“In Silicon Valley, you have more people employed by money-losing companies probably than you ever have before,” Gurley said at SXSW. “Which is tenuous, because when the capital slows, then those [jobs] aren’t real anymore.” - See more at:
Twitter and Amazon continue to hire like mad, and neither has ever been profitable. Snapchat and Dropbox are admired as decacorns (unicorns valued at $10 billion or higher), though both have little to no revenue. Dropbox is locked in an epic spending battle with competitor Box, neither with a coherent plan to eventually pay the bills they’re racking up. - See more at: http://kernelmag.dailydot.com/issue-sections/staff-editorials/12637/tech-bubble-venture-capital/#sthash.TuBQ0dop.dpuf
As Dan Lyons wrote in a lovely Valleywag diatribe, “If you can’t make money after 10 years, what does that tell you?”
It tells you that bleeding-edge technology becomes synonymous with “bleeding money.”
This tech boom runs on Monopoly money—and as we saw 2000, that money can quickly disappear. The startups relying on easy VC cash then wither away, which indirectly hits the revenue of larger and more established companies.
Income inequality as a service
In these select areas, money-losing tech firms drive up the price of everything from housing to a loaf of bread.