Silicon Valley Startups Awash in Dollars, Again (2007)
nytimes.com
nytimes.com
- One "black swan" doesn't happen twice. Though Taleb would disagree, i.e. he'd say that neither the dot-com bubble nor the 2008 crash were black swan events, but for most investors, entrepreneurs and traders they were. In any case, we are somehow immune to big random negative-impact events repeating themselves. We are not that stupid. The Bubble 2.0 didn't happen though something else, unrelated, did.
- The predictions of the time assumed that Internet was there forever. Very soon a dramatic landscape shift happened with the release of the iPhone. We are not living in a purely Internet era anymore, and all the surviving Internet megacorps have managed to embrace the shift (Google, even Facebook with its Messenger), and those who haven't are dead (Yahoo, and probably more to come).
- What we think will happen next is probably wrong. We can't even say whether there will be another technological shift or both the Internet and the mobile are here virtually forever. Something that has already failed can make a come back. In 2007 Taleb mocked e-scooters, for example, now look at their impressive comeback. He also thought in 2007 that Google will be replaced with something else just as quickly and abruptly as Google replaced Alta Vista. Bottom line: don't try to make arbitrary unsubstantiated assumptions even if your name is Nassim Nicholas Taleb. We suck at predictions.
- I think one key difference between entrepreneurs and investors is that the former don't try to make predictions much, while the latter depend on predictions. One corollary being that entrepreneurs should probably ignore the buzz or what the most funded tech is at any given point in time (something-dot-com, IoT, blockchain, AR, AI, ...) and just do their thing: bring their dreams into life regardless of what everyone else is saying.
So... the internet on a big screen and the internet on a small screen?
It's all progressive improvements. Networks converged to internet and TCP/IP while devices converged to computers everywhere with colored screens of various sizes.
Try to do what e.g. Revolut, N26 and similar apps are offering over the phone. It would take ages. This is a really bad comparison.
Sometimes progressive improvements become a breakthrough, though I wouldn't call the invention of touch UIs a progressive improvement. It was a massive one. We take it for granted today but before the release of the first iPhone very very few people would have imagined it, let alone that it could change the world (which it did).
Let alone that mobile platforms being managed environments themselves are a lot more secure.
The user experience limited by the browser vs the user experience (less) limited by native platform APIs.
Kindly, it seems you're a little confused about what the internet is.
It’s still pure Internet. It’s just no longer pure “web.”
The internet‘s UI is your OS’s networking library. Although it has changed with the advent of mobile (e.g. can we transparently handle switching between WiFi / cellular?) it has no GUI, touch or otherwise.
What you are trying to say is that companies have had to adapt to the possibility that web applications in a web browser will lose out to native applications using web or Internet protocols behind the scenes.
Here's one out of thousands of scenarios that are possible only on mobile: I am in London, I need some cash money but my bank accounts are in euros. The sequence is this: Face ID, then with a few taps I convert the necessary amount and withdraw pounds from the nearest ATM. With Revolut I saved a lot of time and money on conversion alone (though to be fair many other mobile banks do the same today).
This is not just "pure Internet" it's a different medium that brings a lot of new possibilities.
While I did pay an interchange fee I could do this with my USD account numerous times in the past 20 years.
So is it just that you avoided slightly higher interchange fees?
> The predictions of the time assumed that Internet was there forever.
...seems to indicate you feel the internet has somehow gone somewhere.
This caused everyone retracting their credit lines as they couldnt trust the whole system any longer, revealing how highly leveraged and dependent on credit lines that everyone was, raising margin requirements - causing liquidations - and completely closing some margin markets.
If that was in anybody’s model I would like to see that model.
I don't quite agree that this is actually what the issue is lately. I think there have been two types of bubbles in the general startup ecosystem over the past few years that are not related to whether early stage startups are profitable:
1) One has been the under-estimating of unit economics in companies that interact with the real world (unlike pure software companies), which caused a lot of 'Uber-for-X' startups to go under, not to mention Uber itself struggling to maintain its hoped-for valuation.
2) The second aspect has been the influx of late-stage money into companies like Uber and WeWork, delaying IPOs, which has definitely caused some irrational exuberance in the sector.
In the case of We I think you are being too generous thinking the IPO is only delayed. The S1 pulled the covers back, and I'm not sure it will ever IPO and may end up out of business.
Uber is not in a much better position, as their financials only work by significantly raising prices and/or driverless self-driving coming to market. I think the later is much farther away than people assume.
So I will cherry pick what I think are the two best parts:
> Consider Facebook, the popular but financially unproven social network, which is reportedly being valued by investors at up to $15 billion. That is nearly half the value of Yahoo, a company with 38 times the number of employees and, based on estimates of Facebook’s income, 32 times the revenue.
Facebook has a market value now of $525 billion and obviously and $30 billion in EBITDA.
...and...
> Twitter, a company in San Francisco that lets users alert friends to what they are doing at any given moment over their mobile phones, recently raised an undisclosed amount of financing
In particular 'lets users alert friends to what they are doing'. I remember when twitter came out people were tweeting what they ate for lunch.
The real turnaround that happened around this time and I guess before is that the platforms started realising how valuable user data was and the relative value of "smart" data-driven advertising as compared to "dumb" content- based ads.
Now when I see that a platform has amassed x million users I'm very cynical about their motives for doing so.
I think the right question is are we looking at a Google or a Webvan.
yes, I know Webvan may have been a “good idea”
Webvan today is Instacart. FB is very valuable. Hindsight is 20:20. I think companies stay private longer to ride out the market not being ready for them long term. But maybe Uber waited too long.
"Consider Facebook, the popular but financially unproven social network, which is reportedly being valued by investors at up to $15 billion. That is nearly half the value of Yahoo, a company with 38 times the number of employees and, based on estimates of Facebook’s income, 32 times the revenue."