Chris is conflating the startup bubble with a general tech bubble and using the strength of profitable companies to defend startups.
Twitter and Color are startups with no clear business model. Groupon and Google are going concerns.
As per the blog entry: "A bubble is a decoupling of asset prices (valuations) from their underlying economic fundamentals". [Agreed!]
Throwing $45 million at Color with nothing more than an idea and the hint of an app is evidence of a bubble. So is Twitter's recent $7.7 billion valuation based on a predicted $150 million in 2011 revenue.
I know it hurts - hell it's going to hurt all of us - but you better believe it. Prepare to be profitable or die.
Totally different stages of business and incomparable. Google revenue is growing steadily, since $30B p.a for a single revenue stream is about as big as you can get.
If you want a proper comparison, Google's PE ratio was 150 at IPO (and 300 at the high range of estimates, and it eventually reached that)
A lot of smart people thought that was a bad buy at the time, as well:
and Twitter has revenue of $150M and is probably 2 years away from an IPO. Just because it hasn't made a profit each year, like Google, doesn't mean that you can compare its current 50x PE to Google's current 6x
I would suggest that Twitter are likely waiting to book an entire year of profits and 3-4 years of revenue growth before they file
Twitter and Color are startups with no clear business model. Groupon and Google are going concerns.
As per the blog entry: "A bubble is a decoupling of asset prices (valuations) from their underlying economic fundamentals". [Agreed!]
Throwing $45 million at Color with nothing more than an idea and the hint of an app is evidence of a bubble. So is Twitter's recent $7.7 billion valuation based on a predicted $150 million in 2011 revenue.
I know it hurts - hell it's going to hurt all of us - but you better believe it. Prepare to be profitable or die.