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Will a Tighter Economy Rein In Startups?
Nerval's Lobster writes: It's been quite a ride for the stock market this week. In China, markets cratered; in the U.S., stocks dove for two days, only to rebound on Wednesday. That made many tech firms nervous, both about the Chinese economy (which some of them depend upon) and the continuing flow of money from VCs and investors. While the economic jitters don't seem to be affecting some tech firms' ability to implode themselves, more than one pundit is wondering whether the tech industry will shift into 'fear mode,' which could be bad for the so-called 'unicorns' that need funders to keep partying like it's 1999. Are we going to see money start drying up for startups?
We've reached a very perverse point in our history where what's bad for Wall Street is good for America, and what's bad for America is good for Wall Street.
In other words, the fed needs to raise interest rates. It would help everyone but Wall Street.
The actual finance guys I know want interest up.
The day traders I know are afraid it's going to kill their ability to make money.
The high frequency traders I know don't care, since they are still able to game the system.
Interesting... so Rovio, the makers of Angry Birds, is laying another 260 employees. Let me put that in perspective for you: I've been in videogame development for the last several decades, working on games ranging from bargain-bin titles to well-known MMOs. I've worked at companies with a dozen employees, and nave *never* been at a company with more than a couple hundred total employees (excluding parent company).
I'm just trying to figure out exactly were they doing with all those people... Does it actually require dozens of people to create an Angry Birds game? I'm having a hard time figuring out what they actually *did* with so many people. They happened to strike gold with Angry Birds, and they must have deluded themselves into believing they could strike gold with each subsequent swing of the pickaxe. Oops, the world has moved on to Candy Crush.
If they wisely invested their incredible earnings, they could have created a much smaller company that would have nearly infinite financial backing to do whatever they wanted. Instead, they succumbed to the temptation to grow into a giant by pretending that they could release the same product an infinite number of times. Now the entire world has played and grown tired of Angry Birds, so there's nothing left to fall back on.
Irony: Agile development has too much intertia to be abandoned now.