There’s a new four letter word in the technology world these days, especially around startups: bubble. David Pollak is a colleague of mine who I deeply respect. We work together on a few different projects, including Lift. Last summer, he had the following conversation on Twitter:

Another day, another offer for a CTO position at a well funded startup. But it’s not a bubble.

— David Pollak (@dpp) June 24, 2013

@cartazio @sseveran no subtext. Just a crazy job market… just like 1999.

— David Pollak (@dpp) June 25, 2013

This past week I got to spend a few days at An Event Apart Atlanta. I hope to write up some useful thoughts from my time there soon, but during the conference I started following Jared Spool on Twitter. (Long overdue, I know.) Jared is a pioneer in the area of usability and design. For my non technical readers, that means he’s one of the people influential in encouraging designers and engineers to build products in a such a way that you don’t hate them (more than you already do).

Jared had this commentary in response to the WhatsApp acquisition by Facebook:

Facebook bought WhatsApp for $16B.

In related news: There’s no bubble.

#YeahRight

— Jared Spool (@jmspool) February 20, 2014

This actually sparked a few heated conversations, including contributions from Luke W, another one of the speakers at AEA Atlanta. You can read the threads off shooting from Jared’s tweets here and here. I’m not sure whose numbers are correct (I’d like to assume Reuters but meh mainstream media), but either way the number is pretty large. Facebook is the same company who, not too long ago, purchased Instagram for $1 billion. There are plenty of people who advocate for these acquisitions. There are plenty of people who balk at them. The thing that rubs me is that this isn’t just a story of one company who has just gone on a spending spree.

I generally give companies the benefit of the doubt in these cases. It’s a poker game of sorts and I choose to assume they’ve got reason to believe a full house is coming on the river and, that if it doesn’t, they already have the two pair. What concerns me is that Facebook’s story as of late isn’t unique. Today, Simple was acquired by BBVA. This is one of the acquisitions that do make sense and the price tag on them also seems high, but not entirely unreasonable. But then I look at Atlanta favorite Pardot, which has changed hands not once but two times: once when Pardot was sold to ExactTarget and once when ExactTarget was sold to Salesforce. Oh hey, by the way, Salesforce took out a loan to make that happen.

It’s no secret to anyone following this blog that I have some pretty strong feelings about startup culture and entrepreneurship. I need to reread some of the things I write periodically to remind myself that these things matter to me, because it’s easy to get absorbed in my day-to-day. I’m still playing in the kiddie pool of entrepreneurship, but I don’t kid about wanting to be involved in home grown businesses in Atlanta that are in it for the long haul. One major reason for that is this: companies who are successful over longer periods are an indicator of stability. Contrary to that, lots of companies changing hands and companies changing hands multiple times in a year are signs of instability.

Now, instability isn’t always bad. I’m no economist, but I can see that in controlled doses it’s actually quite beneficial both on an individual level and a collective level. It’s a byproduct of a free market. What concerns me, not being an economist, is when I see price tags in multiples of billions for companies like WhatsApp and Instagram. I get that “the answer” is they’re buying access to the users for ad purposes, but I’ve run enough products to know that you also get a lot of leeches who will never click an ad. (I’m one of them.) I know that, and I just think “there’s no way their users are worth that number.” It would seem I’m not the only one.

Once again, I’m not an economist. Neither is David or Jared, to my knowledge. It’s entirely possible “bubble” isn’t the correct technical term for what we’re seeing in these acquisitions. But for me, personally, that matters very little. What matters is the level of instability that I perceive and where that level sits in relation to the level that I think is safe. I’m equally vulnerable to pay cuts and down sizes if there’s an acquisition in Silicon Valley that goes bad. So when I see these deals being cut left and right, I start to get a little apprehensive because in my head it becomes less a matter of if a deal goes bad, but when. Then, suddenly, I’m far more likely to check on my hand of trip jacks than I am to raise.

No matter how you slice it, going to work for any new company requires tolerating a certain degree of risk. When it’s a company younger than 2 years, you can multiply that by about 2 for a normal person and about 10 for a person like me. In my head, it was quite a lot of risk to go work for OpenStudy, the first startup I worked at. I don’t regret a minute of it to this day. I have taken that leap of faith since and will do it again for the right opportunity. Unless, of course, there are exacerbating circumstances that amplify my perception of risk. Say, oh, I don’t know… let’s just pull an example out of thin air here… acquisitions with a price tag I can’t quite wrap my head around, perhaps? Yeah, that might do it.

Here’s the deal, whether or not we’re in a bubble is an economic point worth debating in the court of economics. But much like a court of law, there’s a difference between what the people who are experts on the subject think and the court of public opinion. When I see people, deeply intelligent leaders in this industry that I hold in high regard, expressing doubt, even if halfway in jest, over the stability of the industry we’re working in – I start to arch my eyebrow up a few more inches. It doesn’t help that I’ve already had the thought myself a few times before I read these tweets. The longer that doubt percolates and spreads, the more people who may decide to avoid the risk. If that number grows high enough, things get interesting. Unfortunately it won’t be in a “Man, I want to watch that movie again” kind of interesting.

Today there is already a disparity between the demand for engineers and the supply of them. This is true especially in startups, which tend to be more picky. If that supply fluctuates enough due to engineers (like myself) feeling there’s more risk than they’d like to accept, the falling supply could force companies to pay money they don’t have to get any engineers, making them, in turn, appear less likely to pay back loans or investors when you look at their balance sheet. Which could, in turn, lead to the very effect we’d fear from a bubble: an industry-sweeping devaluation. (This is, of course, assuming Congress doesn’t screw the entire US economy, which may not be a safe bet either.)

So, by now you may have an idea of where I’m going. I think the headline of this post sums it up best in one sentence: It doesn’t matter if there’s a bubble. It does matter that the people who are working in the industry are perceiving instability, it’s making them nervous, and the counterarguments they’re being presented aren’t calming that nervousness.

The truth is the situation I’ve described above was a bit dramatic and would be a perfect storm, but it wouldn’t be the first one we’ve faced as an industry or as a country. If we want to avert it, the companies making these moves need figure out how to stop giving off the impression to industry professionals of the irresponsible young teen with their first credit card. I, and others, have yet to be convinced this isn’t the case.

You may be right. There may be no bubble, for some technical definition of the word. But feeding me a surface level marketing argument or just saying “No, there is no bubble” doesn’t convince me there isn’t something wrong. I still think there’s something that smells, and that smell is going to make me a bit uneasy until its origin is discovered or it goes away. Right now that level of unease is only so high that I’m just writing about it, but if companies don’t soon figure out a way to satiate our desire for a good explanation as to how these numbers makes sense they might find it impossible to do later on. Engineers who would be perfectly willing to be brave under other circumstances might decide to play it safe. Then we might all be holding a four high anyway, a hand born entirely out of a nervous perception than an actual problem.