RSS
Is Irrational Exuberance Good For Innovation?
from the questions,-questions,-questions dept
With big name VCs worrying about the lack of meaningful exits (read: no real IPO market, and no, Google buying YouTube doesn't count), some are beginning to wonder if the continuing chill in IPOs is harming innovation by making it quite difficult to fund companies that are doing truly innovative things. While there are some mergers and acquisitions, they're still not all that common -- and as the article makes clear, mergers and acquisitions aren't necessarily the greatest way to drive innovation forward. Often the acquiring company is only interested in one aspect of what it has bought, and lets many of the other, more creative and innovative aspects fall aside. So, do we need IPOs to drive innovation? There are two schools of thought here. One is that all those IPOs, while they encouraged lots of investment money to go into new companies and new ideas, didn't really help innovation. All it did was create a bubble where the investment risk was shifted from professional investors (the VCs and their investors) to the public. When the bubble burst, it lost a lot of people a lot of money. However, the flip side is that, while any individual deal may be overhyped and bad, a bubble-like atmosphere with easy money flowing all around actually does help drive progress by allowing companies to quickly throw up many different ideas to see what sticks. Many of them will fail, often wasting millions of dollars, but the ones that come through it all and withstand the test of time are what drives the economy forward. In other words, with a free and open IPO market, a lot of individual investors get screwed, but the ability to easily fund even the most wacky ideas leads to some real progress.
8 Comments | Leave a Comment..
- New Yorker Reporter May Have Uncovered Secretive Bitcoin Creator
- Let's Face It: S&P's Analysis Is A Joke... But It Still Has A Right To An Opinion
- Dear Everyone: Stock Market Problems Are Not Directly Due To S&P Downgrade
- Insanity: Getting Worked Up Over One Company's Slight Change Of Opinion In The Creditworthiness Of The US
- The MPAA Doesn't Want Anyone Shorting Movies
Reader Comments (rss)
(Flattened / Threaded)
money, money, money
[ reply to this | link to this | view in thread ]
science?
Truth is, the people doing true reseach and inovation are few and far in between. The rest just good at using the buzz words.
[ reply to this | link to this | view in thread ]
it will include Web 2.0 and.. umm.. Social Networking! and Nanotech. and its machine washable, walks your dog, teaches your children how to read and fire medium range surface to surface artillary pieces.
buy now, and in this incredible offer Il send you Nothing, at no extra cost (plus shipping and handling) *some boxes may contain flesh-eating nanotech robots bent on world domination. if found, return to sender**.
**do not get blood all over the UPS return label.
[ reply to this | link to this | view in thread ]
"Screwed?"
And if there is any misunderstanding of the risks involved, it is more often the result of the false sense of security provided by SEC regulations that, while punishing businesses and investors, offers no hope of compensation - or really any promise of ethical behavior - from the companies they "regulate."
[ reply to this | link to this | view in thread ]
strange science
[ reply to this | link to this | view in thread ]
Innovation?
Capitalism is a kind of Darwinian exercise in survival of the fittest, and a I think that there certainly are new business models that emerged from the dot.com bust (ebay, yahoo!, Amazon). And the "investors" (who didn't really know what the hell they were doing, and therefore, I wouldn't even call them investors) who got "screwed" were asking for it.
Personally, the most interesting thing I find about this area right now is how Google is treating this merger with YouTube. I've only read a little about it (can’t find much info on it), but from what I understand, they are going to acquire YouTube, and let it run on its own. If this is the case (which I’m definitively NOT sure of), then Google would be putting itself in a position of acquiring companies simply because they are good companies to own. This would be more along the lines of a Warren Buffet / Berkshire Hathoway type of scenario, and quite a change from Google’s philosophy of swallowing companies whole.
I do know Google would like to emulate the long term outlook and successful strategy employed by Buffett (who wouldn’t) and have specifically stated such, so maybe this is their first step in that direction.
[ reply to this | link to this | view in thread ]
Ironic
Heh. Im sure it doesnt mean anything.
[ reply to this | link to this | view in thread ]
Re:
ahhahaha... i want one already, useful skills to teach your kids....
[ reply to this | link to this | view in thread ]
Add Your Comment