Beware the great tech bubble


If there is a tech bubble as the media has forewarned, I don’t think it would be in the high valuations of a few companies.

Maybe Uber isn’t worth $63 billion or Airbnb isn’t worth $26 billion. But these are companies dominating their industry and providing for a clear market need.

This might be their heyday, but I would expect them to settle at a more “comfortable” valuation as growth slows, not completely disappear as many dot com companies did.

Actually if there is a tech bubble to worry about it, the most visible to me is in the luxury startup support / outsourcing space.

Zirtual which went bust last summer has resurrected as a startups.co company catering to entrepreneurs at its lowest cost plan. That plan starts at $398 / month. Its small business plan costs $998 / month. Between all of the outsourcing service plans (i.e. zenefits, zenpayroll) available to startups these days, I wonder how any of them can ever hope to be profitable.

 

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