Silicon Valley’s denial is over: Everybody thinks we’re in a bubble
By Jeff Chiu : sfgate – excerpt
This week was unusually busy on the tech-media circuit in Silicon Valley, as several publications — Fortune, Re/code, and Vanity Fair — hosted events featuring big-name tech execs and investors.
We talked to a lot of these execs, as well as the quieter folks behind the scenes, at the events and the parties afterward, and a common theme shone through: Everybody agrees we’re in a tech bubble.
At the Code/Mobile conference in Half Moon Bay, there was a lot of chatter about “on-demand” companies such as Uber, Postmates, and Instacart. These companies sprung up over the last few years to provide conveniences at the touch of a smartphone button to busy professionals with disposable income.
But investors are worried that these companies have been subsidized by easy VC money for too long. In many cases, their customer and usage numbers are going up because they’re using VC money to expand into new cities, but customer-acquisition costs remain high and many of them are bleeding money. Worse, mature markets like San Francisco and New York are starting to see some scary, weak customer-adoption numbers, which bodes poorly for these companies as they expand into other regions… (more)
IT’S OVER: The ‘unicorn’ era comes to a screeching halt
By Maya Kosoff : Bussinessinsider – excerpt
The number of private tech companies valued at $1 billion or more has surged so much this year that on average 1.3 so-called unicorn companies have been created every week in 2015, according to data from CB Insights.
But now it looks like winter is coming to Silicon Valley.
Fortune’s Dan Primack went to San Francisco this week and met with a number of people involved with unicorn companies with ballooning valuations.
He says the mentality of people in Silicon Valley is starting to change, and people are getting scared… (more)
Fear and sadness in Silicon Valley
By Dan Primack : Fortune – excerpt
The party isn’t entirely over, but you can hear someone shouting “last call.”
Every couple of months I leave my small Massachusetts town — where most people still shop for their own groceries and drive their own cars — and head for the Bay Area. Suddenly, all of my cynicism and bubble worries are drowned out by the kind of unfettered optimism that only $1 billion valuations (on $0.00 earnings) can buy.
But not today. Not this time… (more)
Twitter to lay off 336 employees
By Marissa Lang : sfgate – excerpt
In Jack Dorsey’s first major act in his second stint as CEO of Twitter, the company announced Tuesday it will lay off 336 employees — about 8 percent of its workforce.
The Twitter co-founder, who has been the official leader of the company for nine days after a months-long term as interim chief executive, announced the layoffs in a tweet.
“Made tough but necessary decisions that enable Twitter to move with greater focus and reinvest in our growth,” Dorsey wrote, then linked to an SEC filing that contained his letter to Twitter employees.
The belt-tightening could quiet critics, who have called the 4,100-employee company bloated… (more)