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I've wondered: Just how large is this latest tech bubble? I've seen some pretty high valuations of companies, but none of the madness I recall from the dot-com

I've wondered: Just how large is this latest tech bubble? I've seen some pretty high valuations of companies, but none of the madness I recall from the dot-com era. I'm not fully convinced the high valuations of a handful of companies it putting the entire tech industry at risk. The dot-com fallout was also exacerbated by the Y2K craze, which isn't a factor this time around.

vessenes 16y ago
Completely agreed. Also, this 'bubble' seems to coincide with serious efficiency gains in startups and the sudden ability of startups to a) scale and b) make money. I don't see any boo.com's right now. There may well be a bubble right now. There's certainly a tidal shift toward founders as has been thoroughly discussed on this site and elsewhere. That tide will probably shift back around at some point, who knows? Small dollar placements resulting in mid-size private purchases does not a bubble make; neither does medium-size (500mm) placements in high revenue, profitable, massive growth tech companies.
- stretchwithme 16y ago
  why do you say startups scaling and making money is a sudden ability? Are they all doing it? Were they never able to before?
  - vessenes 16y ago
    During the bubble 'mindshare' was considered the most valuable thing you could get, more than money. Hence, superbowl commercials for Dotcom startups. Scaling has gotten far, far, far cheaper in terms of hardware, software and staff. This opens up a new class of possible businesses and returns. Remember that Google didn't even exist during the first part of the boom; monetizing with advertising was difficult... Everything cost tens of thousands of dollars back then, phone systems, servers, development environment licenses, ... Anyway, memory lane. Now you can git push to heroku and launch a web app. That's definitely valuable. Heroku probably would have been worth well over $1bn during the boom, though. At the time, you could legitimately spend a year building out a web application.
BerislavLopac 16y ago
I like this comment from Don Dodge at http://dondodge.typepad.com/the_next_big_thing/2011/01/facebook-twitter-and-startup-valuations.html http://dondodge.typepad.com/the_next_big_thing/2011/01/faceb... : "Critics point to Twitter raising $200M at a $3.7B valuation, and Facebook being valued at $35 Billion, or Groupon at $6B valuation just 6 months after raising a $135M round at a $1.35B valuation as evidence of a bubble. Bubbles don't typically start with the market leaders. Bubbles happen when investors extrapolate market leader valuations onto 3rd tier players. Sound the bubble alarm when you see this happening."
- jrockway 16y ago
  Oh, absolutely. I am nearly certain that Facebook, Twitter, and Groupon's investors are not going to get the big payout they expect, and that investors in "third tier players" are going to be eating a lot of rice and beans in the not-so-distant future. But this isn't going to collapse the global economy and put all programmers out of work.

vessenes 16y ago

Completely agreed. Also, this 'bubble' seems to coincide with serious efficiency gains in startups and the sudden ability of startups to a) scale and b) make money. I don't see any boo.com's right now. There may well be a bubble right now. There's certainly a tidal shift toward founders as has been thoroughly discussed on this site and elsewhere. That tide will probably shift back around at some point, who knows? Small dollar placements resulting in mid-size private purchases does not a bubble make; neither does medium-size (500mm) placements in high revenue, profitable, massive growth tech companies.

stretchwithme 16y ago
why do you say startups scaling and making money is a sudden ability? Are they all doing it? Were they never able to before?
- vessenes 16y ago
  During the bubble 'mindshare' was considered the most valuable thing you could get, more than money. Hence, superbowl commercials for Dotcom startups. Scaling has gotten far, far, far cheaper in terms of hardware, software and staff. This opens up a new class of possible businesses and returns. Remember that Google didn't even exist during the first part of the boom; monetizing with advertising was difficult... Everything cost tens of thousands of dollars back then, phone systems, servers, development environment licenses, ... Anyway, memory lane. Now you can git push to heroku and launch a web app. That's definitely valuable. Heroku probably would have been worth well over $1bn during the boom, though. At the time, you could legitimately spend a year building out a web application.

BerislavLopac 16y ago

I like this comment from Don Dodge at http://dondodge.typepad.com/the_next_big_thing/2011/01/facebook-twitter-and-startup-valuations.html http://dondodge.typepad.com/the_next_big_thing/2011/01/faceb... : "Critics point to Twitter raising $200M at a $3.7B valuation, and Facebook being valued at $35 Billion, or Groupon at $6B valuation just 6 months after raising a $135M round at a $1.35B valuation as evidence of a bubble. Bubbles don't typically start with the market leaders. Bubbles happen when investors extrapolate market leader valuations onto 3rd tier players. Sound the bubble alarm when you see this happening."

jrockway 16y ago
Oh, absolutely. I am nearly certain that Facebook, Twitter, and Groupon's investors are not going to get the big payout they expect, and that investors in "third tier players" are going to be eating a lot of rice and beans in the not-so-distant future. But this isn't going to collapse the global economy and put all programmers out of work.