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Bill Gurley argues that tech startups are overvalued, profits are underrated, and a bust is coming.
Not new, it’s a recurring theme.
[ Source : MIT Technology Review ]
<blockquote>The hard truth is that when we employ the idea of the Unicorn as a heuristic to inspire, guide, and shape our limited, priceless effort, imagination, time, and creativity, we are simply limiting ourselves to seeking magic over meaning, convenience over rebellion, riches over worthiness, myopia over <em class="">a point</em>: all that <em class="">is </em>the textbook definition of settling for mediocrity.
Here’s what the idea of the Unicorn really does: it infantilizes us with magical fairy dust thinking, focuses us on the short term, prioritizes making money over creating value, and demands that we create instantaneously crowd-pleasing blockbusters — not devote ourselves to our masterpieces.
[ Source : The Unicorn Bubble — Bad Words — Medium ]
You know my opinion about Unicorns - right ? Others seem to be getting on the train ...
I am back in Boulder after spending much of the last week in San Francisco at Dreamforce. I’m glad to be back, as I find the current climate in the Bay Area somewhat amusing. The tech media writes and talks breathlessly about Unicorns. Startup employees get obsessed with valuations, rather than per share price value.
“Warren Buffett’s Berkshire Hathaway took 18 years to become a Unicorn” – good stuff – click through for the 411.
[ Source : | Bart Lorang , CEO – Full Contact]
I have a business worth $1,000. If you give me $1,000,000 dollars for 10% of my shares - that 'values' my company at $10,000,000 - <strong>overnight -</strong> BUT - is it really worth 1,000 times as much = just because I have convinced you that with $1 million dollars - we can conquer the world ?
More importantly – 3 months down the line – you and I convince a new dude to drop another 10 million dollars into the business – and we give him 10% of the company ….
Over night – my company is now ‘worth’ $100 million – and my original investor’s investment is now ‘worth’ $10 million – a ten fold ‘return’ in 3 months !
See what I did there ?
I am not saying that the Unicorns aren’t going to turn into something great. I am saying that there is zero oversight on this process – rather a bunch of insiders trading on Futures – with no watchdog. What could possibly go wrong ?
A curated leaderboard of companies that were at one point privately worth $1B or more and subsequently exited, either by acquisition or IPO.
Seems like a lot apparently !
[ Source : Crunchable ]
<center><a href="http://www.feld.com/archives/2015/09/unicorpse.html?utm_campaign=Feed%3A+FeldThoughts+%28Feld+Thoughts%29&utm_medium=feed&utm_source=feedburner"><img class="alignnone size-full" src="http://beyondbridges.net/wp-content/uploads/2015/09/tumblr_n24fqkgvyT1tt8wqco1_500.jpg" alt="" /></a></center>
In March, investor Bill Gurley made headlines with his pronouncement that “a complete absence of fear” would lead to dead unicorns this year. Venture capitalist Marc Andreessen warned in a tweetstorm that startups with high burn rates would “vaporize.” Last week Salesforce CEO Marc Benioff also predicted dead unicorns as startups seem to focus more on their valuations than their customers.
I have been talking about the ‘Idiocy of Unicorns’ for a while – though not really writing – other than this where I referenced Doug Henwood. That said I think they survive because there truly is a ‘Confederacy of Dunces’ / ‘Emperor’s New Clothes’ at play here. Thank god then for some sanity from Brad Feld, who in turn references others – but who – despite being famously ‘on’ – and successful people in their own right – are not commented on or referenced in mainstream media.
[ Source : Brad Feld : Feld Thoughts ]
The full title of the original article is : "<strong>Age of the Unicorn: How the Fed Tried to Fix the Recession, and Created the Tech Bubble" </strong>
Its the article I have been wanting to write … meaning to write … and then not writing it. But Doug did an excellent job – and way better than I would aspire to – much less do. I was taken with this closing quote – but really click through and read the whole thing.
slash Amtrak funding by $242 million got some headlines, but the railroad’s $1.3 billion current level of federal funding was none too generous to start with. But Uber has had no problem raising almost $7 billion so far, and rival Lyft another $1 billion. This is a staggering misallocation of capital. Nor do we have the imagination or funding to follow up on the suggestion by Mike Konczal and others to “socialize Uber,” by turning the thing into a driver-owned cooperative. There really are some more urgent tasks than devising a better way to hail a cab—or buy a mattress—and it would be nice to steer some money towards them instead of towards capitalist phantasms.Congressional Republicans’ eagerness to
[ Source : Quibb : Doug Henwood ]