There&#x27;s an elephant in the room: nobody really knows how many valley companies exist solely because of revenues that are diversions of this river of money. Startup-servicing startups. Hosting. Metrics. Food delivery. Recruiting. Hell...there are hundreds (if not thousands) of companies just doing advertising services, alone. Everyone fixates on the unicorns that are doing big revenue numbers, but the regional effects of those redwoods are tiny in comparison to the &quot;robust ecosystem&quot; of mushrooms that grows in their shadow.<p>I often wonder how much of Facebook&#x27;s revenue (for example) consists of valley startups trying to micro-target indifferent consumers. Pretty much any time I look into a VC-funded consumer company, I find that they&#x27;re spending money on Facebook ads, Google ads, mobile ads...you name it. When that money dries up, the &quot;ecosystem&quot; of ad services takes a huge hit.<p>I&#x27;m sure there are consumer companies that have organic growth, but it&#x27;s hard to tell when there&#x27;s so much money sloshing around. One King&#x27;s Lane, for example...they were buying ads like crazy. At their peak, they had big, unicorn-y revenue. They&#x27;re probably going to sell for a fraction of their total investment, and have never been profitable [1].<p>Meanwhile, the theoretical market cap of all current private-market unicorns ($300-$500Bn, depending on the source) is something like 10-20x the market cap of every IPO issued in 2015 (~$30Bn) [2]. It&#x27;s pretty clear that the economic status of San Francisco is at least <i>correlated</i> to the huge influx of VC money since 2012, and that a lot of the resulting value is creative storytelling. I don&#x27;t see why people are so confident in a soft landing if that same money goes away.<p>[1] <a href="http:&#x2F;&#x2F;recode.net&#x2F;2016&#x2F;01&#x2F;06&#x2F;one-kings-lane-once-valued-at-900-million-is-likely-to-sell-for-fraction-of-that&#x2F;" rel="nofollow">http:&#x2F;&#x2F;recode.net&#x2F;2016&#x2F;01&#x2F;06&#x2F;one-kings-lane-once-valued-at-9...</a>
[2] <a href="http:&#x2F;&#x2F;wolfstreet.com&#x2F;2015&#x2F;12&#x2F;22&#x2F;ipo-window-suddenly-closes-worst-year-since-2009-worst-december-since-2008&#x2F;" rel="nofollow">http:&#x2F;&#x2F;wolfstreet.com&#x2F;2015&#x2F;12&#x2F;22&#x2F;ipo-window-suddenly-closes-...</a>