where do you all believe the bay area is now on the startup/tech bubble roadmap?
i'd think the bubble blown will be smaller due to VCs and Angels having learnt their lessons over the past decades - while not terribly smaller on account of New Angels and Corporate Venture Funds clamoring aboard.
of course, there are more tech hubs globally too siphoning off some of the previous "bay area tech bubble" effect...
i believe it's a smaller bubble, but nevertheless a rekindled one. many folks have gold miner fever out here...
"i'd think the bubble blown will be smaller due to VCs and Angels having learnt their lessons over the past decades"
A lot of bubbles get really bad when things get so frothy that people without sufficient background jump in. E.g. the 1929 stock market crash and junk bonds in the '80s ... although there was also government action involved in both of those.
One threat that is getting bigger in the Bay Area, is the ever increased concentration and dependence on start ups. Most of whom are not living of anything remotely resembling cash flow.
The tech eco system itself is one thing, and largely populated by people who can afford a bit of a hit. But nowadays, everything is priced and organized around ever more millionaires being minted in tech every day, and the spending these generate. Take even some of that away, say by making money less artificially cheap, and there is potential for plenty of pain and dislocation across the area.
Much like Finance in NYC, the tech boom/bubble is driving costs so high in the Bay Area, that the only remaining jobs are either in tech, or jobs providing highly paid, localized and personalized services to tech workers able to afford paying thousands to have their toenails clipped, lips kissed and walls decorated with Van Goghs. Leaving those providing the latter, highly vulnerable to any slowdown in the increasingly monocultural spigot from which almost all funds here now flow.
Yeah, in a way it's not all that different from Midwestern towns like Gary, Indiana and Youngstown, Ohio - booming economies that depended on steel. Once the steel went away...
In the 2013 stats there isn't one area that has a large concentration. It looks like 27% finance, 22% consulting, 18% tech, and nothing else with more than a 10% share. So finance is still hot but under their 30% waterline.
Something that confuses me: What is "consulting" as opposed to "finance" or "tech"? There are consultants in finance, tech and most other fields. Do they all just get lumped together there?
funny, by using this and the logic of the article, you can conclude that the USA in general is the worst bubble of them all. 83% of them stay in the states.
Small companies that have $0 revenue (much less profit) getting bought for billions smells like a pyramid scheme to me. At best, it's creating value where none exist, just like the market crash where people were bundling bundles of bundles of debt. Here, companies are selling potential for potential for possible revenue.
Don't have a viable business model? Just get $200M in investment and figure it out in a few years. Problem solved!
This is one of the biggest fallacies. The money these tech giants have should either go toward adding value to the business so it turns its dollars into more than a dollar, or return it to shareholders via dividends/buybacks so the real owners can decide what to do with it. Acquiring companies that will just lose money is robbing the shareholders to give to failed entrepreneurs.
If the shareholders are willing to take the risk of the company they own acquiring other companies (don't acquisitions require board and/or shareholder approval?) then who is to say what that money "should" do?
I was not commenting on whether or not it is wise to spend billions to acquire company A or B or C. That is a separate question from the question of whether that behavior indicates a bubble. And like I said previously, it depends where the money comes from. If it is mostly debt, then it probably is a bubble. But if it is mostly Google's, Facebook's, etc insane profits, then it probably does not indicate a bubble.
Not even SV. Rents in Oakland are at 1700 for a 1 bedroom. Let me repeat, IN OAKLAND. The places are off the bart line, but still, 3 years ago, those places were actual honest-to-god crack-houses.
This article seems to appeal to the emotions of the reader. It's nice to hear that Harvard grads aren't all they're cracked up to me... but I'd like more examples/proof
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[ 3.2 ms ] story [ 50.9 ms ] threadAnd partly because tech looks just as, if not more, lucrative.
i'd think the bubble blown will be smaller due to VCs and Angels having learnt their lessons over the past decades - while not terribly smaller on account of New Angels and Corporate Venture Funds clamoring aboard.
of course, there are more tech hubs globally too siphoning off some of the previous "bay area tech bubble" effect...
i believe it's a smaller bubble, but nevertheless a rekindled one. many folks have gold miner fever out here...
ken, incubation hub
A lot of bubbles get really bad when things get so frothy that people without sufficient background jump in. E.g. the 1929 stock market crash and junk bonds in the '80s ... although there was also government action involved in both of those.
The tech eco system itself is one thing, and largely populated by people who can afford a bit of a hit. But nowadays, everything is priced and organized around ever more millionaires being minted in tech every day, and the spending these generate. Take even some of that away, say by making money less artificially cheap, and there is potential for plenty of pain and dislocation across the area.
Much like Finance in NYC, the tech boom/bubble is driving costs so high in the Bay Area, that the only remaining jobs are either in tech, or jobs providing highly paid, localized and personalized services to tech workers able to afford paying thousands to have their toenails clipped, lips kissed and walls decorated with Van Goghs. Leaving those providing the latter, highly vulnerable to any slowdown in the increasingly monocultural spigot from which almost all funds here now flow.
CEOs like consulting (primarily big name) because if it fails, they can say they got the best.
The tech sector employment has more than doubled since 2006 while the other sectors are roughly flat or, in the case of Finance, falling.
Small companies that have $0 revenue (much less profit) getting bought for billions smells like a pyramid scheme to me. At best, it's creating value where none exist, just like the market crash where people were bundling bundles of bundles of debt. Here, companies are selling potential for potential for possible revenue.
Don't have a viable business model? Just get $200M in investment and figure it out in a few years. Problem solved!
Link to the data.