmm, it doesn't fit". At this point in the story, I would go to the Etsy App Gallery and see if a helpful third party developer had one in a smaller size. On the other hand, if I was on the Board of Etsy, I'd probably get on Etsy IRC instead and tell one of the 70+ engineers there to make me one that fits.

If only every browser supported the 'zoom' CSS property, we could just apply zoom:80%. Then this one would fit fine... alas. Next we ponder what happened to the 'Super Etsy Mini', which died in creation with only the epitaph: "It was trying to do too much".

It's cool you're showing your Etsy stuff on your blog. There's still a huge mass of people who don't know about what is found on Etsy.

nikcub• 15 years ago

my only concern is that the masses will discover secondmarket and NASDAQ that thing like it is '99

otherwise we all cool

AVC: The Word Bubble

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