April 2014 Posts

The New Tech Bubble – How Ugly Could It Become?

The New Tech Bubble – How Ugly Could It Become?

In light of the recent market correction and increasing chatter about a new tech bubble, how likely are we to suffer a meltdown on the scale of, say, the 2000 dotcom bust? Despite some frothy if not downright gassy valuations, as well as some stubbornly profit-free strategies at notable private and publicly-traded companies, I believe the situation is quite different this time around.

A number of potent and probably irreversible megatrends are underpinning continued growth of consumer and enterprise tech for some years ahead. Nonetheless, while we continue to see some entrepreneurs, VCs, investment bankers, and investors bidding up valuations to laughable levels, or giving some companies a pass on delivering actual ROI in financial terms, we shall not be entirely free from risk.