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In 2016, Silicon Valley is facing the contraction of another boom/bust cycle. Investors are starting to admit that some of their big bets aren't worth what they were financed for: some have gone IPO at prices lower than their financing. Then, of course, there are the inevitable bankruptcies and closures.
Who do you think is marked for doom? Who do you think will recover from their current unfortunate situations? Edited to reflect Yahoo Q4 2015 earnings and probable fraud at Theranos. Mod Edit: Discendo Vox posted:
Somebody fucked around with this message at 05:53 on Feb 25, 2016 |
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Feb 6, 2016 19:45
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ShadowHawk posted:1) Startups that don't seem to have a strategy other than "get acquired" 3) Any social-media companies whose revenue depends on advertising (turns out there's a massive industry of fake clicks) 4) Any company with a single product, especially if that product is vulnerable to new generations of cellphone hardware and software.
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Feb 6, 2016 20:08
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ToxicSlurpee posted:Am I the only one that's amazed Yahoo! even still exists? They feel like a relic from a former era at this point.
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Feb 6, 2016 20:30
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mobby_6kl posted:I still haven't figured out what the gently caress Square does.
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Feb 6, 2016 20:33
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ShadowHawk posted:Ahh yes you were probably confusing it with FourSquare, which is a great candidate for the bankruptcy roulette Whoa. They're still in business? e: It won't hurt them significantly, but Amazon and Google are definitely going to feel some pain as all the mid-level companies who used them as a cloud platform collapse. My guess is there'll also be a big shakeout in advertising and tracking. Arsenic Lupin fucked around with this message at 18:13 on Feb 7, 2016 |
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Feb 7, 2016 18:07
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ShadowHawk posted:It's really unclear what percentage of cloud business is a large collection of small customers and what percentage is a few really big customers. For instance it wouldn't at all surprise me if 80% of Amazon's cloud business was Netflix and other parts of Amazon itself.
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Feb 7, 2016 19:03
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Spuckuk posted:Er, chip and pin has been around for a good decade? It's a weird case of America lagging way behind Europe. Also we aren't doing the PIN part. e: Mashable and the Wall Street Journal have great articles explaining click fraud. A big part of the problem is publishers who use "sourced traffic", in which they pay third parties to direct traffic their way. A 2013 article by a guy who made money from bot clicks on ads. quote:My conversations with [these ad networks] were similar: They would let me decide how much I was willing to pay for traffic, and when I told them $0.002 or below, they made it clear they had little control over the quality of traffic they would send at that price. Quality didn’t really matter to us, though. As a website running an arbitrage model, all that mattered was profit, and for every $0.002 visit we were buying, we were making between $0.0025 and $0.004 selling display ads through networks and exchanges. Arsenic Lupin fucked around with this message at 20:12 on Feb 7, 2016 |
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Feb 7, 2016 20:06
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Mo_Steel posted:Square probably has a safe space for a while; chip and pin is a goddamn clusterfuck right now. If you're a local auto shop, electrician, etc. it's probably a million times easier to buy an iPad and use it as a mobile WiFi hotspot with one of their readers than it is to handle personal checks. I'd love to tinker with one of their systems out of curiosity. Square also has a contactless chip system ready to go. It's not as cute and small as the original version, but it should do, assuming it works.
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Feb 7, 2016 20:38
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blah_blah posted:(most of my friends there have left already, and I've heard things like relatively recent hires having stock options with strike prices way, way higher than the current value of the stock, meaning that they are effectively worthless). Isn't this ... kind of missing the point of stock options? At worst, they should be at the day's value when you joined.
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Feb 8, 2016 01:17
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ShadowHawk posted:Yeah, and they joined when the stock was way higher Contrariwise, I had a friend who built his house by getting a loan secured against his ParcPlace shares. That ... didn't end well.
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Feb 8, 2016 02:42
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blah_blah posted:Note that in this sort of scenario it's actually possible for the employee to actually lose money; if you exercise your options at $X and the stock drops below that value and stays there, you are pretty much screwed (see e.g. this recent example). I doubt that this would have affected anyone at Square though. I am not (so not) a tax lawyer, consult a professional on these things.
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Feb 8, 2016 03:28
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I think you were right, I was confusing the perils of options with the perils of RSUs. Buy options for $.07 when you join the company, get imputed income when the options vest at IPO, stock falls before you can sell it (within the restricted period). Fun fun.
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Feb 8, 2016 04:37
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I'm going to stop talking about taxes because I am way wrong.
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Feb 8, 2016 05:10
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DOOP posted:Why are (some) tech companies called unicorns? I don't get it Startups that are worth >= $1 billion. I don't know why -- because they're rare, maybe?
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Feb 8, 2016 22:11
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Nessus posted:Yeah the idea with VC seems to be that you're buying lottery tickets and if you lose or barely break even on 19 out of 20, it's fine because that twentieth one was Facebook. Absolutely. You have to get seed money somewhere. When you're ready to move out of the garage and start expanding, you need a lot of capital. You can't grow a company on three guys and a couple of servers.
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Feb 8, 2016 22:29
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FlamingLiberal posted:I wish people would stop calling it that since it's more the "LALALALA I'M NOT BREAKING THE LAW IF I CAN'T HEAR YOU" Economy This, EXACTLY. Who knew -- it's way cheaper to run hotels or taxis or personal services if you don't have to get a license, post bonds, and obey the standard laws on the subject, including paying specialized taxes. The CEOs (especially Uber's ) say "transformative" but in practice it means "I don't have to follow taxi regulations because I'm not a taxi enjoy your lack of liability insurance, training, and background screening." See also the various AirBNB horror stories, from both hosts and guests, as well as the apartment buildings being turned into AirBNB farms, every apartment on short-term rent but again not having to obey hotel ordinances. The businesses that do obey local laws are at a severe disadvantage against the "disruptive" businesses that claim they don't have to.
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Feb 9, 2016 01:12
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Well, that's certainly an unrelated conglomeration of things there, each an individual snowflake that will never merge into a snowball of DOOM. Yahoo Q4 report comes out tomorrow after the close of the stock market! e: From the Zenefits announcement: quote:Our culture and tone have been inappropriate for a highly regulated company. Zenefits’ company values were forged at a time when the emphasis was on discovering a new market, and the company did that brilliantly. Now we have moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders. ee: Good overview of the 2015 unicorns. Uber is "worth" $51B. Arsenic Lupin fucked around with this message at 04:21 on Feb 9, 2016 |
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Feb 9, 2016 04:08
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Theranos is looking like it will probably become a fraud case, not just a collapse.
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Feb 9, 2016 05:12
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axeil posted:edit: i also genuinely like uber and think its better than taxis because taxis in the dmv region are utter garbage. it took them until 2013 to accept credit cards. no really. Everybody agrees about that. What we really need is a regulatory system that allows new taxi businesses to start up, instead of providing a state-imposed monopoly on the number of people who can get permits to drive taxis. However, Uber is bypassing not only the medallion system, but also standard rules about insurance, liability, training, security checks .... all under the claim that it's just private citizens moonlighting.
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Feb 9, 2016 06:09
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Pervis posted:Theranos didn't realize this isn't the 90's anymore and healthcare isn't the best field to do that type of fraud. It'll all come out in the court case(s), but I wonder what they did with all the venture money. Research that just didn't pan out? A creator who is sure that just a little more time and it will all come together?
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Feb 9, 2016 17:08
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go3 posted:i always figured most of it went into legal fees to draw out a defense of a position you can't hold until favorable legislation went through But the evidence is that the multiple-drop testing simply didn't work; when the Feds looked at the lab, most of the testing equipment was regular (requires bigger samples) equipment, and when they were drawing blood in IIRC Arizona it turned out they were actually asking for a full blood draw rather than a finger prick. At some point they must have realized the science wasn't quite there and started faking it.
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Feb 9, 2016 19:57
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icantfindaname posted:The idea behind Uber and its labor model is to strip away any remaining comforts or security for the working class, so they can finally get back to toiling 12 hours a day from the cradle to the grave for the convenience of the bourgeois upper middle class, like god intended This. No sick leave, no protection against layoffs, no liability bonds, no workman's comp, wage determined entirely by the whims of the employer, and of course no unions. It's a lot cheaper to run a company if you define all (most) of the employees as independent contractors, as well as requiring them to provide their own tools.
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Feb 9, 2016 20:54
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Arsenic Lupin posted:This. No sick leave, no protection against layoffs, no liability bonds, no workman's comp, wage determined entirely by the whims of the employer, and of course no unions. It's a lot cheaper to run a company if you define all (most) of the employees as independent contractors, as well as requiring them to provide their own tools. Shifty Pony posted:They have been doing things like charging patients $7 for a test then paying UC San Francisco >$300 for a comprehensive panel on it because Theranos's wonder machines don't actually work.
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Feb 9, 2016 20:55
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ShadowHawk posted:If I had to guess I'd say that Uber wouldn't need to do that much different to have the Independent Contractors thing be clearly in the legal column. Like not caring about the hours drivers work, letting them set asking prices, and showing those to customers before they book the car. Letting them set prices is directly contrary to Uber's business model, in which prices are set based on demand.
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Feb 9, 2016 22:27
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Paradoxish posted:That said, Uber isn't unique in loving this up and 1099 misclassification didn't start with the sharing economy. It's a problem in general, Uber is just incredibly blatant about it.
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Feb 9, 2016 23:19
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The last two tech crashes (as opposed to the overall financial panic), house sales stayed steady at lower prices, because all the people who couldn't afford to buy got in.
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Feb 10, 2016 00:15
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ToxicSlurpee posted:One of the big issues Silicon Valley and the like are running into is that a great many people just flat out don't want to live in a place where the rent is $3,000 a month for a studio apartment. Yeah sure you can probably start at $70K a year there but you're already paying half of that in rent before taxes or other expenses. Is it worth it? Some people say yes, others say no but where I'm originally from you can buy an entire goddamned house for less than a year's rent. That also makes remote positions even sexier if people can nail them.
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Feb 10, 2016 00:55
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mitztronic posted:As someone who works in MV/PA in Aerospace, and used to live in MV for many years, what the hell are you talking about? There was a crash in the 1970s (ish) when the government pulled way back on R/D funding and military contracts. e: This gloomy paper from 1986 points out that "overall, since 1975, total U.S. aircraft production has collapsed 77%". Arsenic Lupin fucked around with this message at 02:21 on Feb 10, 2016 |
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Feb 10, 2016 02:19
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Solkanar512 posted:That's pretty easy to say if you're not LGBT or a woman who might need an abortion at some point in their lives. The local and state laws also tend to be much more pro labor than the places you speak of. I was raising children there, and I'm glad we got them out, not least because one of them turned out to be a lesbian and very grateful for the supportive environment in California. e: To bring this thread back on-topic, Facebook is threatening to pull out their datacenter, a significant job provider IIRC, because the government slashed solar subsdies. Turns out they built it anyway. Arsenic Lupin fucked around with this message at 16:30 on Feb 10, 2016 |
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Feb 10, 2016 16:23
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Double post; move on.
Arsenic Lupin fucked around with this message at 21:18 on Feb 10, 2016 |
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Feb 10, 2016 19:09
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And holy cow, Theranos, what were you smoking?
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Feb 10, 2016 19:10
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Twitter has announced that they lost users in the last quarter.quote:In its letter to shareholders, Twitter emphasized its belief that the fall-off was a temporary state of affairs. “As of the end of January, we have already seen total MAUs [monthly active users], excluding SMS Fast Followers, return to Q3 levels,” wrote the company’s executives.
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Feb 11, 2016 00:36
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Shifty Pony posted:The leaked slides from the last funding round showed uber burned through $700 million in Q3 of 2015 alone. Holy *cow*. Or unicorn.
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Feb 11, 2016 03:50
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I'm not a mod, but I think this would be a better thread if we stuck to the life and death of startups. Where is a cool place to live and whether Uber is a good point are both discussable elsewhere. Speaking of cargo-culting, a significant VC was quoted in the last year as saying that he was trying to fund startups whose founders reminded him of Mark Zuckerberg. Not iin terms of "driving personality" or whatever, but in having the same sort of background -- under 30, first-tier college, and so on. (Anybody remember details? I can't remember enough to Google.)
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Feb 11, 2016 16:46
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Based on the dot-com wave, stockholders buy expecting Facebook-style (at the time it was Amazon-style IIRC) growth, and they panic at any sign that the growth curve is tapering off. If you can't become rich holding the stock, better sell it off and buy something that *can* make you rich. Lowering your earnings expectations is a classic way to panic investors. (Earnings predictions are such a crazy dance anyway; back in dot-com it was expected for companies to inform finance insiders of their *real* predictions, leading to the "whisper numbers". I have no idea if this still happens.) e: I just encountered the Gartner Magic Quadrant and now I have a stabbing pain in my insides. Arsenic Lupin fucked around with this message at 17:16 on Feb 11, 2016 |
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Feb 11, 2016 17:11
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redscare posted:One of the last things you want to do is sell insurance without a license. But... but... breaking the laws is disruptive!
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Feb 11, 2016 17:42
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shrike82 posted:The Bay Area's extremely livable though. Please can we talk about high-tech unicorns? Insulting each other's places of residence will lead to nothing but
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Feb 11, 2016 18:01
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icantfindaname posted:So one of the Facebook board members just essentially said that colonialism was good for the third world, in reaction to Indian regulators banning their new walled garden subscription plan: Note that this isn't just a board member, this is Marc Andreesen, founder of Netscape, who is now one of the leading Silicon Valley VCs. His opinions have sway not just over Facebook, but over who gets funded and who doesn't.
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Feb 11, 2016 20:06
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shrike82 posted:in terms of actually interesting questions, i'm pretty keen to see whether YouTube Red succeeds or not.
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Feb 11, 2016 20:30
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shrike82 posted:nah the YouTube org is structured somewhat differently from Google. there is a lot of focus on developing content creators.
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Feb 11, 2016 20:38
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