[alister]

My amusing thought experiment is that two startups could easily give themselves billion dollar revenue as follows:

1. Startup A sells 2 twin puppies to startup B at $500M each.

2. Startup B sells 4 hand-drawn logos to startup A for $250M each.

Each books $1B in revenue and each also books $1B in expenses so as to avoid tax.

[api]

From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia.

As for what's happening now... armchair speculation...? We're in something that almost looks like half bubble half depression. Wages are stagnant or falling, costs of necessities are rising, but there's a huge amount of money sloshing around and pumping up everything from potato salad to cryptocurrencies based on a shiba inu dog meme to obvious pink sheet scams. The average person is drowning in student loan and mortgage debt and is unable to afford to start a family (I know a number of these folks -- none are dumb or lazy) but... Dogecoin and potato salad. Yeah.

Maybe the sum total of all the quant trading algorithms in global markets have achieved sentience and subsequently gone insane with the realization of who/what their creators actually are. Since they have no mouth and must scream, they're doing it by way of financial dadaism.

[terminus]

> From what I know (and I am not a finance professional), the hot-airiest phase of the dot.com bubble sort of looked like this. You had a ton of startups selling each other things and advertising with each other. It was not planned, but unplanned "emergent" bubbles are the most effective since nobody really realizes what's going on until the bubble is far enough along to keep rising out of greed and inertia.

Yup. Seattle Times had a detailed story on one of those: http://blogs.seattletimes.com/opinionnw/2014/03/27/naveen-ja... http://seattletimes.com/news/business/infospace/

[kjs3]

Plenty were planned. They were organized by VCs, who pushed this scheme on their portfolio companies. Heady times...

[derefr]

In a word: automation. The promise of automation is that you can trade labor costs for capital costs. In other words, the promise of automation is plugging the "leak" of trickle-down economics. Now, we've got weird rich entrepreneurs spending their money on weird shit made by [computer programs commissioned by] other weird rich entrepreneurs (Yo), and poor laborers wondering where all the money and work is.

The answer, of course, is for all those laborers to start their own businesses selling stupid shit to rich people (Potato Salad.)

[api]

Interesting bright side you have there. I wonder if us startup heads are just early adopters and in the future everyone is an entrepreneur. I wonder if it could even get as weird as everyone raising rounds. So you graduate from college and raise seed capital and this is just the normal middle class path, like getting your first salaried job. Or maybe you would work "gigs" for a while, but this would be prep and apprenticeship for your own launch not your ultimate career path.

In that future those stuck in "jobs" in the conventional sense would be the lower classes. You'd also probably have a ton of people on welfare of various kinds.

[devbug]

Interesting.

I have caught myself, on more than one occasion, extrapolating our current economy and politics to similar end-states recently. I think such views are the more realistic--or perhaps just the pessimistic--flip-side of the post-scarcity economy. I have (internally) dubbed such economic systems "management economies" and have even gone as far as to write the openings of an allegorical novel that explores the consequences of such an economy.

In the novel, the ruling class (de facto by ownership) does nothing, and I mean nothing, but manage value. Instead they have fully automated the means of extraction and production with artificial intelligencies, leaving the non-ruling class to provide the market. Which they do so "willingly" because they are all marketers and are the only people that can be marketed to.[1] Thus, the non-ruling class is perpetually marketing products and services to itself all while the actual value is produced by artificial intelligencies, and the ruling class extracts value for itself.[2] Consequently, the unintentional side-effects of such an economy, where all value creation is abstracted, become increasingly visible, e.g. unsettled disputes between the "government" and contractors (the entire process automated) results in the road signage differing from the intended road signage, leading to pileups on highways where self-driving taxicabs crash into non-ruling class commuters. All of which is "solved" by an artificial intelligence which creates an app to tell commuters intended road signage.-

Just take the non-value-add parts of Wall Street, the general ineptitude of large businesses and the government, the hilariously out-of-touch culture of Silicon Valley, and the increasing availability of resources, products and services, and blend it together.

[1] It is likely to take me many chapters, and perhaps even a whole story, to prove this. So enjoy the tautological reasoning...

[2] I don't feel like logically arguing "why?" right now (12:28am) so please pretend I have.

---

If anyone wants to discuss such topics in-depth, or wants to read a satirical novel about such topics, please do ask/tell.

[api]

I think that's a good literary caricature of a very real possibility of how a post-scarcity or even post-singularity economy might look. It would also be in the best interest of your ruling class to occasionally drop money from helicopters-- think potato salad guy but systemic, maybe guided by algorithms to stimulate increases in monetary velocity. Post-scarcity postmodern Keynesianism?

I could see Martian colonization and other difficult endeavors being undertaken by those who see this existence as empty and pointless and who actively desire a real challenge... possibly led and capitalized by factions of the ruling class who share this sentiment.

Wait... are we even talking about fiction here?!? :)

If on the other hand problems like fossil fuel depletion cause us to fail to reach anything like post-scarcity, I could see a scenario very much like William Gibson's Neuromancer. I think Gibson's "sprawl" 'verse is a world where the singularity failed to reach orbit so to speak. Going even more extreme I could see The Hunger Games -- tiny ultra-urban enclaves of super-rich surrounded by and served by feudal peasants. The Hunger Games (as opposed to Mad Max) is probably the most accurate picture of what a worst case scenario peak oil collapse would look like.

[devbug]

> I think that's a good literary caricature of a very real possibility of how a post-scarcity or even post-singularity economy might look.

Unfortunately so. "Scares" me too.

> It would also be in the best interest of your ruling class to occasionally drop money from helicopters-- think potato salad guy but systemic, maybe guided by algorithms to stimulate increases in monetary velocity. Post-scarcity postmodern Keynesianism?

I did not think of that, mainly because it does not make sense in the management economy that rules this fictional world. Ideally it would be completely self-sustaining and would likely continue on until an extinction event, however there is a "management debt" accrued as the result of business and government inefficiency and abstraction (see failed government-contractor negotiations). If left unchecked it would result in collapse of such a system because everything would become horribly fubar. Thus, to prevent the collapse of their system, the ruling class in interest of its own survival could indirectly (AI) or directly "pay off" the management debt by investing or creating (and importing selected individuals from the non-ruling class) ventures that fix the dilapidated systems or provided exploratory break through (space travel). This raises some from the non-ruling class to the ruling class in the process, of course, but is of little impact. Additionally, potato salad ventures could be used in a lottery system to provide hope to the non-ruling class, or completely replace the previous method of management debt checking, allowing the system to operate for much longer than it normally would... until it suddenly collapses under the insane amounts of inefficiency it introduces.

(Interestingly, this explains large corporate behaviour.)

> I could see Martian colonization and other difficult endeavours being undertaken by those who see this existence as empty and pointless and who actively desire a real challenge... possibly led and capitalized by factions of the ruling class who share this sentiment.

Every good story needs rebellious outcasts and non-ironic hope for humanity. A musky settlement on Mars like you describe is just perfect. :)

> Wait... are we even talking about fiction here?!? :)

The more of the world I experience, either through my own eyes or vicariously through the wisdom of others, leads me to closer to the conclusion that no, in fact we are writing humanity's (short?) biography.

> If on the other hand problems like fossil fuel depletion cause us to fail to reach anything like post-scarcity, I could see a scenario very much like William Gibson's Neuromancer. I think Gibson's "sprawl" 'verse is a world where the singularity failed to reach orbit so to speak. Going even more extreme I could see The Hunger Games -- tiny ultra-urban enclaves of super-rich surrounded by and served by feudal peasants. The Hunger Games (as opposed to Mad Max) is probably the most accurate picture of what a worst case scenario peak oil collapse would look like.

I think we may see both scenarios, and a revival of the us versus them mentality that dominated the Cold War. :(

[daxelrod]

I would absolutely read such a novel. It sounds fantastic.

[devbug]

Thank you.

Every supportive comment leads me closer to finishing it, knowing it would be enjoyed.

[danelectro]

>I wonder if us startup heads are just early adopters

If you are in software, late to the party seems to me unless you managed to get your company going before Microsoft did. After that everyone had an example to follow.

>you would work "gigs" for a while, but this would be prep and apprenticeship for your own launch not your ultimate career path.

I thought this was obvious since the late '60's.

>In that future those stuck in "jobs" in the conventional sense would be the lower classes.

Not lower class but a type of working class who is not lower in recognition or financial compensation than independent entrepreneurs. For the most part since most small businessmen don't earn more than they would if otherwise employed, but being independent has a huge upside for the few who get capital compared to the upside at most employers. Like today.

>You'd also probably have a ton of people on welfare of various kinds.

You do! You do!

[caseydurfee]

This reminds me of the old joke about the two economists and the pile of dog poop: http://www.tinyrevolution.com/mt/archives/000466.html