Remembering “Crying Towels”

I’ve had some very interesting conversations over the last few days, many of them have revolved around the premise that “No one could have seen this coming.” Well, that’s really a yes and no statement. Because much of what we are currently seeing taking place (e.g., the business side) is what was very easily identifiable to those that wanted to see. The only thing that was maybe undefinable was the when everyone else would. And it is that dynamic that sets up competitive advantages.

It’s not easy to be the one making these types of arguments when everyone at the time is convinced it will not only not end, but will only get better. It’s even harder when the entirety of the mainstream business/financial media (at one time that knew better) goes along promoting the absurd with even more delusion. Can you say “Booooo ya!?”

There was a time I used to do pro bono speaking events at places like “Entrepreneur Centers.” I stopped because it had become painfully obvious that no one cared to hear about fundamental business practices (let alone ethical!) that were absolutely crucial to not just build, but remain and grow a business.

No, all anyone wanted to tell me was, “Unicorns are where it’s at, all that other stuff is obsolete because – it’s different this time!”

So, I stopped.

You may think this was an isolated phenom, however, let me show you how it was not…

Many have asked me over the years when they’ve seen one of my articles either here or re-posted elsewhere why I use the term “pictures as they call them in Silicon Valley” when clearly everyone in “the Valley” knows they’re charts, and have never heard them referred to otherwise.

Well, the reason why I do that is because back in the day (circa 2015) what I defined then as the “Silicon Valley Aficionado Set” used to take to places like Twitter™ and even the television/radio programs and “commentate” by snarky insinuation just how pathetic people like myself were.

One day one of Bloomberg’s “commentators” at the time (I notice he’s no longer on the TV that much anymore, scheduling issues I’m sure.) took to Twitter and used both me and my article as it appeared on ZeroHedge™ as one of those moments to show just how superior of thought they were. And in one of those better-than-thou responses this one used the phrase “I only read it for the pictures.” Hence, I’ve used the term ever since when those “pictures” proved out to show all that “intellect” they were sporting was a bit, oh let’s say, not to intellectual.

Yeah, I was rightly ticked off then as I am still. Not because I have thin skin, but because of the lasting scars many that believed this crowd had some actual “insight” and are now precisely where I said they would be – in a world of hurt. And Covid has had nothing to do with it. It’s been happening since the very time when they were ridiculing both myself and ZH.

Here’s what I was trying to put across in my article back in 2015. To wit:

This is the type of stuff only heard in tales of yesteryear. (I.e., the last dot-com crash) I mean, technological (i.e., coders) staff being let go? The very people responsible for the product and all its innovation, not to say; for the innovation that will be needed to turn around such an entity? Those are the people to go first? 8% of its workforce? You hear announcements like this from legacy companies not – “the hottest space in all of Silicon Valley.”

And this brings on a whole host of other meme shattering, break out the “crying towels” type arguments. For if it can happen there – guess where else it’s going to begin happening? Is ________________ next? Just fill in your current favorite high-flying Non-GAAP social darling on that line – for it’s going to happen at all of them very soon in my opinion. Much sooner than many now even think or ever thought possible.

“Coders” will gladly live in some single bed shared between 8 others apartment somewhere near the Valley. Heck. they’re now reporting stories how one can live in a shipping container on the cheap in San Francisco. Sounds fantastic right? Well, it is. As long as the dreams (and expectations) of landing the dream job in a start-up or similar where riches based in stock options and more are forthcoming or, dangled like carrots in front of wide-eyed dreamers.

There’s nothing wrong with lumping it out with the hope of future pay offs. I did similar things when I was young. It’s a risk reward thing and I champion those willing to take the chance.

However, you know what changes everything? When the meme of “Gonna stay here till I cash-in and then I’ll buy me a McMansion!” turns into the underlying realization that quite possibly – you’re going to end up living in a shipping container! Possibly forever if things don’t change.

Suddenly Mom and Dad’s basement looks like paradise, and the thought of leaving “The Valley” becomes more, and more front of mind with every passing IPO failure or failure to launch. Don’t let this point be lost on you. For it’s a tell-tale sign things are changing deep within when it can be noticed shipping container apartments or, communal type living begins to lose its appeal among this set. For when reality bites – it bites hard.

“Crying Towels”: Silicon Valley’s Next Big Investment Opportunity Oct 15, 2015

How’s that all working out? Well here’s two latest examples. The first is something you wouldn’t think possible in what is known to be the home of Silicon Valley’s uber wealthy: Palo Alto.

Remember when home prices (aka 2015) did nothing but go up for tech? Here’s what that looks like today from Palo Alto’s own real estate/newspaper. And yes, this is an actual ad. To wit:

(Image source via screenshot)

Notice anything peculiar? Again, that’s a screenshot of a real ad.

“But wait…there’s more!” as they say in late-night TV advertising.

How about San Francisco? You know, where people were paying bookoo bucks to live in a box in someone else’s apartment (or a shipping container!) as they awaited their “IPO riches!” to come in. Here’s the lead sentence from an article on Medium™ that says it all…

“The kids are jumping ship and they’re not coming back”

Below is the first paragraph, and I encourage you to read it in its entirety, because it’s a sobering look at just how far this city has fallen over the last five years. And for those that may be a bit math challenged or not get the drift, that’s precisely the same time since my above article.

It’s been coming. For the five years I have lived here, people have shaken their heads and wondered how long San Francisco could keep getting away with it. We’ve all stepped in human feces and kicked syringes to the kerb [sic]. It bonds us. We’ve all had to step to the side as a crazy meth head lurched towards us with intent. But, hey, stock prices kept going up and the sun continued to set over the Pacific Ocean and it’s been beautiful enough to somehow make the deal worthwhile. It’s a trade-off, we told ourselves. But then the glass shattered. It’s over.

Brendan Connellan: “The Bell Rings For San Francisco”

But then again…

What do I know.

© 2020 Mark St.Cyr