| > ALL of these people are at the greatest risk - what will happen if this bubble bursts. We will be FUCKED I have the same thoughts exactly. I was a junior at university when the last bubble burst so i have no idea what it was like. Currently i have been running my startup after quitting my job for almost a year and we are doing OK but this talk of bubble worries me because i dont know what to expect. Will it only effect startups that are social types that dont exactly generate revenue but through capital injection( which i assume is what will evaporate the fastest during a pop) have the potential to become massive such as instagram etc or will it also effect the startups that actually do turn up a profit every month so that the founders can eat and re-invest their money back in the business. When i try to draw parallels from 2000 from a technology stand point, i assume the bubble pop killed the tech industry because getting a startup of the ground required tons of cash, it didnt matter whether you could charge from day one or it was a great idea but needed to get to scale before you could make money, you still needed to buy servers, hosting and your development team was larger because there were no frameworks etc .. basically there was alot to spend before you could turn a profit, so when capital dried up so did the ability to start a new company or even continue to run an existing one. As a founder, unless you were already wealthy you could not bootstrap Now with amazon, great frameworks that cut down development time many times over and other things of the like, founders can take savings of 10-15k and start a business that can return that investment maybe after 4-5 months and start making profit soon after. The question is, do these kinds of startups still survive, could this be the differentiating factor this time if the bubble pops. Maybe after the bubble pops we wont get those massive social startups that require millions of dollars worth of injection for a while but instead get many smaller bootstrapped business types that take a small investment and return a profit monthly that eventually grow into large business. Its slower but similar to more traditional businesses. If this is the case then i feel its OK, at least if we find an area there people still have a need and technology solves that need we can still make a living doing our own startup and work on things we love. Im also interested because we are bootstrapped and we have managed to get our small startup to give us back about 60% of our salary that we used to get at our 9-5. its enough to live of and not make us wonder where we are going to get our next dinner, however we are thinking of starting something new because we feel there is a ceiling to what we can achieve with our current startup and its important for us to decide what startup to do next if we actually are heading into a bubble that may pop midway through our next project, 1,2 maybe 3 years down the line What do you guys think the tech scene will look like in the valley and possibly around the world if such an event would occur again ? Sorry for the long post but i thought it important to get ideas from the HN community on this topic. |
My advice is that if you sell, make sure you get some cash for it to park somewhere to use during the bad times when raising cash will become impossible and skills will be cheap when you actually do have cash. Parking might mean an asset you can borrow against when it's hard to get funding based on a promise. Don't sell with any deal like shares in the parent, making an assumption that tries to time the market. Most experts can't even time the market right. Apart from that, keep making stuff people outside of the technology industry use and give them value that is worth paying money for, and try not to make it depend on things you get during a bubble: easy funding and clients with easy funding. Trust me those things are hard to determine, you only realise how much of your client base also depended on the bubble after it's over. Most importantly the effects of bursting bubbles take several years to unravel, so don't think that if you're still fine a year after it's obviously burst that you are in the clear.
That said, I think you are already at an advantage. During a bubble salaries are very good and it takes some guts not to get lured in by an easy salary and doing a startup instead. When the music stops and you are still turning some profit you will be glad.