The Tech Non-Bubble, Tigers, and Scraped Plates

Having only just started his blog, Marc Andreessen is out of the blog-blocks  with a lengthy, contrarian and critical piece about the non-bubble in technology. While various digerati have been wailing about the current frothiness in technology, especially in the Bay Area, Marc’s with me (including in this weekend’s NY Times) in saying, “What bubble?”.

The gist of his argument is that we’re genetically programmed to be nervous economic Nellies. As a result, we are over-eager bubble-spotters, and, as we know from behavioral finance, get more pain from losses than pleasure from gains.

Anyway, there is also good stuff on saber tooth tigers, so read Marc’s whole thing.

Btw, Gary Rivlin pretty much nails the context for all of this in the aforementioned NY Times piece. Here are the opening two paras:

GRANDPA lived through the Depression, and life thereafter was indelibly shaped by haunting memories of soup kitchens and hobos. Similarly, the digerati of Silicon Valley endured the 1990s dot-com bubble, and since then have lived with the psychic shock of its ignoble end.

The average valley entrepreneur tends to spot bubbles everywhere, much the way granddad feared financial ruin every time a grandchild carelessly scraped leftover food into the trash.

This is such an important insight, and a central reason why things have really only just begun in the current wave of change.

Related posts:

  1. The (Tech Bubble) Boys are Back in Town
  2. TechCrunch & the Bubble-Less Bubble
  3. Bubble. Not a Bubble. Bubble. Not a Bubble.
  4. The Tech Bubble in the WSJ
  5. The Tech IPO Resurgence Continues

Comments

  1. It often seems to me like a preventative attempt to save face – no one wants to be called the cheerleader duped by a second bubble! In the mean time, many of the most public voices in this space have lost the enthusiasm that got them into it in the first place – because being openly enthusiastic risks mockery in the short term and ignominy in the medium term. It’s a real shame.

  2. Andi says:

    It is a healthy fear of failure, to coin yet another analogy it is a natural wariness of all skillets after having once enthusiastically grabbed the wrong end of a hot one.
    Observing that Grandpa’s sense of economics had been shaped by the Great Depression is indeed an insight and explains why the Dow didn’t recover its 1929 level until 1954. As Marc noted in this context–a full generation.
    Correlate this with each generation having its own nostalgia decade formalized on late-night infomercials. We are all stuck in our own history, it’s who we are.

  3. Marc hits the nail on the head with this statement:
    “This is money coming from real advertisers and real users for real services with real value.”
    During the dot-com boom, I couldn’t find any correlation between sky-rocketing market caps and online purchases by those around me. People were mostly browsing in every sense of the word.
    Today, survivors of the bust are delivering real products that all of us are willing to pay for – and price isn’t always the deciding factor. We are now paying for convenience. Oddly enough, much of this has to do with the fact the web has made us busier, thereby forcing us to turn to the web for goods and services. Hmmm.
    Conclusion – it is far too early in the “real” cycle to predict its demise. True, I think we still tend to celebrate blue-sky “cool” ideas more than boring money markers – but if we took a moment to recognize the latter most would probably be shocked by the number of real dot-coms out there. I am proud to be one of them and look forward to hundreds more joining the club.
    Best,
    George