Hacker News Reader

But it then bears the question that if the so called "network effect" companies has any real value (that is to generate profit in the future) or are manifestations of a bubble?

View on HN

I think any network with tons of users has some value. Whether that value is what founders or investors hoped it would be is a different question.

It's pretty clear that they have value, or the entire VC industry would not exist.

At least, enough of them have value to pay for the ones that don't.

This is basic economics.

That means they have value for the VCs (usually in the form of "exits", ie, selling to other investors), but the question was whether they'll produce profits (and consequent dividends).

You're mixing up long term probabilities with short term variance and uncertainty. People can make very big bad choices and not see the consequences for years, because not everything unfolds rapidly.

"The market can stay irrational longer than you can stay solvent".

Reply on news.ycombinator.com