Nice attempt by Dixon to pattern match, but I think he is substantially wrong on his diagnosis (of some peaceful build out). My recollection of the dot-com bubb

Nice attempt by Dixon to pattern match, but I think he is substantially wrong on his diagnosis (of some peaceful build out). My recollection of the dot-com bubble is that desktop Internet B2B in the developed world drove the vast majority of VC funding. Specifically, the following markets/opptys (including a greater opportunity with the sum of parts) did not even figure out in the discussion during the dot com time frame 1. smartphone and mobile ecosystem (phones, apps, games etc..) 2. Digital/Search advertising 3. Social networking 4. 1.5 Billion customers in China/SE Asia/South Asia So it is definitely odd to suggest that some sort of correlation between the dot com bubble and the VC funding now. One of the most astute commentaries on the modern VC funding conundrum was published a couple of days back http://reactionwheel.net/2015/01/80s-vc.html http://reactionwheel.net/2015/01/80s-vc.html It is long but well worth reading. The author makes a very good case that VC funding today is like VC funding in the 1980’s in that 1. Too much focus on competing in established markets (so trying to disrupt existing rental, delivery, hotel systems etc.) instead of trying to create new markets from scratch 2. Trying to flip startups to established companies instead of trying to build out a non-existent market 3. Investment driven by fear of risk instead of looking at risk as the ultimate source of super normal returns. I think the correct diagnosis of the flattening of the VC investments is that VC’s are now taken over by fear of risk and keep investing in risk-less opportunities. As a result they keep getting lesser returns, which keeps shrinking the money that will flow into the VC class. They are like our great-grandparents who lost out in the 1929 crash and kept on talking about the always-eminent bubble and never trusted the stock market again. We now had two crashes 2000 and 2008 so who knows how long the psychological scars will take to heal. A lot more VC money should be flowing in so that phenomenal businesses and markets can be created. If anything the size of the VC opportunity should dwarf the dot.com period. One of the consultancies published a report in 2012 that the total wealth of the world was about $600 Trillion (with a T) and on track to grow to $900 Trillion end of the decade. There is a mountain of cash sitting, there is are a bunch of issues to resolve but there is no mechanism to match them. Fear is a pretty destructive force. EDIT: Another good article on the failure of creating new markets (and it is a problem) is by Clay Christensen on the Capitalist Dilemma https://hbr.org/2014/06/the-capitalists-dilemma https://hbr.org/2014/06/the-capitalists-dilemma