This bubble will hurt the smaller startups by no-name people, people that invested everything in an idea that in a non-bubble environment would be laughed out of the room, but with companies like YC around (not that this is their fault) that are harping on about the value of ideas and people it's growing.
There are people here on HN daily that post links to their blog posts that have put all their savings into their startup that has no potential to ever be anything other than a furnace for their money, but people encourage them, they are the people who will be hurt.
How many incubated startups (through programs like yc) will ever go on to be anything other than shut down? With all this cultish behaviour around YC a lot of people are believing that making money doesn't matter any more. Just look at the startups people posted in the yc rejection day threads, some of them just make absolutely no sense.
There is so much money in the internet now that when everything goes wrong nobody outside of the startup scene will really notice because the businesses that matter, the businesses people rely on will be doing fine. There will always be room for businesses that make money, bubble or not, those businesses are the ones the "public" care about. How many "normal people" would care if Instagram disappeared tomorrow and would have their lives impacted a week later? How many would care if ebay went? I suspect the latter would be the worse for the general public, and the latter will never happen because ebay actually makes money.
I'm not sure I buy that. Obviously it's true that "outsider" startups will see their funding dry up faster than YC companies and other "insider" groups will. But I don't think that's the right metric. In fact access to "big money" funding is if anything anti-correlated with success among these companies. Almost all the big YC exits so far were from the early rounds, and those happened during an era of very limited VC cash.
>> There will always be room for businesses that make money, bubble or not
Absolutely. Cycles happen, and for now those of raising money can enjoy the peak. The problem is that with all the fanfare, people forget that companies need to make money.
There are people here on HN daily that post links to their blog posts that have put all their savings into their startup that has no potential to ever be anything other than a furnace for their money, but people encourage them, they are the people who will be hurt.
How many incubated startups (through programs like yc) will ever go on to be anything other than shut down? With all this cultish behaviour around YC a lot of people are believing that making money doesn't matter any more. Just look at the startups people posted in the yc rejection day threads, some of them just make absolutely no sense.
There is so much money in the internet now that when everything goes wrong nobody outside of the startup scene will really notice because the businesses that matter, the businesses people rely on will be doing fine. There will always be room for businesses that make money, bubble or not, those businesses are the ones the "public" care about. How many "normal people" would care if Instagram disappeared tomorrow and would have their lives impacted a week later? How many would care if ebay went? I suspect the latter would be the worse for the general public, and the latter will never happen because ebay actually makes money.