Will the Startup Bubble Burst?

When someone talks negatively about an innovative idea like startups or cryptocurrencies, I get triggered. I know I have to be rational and let those intense emotions go, but sometimes, it’s difficult. In such cases, I use those emotions as fuel for creativity and write a blog post about them.

Who Are the Critics of Startups and Cryptocurrencies?

When someone talks negatively about an innovative idea, there are usually one or two things going on. They either missed the idea or the idea disrupts their business.

You might have heard some famous investors and bankers badmouthing cryptocurrencies. Why do they do that? Most of the time, it’s one of the following.

  • They missed the uptrend entirely.
  • Cryptocurrencies pose a threat to their businesses.

I have yet to come across a reasonable argument against cryptocurrencies from these otherwise brilliant people. To me, their comments don’t sound authentic, but they sound like having a hidden agenda.

Successful investors or bankers are savvy enough to not badmouth the startup idea in general. Startups are generally badmouthed by people who feel like they can’t participate in them, neither as investors nor as founders.

Investing in a Startup

I understand when someone thinks that participating in a startup is not for them. Investing in a startup feels like that’s the last time you have seen your money. The chances of seeing your money back is really low, but if the startup takes off, the returns are unsurpassed.

Investing in a startup isn’t for everyone. Or let’s say it wasn’t for everyone. Cryptocurrencies lowered the barriers to entry to this space. Nowadays, you don’t need to invest a minimum of $100K USD in a startup. You can invest as little as $100 USD in the cryptocurrency of a startup.

I can afford to lose $100 USD, but I can’t afford to lose $100K USD. So, I couldn’t invest in a startup in the past, but now, I can. I bought some Steem Power which is the cryptocurrency of the social platform Steemit.com.

I’m not a big fan of Steemit.com as I have written in a post before. However, you never know how things will evolve in the future. I invested an amount that I can afford to lose entirely. I just marked a date three years later in my calendar. I don’t have any expectations from that investment, at least for the next three years.

This is how investing in startups looks like in general. People invest an amount they can lose entirely and they are ready to wait for three to seven years before they see any returns to their investment.

I get that this type of investing is not for everybody, but why badmouth it just because it’s not for you. There are other people who can benefit from this type of investment. They take the risk and some of them get the rewards.

Is There a Startup Bubble?

Here’s another negative opinion about startups. “The startup space is in a bubble.” The question isn’t whether the startups are in a bubble or not. The question is “is there an investment vehicle that isn’t in a bubble?”

There is excess cash in the market and people are looking for investments that bring in higher returns than the 0% their savings accounts bring.

That excess cash flows into the stock market, cryptocurrencies, and to startups. If you take into account the official 2% inflation policy in fiat currencies, I don’t see anything wrong with that.

Sure, at a certain moment, we could see crashes in the stock market and/or cryptocurrencies. As a result, startups would suffer from that crash as well. However, that doesn’t mean that it’s bad that investments are flowing to the startup space.

If you think that there’s a startup bubble and that’s a bad thing, stop using Facebook, Twitter, Amazon, and every other Internet based product or service. Most of them were built during the Dot-Com Bubble and benefited from those investments. As I have written in a previous post, bubbles are good for technological progress.

Founding a Startup Is Not For Everyone

I get that you can’t found or work in a startup. It’s a lot of hard work. It’s a lot of stress. There’s no job security. Wages are low compared to established corporations. As a result, this career path isn’t for everyone. It favors either the young and single or already well-off people.

Middle class family people need their jobs to have a solid income and to have some downtime to take care of their families. That doesn’t match well with startups. I get that startups aren’t for everyone. And that’s fine. But please don’t badmouth startups. Let the people who can afford to work on them in peace.


Investing in or working on a startup is not for everyone. Neither does it have to be. Startups benefit the society by providing technological progress.

From time to time, there are bubbles in startups, just like the rest of the economy. Startups and as a result the whole society benefit from those bubbles.

Investing in or working on a startup might not be the right move for you, but please be authentic about this fact and don’t badmouth startups.

Disclosure and Disclaimer

At the moment of writing this post, I owned Bitcoin, Steem Power, and S&P 500 Index Funds. This post is for information purposes only and not intended to be business or investment advice.