"If ever there was a positive sign that we are not in a bubble, the poor performance of FB on the open market is it."

The poor performance on the open market is in comparison to the offering price. If the offering price had been considerably different (for whatever reason) the performance would be in comparison to a much lower number potentially. Since the pricing decision was made by people (who have all sorts of motives) not sure that this is (although it maybe of course) representative of a positive sign of a bubble.

True, but it's a good sign that irrational exuberance is not taking hold of the open market, which was a cornerstone of the .com bubble.

I find it somewhat refreshing that with the number of people who use Facebook and feel it has significantly impacted their lives, that there wasn't a upwards pop on this.

The bubble isn't in valuations, which are reasonable. Rather, the bubble is in the high value that some very talented people are giving to subordinate positions in startups that "seem" cool, not based on business or career considerations, but irrelevancies like whether there's an XBox on site. They're doing themselves a disservice by taking positions that tout themselves as the "startup experience" but involve none of the investor contact, mentoring, or career development that they'd actually need in order to become founders for real (I.e. with enough contacts and resources to do it right and without risking personal financial ruin). They'd be better served if they took technical positions at more established and traditional companies, whether these be larger corporations or "lifestyle" businesses.

Of course, there are a lot of great startups out there, where a person can learn a lot very quickly, but those are not all of them and joining a company because "it's a startup!" is, without more knowledge, a bad idea.

That's the bubble I see: people taking jobs in dodgy startups for ridiculously low equity slices based on information that's either biased or only validated by the ridiculous echo chamber, thinking that their position as Employee #57 is going to make them real founder material in 8 months (because the CEO will just give them investor contact). It don't work that way.

Read the article. That 1000 figure is pure speculation. It might be that many, and it might not be.

Just being "early" at Facebook isn't enough to create credibility. A person also needs a track record of promotions. Millionaire or not, no one's going to fund someone who joined Facebook in 2007 and didn't get promoted in the interim.

Startups are a lot worse than people assume when it comes to internal promotion. The selling point of a position at a startup is the ability to get in early and have promotions be "inevitable" with growth, but it's equally common that as the company needs to scale, it has to bring on more established people, and those people tend to want leadership roles if they are going to join.

It does sometimes happen that someone joins a startup out of college and is a VP within five years, but that's not the norm. Just as common is for a person to end up a "paper millionaire" but languish in vesting twilight, not getting the raises and promotions that would be available in a more stable company with a better sense of career development.

You didn't answer the question: By contrast, have you founded a successful startup? Have you raised money from investors? If not, why would you feel qualified to offer advice on the matter?

Internet VC's like bubbles.

I agree this trend the investor posited to pg is a good one. It will force startups to focus on profits not hype and VC. That will make for better startups that can perhaps become longlasting companies.

Facebook is all hype. That is not the formula for a longlasting company. As long as the hype is high, they are in good shape. How long does hype last? Our society is more deficient in sustained attention than ever thanks to the internet. Facebook needs to acquire any Facebook alternatives early and often. People are more than ready for the next new thing.

There is no value in data itself. You have to do something with it to produce income. You need a plan. Facebook lacks a plan. Facebook will stand as a good historical example for those who wantonly collect personal data and dream of its value. The amount of personal data Facebook has collected is unparalled. But that does not magicaly create a business. Unless the business is cold calling or some similarly annoying tactic to generate sales.

Facebook's business is running on hype, not data. If the hype slows. It traffic dies down, it's game over.

The idea that the sucess of Facebook is just a matter of flipping the switch and asking Facebook's users to buy things is unsupported by any evidence. However we have the dot com bubble as an example that just acquiring users without a solid business plan is not enough. Grow big, fast, is not enough. Facebook dreamers still think it is.

As investors see that the general public understands that Facebook has no plan, as reflected in the media, and that only have lots of users and personal data, investors will be more cautious. Investors read newspapers. And they believe what they read.

The hype wears off. People see that these companies are smoke and mirrors. And suddenly you can't pull another Groupon so easily.

Wait so were we in a bubble or weren't we ? And what about now has the bubble burst or not ? All of this bubble talk has been shown for what it is.

Complete nonsense. One or two companies != Bubble.

I said the exact same thing to a friend of mine yesterday, when we were discussing the news surrounding their IPO.

So as long as the market punishes this kind of hubris and rationally prices companies relative to real revenue and potential, I feel better about us not having a bubble.