I'd say it's more of a froth. Some areas are depressed (relatively), some are about right on target, and some are way overvalued. In a bubble lots of people be

I'd say it's more of a froth. Some areas are depressed (relatively), some are about right on target, and some are way overvalued. In a bubble lots of people become sudden "royalty", but in a froth, only a select few are made into kings. It's clear that "valuation", as term, is not indicative of the value a company provides/produces, or the market it serves. It's a kind of shared fantasy. What we keep seeing is that companies with grossly inflated valuations end up M&A'd into a more mature company, and the value that company had is corrected over a couple years to be some fraction of the purchase price. There's also little longevity for many of these companies. An unmonetized cat picture sharing app gets "valued" at $billions because it's hit some kind of faddish meme growth curve, is bought be Yahoo! or whomever, and then turns to vapor within 6 months. The acquiring companies don't even have enough time to insert their ad network monetization scheme onto the pages before the curve turns upside down. Meanwhile, the founders of the site are sitting on piles of cash, and go on to angel invest in other bad faddish ideas that have a monetizable life-span of 12 months. Or other startups form that require as their monetization strategy, for some non-trivial percentage of all humans on the planet to be using their service before they can start skimming profit off of operating expenses. They hit 85% of those metrics, sell or IPO for the GDP of a medium sized European country and everybody is surprised when they have monetization problems. The Startup->Invest->Value->Sell cycle is broken in several subtle places and it's not clear how to fix it other than for investors to just get smarter and/or have other investment vehicles available to them. Or at least start asking for startups to "start up" with a good business plan in place, and carefully evaluate it for nonsense. But this won't happen so long as the cycle as broken. Uninformed investors, who were trained on what success looks like from their own ridiculous lark of a company fundamentally don't know what a real company looks like. Meanwhile there are other companies with real ideas, making real money, who are struggling to get valuations at 1xrevenue. Like anything with money involved, tech startups have become a hit-driven industry, and over the long-term (10-20 years) this is generally bad for everybody.