It would be insane to short any of these companies, because the perception is so far from reality; and it's perception driving the price, not reality. That's the point.

The market isn't necessarily efficient at a given point in time. Just because the stocks are going up, doesn't mean the valuations represent the intrinsic value of the company.

Shorting is a dangerous strategy, especially if you feel the prices are delusional. "The market can stay irrational longer than you can stay solvent."

Yes- agree with you. I think DHH/JF & 37s were not making as much fun of the actual valuation but the lack of monetization.

If we stretched the valuation analogy, it could be applicable to AMZN/Bezos as well- where there is always discussion on their lack of profits & nose bleed valuation. FYI - Bezos is an investor in 37signals.

I have lots if respect for Bezos, JF, DHH etc. I just think it's a little "unfair" (for lack of a better term) to make fun of companies before their monetization plans have kicked in.

No. You're missing the point. FB and TWTR have already made it. If you could, short the vast pool of VC-backed pointless startups in the space that have not IPO'd yet and you would make a fortune.

Hmm- you may well be right. Because VC as an asset class have underperformed. But- you wouldn't have made a fortune shorting it. Maybe, even lost a little money but not much.

On the other hand, if you shorted USV/Sequoia/Benchmark's portfolios you would be hurting a lot.