Are we in a bubble?
There has been a lot of talk over the past years about whether tech is experiencing another bubble. You can’t blame people for assuming that, especially since the bubble of 2000 is still in our generations memory. I think there is another view on the current climate however and this is that rather than a bubble we are in the midst of a digital revolution. We all know that the current business ecosystem is slow being consumed by technology. Slowly but surely every business will undergo radical technological evolution. As Marc Andreessen put it “Software is eating the world” and it sees no sign of stopping. I don’t believe however that this is a bad thing rather than a natural cause of evolution. It seems each week another old industry seems to be replicated by a scrappy startup and many people that are not in tech feel unsure weather this is good or bad. The truth is it is neither and to reliably build a sustainable environment we need everyone to partake in this revolution.
Looking at the current situation from the perspective of a revolution however makes the theory of the bubble seem less likely. In the last major industrial evolution the same thing happened and had their have been the understanding of bubbles back then then I have no doubt similar points would have been raised. In fact as we go through rapid expansion there will un doubtably be times at which this will slow before continuing on. These slow downs may see some of the super high growth companies levelling off and investors looking more at profitability however is unlikely to present any bubble or crash like 2000 or 2008. This is not just a theory either we have proof for this by looking back to the industrial revolution and the rate of change was similar.
So what does this mean. I think moving forward entrepreneurs should be cautious to ensure that the growth created by the disruption has foundations and a view to profitability. It is however essential that people continue to take risks in technology and not be afraid of failure. Many people may disagree that the way forward is greater risk however as long as these a loss of small risks rather than one big one you have the affect of making many bets and failing on a few will not risk the venture or our economy’s health as a whole.