Subscribe · Featured · Recent · The Cold Start Problem 📘

2008 anti-prediction ;-)

Greg Linden writes in a recent blog about his one prediction for 2008: The coming 2008 dot-com crash.

Early January is the time we see many predictions for 2008. I have not played this game since 2006, but I want to chime in this year.

I am only going to make one prediction, but one with broad impact. We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000.

I love it ;-) Yet, I’m much more optimistic about the coming year.

So I think things will continue at the pace they are, and even pick up, at least until late 2009 to 2010. Here’s my reasoning:

  • The "broader" economy and investors have not been investing as bubbliciously as in the late 90s
  • As long as there are big exits from tech startups, investor interest will only grow – this will cause the late majority and laggards (as far as investors, press, etc.) to get excited about the tech economy, and then throw money at the situation
  • As there are good companies out there with real revenues, when these companies exit, it will continue an upwards trend in interest. For example, if the tech industry started a slump but then Facebook exited, wouldn’t it only cause renewed interest?
  • HOWEVER, as these good companies exit, then all there’ll be left is bad startups (at least percentage-wise) – thus causing more bubble-like trends to occur

The question then, is how many good companies are left in the ecosystem, and how long will it take before they exit? As long as there’s a stream of exits, I think everyone will be happy.

Based on what I’ve seen out in the SF tech scene, there are at least a dozen or more startups with revenues beyond $10MM, growing at a significant rate. And IMHO, their revenues are coming from sources that are not likely to crash in 2008. A large percentage of these will take 2-3 years to exit, and beyond that, bubble conditions might be ripe – but not before then ;-)

What do you guys think??

PS. Get new updates/analysis on tech and startups

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of AH Capital Management, L.L.C. (“a16z”) or its respective affiliates. AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell -- or a solicitation of an offer to buy -- any securities, and may not be used or relied upon in evaluating the merits of any investment.

The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any charts provided here are for informational purposes only, and should not be relied upon when making any investment decision. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, I have not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. The content speaks only as of the date indicated.

Under no circumstances should any posts or other information provided on this website -- or on associated content distribution outlets -- be construed as an offer soliciting the purchase or sale of any security or interest in any pooled investment vehicle sponsored, discussed, or mentioned by a16z personnel. Nor should it be construed as an offer to provide investment advisory services; an offer to invest in an a16z-managed pooled investment vehicle will be made separately and only by means of the confidential offering documents of the specific pooled investment vehicles -- which should be read in their entirety, and only to those who, among other requirements, meet certain qualifications under federal securities laws. Such investors, defined as accredited investors and qualified purchasers, are generally deemed capable of evaluating the merits and risks of prospective investments and financial matters. There can be no assurances that a16z’s investment objectives will be achieved or investment strategies will be successful. Any investment in a vehicle managed by a16z involves a high degree of risk including the risk that the entire amount invested is lost. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by a16z is available at https://a16z.com/investments/. Excluded from this list are investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets. Past results of Andreessen Horowitz’s investments, pooled investment vehicles, or investment strategies are not necessarily indicative of future results. Please see https://a16z.com/disclosures for additional important information.