[DownvoteMeToWin]

I bet this is about liquidity.

(reads article)

Yep, it's about liquidity.

I bet the HN comments don't mention liquidity categories.

(reads comments)

Nope, not a single one.

How did I know!!!!??!!11

He's right that sub 25M is dead. You're either the next Uber or you're not getting anything. And if that's the case, then money will be on the sidelines waiting for the next big thing, not the next incremental thing. That will cause a shortage of liquidity for new proposals (the dreamers) and keep those capable of bigger proposals busy. (the titans) You will have a liquidity shortage for the dreamers.

He is right. Incremental investment is no longer possible. All you have is a gigantic bar-to-entry for dreamers and when the titan shortage becomes apparent (no amount of liquidity will reveal more titans to keep the game going), the dreamers will be flushed out. A few titans might go down in the fallout as well.

You either solve everything or nothing today. It's an untenable position that will keep liquidity on the sidelines and stifle innovation. It's also very bubbly as you have more money than there are opportunities (As classified by laws) to chase.

[fsk]

His point is that Sarbanes-Oxley killed the possibility for small-medium companies to go public (~1B market cap). With less than $1B market cap, the overhead costs of Sarbanes-Oxley compliance are a huge % of revenue.

The only way the shareholders can cash out is via a sale to a larger (idiot?) buyer (Facebook/Google/Microsoft/Yahoo).

Even worse, a lot of these companies don't really have a clear path to revenue or profitability (like Tinder).

[DownvoteMeToWin]

Then you look at the cash reserves of the titans (Apple comes to mind) and you see it's not in circulation, which proves there are large sums of liquidity on the sidelines not investing.

[daemin]

Granted a lot of the money that these Titans have is actually spread all over the world and not in the USA (or Australia).

[tjradcliffe]

The sub-25M market is dominated by the sub-100K market, near as I can tell. The cost of startups is so low that people are doing stupid things, just like they were in dotcom-1.0, but they're mostly doing it on their own dime.

This isn't necessarily a bad thing, but it has created some pretty extreme weirdness at the low end. A friend sent this "Shaming-people-into-taking-cold-showers As A Service" thing to me a while back: http://coldshowertherapy.com/ (to be clear, he was mocking it.)

It's hard to look at that and not ask yourself, "Is it getting kind of bubbly out there?"

[erose]

do you have any timely book recommendations?

[DownvoteMeToWin]

I study philosophy and history primarily. Human Swarm by Gregory Rawlins is a huge inspiration. (The book was never released, but you can read it here: https://web.archive.org/web/20080414161145/http://www.roxie....)

That book made me realize that scientific revolutions and financial revolutions go on at the same time. This is because when a new mathematical framework is discovered, scientists use it to reveal nature (which improves labor), and finance uses it to reveal human nature. (which improves influence) Therefore, TWO bubbles exist in parallel:

- The assumption that future labor will be better organized (through science)

- The assumption that better organization will yield greater influence (through finance)

Those bubbles eventually drift, but they can re-synchronize, and right now, finance has outpaced science. Considerably. Smart money is keeping liquidity on the sidelines and awaiting a resynching event: Either finance tones it down or science invents new math.

Here's a gem from the book:

"After the war, the same crisis of confidence came as after the last one, the same blame game started, the same things happened. As usual, we relabeled our own past. Once again we found ways to blame it on someone, and therefore disown it as an event. It was ‘long ago.’ We’re different today though, aren’t we? Such things could never happen again, or so we tell ourselves. On the other hand, the above forecast of 2040 can’t possibly be right. No public forecast can be. Even were it to have proved accurate, had it been kept secret, once published its existence would change our future. Most of us would ignore it, as we ignore most things. But if it strikes a nerve, some of us might work hard to bring it about. Others of us might work equally hard to stop it from happening. Whoever wins, the resulting future won’t be the same as the forecast had stated it would be. No forecast can predict its own effect. It can’t predict how many of us will either fight it or push it, nor how many of us will try to predict how many of us will fight or push and try to profit from that, nor how many of us will try to predict how many of us will try to profit, and thus profit from that. Pattern recognition leads to pattern exploitation. Thus, a public forecast can come true only if none of us cares about it. In other words, our only useful predictions are our predictably useless ones. Call it Gödel’s Inanity Theorem."

[svieira]

Chuckles - Gödel's Inanity Theorem sounds suspiciously like the game of "Cheat the Prophet" from G. K. Chesterton's The Napoleon of Notting Hill [1]:

> The human race, to which so many of my readers belong, has been playing at children's games from the beginning ... The players listen very carefully and respectfully to all that the clever men have to say about what is to happen in the next generation. The players then wait until all the clever men are dead, and bury them nicely. They then go and do something else. That is all. For a race of simple tastes, however, it is great fun.

[1]: http://www.cse.dmu.ac.uk/~mward/gkc/books/Napoleon_of_Nottin...