There seems to be a collective race among many commentators, media outlets and so forth as to when the IPO or “tech” bubble popped. Some are pointing to the recent WeWork™ debacle, others are using Uber™, and even more pointing to SnapChat™.
All of them I contended do offer fine examples. But what I pointed out to a friend that had called asking for my opinion was, I had pointed out precisely what would happen long ago, before they became the “obvious” examples they are now – back in 2015.
To prove my point I related this passage from an article I penned, again, back in April of 2015. To wit:
If the stresses now rearing their head within the markets continue I’ll make a prediction.
What you’ll not find more of going forward is VC’s strewn across the skies dawning capes and spandex searching through an ever-expanding universe of start-ups to fund. No. What you’ll find is a lot of the once so-called “wonder companies” that were previously funded desperately seeking additional funding of any type possible. Not to expand, or to buy the next greatest “eye balls for dollars model” to compliment their existing “now desperately seeking eyeballs for dollars” model.
What they’ll be in is a frenzy seeking funding – for their very own survival. Because Non-GAAP “We’re killing it!” earnings reports won’t do the most important thing in a recessionary downturn alongside the reality of no more “free” money.
And what’s the most important thing?
The ability to generate actual net profits garnered from servicing satisfied customers that actually purchased what you made available for sale at margins that in turn pays: the help, rent, and other bills – consistently. Period.“Bubble Confirmed: From Sock Puppets To Action Heroes” April, 2015
Here was the catalyst that pushed me into writing that article, again, to wit:
And here’s what replaced them, just as I argued would happen:
As I iterated to my friend – the moment QE ended in earnest in late 2014: It’s. Been. Over. Period.
The once rarefied air breathed in Silicon Valley has been nothing more than “The Valley” sucking on their own exhaust fumes for years.
We’ve just arrived at that moment when everyone else smells it also.
© 2019 Mark St.Cyr