You don't increase wealth by being inefficient. The cult of startups leads to more startups, but it doesn't make them more successful.
There are some exceptions, but the market can always be irrational for a little while. LinkedIn and GroupOn aren't real businesses and eventually the stock price will reflect this. However, in the short run they are able to pump the stock price by having a microscopic float and getting listed on things like Russel 2000.
Oracle, Cisco, Intel, HP are all startups, they are just very old and established. They employ tons of people. They aren't doing us any favors if they barely survive, however. Inefficiency makes us all poorer, even if in the shortrun it makes some people better off because of a paycheck (HP employee for example).
There are some exceptions, but the market can always be irrational for a little while. LinkedIn and GroupOn aren't real businesses and eventually the stock price will reflect this. However, in the short run they are able to pump the stock price by having a microscopic float and getting listed on things like Russel 2000.
Oracle, Cisco, Intel, HP are all startups, they are just very old and established. They employ tons of people. They aren't doing us any favors if they barely survive, however. Inefficiency makes us all poorer, even if in the shortrun it makes some people better off because of a paycheck (HP employee for example).