Until now, the idea of a looming bubble in the tech startup scene has only been discussed notionally. We've looked at facts and figures to create trends and predictions of just how bad things will get for the free flow of money in Silicon Valley and the hills beyond.
But now we have a real world story, an allegory of sadness that speaks volumes about just how bad things are getting for tech bros. We'll turn it over to WSJ to share this tale of woe...
Until late 2014, Twitter was regularly ordering tables from Billiard Wholesale, a store in San Jose, Calif. Then, suddenly, it wasn’t.
The store’s owner, Simon Ng, figured it either ran out of space “or they’re having company problems.”
Good call, Simon. Twitter's share price hit an all time low this morning. But it's not just Twitter slapping the paddle on ping pong table sales in Silicon Valley. Apparently no one is spending on the most hackneyed piece of furniture that a tech startup can buy...
In the first quarter of 2016, his table sales to companies fell 50% from the prior quarter. In that period, U.S. startup funding dropped 25%, says Dow Jones VentureSource, which tracks venture financing.
The table-tennis indicator is a peek into Silicon Valley culture, in which the right to play ping pong on the job is sacrosanct.
Of ping pong tables are feeling the freeze, one can only pray for the sales of hooded sweatshirts and hybrid cars. And anyone holding the paper on Stanford student loans better brace for impact.
It's carnage, you guys.
Mr. Ng, 38, who drives a Porsche Boxster to work, sells ping-pong, foosball and pool tables from a store wedged between a CrossFit gym and a cabinet shop. His company sales are primarily to tech firms.
In February, when the Nasdaq index fell to its lowest in over a year, he says he sold the fewest ping-pong tables to companies since he started keeping track in 2014. That tech-heavy index includes many more-established companies.
But what about the big firms? Aren't they still trying to keep their "street cred" up? You can't have a kitchen full of free coconut water without a ping pong table to work up a thirst.
Yahoo? “They haven’t bought stuff in a looong time,” he says, pulling up a picture of a purple foosball table, the last piece he sold to the company. (Yahoo Inc. has been hard hit by shrinking revenue.)
So ping pong table are literally the only thing that Marissa Mayer is refusing to spend money on these days?
Yahoo spokeswoman Carolyn Clark says while headquarters hasn’t bought a table recently, its offices elsewhere have. “I can assure you that people are still playing ping pong at Yahoo.”
Which must be difficult, what with all the smoke getting in their eyes from the still-burning trash fire that Yahoo has become.
But like Yahoo, why don't these troubled startups just try to sell everything they can get their hands on?
Startups pay up to $2,300 for a high-end Butterfly-brand table. Mr. Ng says he won’t buy them back, because nicks make them nearly worthless.
Martin Pichinson, co-president of Sherwood Partners, which auctions failed Silicon Valley firms’ assets, says he can sell pool tables but used ping-pong tables often fetch only $5 or $10.
Sherwood gives them to churches and synagogues. “If the banks want ’em, they can have ’em,” he says.
So also like Yahoo, the banks don't want them.