"The current 'tech bubble' is just one of multiple bubbles being driven by an even larger bubble in public equities."
I would be interested in how you reason to that statement. I enjoyed reading Michael Pettis' blog entry[1] about excess capital, which provided an alternative narrative to the rise in equities but it wasn't really a bubble so much as it was just an excess of capital.
To your question "How many people are employed by these startups?" I believe the median size is <10 employees[2]. If you dumped 10,000 employees onto the market in the Bay Area it would probably sort out reasonably quickly.
I'm still stuck trying to figure out if this is really just a capital excess or a bubble though.
[2] Hard to get precise numbers but you can troll around Crunchbase and other 'tracking' sites and get an idea on the size for "Smaller Younger startups" which is what this question referred to.
> I enjoyed reading Michael Pettis' blog entry[1] about excess capital, which provided an alternative narrative to the rise in equities but it wasn't really a bubble so much as it was just an excess of capital.
You seem to be splitting hairs. From your referenced blog post:
Washington is absolutely correct, in my opinion, to want to boost American consumption, but the Fed seems to be trying to boost consumption by igniting another asset bubble in the hopes that, like before 2007, Americans will feel “richer” and so will consume more. This isn’t sustainable, however, and will leave us, as Paul and Druckenmiller fear, even more heavily indebted and more dangerously exposed to the underlying weakness in demand.
But to answer your question: the strong public equities market has provided investors with the capital and confidence to plow money into investments in private tech companies.
> If you dumped 10,000 employees onto the market in the Bay Area it would probably sort out reasonably quickly.
Even if we assume that we're looking at just 10,000 people, your assumption that the market will quickly absorb them without much pain is quite optimistic.
Companies like Google and Facebook will certainly pick up some of the most skilled folks, but the vast majority of startup employees are not as desirable as many would like to believe, and they won't be able to replace their salaries.
Put simply, there are 20-something [insert programming language du jour] developers with a few years of experience making $120,000/year plus benefits at unprofitable angel or venture-backed startups who are going to have to face the reality that their six-figure earning potential is completely dependent on the continued inflow of investment dollars to early-stage startups.
I would be interested in how you reason to that statement. I enjoyed reading Michael Pettis' blog entry[1] about excess capital, which provided an alternative narrative to the rise in equities but it wasn't really a bubble so much as it was just an excess of capital.
To your question "How many people are employed by these startups?" I believe the median size is <10 employees[2]. If you dumped 10,000 employees onto the market in the Bay Area it would probably sort out reasonably quickly.
I'm still stuck trying to figure out if this is really just a capital excess or a bubble though.
[1] http://blog.mpettis.com/2014/09/not-with-a-bank-but-a-whimpe...
[2] Hard to get precise numbers but you can troll around Crunchbase and other 'tracking' sites and get an idea on the size for "Smaller Younger startups" which is what this question referred to.