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		<title>Yes, it&amp;apos;s a bubble, of course</title>
		<dateCreated>Sun, 29 Apr 2012 19:21:35 GMT</dateCreated>
		<dateModified>Sun, 29 Apr 2012 19:34:36 GMT</dateModified>
		<ownerName>Dave Winer</ownerName>
		<ownerEmail>dave.winer@gmail.com</ownerEmail>
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		<outline created="Sun, 29 Apr 2012 19:21:35 GMT" ctSaves="11" flPreview="false" id="2012.04.29.1786" server="xmlrpc://cms.scripting2.com:5337/RPC2" storySerialNum="1786" text="Yes, it's a bubble, of course" type="scripting2Post" url="http://scripting.com/stories/2012/04/29/yesItsABubbleOfCourse.html" username="davewiner" versionClient="0.44" versionServer="0.44" whenLastSave="Sun, 29 Apr 2012 19:34:36 GMT">
			<outline created="Sun, 29 Apr 2012 19:11:09 GMT" pgfnum="13811" text="&lt;img src=&quot;http://scripting.com/images/2012/04/29/dice.gif&quot; width=&quot;145&quot; height=&quot;111&quot; border=&quot;0&quot; style=&quot;float: right; padding-left: 15px; padding-bottom: 5px; padding-top: 10px; padding-right: 15px;&quot; alt=&quot;A picture named dice.gif&quot;&gt;This is a permathread in the tech discussion, and it's basically always true, and the discussion is always the same."></outline>
			<outline created="Sun, 29 Apr 2012 19:11:35 GMT" pgfnum="13812" text="First, there are the mature companies, ongoing concerns. They are never part of the bubble. Apple makes products that people buy. They will likely make faster CPUs and disks will get bigger, so we'll buy new computers periodically. And they also invent new stuff and we buy that too. Any business that makes products that people will continue to buy long-term is not a bubble company. "></outline>
			<outline created="Sun, 29 Apr 2012 19:12:50 GMT" pgfnum="13813" text="Then we hear from VCs, and they report on it as if the front-line of whether it's a bubble or not is in their minds. If they're making decisions based on sound business principles, they believe, then it's not a bubble. It's understandable that they're self-centered, that's the reflex we all have. And money -- everyone likes to talk about money. That's why when VCs speak lots of other VCs come to listen, and the press, and prospective entrepreneurs. "></outline>
			<outline created="Sun, 29 Apr 2012 19:14:04 GMT" pgfnum="13814" text="The reason it is a bubble has nothing to do with the minds of the VCs. Nothing. "></outline>
			<outline created="Sun, 29 Apr 2012 19:14:23 GMT" pgfnum="13815" text="The question is this. Are the new businesses, the startups, making identifiable products that make sense, and will they make money selling them, and how long will that last, and most important, will they grow. Because that's fundamentially what makes companies worth something. If you put money into them, how much will it grow. "></outline>
			<outline created="Sun, 29 Apr 2012 19:15:20 GMT" pgfnum="13816" text="If they are making good businesses that will be profitable and will grow, then no bubble. If they aren't -- depending how frothy the startup scene is -- that's the extent to which we're in a bubble. "></outline>
			<outline created="Sun, 29 Apr 2012 19:16:00 GMT" pgfnum="13817" text="An example of a bubble was the derivatives market that grew up around junk mortgages. that popped in 2006 through 2008. No one is in that business anymore (at least I hope so!) and the collapse took a lot of people's futures with it. Jobs were lost, houses were lost, and sure some investors lost money too. But the big concern are the people who could ill-afford to lose. When they lost they were put out into the street, or unemployed, future-less, hope-less. &lt;a href=&quot;http://fuckedcompany.com/&quot;&gt;Fucked&lt;/a&gt;, as we used to say in the dotcom crash of the early 2000's. "></outline>
			<outline created="Sun, 29 Apr 2012 19:17:52 GMT" pgfnum="13818" text="This time around they're building businesses whose only way of making money will be through advertising. Are there as many different ways to slice things as all the startups, collectively, would have you believe. And when they're done, what will happen to them. What institutions will the bubble-pop take with it. How many people, and which people. That's what we have to worry about. "></outline>
			<outline created="Sun, 29 Apr 2012 19:19:08 GMT" pgfnum="13819" text="You do know that a lot of universities were hurt hard when the real estate bubble crashed because they got greedy and put their endowments into the derivatives market. This time around it's going to hit universities even harder. And the people who will be fucked won't be homeowners. They'll be young people whose lives are just beginning, who have student debt to pay off, and post-bubble will have few prospects. It's a vast game of musical chairs, and there really aren't that many chairs."></outline>
			<outline created="Sun, 29 Apr 2012 19:20:18 GMT" pgfnum="13820" text="We're not worried about the VCs, or we shouldn't be. They are the promoters. They have the money, and they surely will protect themselves against losing everything. It's the generation that will be lost, and the educational system that will go with it. That won't be fun to see. I'm totally sure it's going to happen. We've seen this so many times, how can we pretend not to see it this time?"></outline>
			<outline created="Sun, 29 Apr 2012 19:28:45 GMT" pgfnum="13821" text="How many times have we been through this? Here's a good indicator. I wrote this piece in seven minutes. Believe me, it's well-rehearsed. :-)"></outline>
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