Who ever has been watching the WeWork story unfold with the valuation going from 75B at IPO filing to 8B and no IPO or ’sinking IPOs of Uber, Lyft and Peloton’ may be reminded of the dot com bubble in 2000. According to Derek Thompson, staff writer at The Atlantic, host of podcast Crazy/Genius, it is actually ‘The Not-Com bubble’ popping.
So why do they look similar?
Both times B2C companies spent a boat load of cash trying to get to profitability, valuations plummeted in a matter of weeks, leading to massive cut in jobs and joblessness.
Dot.com era was euphoria of the masses about all things ‘e’ or ‘.com’- with no link to reality. Public lost money. Today, the public market is rejecting private valuations. Real tech companies are seeing their value doubling in the public market while the posers are listing at a loss. Derek writes – ‘Consumer tech grabs most of the headlines. But enterprise tech, whose top clients are other businesses, grabs most of the profit…the most celebrated unicorns werenʼt actually software companies’.
The article provides a great perspective to what is actually happening in the market place and how you can possibly calibrate your story.
Where I learnt this #319
The Not-Com Bubble Is Popping https://www.theatlantic.com/ideas/archive/2019/10/are-we-cusp-next-dot-com-bubble/600232/