On 1999 & The Future

Thoughts on Economic Opportunity on the Internet

There is a lot of FUD in Silicon Valley right now referencing 1999 and an impending macro economic crisis or correction. Now, I don’t know which way it is going to go, but I think it is important to understand the data so that one can be either optimistic or pessimistic and thus make good decisions.

In 1999 there were 280 million people on the Internet, TOTAL. Today, that number has grown 10x to 2.8 BILLION. An order of magnitude. Mobile will accelerate that growth to 6 billion people and beyond in the next few years. The economic opportunity is so big it is hard to put the human mind around it. This is why you see 60+ buildings under construction in San Francisco right now.

Indeed it is important to focus on the generation of cash flow, which is the key driver of equity value in the long term. And, even more important to very VERY carefully manage burn and to allocate capital to projects with the best possible return. But, comparing today to 1999 is just lazy in my opinion. There are too many insanely big problems that are possible to solve now, that just were not possible to solve then.

For a truly fresh perspective on this I would suggest reading Peter Thiel’s new book Zero to One. It is by far the best book of all time on Silicon Valley, startups, and how to think about the future.