Comments on: Doom And Gloom Hits Silicon Valley http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/ Startup and Tech News Sat, 17 May 2008 09:44:56 +0000 http://wordpress.org/?v=2.3.3 By: How To Fix Venture Capital, Part 2: The Opening is As Important as the Endgame « SmoothSpan Blog http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2179787 How To Fix Venture Capital, Part 2: The Opening is As Important as the Endgame « SmoothSpan Blog Tue, 15 Apr 2008 15:45:25 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2179787 [...] a cause and effect, or is it all just a function of how the economy is behaving?  Returns are still under a lot of pressure, so it behooves us to figure it [...] […] a cause and effect, or is it all just a function of how the economy is behaving?  Returns are still under a lot of pressure, so it behooves us to figure it […]

]]> By: .: The Economics of Entertainment Convergence :. » Blog Archive » The High Cost of Free - Why The Gift Economy Means Stay Tuned for Amatuer Hour http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2165061 .: The Economics of Entertainment Convergence :. » Blog Archive » The High Cost of Free - Why The Gift Economy Means Stay Tuned for Amatuer Hour Sat, 12 Apr 2008 21:29:40 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2165061 [...] M&A activity for content and tech is disappearing. [...] […] M&A activity for content and tech is disappearing. […]

]]> By: James Zhuo http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2163510 James Zhuo Fri, 11 Apr 2008 23:58:10 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2163510 Just out of interest, where do you get all your stats from? Just out of interest, where do you get all your stats from?

]]> By: Tech and the Economy? A Straight Answer is Hard to Find « HellaFrank http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2162448 Tech and the Economy? A Straight Answer is Hard to Find « HellaFrank Fri, 11 Apr 2008 14:30:07 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2162448 [...] the numbers show that those IPOs have not been plentiful the past few months. [...] […] the numbers show that those IPOs have not been plentiful the past few months. […]

]]> By: I Saw The Future Of Social Networking The Other Day | Innovation Toronto http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2160157 I Saw The Future Of Social Networking The Other Day | Innovation Toronto Thu, 10 Apr 2008 16:08:16 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2160157 [...] Read more . . . [...] […] Read more . . . […]

]]> By: Doom And Gloom Hits Silicon Valley « Blog of Intellectual Capital http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2159155 Doom And Gloom Hits Silicon Valley « Blog of Intellectual Capital Thu, 10 Apr 2008 08:38:13 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2159155 [...] April 10, 2008 by Robert Tillman You didn’t really think that Silicon Valley would be immune to the general convulsions in the overall economy, did you? Read some good thoughts on the issue here. [...] […] April 10, 2008 by Robert Tillman You didn’t really think that Silicon Valley would be immune to the general convulsions in the overall economy, did you? Read some good thoughts on the issue here. […]

]]> By: John http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158530 John Thu, 10 Apr 2008 03:08:40 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158530 Now worries just diversify your tech portfolio with a tech acquisitions in a booming market like shipping... I'm sure we can find a place for your money here at gCaptain.com ;) Now worries just diversify your tech portfolio with a tech acquisitions in a booming market like shipping… I’m sure we can find a place for your money here at gCaptain.com ;)

]]> By: Ric Dragon http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158419 Ric Dragon Thu, 10 Apr 2008 02:25:27 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158419 I don't know... before the economic crisis became accepted and obvious, we were getting so many inquiries about developing web 2.0 platforms for nascent web-based businesses.... And the buzz is still pretty strong. In that sense, I feel like our web development/application development business is a good barometer. I don’t know… before the economic crisis became accepted and obvious, we were getting so many inquiries about developing web 2.0 platforms for nascent web-based businesses…. And the buzz is still pretty strong. In that sense, I feel like our web development/application development business is a good barometer.

]]> By: John http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158406 John Thu, 10 Apr 2008 02:19:04 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158406 The NYTimes story struck me as pretty factual, I didn't see any schadenfreude. Why do tech types so love to bash the Times? Andreessen's always going on about them too. They're not perfect, but they do more high quality original reporting than anyone else. TechCrunch can talk when you hire 500 more reporters and start doing serious investigative news :-) As to the story, I agree with Tony and Paul. If you have a good idea and skills, this is a great time to build something. When money is too easy to come by for too long, too many quick-buck schemers start pissing in the pool. A little belt-tightening separates the wheat from the chaff. The NYTimes story struck me as pretty factual, I didn’t see any schadenfreude. Why do tech types so love to bash the Times? Andreessen’s always going on about them too. They’re not perfect, but they do more high quality original reporting than anyone else. TechCrunch can talk when you hire 500 more reporters and start doing serious investigative news :-)

As to the story, I agree with Tony and Paul. If you have a good idea and skills, this is a great time to build something. When money is too easy to come by for too long, too many quick-buck schemers start pissing in the pool. A little belt-tightening separates the wheat from the chaff.

]]> By: Paul http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158219 Paul Thu, 10 Apr 2008 00:35:20 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158219 Also agreed with #5... It would be nice to be able to start a company without having to pay second-stringers too much money just to stay even with over-financed, dead pool-bound competition. Also agreed with #5… It would be nice to be able to start a company without having to pay second-stringers too much money just to stay even with over-financed, dead pool-bound competition.

]]> By: johns http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158106 johns Wed, 09 Apr 2008 23:27:22 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158106 "The C.E.O. Confidence Index, measured by Chief Executive magazine since 2002, plunged to a record low last month. Not mincing words, 52 percent of top chiefs surveyed called current business conditions downright “bad.” No word on whether the magazine plans to add choices like “truly abysmal” or “utterly hopeless” to the survey, just in case “bad” ends up becoming business as usual." http://www.nytimes.com/2008/04/06/business/06suits.html “The C.E.O. Confidence Index, measured by Chief Executive magazine since 2002, plunged to a record low last month. Not mincing words, 52 percent of top chiefs surveyed called current business conditions downright “bad.” No word on whether the magazine plans to add choices like “truly abysmal” or “utterly hopeless” to the survey, just in case “bad” ends up becoming business as usual.”

http://www.nytimes.com/2008/04.....suits.html

]]> By: Simon Brocklehurst http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158037 Simon Brocklehurst Wed, 09 Apr 2008 22:43:11 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158037 @Jimbo. LOL! We'll see. The devil's in the detail, not in the charts, I'm afraid. You're mistaken if you think all business models for all companies demand early revenues. It depends on how and where value is created in the business. You're similarly mistaken if you think that all strong privately held companies - ones that are delivering on their plans, and that have deep-pocketed investors - will be doing M&A transactions where their valuations are less than the valuations from their previous financing rounds. And if you think that strong privately held companies like these aren't starting to look to see if there are any bargains to be had on the public markets right at this minute, well... you got it wrong again. Congratulations - you appear to know nothing about business! @Jimbo. LOL! We’ll see. The devil’s in the detail, not in the charts, I’m afraid.

You’re mistaken if you think all business models for all companies demand early revenues. It depends on how and where value is created in the business.

You’re similarly mistaken if you think that all strong privately held companies - ones that are delivering on their plans, and that have deep-pocketed investors - will be doing M&A transactions where their valuations are less than the valuations from their previous financing rounds.

And if you think that strong privately held companies like these aren’t starting to look to see if there are any bargains to be had on the public markets right at this minute, well… you got it wrong again.

Congratulations - you appear to know nothing about business!

]]> By: Trace Johnson http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158020 Trace Johnson Wed, 09 Apr 2008 22:35:11 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2158020 I posted this story last week. The IPO market is heavily leveraged to a strong market, and IPO's will routinely get delayed when the stock market is showing weakness. So, in that instance, this is possibly too short a time horizon to look at. The M&A valuations are more troubling, but two things: 1) A weak market can cause more friction between the acquiring and acquired companies. See Microsoft & Yahoo. 2) Investors losing money and compressed valuations is inevitable when you consider the herd mentality of VC investing. TC constantly charts the copycat competitors within a space - Green investing, mobile ad networks, thin-client instant messaging, casual gaming, etc. Many of these companies will become empty vessels for which larger companies will buy the software but pay no premium for an installed base of users or strong brand. I posted this story last week.

The IPO market is heavily leveraged to a strong market, and IPO’s will routinely get delayed when the stock market is showing weakness. So, in that instance, this is possibly too short a time horizon to look at.

The M&A valuations are more troubling, but two things:

1) A weak market can cause more friction between the acquiring and acquired companies. See Microsoft & Yahoo.
2) Investors losing money and compressed valuations is inevitable when you consider the herd mentality of VC investing. TC constantly charts the copycat competitors within a space - Green investing, mobile ad networks, thin-client instant messaging, casual gaming, etc. Many of these companies will become empty vessels for which larger companies will buy the software but pay no premium for an installed base of users or strong brand.

]]> By: SearchCap: The Day In Search, April 9, 2008 | Search Engine Studies http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157835 SearchCap: The Day In Search, April 9, 2008 | Search Engine Studies Wed, 09 Apr 2008 21:05:50 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157835 [...] Doom And Gloom Hits Silicon Valley, TechCrunch [...] […] Doom And Gloom Hits Silicon Valley, TechCrunch […]

]]> By: Andrew http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157742 Andrew Wed, 09 Apr 2008 20:31:20 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157742 This is far too short in scale to be a trend. It's like watching a stock price from one second to the next. This is far too short in scale to be a trend. It’s like watching a stock price from one second to the next.

]]> By: TechCrunch Japanese アーカイブ » シリコンバレーに暗雲 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157548 TechCrunch Japanese アーカイブ » シリコンバレーに暗雲 Wed, 09 Apr 2008 19:25:05 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157548 [...] [原文へ] [...] […] [原文へ] […]

]]> By: dustin http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157534 dustin Wed, 09 Apr 2008 19:20:08 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157534 There's no way there won't be some impact. When money gets tight, it impacts everyone along the food chain. Yes, VCs "allegedly" have longer time horizons, but they depend on the upstream capital markets like any other investor/lender. No way it will be like 2000 because there isn't nearly the excess, but I think we'll see more smaller deals, less friendly terms for entrepreneurs and more deadpool entrants as it gets harder to get next rounds if you aren't showing serious progress. There’s no way there won’t be some impact. When money gets tight, it impacts everyone along the food chain. Yes, VCs “allegedly” have longer time horizons, but they depend on the upstream capital markets like any other investor/lender. No way it will be like 2000 because there isn’t nearly the excess, but I think we’ll see more smaller deals, less friendly terms for entrepreneurs and more deadpool entrants as it gets harder to get next rounds if you aren’t showing serious progress.

]]> By: Arctic Startup » Funding to get more difficult? http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157508 Arctic Startup » Funding to get more difficult? Wed, 09 Apr 2008 19:10:16 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157508 [...] TechCrunch reports more difficult times ahead for companies looking for funding in Silicon Valley. Overall, the number of M&As have gone down, as well as IPOs and the total value of disclosed M&A deals. When in US, they report on quarterly figures, we have to settle for annual figures (which are increasingly late as well) here in Finland. Then again, our market domestically is in very early stages (the average size of a venture capital investment in 2006 was a mere 680 000 euros). [...] […] TechCrunch reports more difficult times ahead for companies looking for funding in Silicon Valley. Overall, the number of M&As have gone down, as well as IPOs and the total value of disclosed M&A deals. When in US, they report on quarterly figures, we have to settle for annual figures (which are increasingly late as well) here in Finland. Then again, our market domestically is in very early stages (the average size of a venture capital investment in 2006 was a mere 680 000 euros). […]

]]> By: Jimbo http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157377 Jimbo Wed, 09 Apr 2008 18:19:36 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157377 @Simon Brockelhurst (#3): did you even read the charts? what is this VC floor you talk of? 7 of the 18 deals in Q1 were done for less than the $$ invested (even worse than being done for less than the previous valuation). I don't even want to get into your comment about startups that "don't need revenue for awhile"...those are exactly the kind that can't sustain themselves in a down market... Please head back to commenting on digg with that kind of analysis. Thanks @Simon Brockelhurst (#3): did you even read the charts? what is this VC floor you talk of? 7 of the 18 deals in Q1 were done for less than the $$ invested (even worse than being done for less than the previous valuation).

I don’t even want to get into your comment about startups that “don’t need revenue for awhile”…those are exactly the kind that can’t sustain themselves in a down market…

Please head back to commenting on digg with that kind of analysis.

Thanks

]]> By: dave http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157375 dave Wed, 09 Apr 2008 18:19:06 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157375 Imagine... You Can Earn money and Socialize on facebook or myspace In Just 30 days ! The first social networking website that actually pays its members! It's a lot like MySpace or Facebook, the only difference is you get paid for your hits, blogs, friends, and just browsing. Tom from MySpace makes about 20 MILLION a month from the companies that advertise on his site. Is he sharing it? No. Join for free today at: http://2url.us/1930 A lot of people make over $1,000 a month on this site. But even if you aren't a hardcore internet user, you could easily make an extra $50 a month easy. Imagine… You Can Earn money and Socialize on facebook or myspace In Just 30 days !

The first social networking website that actually pays its members! It’s a lot like MySpace or Facebook, the only difference is you get paid for your hits, blogs, friends, and just browsing. Tom from MySpace makes about 20 MILLION a month from the companies that advertise on his site. Is he sharing it? No. Join for free today at:
http://2url.us/1930

A lot of people make over $1,000 a month on this site. But even if you aren’t a hardcore internet user, you could easily make an extra $50 a month easy.

]]> By: david http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157294 david Wed, 09 Apr 2008 18:00:03 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157294 Erick, That first graph is a crime against Tufte. For the love of god, fix the x-axis labels. Erick,

That first graph is a crime against Tufte. For the love of god, fix the x-axis labels.

]]> By: Ian http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157292 Ian Wed, 09 Apr 2008 17:59:29 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157292 There isn't enough conclusive data there to prove what you are forecasting. There isn’t enough conclusive data there to prove what you are forecasting.

]]> By: Andrew http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157267 Andrew Wed, 09 Apr 2008 17:51:53 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157267 time to apply to business schools before the flood, worst case scenario in September you tell them you changed your mind. time to apply to business schools before the flood, worst case scenario in September you tell them you changed your mind.

]]> By: VentureDeal http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157251 VentureDeal Wed, 09 Apr 2008 17:46:24 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157251 Recessions are part of the normal cycle. They represent opportunities for the sharp-witted... Recessions are part of the normal cycle. They represent opportunities for the sharp-witted…

]]> By: grand inquisitor http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157249 grand inquisitor Wed, 09 Apr 2008 17:46:16 +0000 http://www.techcrunch.com/2008/04/09/doom-and-gloom-hits-silicon-valley/#comment-2157249 Also, keep in mind that during the past boom there were mild to serious corrections such as the Asian economic crisis and the meltdown of LT Capital management, leading pundits to declare that we had seen the end of the world, and that the year 2000 problem was going to be nails in the coffin. For 4-6 months at the end of 1998 due to the fear and uncertainty, VC funding slowed, and then kicked into high gear in January 1999. (It slowed the closing of our "A'' round by several months). Assuming Microhoo happens, then what? Will it be looked back upon as an AOL/Time Warner moment? Also, keep in mind that during the past boom there were mild to serious corrections such as the Asian economic crisis and the meltdown of LT Capital management, leading pundits to declare that we had seen the end of the world, and that the year 2000 problem was going to be nails in the coffin. For 4-6 months at the end of 1998 due to the fear and uncertainty, VC funding slowed, and then kicked into high gear in January 1999. (It slowed the closing of our “A” round by several months). Assuming Microhoo happens, then what? Will it be looked back upon as an AOL/Time Warner moment?

]]>