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??