SF and Silicon Valley SA's: Should We Be Scared? Forum

[Anonymous User]

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This just came down last night. Obviously, FB IPO has been ongoing, but PG's letter to YCombinator companies seems to mark the recent Web 2.0 bubble popping? How worried should we be about a slowdown and no-offers? I wonder if people (esp. corp and startup) will have worried looks on their faces today at firms here.

[SchopenhauerFTW]

Facebook's purchase of Instagram for $1 billion should have been the first major warning sign for people. This bubble has been growing for a couple of years, but I'm not sure it will be nearly as disastrous as the first one. Nobody knew what they were doing at that time.

[wiseowl]

It's too early to be as dour as he is here, particularly in secondary industries like law where it trickles down.

If companies would, I dunno, have some means of making money, they should be fine in investment. The first dot com burst should have reinforced the need for actual products and services instead of "maybe we can get ads," but seems to have fallen on deaf ears in a lot of circles.

Facebook has had a series of missteps lately, but I chalk that up as much to having a 20-something making billion dollar decisions as to the whole climate being poisonous. They also aren't in any danger of going out of business - they simply hooked a lot of fat cats who aren't happy with their (very short-term) ROI.

[Julio_El_Chavo]

LOL @ idiots who bought FB stock above $30.

There's still a lot cash sloshing around in companies like Google, Oracle and Apple, so I'm not worried that SV's litigation or big-company corp work is going to dry up any time soon, particularly IP litigation. Start-up and related corporate work, on the other hand, might be easing into a slowdown; so firms like WSGR might feel the pinch.

[shmoo597]

LOL @ idiots who bought FB stock above $30.

There's still a lot cash sloshing around in companies like Google, Oracle and Apple, so I'm not worried that SV's litigation or big-company corp work is going to dry up any time soon, particularly IP litigation. Start-up and related corporate work, on the other hand, might be easing into a slowdown; so firms like WSGR might feel the pinch.

this is credited. that letter is directed to startups and is focused on issues surrounding start up funding....not on major SV/SF players with massive cash hordes. IP litigation, IP transactions, and big company tech M&A shows every sign of remaining relatively strong, because large SV/SF companies are doing better then ever. but with the poor performance of the facebook IPO, a number of canceled IPOs, and possible overvaluation in the tech space, I'd be worried about firms focusing primarily on start ups and VC work, like wilson, fenwick, gunderson, and cooley. as with every tech bubble, these firms do amazing during the booms and suffer greatly during the busts.

that being said, I'm not sure there's a huge amount to worry about. yea, the facebook IPO flopped (at least for the people who bought stock...certainly not for facebook!), but unlike 1999/2000, most funded tech start ups these days are profitable from the getgo and require much smaller amounts of capital to get up and running. and I don't think the market today comes even close to the irrational exuberance of the late 1990s. on top of all of that, tech companies are one of the only bright spots in the economy for investors who want to deploy capital. I think the facebook IPO will serve as a warning/hickup/check on any tech bubble, but I don't think it heralds a major downturn in the tech start up space. SF/SV is still the strongest regional economy in the US right now and I don't think that's going to change in the short to medium term.