Dear All
So here I am tonight trying to finish what I started last month! The part 2 of the blog which some of my friends told they are eagerly waiting for just to keep me happy and enthusiastic enough to not stop blogging!
Yes, so now comes the third generation or the start up generation or as my blog's title says 'over-rated' start up generation.
First of all as I mentioned in the part 1, I believe that the 2nd generation was the one which created the manufacturing base in this country and the distribution channels. They were the real start up kings!
Ours is more of a bubble generation, no doubt with a lot of substance but the advent of high communication has blown things out of proportions. We are living in a world of valuations rather than asset base. Today, like of a flipkart is valued 4 -5 times that of a Tata Steel! Are these valuations justified?
Recently I observed that in last month or so a The Economic Times has questioned these valuations thrice on its front page. I have been discussing the same over past 6 months with various people.
So our generation, instead of creating wealth, is creating valuation. Instead of creating manufacturing, organising the services through internet. Instead of creating assets, creating brands. Instead of creating a long term robust business, creating a bubble!
Well, the above paragraph sounds like I am a big pessimist about these internet businesses, but I am not! These businesses are here to stay, only issue is the valuations these are garnering. If the valuations are justified by fundamentals like revenue, profits, asset base, free cash flow, well and good but the same is far from happening in many cases.
There is a lot of money in the world wanting to be invested and somewhere some good sales man is selling a 15 year story today and that desperate money waiting to get invested is getting invested. I hope that it sustains those 15 years and finally the investment is justified.
Anyway currently every purchase I make online comes with money from the investor sitting somewhere in Japan or the US or China or India!
Fortunately currently only rich are investing their money in such businesses who can afford taking a beating.
I hope our generation creates wealth like the earlier one and all the big names remain intact after 15 years, in green with their fundamentals supporting their valuations.
I hope that this is not another .com bubble waiting to get burst...
Signing off
Siddharth!
So here I am tonight trying to finish what I started last month! The part 2 of the blog which some of my friends told they are eagerly waiting for just to keep me happy and enthusiastic enough to not stop blogging!
Yes, so now comes the third generation or the start up generation or as my blog's title says 'over-rated' start up generation.
First of all as I mentioned in the part 1, I believe that the 2nd generation was the one which created the manufacturing base in this country and the distribution channels. They were the real start up kings!
Ours is more of a bubble generation, no doubt with a lot of substance but the advent of high communication has blown things out of proportions. We are living in a world of valuations rather than asset base. Today, like of a flipkart is valued 4 -5 times that of a Tata Steel! Are these valuations justified?
Recently I observed that in last month or so a The Economic Times has questioned these valuations thrice on its front page. I have been discussing the same over past 6 months with various people.
So our generation, instead of creating wealth, is creating valuation. Instead of creating manufacturing, organising the services through internet. Instead of creating assets, creating brands. Instead of creating a long term robust business, creating a bubble!
Well, the above paragraph sounds like I am a big pessimist about these internet businesses, but I am not! These businesses are here to stay, only issue is the valuations these are garnering. If the valuations are justified by fundamentals like revenue, profits, asset base, free cash flow, well and good but the same is far from happening in many cases.
There is a lot of money in the world wanting to be invested and somewhere some good sales man is selling a 15 year story today and that desperate money waiting to get invested is getting invested. I hope that it sustains those 15 years and finally the investment is justified.
Anyway currently every purchase I make online comes with money from the investor sitting somewhere in Japan or the US or China or India!
Fortunately currently only rich are investing their money in such businesses who can afford taking a beating.
I hope our generation creates wealth like the earlier one and all the big names remain intact after 15 years, in green with their fundamentals supporting their valuations.
I hope that this is not another .com bubble waiting to get burst...
Signing off
Siddharth!
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