I think the title should be "We need to talk about startups in Silicon Valley..."
Having worked for several startups in the Valley (I'm including SF in here) and now working for a startup out of the midwest; I can tell you with a fair amount of confidence that these irresponsible business practices are pretty much isolated to the Valley.
You're not going to find a startup in the south or Midwest with millions in funding with no revenue. In the Valley on the other hand...
I'm know I'm generalizing as I'm sure Andrew can attest to a few startups doing the right things in SF...
Bet you $73 billion it's going to fall on deaf ears.
.edit: amount adjusted for inflation
Really enjoyed that.
I've written about 15 draft responses about how utterly batshit mental it is watching the startup cycle and the people who constantly throw "investment" at businesses who will blatantly never make a dime but every time I keep thinking about it it blows my mind.
Andrew: I guess you've read Benedict Evans' analysis on tech funding published 2 weeks ago: http://ben-evans.com/benedictevans/2015/6/15/us-tech-funding – but you don't reference it in your article, seems very relevant.
What are your thoughts on their (a16z) findings?
I need to move to silicon valley.
One thing he doesn't discuss is how many of these tech startups, once they've built up a brand name and have a "network effect" (the platform delivers more value as it gains users) are often times monopolies that make it nearly impossible for the competition to gain a foothold (think eBay, Uber, Airbnb). In these unique cases, I think valuations may be warranted, but this is the exception not the rule.
I do agree on a whole that another tech bubble is about to burst...