Are we living through another tech bubble?
By Kevin O’Connor
The views expressed are his own.
Yesterday’s announcement that Groupon is planning an IPO has accelerated the view (at least in some quarters) that we are living through a second tech bubble, fueled by social media companies.
Perhaps we are, but the conclusions to draw from that are not so simple. I still remember the negative reaction we received from potential investors back in 1995 concerning our forecast for Internet growth. Well, they were right – our forecasts were way, way off – the Internet grew a lot faster than we or anybody else could envision.
I lived through the bursting of the dot-com bubble and watched in horror as our stock – DoubleClick – plummeted, with 75% of our customers going out of business. My mother was so embarrassed I was a CEO of an Internet company she began telling friends I was a mid-level crack dealer.
Thankfully, sanity prevailed, as “great” Internet companies continued to produce real value for both their customers and shareholders.
Now, fifteen years on, I’m CEO of another Internet startup – FindTheBest. Six months ago we raised venture financing, and it’s clear things are far different from 1998. Back then, if you moved you got money and if you could crawl you did an IPO. Today, VCs are far more tight-fisted and the few companies that have done IPOs have real revenue.
Groupon has to be one of the fastest growing companies in history. Their revenue is not of a speculative nature, where traditional metrics are replaced by overstated market confidence. On the contrary, Groupon has generated massive revenue from thousands of local merchants.
My first impression of LinkedIn was pretty mediocre. However, now it’s the first place I look to do research on potential new hires or business partners. Somehow, LinkedIn has convinced all of us that it’s GOOD to publish your most intimate professional details online for all to see. It’s crazy — and crazy valuable.
So is there a Bubble 2.0? Without question, there will be some real lemons out there that will flame out in spectacular fashion. There will, however, be some incredible new companies that will continue to transform how we do business and live our lives.