When's the "Social Web" bubble going to burst?

[Platinum Pete]

Soon:

http://wolfstreet.com/2014/10/09/pri...t-for-burnout/

So now, 49 US startups that have not yet gone public and have not yet been acquired have valuations of over $1 billion, with five of them in, or nearly in, the $10 billion club. Uber tops the list with a valuation of $18 billion. And Snapchat, one of these $10-billion outfits, doesn’t even have revenues yet though it might eventually by selling ads via its disappearing messages.

It’s anecdotal evidence, but it’s everywhere in San Francisco and Silicon Valley. A neighbor was cooling her heels by the curb, suitcase next to her. She’s going to Europe on a “vacation-thing,” organized and paid for by her company, she told me. A team-building perk. She’s a coder at a startup, her first job out of college. When she moved in less than two years ago, trucks kept pulling up to deliver her latest acquisitions. One day, she gingerly parked a new BMW in the garage. As we were chatting about her trip to Europe, a limo pulled up for her ride to the airport. That too was part of the perk. No expenses will be spared.

This startup occupies super-expensive San Francisco office space that’s way too big for the number of employees. It’s embellished with designer furniture. Free lunches are de rigueur. All paid for with the boundless money it is getting from investors.

But who cares, except for a few wayward souls in the VC community who lament those sizzling burn rates. Bill Gurley, partner at Benchmark, had stepped to the forefront a few weeks ago to warn that “the average burn rate at the average venture-backed company” is at an “all-time high since ‘99 and maybe in many industries higher than in ‘99” [“Excessive Amounts of Risk” Doom Startup Bubble].

Marc Andreessen, founder of long-forgotten Netscape, then warned in a series of tweets: “When the market turns, and it will turn, we will find out who has been swimming without trunks on. Many high burn rate companies will VAPORIZE.” His final and most eloquent tweet: “Worry.”

Also fascinating is the number of founders who have taken significant money off the table, particularly in early rounds.
The Snapchat founders all took $10mm plus out of their (I think) Series B, before the Facebook offer. It will be interesting to see if they cash out more in the current round. The Air BnB guys did the same thing a while back, but their business was much more mature at that point, actually earning money. It's not a rare practice, but you're seeing founders grab cash for themselves earlier and earlier. Combine that with the secondary markets for pre-IPO stock, and there's less & less incentive to create viable businesses that may ever have to stand on their own, and more & more ways to extract cash from the "paper wealth." How this aligns insider/founder interests with the longer term interests of their companies is even more dubious.

[Hott Butt Mud]

Ask yourself this, when was the last time someone said 'Groupon' to you?

[glademaster]

Ask yourself this, when was the last time someone said 'Groupon' to you?

It's been 6 or 8 months.

[Bromontana]

Ask yourself this, when was the last time someone said 'Groupon' to you?

My gf reads those things everyday. To her credit, we did score a decent Indian meal a few weeks back for half off. Pretty low ROI if you ask me, maybe it's a female thing.

Wanna see a complete POS social media company? LIVE deal. Aggressive stock pumpers with a failing business.

LIVE deal will fail but Groupon.. Wouldn't bet on it considering how addicted people are to phones.