Is the next tech bubble about to burst within the next half year?
Facebook is now worth two hundred and eighteen billion dollars ($ 218 000 000 000). Investors and venture capital markets will stop throwing around billions in Monopoly money, companies without any profits will lose their suspiciously optimistic valuations, and startups. We saw this with tech in 2000, with banks in 2008.
Google’s purchase of the thermostat maker Nest for $3.2 billion and got a thermostat business...
Twitter and Amazon continue to hire like mad, and neither has ever been profitable. Snapchat and Dropbox are admired as decacorns (unicorns valued at $10 billion or higher), though both have little to no revenue.
Listen to the the nervous predictions from some very big venture capitalists:
Mark Cuban said this tech bubble is worse than the tech bubble of 2000. “If we thought it was stupid to invest in public internet websites that had no chance of succeeding back in 2000, it’s worse today."
“It’s worse, because the risk is concentrated on individual angel investors and crowdfunders rather than a broader public stock market. I have absolutely no doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments.”
Andreessen & Horowitz cofounder and megabucks financier Marc Andreessen recently submitted his Twitter followers to an 18-tweet rant declaring that startups’ burn rates were too high and their executives too inexperienced.
“When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co’s will VAPORIZE”
“How old is he, twenty-four? God damn it, let’s give him all our money!”
Benchmark Capital partner Bill Gurley declared a bubble during a discussion with author Malcolm Gladwell at South by Southwest (SXSW) last month. He calls it a “risk bubble,” with billions being invested in young companies with little track record of success.
“We’re taking on, in these startups, these… so-called unicorns, a level of risk that we’ve never taken on before in the history of Silicon Valley or startups.”
Most of the world will make decisions by either guessing or using their gut. They will be either lucky or wrong.
When the tech bubble bursts, it won’t hurt just tech workers: It’ll affect cooks, custodians, assistants, the pizza dude and Uber drivers... Silicon Valley and New York City are paying larger-than-ever salaries, in these areas money-losing tech firms drive up the price of everything from housing to a loaf of bread. This cost-of-living overvaluation not only causes displacement and gentrification, it inflates other bubbles in corporate office space, in the cost of housing and rental units, in salaries, and in the overall employment market.
So fasten your seat-belt, and connect your Apple-watch, so we can monitor your heartbeat, ones the shit hits the fan.
Meanwhile at a16z's office, the most prestigious V.C. firm in SF. And in The New Yorker and Financial Times they talks about Unicorns...